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At Water Tower Place, Gov. J.B. Pritzker signs measure to confront organized retail theft

Gov. J.B. Pritzker signed into law a measure aimed at groups that engage in large-scale retail theft and then sell the stolen goods online.Gov. J.B. Pritzker signed into law a measure aimed at groups that engage in large-scale retail theft and then sell the stolen goods online......»»

Category: topSource: chicagotribuneMay 13th, 2022

California Dem Flips On Party Over Smash And Grab Robbery Epidemic

California Dem Flips On Party Over Smash And Grab Robbery Epidemic Authored by Jazz Shaw via HotAir (emphasis ours), In 2014, California passed proposition 47, which made the theft of less than 950 dollars worth of merchandise only a misdemeanor. When combined with the state’s generous “bail reform” rules, this meant that anyone could walk into a store, grab nearly a thousand dollars worth of goods and bolt out of there. If they happened to somehow get caught, they would be back out on the street within hours to try again. In response, aspiring thieves accepted the invitation and began robbing retail outlets with abandon. Soon, organized groups figured out that if they entered a store in large numbers, one or two cops couldn’t stop them all even if they showed up promptly, so most of them would get away to sell their illicit merchandise. Now retail chains are moving out of the state because they can’t keep their shelves stocked and their insurance rates are too high for the stores to be profitable. AP Photo/Charles Rex Arbogast This has apparently reached the point where a straw has broken the camel’s back for one California Democrat. Assemblyman Rudy Salas has thrown in the towel and recognized that this crime wave can’t be allowed to continue. With that in mind, Salas introduced a new bill that would reverse proposition 47 and reset the threshold of misdemeanor theft to its previous level of $400. But will the rest of his party back him up? (Fox Business) A Democratic California lawmaker introduced a bill that would reverse the state’s Proposition 47, which has been blamed for the rampant shoplifting and smash-and-grab crimes plaguing the state. “Enough is enough, we need to fight back against the criminals who are stealing from our communities,” Democratic Assemblyman Rudy Salas said in a statement about the bill’s introduction Tuesday. California’s Proposition 47 passed in 2014 and reduced shoplifting charges regarding the theft of $950 or less from felonies to misdemeanors. The new bill would lower the amount a suspect can steal before facing a felony to $400, which was the original threshold before Prop 47 passed. I suppose we should give at least some credit to Assemblyman Salas for finally waking up and smelling the coffee, assuming all of the coffee wasn’t already stolen before he got to the store. But this encouraging news doesn’t mean that California’s troubles will shortly be in the rearview mirror. First of all, as I mentioned above, it’s far from a sure thing that enough Democrats will hop onboard with this measure to reverse the original proposition. Plenty of California Democrats are still buying into the entire “social justice” and “defund the police” movements and I somehow doubt that many of them are ready to admit that they royally screwed up on this process. Even if plenty of Democrats do hop on the bandwagon, it could very well be far too late for this to work. The message has been sent out to California’s gangs and aspiring thieves for more than seven years now. Theft is not taken seriously and you can get away with it with little or no penalty being imposed on you. If they lower the felony threshold to $400, the thieves can simply start taking less merchandise on each trip and come back later for the rest. $400 in pure profit for each trip is still pretty good work if you can get it, right? On top of that, California’s already overworked police are facing plenty of far more serious crimes with reduced ranks following the previous “defund the police” policies that were put in place. How quickly do you think they will be responding to smash and grab calls from the dispatchers? I somehow doubt that the gangs of looters are terribly worried. California isn’t dealing with some random instances of bad behavior. The state is grappling with a cultural evolution of its own creation. People see that the government is afraid to take on rampant crime for fear of being labeled “racist” or out of step with the new, woke culture. They were invited to this smash and grab party by their own lawmakers and the party is still rolling. Reversing that cultural trend will be neither quick nor easy to accomplish. The word needs to spread on the streets that the cops are back in force and they’re going to be cracking some heads and locking people up for significant periods of time. But the legislature can’t even make that happen on its own. As long as people like Chesa Boudin are in charge of who is or isn’t prosecuted and who will or won’t go to jail, the criminals will have little to fear. Again… we’re talking about a cultural shifting of the tides. California’s culture evolved to embrace criminal activity and the criminals responded in kind. Before their behavior changes, the culture in the state must return to enhanced respect for (and more importantly, a desire for) law and order. That means community support and assistance for law enforcement, not attacks on the police. When the vast majority reject lawlessness and support the police, fewer people will risk committing crimes. Is the majority of the public in California ready to make that sort of change? I wouldn’t bet you a plugged nickel on that. Tyler Durden Thu, 01/06/2022 - 17:00.....»»

Category: blogSource: zerohedgeJan 6th, 2022

Futures Ramp On China Stimulus Hopes Ahead Of Central Bank Barrage

Futures Ramp On China Stimulus Hopes Ahead Of Central Bank Barrage U.S. futures rose again, starting the Santa rally predicted over the weekend by Goldman, after the underlying index surged to a record on Friday with risk appetite returning ahead of this week’s barrage of central bank meetings including the Fed on Wednesday, followed by the Bank of England and ECB. Nasdaq 100 futures climbed 0.4% as major technology and internet stocks rose in premarket trading with Apple inching closer to a $3 trillion market valuation; S&P 500 futures rose 11 points or 0.2%; with Dow Jones futures also rising 0.2%. Chinese developers’ bonds and shares experienced a wave of selling after the sudden plunge in Shimao Group's notes restarted concern over the health of the sector 10-year Treasury yields inched lower to 1.4684% and the dollar pushed higher. Bitcoin extended losses toward $48,000 as Binance bailed on plans for a Singapore exchange. Traders pared bets that the BOE will raise rates next year as concerns over fresh Covid restrictions outweighed inflation fears. Risk sentiment got a boost from predictions China will start adding fiscal stimulus in early 2022, said Ipek Ozkardeskaya, a senior analyst at Swissquote. “The chances of a massive hawkish surprise are limited, and the actual expectation doesn’t interfere with equity investors’ craving for a Santa rally to close a record-breaking year with one last record,” she wrote. Indeed, as we have been expecting for much of the past 6 months, China’s top decision makers last week signaled policies may become more supportive of growth next year. Economists predict China will start adding fiscal stimulus in early 2022. US stocks close Friday at a new record after in-line inflation data did not surprise to the upside for the first time in months and spurred bets that the Federal Reserve won’t have to accelerate plans to tighten monetary policy. That came amid a backdrop of uncertainty from the omicron coronavirus variant, a factor that traders are likely to also monitor closely as the week starts. Volatility should remain high as several central banks will decide on interest rates this week, Pierre Veyret, a technical analyst at ActivTrades, said in written comments. The “policies should set the trading tone, providing investors with more clues on next year’s investing environment.” The Federal Reserve on Wednesday is expected to speed up stimulus withdrawal and perhaps open the door to earlier interest-rate hikes in 2022 if price pressures stay near a four-decade peak. After repeated jawboning, it would be a major surprise if the bank doesn't announce a faster tapering, and the bond market will have to adapt to the new approach. “Global equities had a solid run last week and we’ll see if the goodwill lasts into what is a behemoth when it comes to event risk,” Chris Weston, head of research with Pepperstone Financial Pty Ltd., wrote in a note. Omicron and the Fed should dictate sentiment, he added. Meanwhile, in the world of covid, at least 30 U.S. states have reported omicron cases, with Anthony Fauci of course stepping up calls for boosters to increase protection and making pharma CEOs even richer. That said, all cases for which there's available information were asymptomatic or mild, European health chiefs said. That did not stop Boris Johnson from warning that the U.K. faces a tidal wave of infections and set a year-end deadline for its booster program. South Africa's Cyril Ramaphosa tested positive. Here are some of the biggest U.S. movers today: Arena Pharmaceuticals soars after Pfizer agrees to buy it for $100/Shr in Cash Apple shares rose 1%, leaving the stock close to hitting $3t market capitalization if the move holds. Airbnb, Lucid, Zscaler and Datadog shares all rise in U.S. premarket trading with the companies set to be added to the Nasdaq 100 index later this month. Peloton Interactive shares gain after the home-exercise firm put out an advert responding to a scene in the TV show “And Just Like That...” where a character dies using its product. The stock closed 5.4% lower on Friday, the day after the episode aired. TherapeuticsMD fell 25% in premarket trading after the FDA said it couldn’t approve revisions to some manufacturing testing limits for the Annovera birth-control ring requested by the company through a supplemental new drug application. European stocks also advanced, led by technology and mining stocks. The Euro Stoxx 50 rose as much as 1%, DAX outperforming at the margin.  In the U.K., traders are paring back bets on Bank of England rate hikes over the next year as concerns over fresh Covid restrictions outweigh inflation fears. Asian stocks erased an early advance as deepening losses in shares of Chinese property developers and persistent concerns over the omicron coronavirus variant soured sentiment. The MSCI Asia Pacific Index was down 0.2% after having climbed as much as 0.8%. Equity benchmarks in India and South Korea led regional declines. While stocks in China and Hong Kong rallied in morning trade on signals policies may become more pro-growth next year, the Hang Seng Index erased a gain of as much as 1.6%. That was owing to a selloff in real estate names after a plunge in the bonds and shares of Shimao Group sparked renewed concern over the health of the sector. Monday’s trading in Asia also highlighted investor caution as markets confront potential economic risks from omicron’s spread and a series of central bank meetings this week, including the Federal Reserve. The Fed on Wednesday is expected to speed up stimulus withdrawal and perhaps open the door to earlier interest-rate hikes in 2022 if price pressures stay near a four-decade peak. “We are in the last three weeks of the year -- no investor is going to place new bets and are more likely to be taking profits off the table,” said Justin Tang, head of Asian research at United First Partners. “Any negative news will be taken as a reason to press the sell button.” Meanwhile, China’s stocks climbed for the fourth day in five after the nation’s annual economic conference ended Friday with a vow to ensure “stability” and “front load” policies. Foreign investors on Monday added to record purchases of mainland shares last week. Focus now shifts to data due later in the week, including industrial production, retail sales and fixed-asset investment. India’s benchmark stock index dropped, with a fall in Reliance Industries Ltd. weighing on the market. The S&P BSE Sensex slipped 0.9% to close at 58,283.42 in Mumbai, reversing gains of as much as 0.7%. The index had posted its best weekly performance since mid-October on Friday. The NSE Nifty 50 Index also fell 0.8% on Monday. Still, a measure of small-cap companies gained 0.2%. Reliance, the nation’s most valuable company, dropped 2%. Out of 30 shares in the Sensex, 23 fell and seven rose. All but one of the 19 sector sub-indexes compiled by BSE Ltd. declined, led by a gauge of energy companies. “Selling is more evident in benchmark indices as overseas investors are booking at least a part of their profits ahead of the U.S. Fed’s rate-setting meeting that is likely to speed up the policy normalization process,” Abhay Agarwal, founder of Mumbai-based Piper Serica Advisors Pvt., an investment management company with assets of 5 billion rupees under management, said by phone.  The Fed.’s policy announcement is due Wednesday, where it is expected to speed up stimulus withdrawal and perhaps open the door to earlier interest-rate hikes in 2022. “Post-event, we expect to see a reallocation, though at a slower pace as FPIs will factor in the possible hike in interest rates, apart from the tapering of stimulus,” Agarwal said. Locally, the government will release its consumer inflation print for the month of November later on Monday. Inflation likely rose to 5.1% year-on-year in November from 4.5% in the previous month, according to a Bloomberg survey. Fixed income drifts higher with bund and UST curves bull flattening. Treasury yields were lower as the U.S. trading day begins, with the 10Y sliding to 1.46% and short-term little changed, prolonging the curve-flattening trend. With no U.S. economic data slated and Fed speakers silent ahead of Wednesday’s policy meeting, supply is a focal point, and Fed is slated to buy long-end sectors with no coupon supply until next week’s 20-year reopening. 10- to 30-year yields lower by about 1bp-2bp, 10-year by 1.5b at ~1.468%; 2- to 5-year yields little changed, narrowing 2s10s and 5s30s by 1bp-2bp.Peripheral spreads tighten slightly with short-dated BTPs leading a cautious move higher. Gilts bull steepen, trading ~2.5bps richer across the short end as money markets continue to price out hikes in light of the latest Covid restrictions. In FX, Bloomberg Dollar index drifts 0.3% higher, erasing Friday’s decline and rallying against all its peers with the focus on Wednesday’s Federal Reserve meeting amid speculation officials might accelerate the pace of policy normalization. Flows in the spot market are running at 70% of the recent average, a Europe-based trader told Bloomberg. Volatility term structures in the major currencies remain inverted as the market awaits forward guidance that could shape trading for the better part of 2022 U.S. inflation data in line with expectations on Friday “almost certainly won’t change the balance-of-risk assessment for the Fed, and the communications of late expressing concern over inflation risks remain valid,” says MUFG’s Derek Halpenny. “The week starts quietly in terms of data today but it remains likely that the dollar will remain supported into the FOMC on Wednesday with anticipation high of some hawkish rhetoric to accompany the decision to speed up QE tapering.” GBP/USD fell 0.2% to 1.3244 after gaining 0.5% over the previous two sessions. The Bank of England is set to opt for caution over Covid rather than worries about inflation, pushing back its first rate increase since the pandemic into 2022, according to economists. U.K. Health Secretary Sajid Javid said there’s no certainty the government will be able to keep schools in England open, as it battles to contain the spread of the omicron Covid-19 variant.  “This week is interesting for GBP as markets scrutinize labor-market report tomorrow ahead of BOE,” said Christopher Wong, senior foreign-exchange strategist at Malayan Banking Bhd. in Singapore. “There are concerns unemployment will spike if workers are made redundant or if people cannot find jobs, and this labor report will provide the first assessment.” The Yen outperformed amid broad dollar strength; USD/JPY still up 0.2% at 113.69. AUD and NOK are the weakest in G-10.  Turkish lira crashed again, plunging to a new record low in early London trade with USD/TRY initially rallying over 6% to highs of 14.7590, before fading some of the move after another intervention from the Turkish central bank. In commodities, crude futures give back Asia’s gains; WTI is little changed near $71.78, Brent dips below $75.50. Spot gold holds a narrow range near $1,785/oz. Most base metals are in the green with LME aluminum outperforming.  Bitcoin once again failed to rise above $50,000, extending losses toward $48,000 as Binance bailed on plans for a Singapore exchange There are no major economic developments on today's calendar, but it's a busy week with about 20 central banks making monetary policy announcements, including the Fed, the BOE and ECB, and the divergence of their paths will be evident. Jerome Powell may turn more hawkish as he fights rising inflation, while the ECB joins China in leaning dovish and playing down soaring prices. Market Snapshot S&P 500 futures up 0.4% to 4,728.00 STOXX Europe 600 up 0.7% to 478.82 MXAP down 0.2% to 193.62 MXAPJ down 0.3% to 630.93 Nikkei up 0.7% to 28,640.49 Topix up 0.1% to 1,978.13 Hang Seng Index down 0.2% to 23,954.58 Shanghai Composite up 0.4% to 3,681.08 Sensex down 0.9% to 58,278.65 Australia S&P/ASX 200 up 0.4% to 7,379.26 Kospi down 0.3% to 3,001.66 Brent Futures up 0.8% to $75.74/bbl Gold spot up 0.1% to $1,784.20 U.S. Dollar Index up 0.34% to 96.42 German 10Y yield little changed at -0.36% Euro down 0.4% to $1.1265 Top Overnight News from Bloomberg Almost 20 central banks meet this week, including the world’s biggest. No surprise that volatility term structures in the major currencies remain inverted as the market awaits forward guidance that could shape trading for the better part of 2022 The Bank of Japan offered to buy 2 trillion yen ($17.6 billion) of government bonds under repurchase agreements after repo rates jumped to a two-year high Turkey’s central bank intervened in the market by selling FX after the lira tumbled past 14 to the dollar for the first time, piling pressure on a central bank that’s forecast to keep cutting interest rates this week despite rising inflation. The decline came after S&P Global Ratings lowered the outlook on the nation’s sovereign credit rating to negative on Friday, citing risks from the “extreme currency volatility” The ECB’s biggest decision this week is to decide if it can still call the current inflation spike “transitory.” The answer will have a huge bearing on the euro-area economy, which is already dealing with resurgent coronavirus infections, new restrictions and lockdowns, and uncertainty about the omicron variant ECB Vice President Luis de Guindos is self-isolating after testing positive for Covid-19 on Saturday, the ECB said in a statement posted on its website. Guindos hasn’t been in close contact with ECB President Christine Lagarde over the past week, according to the statement. The Spaniard, who is double- vaccinated and has very mild symptoms, will work from home until further notice Two doses of the Pfizer Inc. and AstraZeneca Plc. vaccines induced lower levels of antibodies against the omicron variant, increasing the risk of Covid infection, according to researchers from the University of Oxford. A more detailed breakdown of overnight news from Newsquawk Asia-Pac equity markets took their cues from last Friday’s gains on Wall Street where the S&P 500 notched a fresh record close and its best weekly performance since February, with markets now bracing for a risk-packed week including a busy schedule of central bank meetings. The ASX 200 (+0.4%) traded higher with risk appetite supported by the reopening of Australia’s borders to international students and skilled workers from Wednesday, while the government will also partially underwrite up to AUD 7bln in new loans for small businesses impacted by lockdowns. The Nikkei 225 (+0.7%) benefitted from the mild outflows from the JPY, with the index unphased by mixed Tankan and Machinery Orders data in which the Tankan Large Manufacturers Index and Outlook missed expectations but sentiment among Large Non-Manufacturers and Small Manufacturers improved for the sixth consecutive quarter. The Hang Seng (-0.2%) and Shanghai Comp. (+0.4%) predominantly conformed to the upbeat mood amid economists' expectations for China to add fiscal stimulus from early next year following last week’s conclusion to the Central Economic Work Conference, which noted that China's economy faces shrinking demand, supply shock, and weakening expectations but added that economic operations are to be kept within a reasonable range. Alibaba shares were among the biggest gainers in Hong Kong as it extended its rebound from YTD lows. Finally, 10yr JGBs were rangebound with March futures contained by resistance at the key 152.00 level and amid the positive mood across riskier assets, although JGBs were off the lows seen late last week where there were source reports that the BoJ is likely to scale back its pandemic relief programs in March with a potential announcement as early as this week’s meeting. Top Asian News Shriram Units Merge to Form Largest India Retail Financier Intel to Spend $7 Billion on Big Malaysia Chipmaking Expansion Shimao Group Appoints Xie Kun as Executive Director Daimler Reveals Chinese Partner BAIC Raised Stake to Almost 10% Stocks in Europe have continued to gain since the cash open (Euro Stoxx 50 +1.0%; Stoxx 600 +0.5%) as the APAC sentiment reverberates through the region following a fleeting blip lower in early European trade. US equity futures are also firmer but to a lesser magnitude – with the RTY (+0.3%) narrowly outpacing the ES (+0.%), NQ (+0.4%) and YM (+0.2%). Focus this week will be on the slew of central bank updates which kicks off with the FOMC on Wednesday, followed by the BoE and ECB on Thursday - with Flash PMIs, Christmas liquidity and Quad Witching also part of this week’s concoction. Add to that the potential tail-risk from geopolitics and headline risk from COVID. Nonetheless, European cash markets at the moment seem unfazed by what’s ahead. Sectors are pro-cyclical with Basic Resources and Autos topping the charts, whilst the defensive Healthcare, Telecoms and Personal & Household goods reside at the bottom. A recent Citi note suggests that rising earnings should keep European stocks moving higher and offset expansive valuations and tightening monetary policy in the US. Citi targets some 9% upside for the Stoxx 600 next year, with a target of 520 (vs current c.477), whilst 12% upside is targeted in the FTSE 100 to 8,200 (vs current c. 7,303). Citi leans in favour of cyclicals vs defensives - with overweights in Banks, Insurance, Basic Resources, Industrials, Media, Luxury Goods and Chemicals. Citi is underweight Utilities, Telecoms, Food & Beverages, Personal Care, Travel, Autos and Financial Services. The bank has also added to its focus list: AstraZeneca (+0.1%), Aviva (+0.7%), Capgemini (+1.2%), Faurecia (+0.9%), Iberdrola (-0.3%), Lloyds (-0.7%), Prosus (+1.5%), Royal Mail (+1.6%), Sanofi (Unch), Tesco (+0.4%), UBS (+0.2%), Vodafone (Unch), Volvo (+1.1%). Separately, Goldman Sachs sees muted returns for global stocks next year amid negative real rates coupled with high equity risk premia and in the absence of a growth shock. GS suggests that risks are growing in the US on a relative basis and sees a maximum drawdown of between -5 to -10% over the next 12 months. Top European News European Gas, Power Prices Surge on Nord Stream 2 Worries U.K. Says Can’t Rule Out Shutting Schools as Omicron Spreads UBS Global Wealth Management Discontinues USDTRY Coverage Vivendi Has ‘Never Been a Threat’ to Lagardere: Arnaud Lagardere In FX, the Greenback has clawed back all and a bit more of its post-US inflation data losses, partly on reflection perhaps that the CPI prints were broadly in line, and actually a tad above consensus in terms of the m/m headline rate, so highly unlikely to derail the Fed from upping the pace of QE tapering this week and probably won’t deter the more hawkish FOMC members from pencilling in a steeper lift-off. Hence, having ended Friday’s session fractionally below a Fib retracement level (96.098), the index subsequently eclipsed the intraday peak (96.429) to turn what was a bearish technical close into a constructive start to the new week within a 96.080-450 range and a ‘close’ above 96.500 would be deemed positive, if not bullish. CHF/EUR/AUD - Very little traction from latest signs of building inflation pressure in the Eurozone via German wholesale prices reaching a record high 16.6% y/y in November, but the Euro has held above 1.0400 against the Franc in wake of latest weekly Swiss sight deposits showing a rise in domestic bank balances. Meanwhile, the single currency has absorbed some stops triggered on a breach of 1.1265 vs the Buck and could derive underlying support from decent option expiry interest at 1.1250 (1.5 bn) at the base of a band extending to 1.1320 (2 bn) through 1.1270-1.1300 (1.1 bn), and Usd/Chf is hovering around 0.9250 at the upper end of a 0.9257-00 band ahead of producer/import prices on Tuesday. Elsewhere, the Aussie has not been able to benefit from good news in the form of Australia opening its borders to international students and skilled workers from Wednesday, Government plans to partially underwrite up to Aud 7 bn new loans for small businesses impacted by lockdowns, or buoyant risk appetite, as it straddles 0.7150 against its US counterpart. JPY/NZD/CAD/GBP - Also conceding ground to their US peer, with the Yen back below 113.50 and hardly helped by mixed Japanese macro releases including December’s Tankan survey and October machinery orders, while the Kiwi is back under 0.6800 even though NZ PM Ardern said the COVID-19 alert level for Auckland is to be eased on December 30 and the next review is scheduled for January 17. The Loonie is slipping alongside WTI between 1.2753-06 parameters and Cable has tested Fib support into 1.3200 at 1.3200 amidst ongoing UK political furore over Conservative Party transgressions during lockdown last year and heightened Omicron restrictions to prevent a tidal wave of infections. In commodities, WTI and Brent front-month futures have been drifting lower since the European morning after the former tested USD 73/bbl to the upside and the latter briefly topped USD 76/bbl. Newsflow for the complex has been light but there have been further positive omens regarding the Iranian nuclear talks - Iran’s top nuclear negotiator said good progress was made in nuclear talks and can quickly pave the way for serious negotiations, whilst Russia's Deputy Foreign Minister said they have reason to anticipate some progress. That being said, we are yet to hear from some of the western nations. Meanwhile, on the OPEC front, Iraq’s Oil Minister said he expects OPEC to maintain its current policy of gradual monthly increases of 400k BPD at the next meeting – slated for early January. On the COVID front, the UK opted not to further tighten restrictions over the weekend but instead boosted the booster programme, whilst reports surrounding the Omicron variant have all highlighted a mild illness. The geopolitical space may require some more attention as tensions remain high on the Ukraine/Russia and Taiwan/China front, with the US involved in both. Russian Deputy Foreign Minister, according to reports this morning, said if the US and NATO do not provide them with guarantees around security, it may lead to confrontation – and emphasised that the lack of progress on this would lead to a military response. Further, there were reports that Saudi Arabia and Iran held security talks. Ahead, the monthly OPEC oil market report is due to be released, but focus this week will likely remain on the slew of central bank meetings. Elsewhere, spot gold and silver are constrained to recent ranges ahead of a risk-packed week, with the former still in a purgatory zone below its 50 DMA (1,789/oz), 200 DMA (1,793/oz) and 100 DMA (1,795/oz). Meanwhile, LME copper is firmer on the mild market optimism but has receded south of the USD 9,500/t mark. US Event Calendar Nothing major scheduled DB's Jim Reid concludes the overnight wrap We had our first Xmas lunch yesterday with my golf club hosting Santa (arriving on a golf buggy up the 18th fairway) and welcoming kids to the dinning room. I spent the whole lunch worrying their behaviour would get me black balled and banned from golf. Before we went my wife and I took lateral flow tests and Maisie asked if this was to stop Santa getting the virus? She then asked who would deliver all the presents if he had to self isolate. I must admit that I thought this was a very good question, especially as she’s starting to slowly question his existence. I said it was likely ok as Santa had just got his booster as he is over 50. I remember when the third week of December was one long string of Xmas client lunches that you desperately tried the leave as early as you could politely do so even if that was 8pm. This week they’ll be no time for lunches and we’ll be glued to our screens with just the eight G20 central banks deciding on monetary policy. The Fed’s decision on Wednesday will be key of course, with anticipation that they might accelerate the tapering of their asset purchases, but there’s also the ECB and Bank of England meetings to watch out for as well. All of them are very much “live” meetings. Elsewhere the flash PMIs for December (Thursday) could give us an initial indication as to how increased restrictions have begun to affect economic activity. US retail sales and UK CPI (both Wednesday) might be other interesting data points. Reviewing the main highlights in more details now. The Fed’s decision on Wednesday will be the focal point of the week. In terms of what to expect, our US economists write in their preview (link here) that they anticipate a doubling in the pace of tapering, which would bring the monthly drawdown of Treasury and MBS to $20bn and $10bn per month respectively. That would see the process of tapering conclude in March, giving them greater optionality for an earlier liftoff. Bear in mind that this meeting will also see the release of the latest dot plot, as well as the projections for inflation, growth and unemployment. On that, our economists see the median dot in 2022 likely showing two rate hikes, with risks of more, up from September when only half the dots saw any hikes by the end of 2022. The ECB’s decision will then follow on Thursday. In our European economists’ preview (link here) they write that until the arrival of the Omicron variant, the ECB appeared on track to initiate a transition to a monetary policy stance based more on policy rates and rates guidance and less on liquidity provision. They were also set to create a policy framework with more optionality to better respond to inflation uncertainties. The Omicron variant reinforces the need for optionality, but until there’s greater clarity on what it means for the pandemic and the recovery, the ECB may stall the expected decisions in part or in whole until early 2022. As with the Fed, it’ll be interesting to see the December staff forecasts on inflation, which could influence the market view on lift-off timing. The Bank of England’s decision will then take place on Thursday, and our UK economist expects the MPC will raise Bank Rate by +15bps to 0.25%. In the preview (link here) it argues that news of the Omicron variant has changed little on the medium-term economic outlook, with the labour market remaining as tight as it has been in recent memory, and inflation continuing to outpace staff forecasts. Nevertheless, the risks to this view are finely balanced, and risk management considerations may lead them to delay a rate hike, as they instead opt to find out more information on Omicron’s impact. Finally on the central bank front, the Bank of Japan will be holding their final monetary policy meeting of the year on Friday. In our economist’s preview (link here), it says that although there had been an expectation that the bank would revise their special pandemic corporate financing support program at this meeting, the emergence of the Omicron variant has changed the situation. Given the next meeting is only a month later, the view is now that they’ll maintain a wait-and-see stance in this meeting and adjust the policy in January, although a revision remains possible this week if more positive evidence is found on the new variant. Moving on to the data, the main highlight will be the flash PMIs for December from around the world on Thursday which will offer an initial indication as to whether there’s been any economic reaction yet to rise in restrictions and the emergence of the Omicron variant. There’ll also be an increasing amount of hard data out of the US for November, including retail sales (Wednesday), industrial production, housing starts and building permits (all Thursday). In China, Wednesday will see the release of their own retail sales and industrial production data for November, and in Germany on Friday there’s the Ifo’s business climate indicator for December. Finally on the inflation side, releases will include the US PPI data for November tomorrow, along with the UK and Canadian CPI readings for November on Wednesday. Late on Friday the UK released a paper looking at vaccine effectiveness against the Omicron variant. The good news is it suggested those who’d been boosted at least a couple of weeks ago still had decent protection, with 3 doses of Pfizer offering 75.5% effectiveness against symptomatic disease, and those who’d had two doses of AstraZeneca followed by a Pfizer booster had 71.4% effectiveness. Those are both lower than the 90+% effectiveness against delta with a booster, but is still much better than some of the worst outcomes had feared. Furthermore, if the past variants are anything to go by, then the protection against severe disease and hospitalisation could be even higher. However, the bad news is it indicated those who’ve been double-jabbed for some months now have significantly waning protection against this new variant from a purely symptomatic basis without a booster, so this will only encourage governments to ramp up their booster campaigns. The UK last night accelerated their plans to get all over 18s offered a booster. It’s now by the end of the year which will be a Herculean task. This follows PM Johnson last night telling the nation that there’s a tidal wave of Omicron cases coming. The government expects it to become the dominant strain very soon in what will be an incredibly short space of time. Overnight in Asia, markets are trading notably higher with the CSI (+1.31%), Hang Seng (+1.01%), Shanghai Composite (+1.00%), the Nikkei (+0.89%) and KOSPI (+0.28%) all strong after China's policymakers' hinted at more stimulus at the end of annual Central Economic Work Conference on Friday. Indeed our economists suggest that this is the decisive policy shift that markets have been waiting for and believe it’s a big deal. See their report on it here. This optimism is being reflected in the near 6% jump in Iron Ore trading overnight. DM futures are indicating a positive start to markets in the US and Europe with S&P 500 (+0.37%) and DAX (+0.44%) futures both in the green. Looking back at last week now and the focus remained squarely on Omicron, where the lack of any concrete bad news lent a more optimistic tone. This modestly improved risk sentiment sent equities and yields higher, and pushed volatility lower with the VIX ending the week -11.88 ppts lower at 18.79. The S&P 500 and Stoxx 600 gained +3.82% and +2.76% over the week (+0.95% and -0.30% Friday respectively). Cyclical sectors and tech stocks led the gains in the US. The small cap Russell 2000 advanced +2.43% (-0.38% Friday) while the Nasdaq climbed +3.61% (+0.73% Friday). The optimism also pushed yields higher and yield curves slightly steeper, with the 10yr treasury gaining +14.1bps this week after a poor close the previous week (-1.5bps Friday) and 10yr bunds climbing +5.1bps (+0.7bps Friday). The 2s10s treasury curve steepened +7.2bps (+1.6bps Friday). Ahead of the Fed’s meeting this week, the market is pricing the first full Fed rate hike by June. In the world of central banking, the Bank of Canada kept policy on hold and reinforced expectations for their inflation target to be sustainably achieved in the middle of 2022, enabling policy rate hikes. Like most DM central banks, they are focused on persistently elevated inflation, which they ascribe to supply constraints that will take time to alleviate. The Reserve Bank of Australia also left its benchmark interest rate unchanged while cautioning that price pressures remain subdued, in contrast to the rest of the DM space. In China, the PBoC cut the required reserve ratio by -50bps to support the economy, while FX reserve ratio was lifted +2.0% to lean against an appreciating renminbi. Property developers Evergrande and Kaisa defaulted on dollar debt. Chinese officials asserted the defaults would be dealt with “in a market-oriented way”. Geopolitical rumblings out of Europe also garnered focus. Presidents Biden and Putin held a phone call to discuss tensions following the build-up of Russian forces on the Ukrainian border. The readouts following the call offered few details but signalled both sides would follow up. President Biden has cautioned severe economic sanctions would be levied should Russia invade Ukraine, including sanctions on Putin’s inner circle, energy companies, and banks. The US would also consider severing Russian access to the US-run international payments system, SWIFT. On Friday, US CPI increased 0.8% and core US CPI increased 0.5% month-over-month in November, with the headline reading a tenth ahead of expectations. Commensurate year-over-year readings were 6.8% and 4.9%, the highest readings since 1982 and 1991, respectively. Measures of underlying and trend inflation continued to move higher, suggesting the Fed’s recent hawkish pivot will continue to be embraced by policymakers. Tyler Durden Mon, 12/13/2021 - 07:56.....»»

Category: blogSource: zerohedgeDec 13th, 2021

Shellenberger: The Real Threat To Banks Isn"t From Climate Change, It"s From Bankers

Shellenberger: The Real Threat To Banks Isn't From Climate Change, It's From Bankers Authored by Michael Shellenberger via substack, Over the last two years, some of the world’s most powerful and influential bankers and investors have argued that climate change poses a grave threat to financial markets and that nations must switch urgently from using fossil fuels to using renewables. In 2019, the Federal Reserve Bank of San Francisco warned that climate change could cause banks to stop lending, towns to lose tax revenue, and home values to decline. Last year, 36 pension fund managers representing $1 trillion in assets said climate change “poses a systemic threat to financial markets and the real economy.” And upon taking office, President Joe Biden warned government agencies that climate change disasters threatened retirement funds, home prices, and the very stability of the financial system. But a major new staff report from the New York Federal Reserve Bank throws cold water on the over-heated rhetoric coming from activist investors, bankers, and politicians. “How Bad Are Weather Disasters for Banks?” asks the title of the report by three economists. “Not very,” they answer in the first sentence of the abstract. The reason is because “weather disasters over the last quarter century had insignificant or small effects on U.S. banks’ performance.” The study looked at FEMA-level disasters between 1995 and 2018, at county-level property damage estimates, and the impact on banking revenue. The New York Fed’s authors only looked at how banks have dealt with disasters in the past, and what they wrote isn’t likely to be the final word on the matter. The United Nations Intergovernmental Panel on Climate Change and most other scientific bodies predict that many weather events, including hurricanes and floods, which cause the greatest financial damage, are likely to become more extreme in the future, due to climate change. And in February, The New York Times quoted one of six United States Federal Reserve governors saying, “Financial institutions that do not put in place frameworks to measure, monitor and manage climate-related risks could face outsized losses on climate-sensitive assets caused by environmental shifts.” But the Fed economists looked separately at the most extreme 10 percent of all disasters and found that banks impacted not only didn’t suffer, “their income increases significantly with exposure,” and that the improved financial performance of banks hit by disasters wasn’t explained by increased federal disaster (FEMA) aid. In other words, disasters are actually good for banks, since they increase demand for loans. The larger a bank’s exposure to natural disasters, the larger its profits. Happily, the profits made by banks are trivial compared to rising societal resilience to disasters, which can be seen by the fact that the share of GDP spent on natural disasters has actually declined over the last 30 years. While scientists expect hurricanes to become five percent more extreme they also expect them to become 25 percent less frequent, and now, new data show global carbon emissions actually declined over the last decade, and thus there is no longer any serious risk of a significant rise in global temperatures. Banking Against Growth The real risk to banks and the global economy comes from climate policy, not climate change, particularly efforts to make energy more expensive and less reliable through the greater use of renewables, new taxes, and new regulations. “For policymakers,” warned the three economists writing for the New York Fed, “our findings suggest that potential transition risks from climate change warrant more attention than physical disaster risks.” While they may seem like outliers, they are far from alone in expressing their concern. The second half of the quote by the Fed governor about climate change, which was hyped by The New York Times, warned that banks “could face outsized losses” from the “transition to a low-carbon economy.” (My emphasis.) And, now concern is growing among members of Congress about the dangers of over-relying on weather-dependent energy, with some members citing the New York Fed’s report after The Wall Street Journal editorialized about it last week . Proof of the threat to the economy from climate policy is the worst global energy crisis in 50 years. Shareholder activists played a significant role in creating it, according to analysts at Goldman Sachs, Bloomberg, and The Financial Times, by reducing investment in oil and gas production, and causing nations to over-invest in unreliable solar and wind energies, which has driven up energy prices, and contributed significantly to inflation. And yet a crucial Biden Administration nominee for bank regulation has openly said she would like to bankrupt firms that produce oil and gas, the two fuels whose scarcity is causing the global energy crisis. Progressive academic, Saule Omarova, nominated by Biden, said recently that “we want [oil and gas firms] to go bankrupt” and that “the way we basically get rid of these carbon financiers is we starve them of their source of capital. Biden nominee Saule Omarova said she wants to bankrupt energy companies Omarova is not an outlier. The Biden Administration’s Financial Stability Oversight Council (FSOC) is advocating 30 new climate regulations that should be imposed on banking. Many analysts believe the US Securities and Exchange Commission will require new regulations. The goal is to radically alter how America’s banks lend money, the energy sector, and the economy as a whole. And former Bank of England chief, Mark Carney, co-chair of the Glasgow Financial Alliance for Net Zero, has organized $130 trillion in investment and said recently that his investors should expect to make higher, not lower, returns than the market. How? In the exact same way Omarova predicted: by bankrupting some companies, and financing other ones, through government regulations and subsidies. Former Bank of England head Mark Carney Carney created the Glasgow Financial Alliance, or GFANZ, with Michael Bloomberg, and they did so under the official seal of the United Nations. “Carney said the alliance will put global finance on a trajectory that ultimately leaves high-carbon assets facing a much bleaker future,” wrote a reporter with Bloomberg. “He also said investors in such products will see the value of their holdings sink.” What’s going on, exactly? How is it that some of the world’s most powerful bankers, and the politicians they finance, came to support policies that threaten the stability of electrical grids, energy supplies, and thus the global economy itself? The Unseen Order Three of the largest donors to climate change causes are billionaire financial titans Michael Bloomberg, George Soros, and Tom Steyer, all of whom have significant investments in both renewables and fossil fuels. Tom Steyer, Michael Bloomberg, and George Soros Soros is worth $8 billion and recently made large investments in natural gas firms (EQT) and electric vehicles (Fisker), Bloomberg has a net worth of around $70 billion and has large investments in natural gas and renewables, and much of Steyer’s wealth derives from investments in all three main fossil fuels—coal, oil, and natural gas — as well as renewables. All three men finance climate activists and politicians, including President Biden, who then seek policies — from $500 billion for renewables and electric vehicles over the next decade to federal control over state energy systems to banking regulations to bankrupt oil and gas companies — which would benefit each of them personally. Bloomberg gave over $100 million to Sierra Club to lobby to shut down coal plants after he had taken a large stake in its replacement, natural gas, and operates one of the largest news media companies in the world, which publishes articles and sends emails nearly every day reporting that climate change threatens the economy, and that solar panels and wind turbines are the only cost-effective solution. Soros donates heavily to Center for American Progress, whose founder, John Podesta, was chief of staff to Bill Clinton, campaign chairman for Hillary Clinton’s presidential campaign, and who currently runs policy at the Biden White House. So too does Steyer, who funds the climate activist organization founded by New Yorker author Bill McKibben, 350.org, which reported revenues of nearly $20 million in 2018. The most influential environmental organization among Democrats and the Biden Administration is the Natural Resources Defense Council, NRDC, which advocated for federal control of state energy markets, the $500 billion for electric cars and renewables, and international carbon markets that would be controlled by the bankers and financiers who also donate to it. In the 1990s, NRDC helped energy trading company Enron to distribute hundreds of thousands of dollars to environmental groups. “On environmental stewardship, our experience is that you can trust Enron,” said NRDC’s Ralph Cavanagh in 1997, even though Enron executives at the time were defrauding investors of billions of dollars in an epic criminal conspiracy, which in 2001 bankrupted the company. From 2009 to 2011, NRDC advocated for and helped write complex cap-and-trade climate legislation that would have created and allowed some of their donors to take advantage of a carbon-trading market worth upwards of $1 trillion. NRDC created and invested $66 million of its own money in a BlackRock stock fund that invested heavily in natural gas companies, and in 2014 disclosed that it had millions invested in renewable funds. Former NRDC head, Gina McCarthey, now heads up Biden’s climate policy team, and Biden’s top economic advisor, Brian Deese, last worked at BlackRock, and almost certainly will return at the end of the Biden Administration. Money buys influence. In 2019, McKibben called Steyer a “climate champ” when Steyer announced he was running for president, adding that Steyer’s “just-released climate policy is damned good!” And in 2020, McKibben wrote an article called, “How Banks Could Bail Us Out of the Climate Crisis,” for The New Yorker, which repeated the claim that extreme weather created by climate change threatens financial interests, and that the way to prevent it is to divert public and private money away from reliable energy sources toward weather-dependent ones. Forms filed to the Internal Revenue Service by Steyer’s philanthropic organization, the TomKat Charitable Trust, show that it gave McKibben’s climate activist group, 350.org, $250,000 in 2012, 2014, and 2015, and may have given money to 350.org in 2013, 2016, 2017, 2018, 2019, and 2020, as well, because 350.org thanked either Steyer’s philanthropy, TomKat Foundation, or his organization, NextGen America, in each of its annual reports since 2013. At the same time, McKibben’s motivations are plainly spiritual. He claims that various natural disasters are caused by humans, that climate change literally threatens life on Earth, and is thus “greatest challenge humans have ever faced,” a statement so unhinged from reality, considering declining deaths from disasters, declining carbon emissions, and the total absence of any science for such a claim, that it must be considered religious. McKibben first book about climate change, The End of Nature, explicitly expressed his spiritual views, arguing that, through capitalist industrialization, humankind had lost its connection to nature. “We can no longer imagine that we are part of something larger than ourselves,” he wrote in The End of Nature. “That is what this all boils down to.” Indeed, for William James, the belief in “an unseen order” that we must adjust ourselves to, in order to avoid future punishment, is a defining feature of religion. Climate change is punishment for our sins against nature — that’s the basic narrative pushed by journalists, climate activists, and their banker sponsors, for 30 years. It has a supernatural element: the belief that natural disasters are getting worse, killing millions, and threatening the economy, when in reality they are getting better, killing fewer, and costing less. And it offers redemption: to avoid punishment we must align our behavior with the unseen order, namely, a new economy controlled by the U.N., bankers, and climate activists. Unfortunately, as is increasingly obvious, the unseen order is parasitical and destructive. When Nuclear Leads, the Bankers Will Follow The unseen order of bankers, climate activists, and the news media is so powerful that it is difficult to imagine how it could ever be challenged. The financial might of the climate lobby covers the wealth not only of billionaires Soros, Steyer, and Bloomberg, but also $130 trillion in investment funds, including many of the world’s largest pension funds, such as the one belonging to California public employees. The climate lobby’s political power is equally awesome, covering the entirety of the Democratic Party and a significant portion of the Republican Party, and most center-Left parties in Europe. Former German Chancellor Angela Merkel, French President Emanuel Macron, and U.S. Energy Secretary Jennifer Granholm And all of that is sustained by cultural power, which has led many elites to view climate change as the world’s number one issue, has convinced half of all humans that climate change will make our species extinct, and has served as the apocalyptic foundation for Woke religion. But serious cracks in the foundation are growing. The global energy crisis has revealed for many around the world the limits of unreliable renewables, with European governments having to subsidize energy to avoid public backlash, President Biden and other heads of state opening up emergency petroleum reserves, and all nations begging OPEC to produce more energy. The blackouts and rising unreliability of electricity in California, along with the work of the pro-nuclear movement over the last 6 years, has resulted in a growing number of Democrats supporting nuclear energy. Energy Secretary Jennifer Granholm last week publicly urged California Governor Gavin Newsom not to close California’s Diablo Canyon nuclear plant, the signature nuclear plant Environmental Progress has been trying to save since 2016. Democratic support in particular for nuclear is growing. And alternative media including Substack, podcasts, and social media platforms are increasingly providing a counterweight to the mainstream news media, exposing a huge number of issues that the media got wrong in recent years, and amplifying alternative voices. Nowhere is the change occurring faster than in Europe, where energy shortages are affecting heating, cooking, and electricity supplies in ways that undermine the legitimacy of the banker-led climate efforts. In Britain, private energy companies have gone bankrupt, forcing the government to bail them out. For-profit energy companies, like banks, ultimately depend on taxpayers, who are also voters. Outgoing German Chancellor Angela Merkel, who led her nation’s exit from nuclear energy, acknowledged that Germany had been defeated in its anti-nuclear energy advocacy at the European Union level, and that nuclear would finally be recognized as low-carbon. And French president Emanuel Macron, under pressure from the political right as voters look to elections next year, gave a passionate speech in favor of nuclear energy last month, announcing $35 billion for new reactors. As the world returns to nuclear, policymakers, media elites, and climate advocates will be increasingly confronted with the question of why consumers and taxpayers will benefit from a global carbon trading scheme and more weather-dependent renewables, particularly at a time of declining global emissions from the continuing transition from coal to natural gas, reduced deforestation, and increased reforestation. Simply building more nuclear power plants means there is no climate change justification for weather-dependent renewables, which actually require greater use of natural gas, in order to deal with the high amount of unreliability. Nuclear power goes with slow and patient capital. The obvious funders of a nuclear expansion in the West would be the pension funds, which need the secure return on investment that major construction and infrastructure projects provide, and which unreliable renewables, as the energy crisis shows, do not. And though the news media is currently ignoring the New York Fed’s report, reporters will not be able to continue spreading misinformation about climate change indefinitely. Increasingly, they, and thus policymakers and the public, will be forced to confront facts inconvenient to their narrative, including that humans are adapting remarkably well to climate change, that renewables make energy unreliable and expensive, and that only nuclear can achieve sustainability goals of reduced emissions, material throughput, and land use. As people ask, “How Bad Are Weather Disasters?”, not just for banks, but for all of us, the answer will increasingly come back, “Not very.” *  *  * Michael Shellenberger is a Time Magazine "Hero of the Environment,"Green Book Award winner, and the founder and president of Environmental Progress. He is author of just launched book San Fransicko (Harper Collins) and the best-selling book, Apocalypse Never (Harper Collins June 30, 2020). Subscribe To Michael's substack here Donate to Environmental Progress Tyler Durden Sat, 12/04/2021 - 21:30.....»»

Category: blogSource: zerohedgeDec 4th, 2021

Best 6 weighted blankets for sleeping, snuggling, and relaxing

A weighted blanket may help if you have trouble falling asleep. We tested 12 of them to round up the best weighted blankets for a good night's rest. Brooklinen Table of Contents: Masthead Sticky Research is limited, but recent findings say weighted blankets can aid in sleep and reduce anxiety. We tested 12 of them. Our favorites are the Brooklinen Weighted Comforter and the Bearaby Napper. Click here for more advice on what to consider when buying a weighted blanket. Find out more about how Insider Reviews tests and reviews home products. As temperatures dip, you need a good blanket to keep you warm and cozy, whether you're trying to get a good night's rest or want supreme comfort while reading a book or watching a movie. Weighted blankets have gained popularity in recent years because they may help reduce insomnia and ease anxiety, though only limited research supports these claims.Rebecca Robbins, sleep researcher, author, and instructor in medicine at Harvard Medical School and associate scientist at the Brigham and Women's Hospital, said the gentle, constant pressure of a weighted blanket evokes a primal yearning. In the womb, we are compressed on all sides. We swaddle newborns to replicate the pressure. She explained that weighted blankets are like swaddling for adults, emulating a time when we felt at ease.To find the best weighted blankets you can buy, we tested 12 of the most popular ones. We assessed them based on how comfy they were, the quality of the construction and materials, how easy they were to care for and wash, and how well we slept while using them.The best weighted blankets in 2021Best weighted comforter: Brooklinen Weighted ComforterBest cheap weighted blanket: Luna Weighted BlanketBest extra-heavy weighted blanket: Gravity 35-Pound BlanketBest cooling weighted blanket: BlanQuil ChillBest weighted throw blanket: Bearaby NapperBest king-size weighted blanket: HomeSmart Products King Size Weighted Blanket Best weighted comforter Jen Gushue/Insider Brooklinen's Weighted Comforter has a premium plush design that blends seamlessly with the rest of your bedding.Available sizes: Twin/twin XL (64" x 90"), full/queen (90" x 90"), king/Cali king (106" x 90")Available weights: 15 lbs., 20 lbs., 30 lbs.Available colors: WhiteMaterials: 400 thread-count cotton sateen shell, polyfill interior, glass micro-beadsCare instructions: Dry clean only, spot clean with soap and warm water, and dry with hairdryerPros: Looks just like a normal comforter, lots of plush fill, made of 400-thread-count cotton sateen, has duvet cover loops, accepts returns in any condition within one year of purchaseCons: Dry clean only, duvet cover sold separately, difficult to adjust while using itIf you don't want to sleep under a stack of blankets or compromise your bedroom's look, you'll want a weighted comforter, and Brooklinen makes the best one I tried. It looks and feels like a traditional plush comforter but with an extra 20 pounds of weight integrated with small glass beads. The blanket itself is made of 400-thread-count cotton sateen, so it's soft enough to throw on your bed without a duvet cover.That being said, we recommend adding one — corner loops make it easy to tie on — because the blanket is dry-clean only, which could run you anywhere from $20 to $50.I found that the 20-pound comforter I tested weighed closer to 24 pounds, but the extra weight didn't make too much of a difference once I laid it out on the bed. Sleeping under it was pretty dreamy (excuse the pun). I felt enveloped by the cushy fill but not too overwhelmed or overheated. It was somewhat difficult to adjust while lying under it due to the weight and size, but I found this typical for just about every comforter-sized weighted blanket I tested.Though pricey, this comfortable weighted blanket is worth the investment, especially because it will entirely replace your comforter. If you find it's not right for you, Brooklinen has an incredibly lenient return policy, accepting returns for any reason in any condition within 365 days of your purchase. Best cheap weighted blanket Jen Gushue/Insider Weighted blankets are typically expensive, but the Luna Weighted Blanket is gentle on your wallet despite being constructed from Oeko-Tex-certified cotton and filled with natural glass beads.Available sizes: 36" x 48", 41" x 60", 48" x 72", 60" x 80", 80" x 87"Available weights: 5 lbs., 7 lbs., 10 lbs., 12 lbs., 15 lbs., 17 lbs., 20 lbs., 22 lbs., 25 lbs., 30 lbs.Available colors: 11 solid colors and 14 patterns currently availableMaterials: Cotton shell, glass beadsCare instructions: Machine wash cold on delicate cycle, hang dry or tumble dry lowPros: Excellent quality at a low price; comes in a wide variety of colors, sizes, and weights; fully machine washable; Oeko-Tex Certified construction; true to weightCons: Thinner blanket than some others on our listWeighted blankets tend to be very expensive, but Luna offers an excellent weighted blanket at an affordable price.I tested the 15-pound queen-size blanket, and the glass beads inside were barely noticeable, producing no beanbag effect. Where many other cheap weighted blankets are loaded with chemicals, the Luna Weighted Blanket is Oeko-Tex Certified, meaning it contains no harmful materials.The blanket is much thinner than some of the others I tested, but it stayed breathable and was light enough to easily adjust in the middle of the night. It wasn't quite as cozy as some others, but it's a great option to layer with your usual comforter or use during the warmer months.As I've continued to test these blankets, the Luna has become a bit of a travel-sized weighted blanket for me. I wouldn't recommend taking it on an airplane — it's a bit bulky for that — but the Luna is thin enough to fold into a car trunk-friendly size. The blanket was a true 15 pounds according to my scale, but that weight was dispersed over a queen-size surface area, making it feel lighter. It's also one of the easiest blankets to clean that I tested. The entire thing fits into my compact washer-dryer and was fully dry within one cycle — and it got softer after just one wash. Best extra-heavy weighted blanket Jen Gushue/Insider Gravity's 35-pound weighted blanket evenly distributes weight across your king-size bed and is perfect for those who are looking for some extra heft.Available sizes: Queen/king (90" x 90")Available weights: 35 lbs.Available colors: White, navy, grayMaterials: Micro-fleece removable cover, glass beadsCare instructions: Removable cover is machine wash cold and tumble dry low, inner blanket is hand wash and air dry onlyPros: Great for those who need a heavier blanket, weight is evenly distributed, no beanbag feel, the cover is machine washable, low profile blanketCons: Queen/king size only comes in 35 pounds, the cover should be washed before use, too heavy to adjust in the middle of the night, the inner blanket is hand-wash only, customers are responsible for return feesWhen I first received the Gravity 35-pound blanket, I thought it would feel way too heavy, but I found it pretty manageable. It did tend to slide down the bed as I was sleeping, and I'd often wake up about a foot lower than usual because I was chasing the blanket around through the night. It was simply too heavy to pull up or adjust while laying under it, though someone stronger than me will likely not have this issue.One issue with this blanket was that the included micro-plush duvet cover felt oddly greasy out of the package. It left a film on my hands as I tried to smooth it out over the bed. But the zip-on cover is removable and washable, and a run through the wash resolved the issue. I can't imagine hauling such a heavy blanket into and out of a washing machine, so the removable cover is a huge plus. The Gravity blanket is low-profile without any excess fill, so it won't add a lot of bulk to your bed. That said, it's not as plush or cozy as the Brooklinen comforter, which does also come in a 30-pound version, though it's much more expensive.The brand also makes "single" size weighted blankets that measure 48-inches by 72-inches. I tested a 15-pound one with a cooling cover and found it performed well, but nothing made it stand out from the pack. Best cooling weighted blanket Jen Gushue/Insider The BlanQuil Chill's unique cover disperses heat and stays cool to the touch as you fall asleep, but its slick fabric can cause it to slide off the bed.Available sizes: 48" x 74"Available weights: 15 lbs., 20 lbs.Available colors: White with blue threadingFill materials: Glass micro-beadsCare instructions: Removable cover is machine wash cold and tumble dry low, inner blanket is spot clean onlyPros: Stays cool to the touch, no beanbag feel, glass beads don't shift, 60-night sleep trialCons: Slides off the bed easily; internal blanket is spot-clean only; only one size, one color, and two weights availableI sleep hot, and the BlanQuil Chill is the weighted blanket I have the longest relationship with. It's been on my bed for about a year and a half, and I've had two iterations of the design.I lined up all the cooling blankets I tested for this guide and ran my hand across each one, and the BlanQuil felt noticeably cooler than all the others. Plus, it did the best job of dissipating heat and getting back to its cool baseline.Since it's slightly bigger than a twin bed, it's not a blanket that's intended to be shared. Glass beads add weight, but there's no beanbag feeling, and I've never felt them shift in a way that causes the blanket to feel lumpy or uneven.The zipper on the removable, washable cover of the first version of the design was weak, couldn't handle the weight of the blanket, and broke just a couple of months into its use. But BlanQuil has since reinforced the zipper, and I've yet to have a problem with it. I even stress tested it by holding the weight of the blanket against the zipper, and it held strong.Though it's one of the best I've used, the cooling cover's material has a bit of a sheen to it, which makes it slick so it slides off the bed easily — especially if you toss and turn at night. As soon as it gets off-center, the blanket's weight will cause it to slide. Best weighted throw blanket Jen Gushue/Insider The cocoon-like, knit-woven Bearaby Cotton Napper keeps you cozy yet cool as you lounge on the couch, it's entirely machine washable, and it's one of the heftiest blankets we tested.Available sizes: 40" x 72", 45" x 72", 48" x 72"Available weights: 15 lbs., 20 lbs., 25 lbs.Available colors: Eight colors currently availableMaterials: Organic long-staple cottonCare instructions: Machine wash cold on delicate cycle, tumble dry lowPros: Aesthetic design, has significant heft, made from organic cotton, washable and dryable, 30-day return policy if blanket remains unwashed, most versatile weighted blanket I testedCons: Doesn't fit in compact washing machines, takes multiple cycles to dry, open weave may catch toes and fingers, heavier than advertised (though this may be a pro, depending on your preference)The weight of the Bearaby Napper comes entirely from the dense organic cotton strands hand-knit into one of the most aesthetically minded weighted blankets I've ever seen.This is a really heavy blanket — the blanket I tested, which was advertised as the 15-pound version, actually tipped the scales at 24 pounds. I contacted the company to verify that they sent me the right item, and they assured me they did. It's not necessarily bad that they're heavier than advertised, but it's something to keep in mind when you order.A blanket this heavy — and bulky — can be tough to shift around, and if it's going to live on your couch, it will take up quite a bit of space. I've shifted it to my bed. It drapes nicely over my partner and me, but the open weave makes it prone to stretching if you need to pull it up in the night. It hasn't become misshapen in any significant way, thankfully.It's not quite a cooling blanket — Bearaby does offer one called the Tree Napper that I haven't tested — but it doesn't trap heat thanks to the open weave. The holes are quite large, though, so if you are bothered by some toes or fingers poking through, you might want to look elsewhere.The Napper is fully machine washable and can go in the dryer on a delicate setting. I wanted to see how the blanket washed and dried as part of my test, but it didn't fit in my space-saving apartment-sized washing machine. Best king-size weighted blanket James Brains/Insider The HomeSmart Products King Size Weighted Blanket is large enough for couples, breathes well to keep you from overheating, and can go in the washer and dryer.Available sizes: 60" x 80", 80" x 86", 88" x 104"Available weights: 15 lbs., 20 lbs., 25 lbs., 30 lbs., 35 lbs., 40 lbs., 50 lbs.Available colors: White, dark grey, cool mint, burgundy, greyMaterials: Cotton shell, glass beadsCare instructions: Machine wash cold on delicate cycle, hang dry or tumble dry lowPros: Breathable organic cotton shell, glass beads sewn into pockets for even weight distribution, machine washable and dryable, king size is large enough for couples, weight options up to 50 lbs.Cons: Started to leak beads after 18 months of use, hard to track down customer supportAs a big guy, one of the problems I run into with weighted blankets is that they aren't large enough to cover my whole body. Even queen-size blankets tend to be too small to reach my giant feet. This was not a problem with the HomeSmart Products King Size Weighted Blanket.At 88 inches by 104 inches and with weight options up to 50 pounds, it's the ideal blanket for couples who want to enjoy the comfort of a weighted blanket without sacrificing intimacy.The HomeSmart blanket features micro glass beads sewn into 5-by-5-inch pockets to keep the weight evenly distributed. The blanket is machine washable and dryable. I've washed it several times over the last two-and-a-half years and have found it's an effortless endeavor. If you want to add a duvet cover, the blanket has 10 loops for tying one on.I tested the 15-pound and 25-pound comforters and enjoyed both, though the 25-pounder was almost too restrictive. I prefer the 15-pounder, and it's what I sleep under when I'm not testing other models. Thanks to its breathability, it's a great year-round blanket.The HomeSmart Weighted Blanket isn't without its flaws. The 25-pound blanket started to leak beads after 18 months of use. This was likely due to one of our pets working a hole into it. I tried to reach customer service but couldn't get ahold of anyone.Read our full review of the HomeSmart King-Size Weighted Blanket What else we tested The Gravity Cooling, Helix, and Brooklyn Bedding weighted blankets were among the others we tested. Jen Gushue/Alyssa Powell/Insider What we recommend and why Baloo Cool Cotton Weighted Blanket: The Baloo weighted blanket struck a great balance between comfort and cost. Its construction and quality felt similar enough to the Luna that we'd rather recommend the one that's even more affordable.Gravity Cooling Blanket: The blanket itself is well-built and high-quality, but the cooling cover did little to actually cool me off as I slept. It just felt like any other weighted blanket and didn't do much to distinguish itself from the other blankets I tried.Brooklyn Bedding Dual Therapy Weighted Blanket: This blanket is dual-sided — with a silky cooling side and a minky textured side. The silky side stayed cool to the touch, and the bumps on the minky side provided a nice sensory option. It didn't feel beanbaggy, and the weight was evenly distributed. But it was only available in one size, two weights, and one dark gray color that severely limited how many home decor scenarios it would work within.What we don't recommend and whyYaasa Weighted Blanket: This is a knit-style blanket similar to the Bearaby Napper, but Yaasa's weave was much tighter and allowed for less airflow. The material also felt spongier and less cozy than the Napper's. The Yaasa blanket was also dry clean only.Helix Weighted Blanket: This blanket is dual-sided with a white sherpa fleece side and a gray minky fleece side. I found the sherpa side especially cozy, and so did my cat. But it had one of the worst beanbag effects of any of the blankets I tried, and there is only one size and color option available, though it did come in three weights. If this blanket suits your style, it's a decent buy for an affordable price.YnM Weighted Blanket: This is an Amazon bestseller in weighted blankets, so we wanted to put it to the test. It's a perfectly serviceable budget blanket, but the glass beads created a sort of beanbag effect that the Luna did not. Plus, the Luna is even cheaper and made of Oeko-Tex certified cotton, which isn't found with the YnM. Our weighted blanket testing methodology James Brains/Insider There are several factors I took into consideration while assessing weighted blankets. Aside from the general coziness and comfort provided by each blanket, I also assessed things like quality of material, value, weight options, and aesthetics. For example, a blanket that came in more color and weight options beat out a blanket of equal quality that came in fewer options. I also considered return policies, sleep trials, and how easy these blankets were to clean.The following are three tests I ran each blanket through to assess general user experience:Sleep test: I slept with each weighted blanket on my bed for at least three consecutive nights. I noted how well I slept overall and how the blanket regulated my sleep temperature. I also paid attention to how well the blanket stayed in place as I slept and how easy it was to adjust while lying under it. Part of this test also included making the bed every day (hauling a weighted blanket is harder than it looks).Wash test: I washed every weighted blanket or cover that was machine washable at least once to ensure they held up well in the wash and didn't shrink, shed, or otherwise show signs of wear. I noted if the added weight made them more difficult to haul into and out of the washing machine. I also discovered that one of the machine-washable blankets was so bulky it didn't fit into my washing machine. For those blankets that weren't machine-washable, I noted the care instructions and factored that into the cons of the blanket as I assessed them.Weight test: I wanted to ensure each blanket was actually the advertised weight. To get an accurate reading, I weighed myself and then weighed myself again while holding each blanket, noting any discrepancies in the advertised weight versus the actual weight. Weighted blanket FAQs What weight should a weighted blanket be?It's recommended that you select a blanket that's roughly 10% of your body weight.However, Robbins adds that there are no clinically established guideposts for choosing a blanket weight. "It's hard for the one size fits all approach because we're all just so unique and have different physiologies," she said.This is especially true when blankets come in different sizes. A 15-pound throw blanket is going to feel much heavier than a 15-pound comforter since a larger blanket distributes its weight over a larger surface area. Robbins suggests trying out weighted blankets before purchasing them. If you can't test weighted blankets in a store, look for brands that offer sleep trials or have buyer-friendly return policies like many of our top picks.What if I'm sharing the weighted blanket with a partner?If you're sharing a weighted blanket with a partner, you'll likely want something a bit heavier, mostly because larger blankets feel lighter than smaller ones. A blog from Layla Sleep advises purchasing a blanket that's roughly 7.5% of the couple's combined weight.I reached out to the brand to determine how they established this number, and a representative responded, "Most suggestions in terms of weight are based on anecdotal evidence. We also factor in the customer satisfaction data that we have when making suggestions, but ultimately the weight that's right for any one person will depend heavily on personal preference."It's important to note that this parameter hasn't been established in any clinical trial or scientific study, so take it with a grain of salt. As long as you're comfortable and can move freely under the blanket, you should choose the weight that works best for you.What size weighted blanket should I get?If you're sharing a blanket with a partner with a similar body weight, you'll want a weighted blanket that covers your entire bed. If you and your partner are very different weights, consider opting for two smaller separate blankets in a throw or twin size.This way, you can each get the weight that's most comfortable for you. Plus, you'll have the added benefit of not having to worry about blanket theft in the middle of the night.Many brands, including almost all of our top picks, offer blankets in multiple sizes to fit standard twin, full, queen, and king beds. Some weighted blankets in these sizes are a bit smaller than typical comforters so the weighted blanket doesn't hang off the side of your bed too much. Excess fabric hanging off the side can pull the weighted blanket off-center as you shift around in the night.How do I choose a weighted blanket?In addition to weight and size considerations (see above), you'll also want to consider how easy the blanket is to clean and what type of fill it uses. A duvet cover is easier to wash than a weighted blanket, but with a cover, you have to deal with removing it and putting it back on. Weighted blankets rely on glass beads, plastic pellets, or, less commonly, steel shot beads. What you prefer is a matter of personal preference. Comforters with plastic pellets tend to be cheaper, but it's a less eco-friendly material.How often should I wash my weighted blanket?Brian Sansoni, Senior Vice President at The American Cleaning Institute, recommends you treat your weighted blanket like any comforter, washing it once or twice a year. However, if it doesn't have a removable cover, the entire blanket should be washed roughly once a month.Are weighted blankets good for anxiety?In theory, the answer is yes. However, there are no randomized clinical trials that can speak to the efficacy of weighted blankets in treating anxiety. This is because it would be obvious once participants curl up under the blankets that they're in the control group or the weighted blanket group. The theory is that weighted blankets help reduce some anxiety symptoms, like quickened breathing or heart rate, by putting your autonomic nervous system at ease. Anecdotally, my wife and I have both been diagnosed with anxiety disorders. We've found lounging with a weighted blanket helps us unwind.The bottom line is weighted blankets may help with anxiety, but there isn't any hard science to back it up. The best deals on weighted blankets from this guide Whether you're lounging or sleeping, a weighted blanket can take your comfort to a whole new level. In fact, many weighted blanket users report that the gentle pressure helps reduce their insomnia and anxiety symptoms. Since weighted blankets remain a hot item, deals are harder to find. However, we've noticed you can find enticing discounts at the end of the cold season as the demand for blankets falls. Black Friday and Cyber Monday are also great days to buy a weighted blanket on sale. For instance, the Gravity Blanket was $75 off last Black Friday.These are the best deals currently available on the weighted blankets we recommend.There are currently no deals on our recommended weighted blankets. Read more about how the Insider Reviews team evaluates deals and why you should trust us. Check out our other sleep and bedding guides Lauren Savoie/Insider 7 weighted blankets for kids that may help with sleep, anxiety, and sensory issuesThe best pillowsThe best mattressesThe best sheetsThe best duvet coversThe best comforters Read the original article on Business Insider.....»»

Category: topSource: businessinsiderNov 3rd, 2021

The 6 best weighted blanket we tested in 2021

A weighted blanket may help if you have trouble falling asleep. We tested 12 of them to round up the best weighted blankets for a good night's rest. Brooklinen Table of Contents: Masthead Sticky Research is limited, but recent findings say weighted blankets can aid in sleep and reduce anxiety. We tested 12 of them. Our favorites are the Brooklinen Weighted Comforter and the Bearaby Napper. Click here for more advice on what to consider when buying a weighted blanket. If you toss and turn at night or find your mind racing when trying to fall asleep, you might benefit from adding a weighted blanket to your bedding. Usually weighing somewhere between 15 and 25 pounds, weighted blankets provide gentle, constant pressure as you sleep, and recent studies have shown promising results in their ability to ease anxiety and reduce insomnia, though research remains limited. I spoke with Rebecca Robbins, sleep researcher, author, and instructor in medicine at Harvard Medical School and associate scientist at Brigham and Women's Hospital. She said the reason why weighted blankets tend to work is quite primal. "It really hearkens back to the way we entered the world," said Robbins. "You were in a womb, compressed on all sides by water and fluid, and so there was a sense of pressure. We try to emulate that with infants by swaddling them. We might look at weighted blankets as the adult version of swaddling or emulating those circumstances where we feel at ease."I tested 12 of the most popular weighted blankets on the market to determine the best ones you can buy. I evaluated them for how well I slept while using them, the quality of materials and construction, how easy they were to wash and care for, and how comfy they were. The best weighted blankets in 2021Best weighted comforter: Brooklinen Weighted ComforterBest extra-heavy weighted blanket: Gravity 35-Pound BlanketBest cooling weighted blanket: BlanQuil ChillBest weighted throw blanket: Bearaby NapperBest budget weighted blanket: Luna Weighted BlanketBest king-size weighted blanket: HomeSmart Products King Size Weighted Blanket Best weighted comforter Jen Gushue/Insider Brooklinen's Weighted Comforter has a premium plush design that blends seamlessly with the rest of your bedding.Available sizes: Twin/twin XL (64" x 90"), full/queen (90" x 90"), king/Cali king (106" x 90")Available weights: 15 lbs., 20 lbs., 30 lbs.Available colors: WhiteMaterials: 400 thread-count cotton sateen shell, polyfill interior, glass micro-beadsCare instructions: Dry clean only, spot clean with soap and warm water, and dry with hairdryerPros: Looks just like a normal comforter, lots of plush fill, made of 400-thread-count cotton sateen, has duvet cover loops, accepts returns in any condition within one year of purchaseCons: Dry clean only, duvet cover sold separately, difficult to adjust while using itIf you don't want to sleep under a stack of blankets or compromise your bedroom's look, you'll want a weighted comforter, and Brooklinen makes the best one I tried. It looks and feels like a traditional plush comforter but with an extra 20 pounds of weight integrated with small glass beads. The blanket itself is made of 400-thread-count cotton sateen, so it's soft enough to throw on your bed without a duvet cover.That being said, we recommend adding one — corner loops make it easy to tie on — because the blanket is dry-clean only, which could run you anywhere from $20 to $50.I found that the 20-pound comforter I tested weighed closer to 24 pounds, but the extra weight didn't make too much of a difference once I laid it out on the bed. Sleeping under it was pretty dreamy (excuse the pun). I felt enveloped by the cushy fill but not too overwhelmed or overheated. It was somewhat difficult to adjust while lying under it due to the weight and size, but I found this typical for just about every comforter-sized weighted blanket I tested.Though pricey, this comfortable weighted blanket is worth the investment, especially because it will entirely replace your comforter. If you find it's not right for you, Brooklinen has an incredibly lenient return policy, accepting returns for any reason in any condition within 365 days of your purchase. Best extra-heavy weighted blanket Jen Gushue/Insider Gravity's 35-pound weighted blanket evenly distributes weight across your king-size bed and is perfect for those who are looking for some extra heft.Available sizes: Queen/king (90" x 90")Available weights: 35 lbs.Available colors: White, navy, grayMaterials: Micro-fleece removable cover, glass beadsCare instructions: Removable cover is machine wash cold and tumble dry low, inner blanket is hand wash and air dry onlyPros: Great for those who need a heavier blanket, weight is evenly distributed, no beanbag feel, the cover is machine washable, low profile blanketCons: Queen/king size only comes in 35 pounds, the cover should be washed before use, too heavy to adjust in the middle of the night, the inner blanket is hand-wash only, customers are responsible for return feesWhen I first received the Gravity 35-pound blanket, I thought it would feel way too heavy, but I found it pretty manageable. It did tend to slide down the bed as I was sleeping, and I'd often wake up about a foot lower than usual because I was chasing the blanket around through the night. It was simply too heavy to pull up or adjust while laying under it, though someone stronger than me will likely not have this issue.One issue with this blanket was that the included micro-plush duvet cover felt oddly greasy out of the package. It left a film on my hands as I tried to smooth it out over the bed. But the zip-on cover is removable and washable, and a run through the wash resolved the issue. I can't imagine hauling such a heavy blanket into and out of a washing machine, so the removable cover is a huge plus. The Gravity blanket is low-profile without any excess fill, so it won't add a lot of bulk to your bed. That said, it's not as plush or cozy as the Brooklinen comforter, which does also come in a 35-pound version, though it's much more expensive.The brand also makes "single" size weighted blankets that measure 48-inches by 72-inches. I tested a 15-pound one with a cooling cover and found it performed well, but nothing made it stand out from the pack. Best cooling weighted blanket Jen Gushue/Insider The BlanQuil Chill's unique cover disperses heat and stays cool to the touch as you fall asleep, but its slick fabric can cause it to slide off the bed.Available sizes: 48" x 74"Available weights: 15 lbs., 20 lbs.Available colors: White with blue threadingFill materials: Glass micro-beadsCare instructions: Removable cover is machine wash cold and tumble dry low, inner blanket is spot clean onlyPros: Stays cool to the touch, no beanbag feel, glass beads don't shift, 60-night sleep trialCons: Slides off the bed easily; internal blanket is spot-clean only; only one size, one color, and two weights availableI sleep hot, and the BlanQuil Chill is the weighted blanket I have the longest relationship with. It's been on my bed for about a year and a half, and I've had two iterations of the design.I lined up all the cooling blankets I tested for this guide and ran my hand across each one, and the BlanQuil felt noticeably cooler than all the others. Plus, it did the best job of dissipating heat and getting back to its cool baseline.Since it's slightly bigger than a twin bed, it's not a blanket that's intended to be shared. Glass beads add weight, but there's no beanbag feeling, and I've never felt them shift in a way that causes the blanket to feel lumpy or uneven.The zipper on the removable, washable cover of the first version of the design was weak, couldn't handle the weight of the blanket, and broke just a couple of months into its use. But BlanQuil has since reinforced the zipper, and I've yet to have a problem with it. I even stress tested it by holding the weight of the blanket against the zipper, and it held strong.Though it's one of the best I've used, the cooling cover's material has a bit of a sheen to it, which makes it slick so it slides off the bed easily — especially if you toss and turn at night. As soon as it gets off-center, the blanket's weight will cause it to slide. Best weighted throw blanket Jen Gushue/Insider The cocoon-like, knit-woven Bearaby Cotton Napper keeps you cozy yet cool as you lounge on the couch, it's entirely machine washable, and it's one of the heftiest blankets we tested.Available sizes: 40" x 72", 45" x 72", 48" x 72"Available weights: 15 lbs., 20 lbs., 25 lbs.Available colors: Eight colors currently availableMaterials: Organic long-staple cottonCare instructions: Machine wash cold on delicate cycle, tumble dry lowPros: Aesthetic design, has significant heft, made from organic cotton, washable and dryable, 30-day return policy if blanket remains unwashed, most versatile weighted blanket I testedCons: Doesn't fit in compact washing machines, takes multiple cycles to dry, open weave may catch toes and fingers, heavier than advertised (though this may be a pro, depending on your preference)The weight of the Bearaby Napper comes entirely from the dense organic cotton strands hand-knit into one of the most aesthetically minded weighted blankets I've ever seen.This is a really heavy blanket — the blanket I tested, which was advertised as the 15-pound version, actually tipped the scales at 24 pounds. I contacted the company to verify that they sent me the right item, and they assured me they did. It's not necessarily bad that they're heavier than advertised, but it's something to keep in mind when you order.A blanket this heavy — and bulky — can be tough to shift around, and if it's going to live on your couch, it will take up quite a bit of space. I've shifted it to my bed. It drapes nicely over my partner and me, but the open weave makes it prone to stretching if you need to pull it up in the night. It hasn't become misshapen in any significant way, thankfully.It's not quite a cooling blanket — Bearaby does offer one called the Tree Napper that I haven't tested — but it doesn't trap heat thanks to the open weave. The holes are quite large, though, so if you are bothered by some toes or fingers poking through, you might want to look elsewhere.The Napper is fully machine washable and can go in the dryer on a delicate setting. I wanted to see how the blanket washed and dried as part of my test, but it didn't fit in my space-saving apartment-sized washing machine. Best budget weighted blanket Jen Gushue/Insider Weighted blankets are typically expensive, but the Luna Weighted Blanket is gentle on your wallet despite being constructed from Oeko-Tex-certified cotton and filled with natural glass beads.Available sizes: 36" x 48", 41" x 60", 48" x 72", 60" x 80", 80" x 87"Available weights: 5 lbs., 7 lbs., 10 lbs., 12 lbs., 15 lbs., 17 lbs., 20 lbs., 22 lbs., 25 lbs., 30 lbs.Available colors: 11 solid colors and 14 patterns currently availableMaterials: Cotton shell, glass beadsCare instructions: Machine wash cold on delicate cycle, hang dry or tumble dry lowPros: Excellent quality at a low price; comes in a wide variety of colors, sizes, and weights; fully machine washable; Oeko-Tex Certified construction; true to weightCons: Thinner blanket than some others on our listWeighted blankets tend to be very expensive, but Luna offers an excellent weighted blanket at an affordable price.I tested the 15-pound queen-size blanket, and the glass beads inside were barely noticeable, producing no beanbag effect. Where many other cheap weighted blankets are loaded with chemicals, the Luna Weighted Blanket is Oeko-Tex Certified, meaning it contains no harmful materials.The blanket is much thinner than some of the others I tested, but it stayed breathable and was light enough to easily adjust in the middle of the night. It wasn't quite as cozy as some others, but it's a great option to layer with your usual comforter or use during the warmer months.As I've continued to test these blankets, the Luna has become a bit of a travel-sized weighted blanket for me. I wouldn't recommend taking it on an airplane — it's a bit bulky for that — but the Luna is thin enough to fold into a car trunk-friendly size. The blanket was a true 15 pounds according to my scale, but that weight was dispersed over a queen-size surface area, making it feel lighter. It's also one of the easiest blankets to clean that I tested. The entire thing fits into my compact washer-dryer and was fully dry within one cycle — and it got softer after just one wash. Best king-size weighted blanket James Brains/Insider The HomeSmart Products King Size Weighted Blanket is large enough for couples, breathes well to keep you from overheating, and can go in the washer and dryer.Available sizes: 60" x 80", 80" x 86", 88" x 104"Available weights: 15 lbs., 20 lbs., 25 lbs., 30 lbs., 35 lbs., 40 lbs., 50 lbs.Available colors: White, dark grey, cool mint, burgundy, greyMaterials: Cotton shell, glass beadsCare instructions: Machine wash cold on delicate cycle, hang dry or tumble dry lowPros: Breathable organic cotton shell, glass beads sewn into 5-by-5-inch pockets for even weight distribution, machine washable and dryable, the king size is large enough for couples, weight options up to 50 lbs.Cons: The blanket started to leak beads after 18 months of use, hard to track down customer supportAs a big guy, one of the problems I run into with weighted blankets is that they aren't large enough to cover my whole body. Even queen-size blankets tend to be too small to reach my giant feet. This was not a problem with the HomeSmart Products King Size Weighted Blanket.At 88 inches by 104 inches and with weight options up to 50 pounds, it's the ideal blanket for couples who want to enjoy the comfort of a weighted blanket without sacrificing intimacy.The HomeSmart blanket features micro glass beads sewn into the 400-thread count organic cotton shell with 5-by-5-inch pockets to keep the weight evenly distributed. The blanket is machine washable and dryable, which is a must for me since I don't use duvet covers. I've washed the blanket several times over the last two-and-a-half years and have found it's an effortless endeavor. If you want to add a duvet cover, the blanket has 10 loops for tying one on.I tested the 15-pound and 25-pound comforters and enjoyed both, though the 25-pounder was almost too restrictive for me. I prefer the 15-pounder, and it's what I sleep under when I'm not testing other models. Thanks to its breathability, it's a great year-round blanket. Even in the summer, overheating has never been an issue.The HomeSmart Weighted Blanket isn't without its flaws. The 25-pound blanket started to leak beads after 18 months of use. This was likely due to one of our pets working a hole into it. I tried to reach customer service but couldn't get a hold of anyone.-James Brains, reporter What else we tested The Gravity Cooling, Helix, and Brooklyn Bedding weighted blankets were among the others we tested. Jen Gushue/Alyssa Powell/Insider What we recommend and why Baloo Cool Cotton Weighted Blanket: The Baloo weighted blanket struck a great balance between comfort and cost. Its construction and quality felt similar enough to the Luna that we'd rather recommend the one that's even more affordable.Gravity Cooling Blanket: The blanket itself is well-built and high-quality, but the cooling cover did little to actually cool me off as I slept. It just felt like any other weighted blanket and didn't do much to distinguish itself from the other blankets I tried.Brooklyn Bedding Dual Therapy Weighted Blanket: This blanket is dual-sided — with a silky cooling side and a minky textured side. The silky side stayed cool to the touch, and the bumps on the minky side provided a nice sensory option. It didn't feel beanbaggy, and the weight was evenly distributed. But it was only available in one size, two weights, and one dark gray color that severely limited how many home decor scenarios it would work within.What we don't recommend and whyYaasa Weighted Blanket: This is a knit-style blanket similar to the Bearaby Napper, but Yaasa's weave was much tighter and allowed for less airflow. The material also felt spongier and less cozy than the Napper's. The Yaasa blanket was also dry clean only.Helix Weighted Blanket: This blanket is dual-sided with a white sherpa fleece side and a gray minky fleece side. I found the sherpa side especially cozy, and so did my cat. But it had one of the worst beanbag effects of any of the blankets I tried, and there is only one size and color option available, though it did come in three weights. If this blanket suits your style, it's a decent buy for an affordable price.YnM Weighted Blanket: This is an Amazon bestseller in weighted blankets, so we wanted to put it to the test. It's a perfectly serviceable budget blanket, but the glass beads created a sort of beanbag effect that the Luna did not. Plus, the Luna is even cheaper and made of Oeko-Tex certified cotton, which isn't found with the YnM. Our testing methodology There are several factors I took into consideration while assessing weighted blankets. Aside from the general coziness and comfort provided by each blanket, I also assessed things like quality of material, value, weight options, and aesthetics. For example, a blanket that came in more color and weight options beat out a blanket of equal quality that came in fewer options. I also considered return policies, sleep trials, and how easy these blankets were to clean.The following are three tests I ran each blanket through to assess general user experience:Sleep test: I slept with each weighted blanket on my bed for at least three consecutive nights. I noted how well I slept overall and how the blanket regulated my sleep temperature. I also paid attention to how well the blanket stayed in place as I slept and how easy it was to adjust while lying under it. Part of this test also included making the bed every day (hauling a weighted blanket is harder than it looks).Wash test: I washed every weighted blanket or cover that was machine washable at least once to ensure they held up well in the wash and didn't shrink, shed, or otherwise show signs of wear. I noted if the added weight made them more difficult to haul into and out of the washing machine. I also discovered that one of the machine-washable blankets was so bulky it didn't fit into my washing machine. For those blankets that weren't machine-washable, I noted the care instructions and factored that into the cons of the blanket as I assessed them.Weight test: I wanted to ensure each blanket was actually the advertised weight. To get an accurate reading, I weighed myself and then weighed myself again while holding each blanket, noting any discrepancies in the advertised weight versus the actual weight. What we're testing next Bearaby Sleeper: This is the only weighted blanket I've discovered designed specifically for couples. While there's little data available to determine the best weight for a couple to share, Bearaby has eliminated some of that guesswork by weighting the two halves of the blanket differently, allowing you to choose the right weight for each person. This is especially useful if you and your partner are drastically different sizes and would benefit from different blanket weights. The two halves can unzip from each other and become two distinct blankets. Right now, they are sold out, but Bearaby has assured us that they'll be restocking soon, and we hope to test it once they do.Luxome Luxury Weighted Blanket: The Luxome weighted blanket comes with a reversible cover with a plush minky fabric on one side and a cooling bamboo fabric on the other. This allows you to customize your blanket with the seasons. I'm curious to see if this versatility makes a difference in how the blanket affects my body temperature. It's also a nice mid-range option in terms of price, and I'm hoping to add more affordable options to this guide.Slumber Cloud Weighted Blanket: In my ongoing quest to find a cooling weighted blanket that stays put throughout the night, I'm looking forward to testing the Slumber Cloud. It's made using thermoregulation technology developed by NASA to keep astronauts comfortable in their spacesuits. The Outlast technology uses small beads that absorb body heat when you get too hot and release it back to you when you get too cold. I'm fascinated by this concept, and I'm excited to see if it works. Weighted blanket FAQs What weight should a weighted blanket be?It's recommended that you select a blanket that's roughly 10% of your body weight. But Robbins adds that there are no clinically established guideposts for choosing a blanket weight. "It's hard for the one size fits all approach because we're all just so unique and have different physiologies," she says.This is especially true when blankets come in different sizes. A 15-pound throw blanket is going to feel much heavier than a 15-pound comforter since a larger blanket distributes its weight over a larger surface area. Robbins suggests trying out weighted blankets before purchasing them. If you can't test weighted blankets in a store, look for brands that offer sleep trials or have buyer-friendly return policies like many of our top picks.What if I'm sharing the weighted blanket with a partner?If you're sharing a weighted blanket with a partner, you'll likely want something a bit heavier, mostly because larger blankets feel lighter than smaller ones. A blog from Layla Sleep advises purchasing a blanket that's roughly 7.5% of the couple's combined weight.I reached out to the brand to determine how they established this number, and a representative responded, "Most suggestions in terms of weight are based on anecdotal evidence. We also factor in the customer satisfaction data that we have when making suggestions, but ultimately the weight that's right for any one person will depend heavily on personal preference."It's important to note that this parameter hasn't been established in any clinical trial or scientific study, so take it with a grain of salt. As long as you're comfortable and can move freely under the blanket, you should choose the weight that works best for you.What size weighted blanket should I get?If you're sharing a blanket with a partner with a similar body weight, you'll want a weighted blanket that covers your entire bed. Many brands, including almost all of our top picks, offer blankets in multiple sizes to fit standard twin, full, queen, and king beds.Some weighted blankets in these sizes are a bit smaller than typical comforters so the weighted blanket doesn't hang off the side of your bed too much. Excess fabric hanging off the side can pull the weighted blanket off-center as you shift around in the night.If you and your partner are very different weights, consider opting for two smaller separate blankets in a throw or twin size. This way, you can each get the weight that's most comfortable for you. Plus, you'll have the added benefit of not having to worry about blanket theft in the middle of the night.How do I choose a weighted blanket?In addition to weight and size considerations (see above), you'll also want to consider how easy the blanket is to clean and what type of fill it uses. A duvet cover will be easier to wash than a weighted blanket, but with a cover, you have to deal with the hassle of removing it and putting it back on. Even with ties to keep it in place, the blanket may still bunch up inside the cover.Weighted blankets rely on glass beads, plastic pellets, or, less commonly, steel shot beads. What you prefer is a matter of personal preference. Comforters with plastic pellets tend to be cheaper, but it's a less eco-friendly material.How often should I wash my weighted blanket?Brian Sansoni, Senior Vice President at The American Cleaning Institute, recommends you treat your weighted blanket like any comforter, washing it once or twice a year, provided it's covered by a duvet cover that you're washing monthly. If it doesn't have a removable cover, the entire blanket should be washed roughly once a month.Are weighted blankets good for anxiety?In theory, the answer is yes. However, there are no randomized clinical trials that can speak to the efficacy of weighted blankets in the treatment of anxiety. This is because it would be obvious once participants curl up under one of the blankets that they're either in the control group or the weighted blanket group. The theory is that weighted blankets help reduce some anxiety symptoms, like quickened breathing or heart rate, by putting your autonomic nervous system at ease. Anecdotally, my wife and I have both been diagnosed with anxiety disorders. We've found lounging with a weighted blanket helps us unwind.The bottom line is weighted blankets may help with anxiety, but there isn't any hard science to back it up.  Check out our other sleep and bedding guides Lauren Savoie/Insider 7 weighted blankets for kids that may help with sleep, anxiety, and sensory issuesThe best pillowsThe best mattressesThe best sheetsThe best duvet coversThe best comforters Read the original article on Business Insider.....»»

Category: topSource: businessinsiderOct 14th, 2021

Futures Slide As Soaring Oil Nears $85

Futures Slide As Soaring Oil Nears $85 While cash bonds may be closed today for Columbus Day, which may or may not be a holiday - it's difficult to know anymore with SJW snowflakes opinions changing by the day - US equity futures are open and they are sliding as soaring oil prices add to worries over growing stagflation (Goldman and Morgan Stanley both slashed their GDP estimates over the weekend even as they both see rising inflation), fueling concern that a spreading energy crisis could hamper economic recovery (as a reminder, yesterday we had one, two, three posts on stagflation, showing just how freaked out Wall Street suddenly is). Rising raw material costs, labor shortages and other supply chain bottlenecks have raised concerns of elevated prices hammering corporate profits while rising rates are suggesting that a tidal wave of inflation is coming. And while cash bonds may be closed, one can easily extrapolate where they would be trading based on TSY futures which are currently trading at a 1.65% equivalent. But while cash bonds may be closed, the big mover on Monday was oil, with WTI surging nearly 3% and touched a seven-year high as an energy crisis gripping the major economies showed no sign of easing. Meanwhile, Brent rose just shy of $85, rising to the highest since late 2018 when the Fed abruptly reversed tightening course. Over in China, coal futures reached a record as flooding shuttered mines. The surge in oil lifted shares of Chevron Corp, Exxon Mobil Corp and APA Corp between 1.2% and 3% in premarket trading. At the same time, rising rates hit FAAMGs, with Apple, Microsoft and Amazon all falling between 0.6% and 0.8%. The surge above 1.6% for 10-year Treasury yields is intensifying debate among strategists over how to position investor portfolios amid anxiety over whether transitory inflation is transitioning into stagflation. Lucid Group rose 2.2% and Occidental Petroleum climbed 3.1%, leading gains in the U.S. premarket session. Here are some of the biggest movers and stocks to watch today: U.S.-listed Chinese tech stocks soar 2% to 5% in premarket trading, extending their recent rebound. Rally supported by Beijing slapping a smaller-than-expected fine on food delivery giant Meituan and last week’s news that U.S. President Joe Biden was planning to meet with Xi Jinping before the end of the year. Alibaba (BABA US +5%) leads gains, while JD.com (JD US) and Baidu (BIDU US) rise 2% apiece Watch U.S. energy stocks as oil surges past $80 a barrel as the global power crunch rattled a market in which OPEC+ has only been restoring output at a modest pace. Exxon Mobil (XOM US +1.1%), Chevron (CVX US +1%) and Occidental (OXY US +3.1%) among top risers in premarket trading. Robinhood (HOOD US) dropped 2%; the company was under pressure in U.S. premarket trading as a looming share sale by early investors and a toughening regulatory environment for cryptocurrencies are adding to the headwinds in the stock market for the darling of the U.S. retail trading mania. ChemoCentryx (CCXI US) up 2% in U.S. premarket trading, adding to Friday’s massive gains after the drug developer won U.S. approval for Tavneos as a treatment for a rare autoimmune disorder Cloudflare (NET US) slides 1.8% in U.S. premarket trading after Piper Sandler downgraded stock to neutral Akerna Corp. (KERN US) gained in Friday postmarket trading after Matthew Ryan Kane, a board member, bought $346,032 of shares, according to a filing with the U.S. Securities & Exchange Commission. “We see rising risks to global growth and evidence of more persistent inflation, which makes us more cautious on the outlook for global markets overall,” Salman Ahmed, global head of macro and strategic asset allocation at Fidelity International, wrote in a note to clients. In Europe, the Stoxx 600 Index fell 0.2%, led by declines in travel and property firms. Miners and energy stocks were the two strongest-performing sectors in Europe on Monday on rising prices for iron ore and oil. The Stoxx 600 Basic Resources Index climbed as much as 2.4%, while the Energy Index gains as much as 1.5% to the highest since Feb. 24, 2020. European banking stocks also advanced on Monday, following four weeks of gains, and traded about 1.3% below pre-pandemic high. The sector has gained 36% ytd, is the best performer among 20 European sectors in 2021. Up 0.7% today, outperforming a slightly weaker broader Stoxx 600 Index and as investors tilt toward cyclical sectors. Earlier in the session, Asian stocks jumped, buoyed by Hong Kong-listed technology shares including Meituan, which was consigned a lower-than-expected regulatory fine. The MSCI Asia Pacific Index climbed as much as 0.9%, driven by the consumer-discretionary and communication sectors. Alibaba and Meituan were the top contributors to the gauge, each surging about 8% in the first trading in Hong Kong after the food-delivery giant was handed a $533 million fine for violating anti-monopolistic practices.  The result of the investigation into Meituan is “a relief and likely to provide closure to the share price overhang,” Citigroup analysts wrote in a note Friday, when the penalty was announced.  Hong Kong’s stock gauge was among the top performing in the region. Japan’s benchmarks also climbed as the yen weakened to an almost three-year low against the dollar and new Prime Minister Fumio Kishida said he’s not considering changes to the country’s capital-gains tax at present. Improved sentiment in China is providing much-needed support to Asian equities, which declined for four straight weeks amid uncertainty circling global markets. Power shortages in China and India, supply-chain woes, inflation risks and rising bond yields are all on the radar as the earnings season kicks off. “We are still in a market that is very, very concerned about the growth outlook,” said Kyle Rodda, market analyst at IG Markets. These sort of rallies that appear almost inexplicable are “symptomatic of the market still trying to piece together all pieces of the puzzle,” he added. Australia The S&P/ASX 200 index fell 0.3% to close at 7,299.80, with most subgauges taking a hit. Miners advanced, posting gains for a third session, offsetting losses in healthcare and consumer discretionary stocks.  Star Entertainment was the worst performer after a report saying the company had enabled suspected money laundering, organized crime and fraud at its Australian casinos for years. Fortescue surged after the company said it plans to build a green energy factory to rival China.  In New Zealand, the S&P/NZX 50 index dropped 0.5% to 13,019.37. In FX, the pound crept higher to touch an almost 2-week high versus the dollar and the Gilt curve shifted higher, led by the front-end, after the Bank of England’s Michael Saunders, one of the most hawkish members of the Monetary Policy Committee, suggested in remarks published Saturday that investors were right to bring forward bets on rate hikes. Hours earlier, Governor Andrew Bailey warned of a potentially “very damaging” period of inflation unless policy makers take action. Australia’s dollar led gains among G-10 currencies on the back of increases in oil, natural gas and iron ore prices and as Sydney emerges from a 15- week lockdown on Monday. Iron ore futures extended gains as improved rebar margins at Chinese steel mills buoyed demand prospects. The yen dropped against the dollar, with analysts forecasting more weakness ahead as the nation’s yield differentials widen. As noted above, treasury futures slumped in U.S. trading Monday, with the cash market closed for Columbus Day; they implied a yield of 1.65% on the 10Y. 10-year note futures price is down 8+/32, a price change equivalent to a yield increase of about 3bp. Benchmark 10-year yield ended Friday at 1.615%, its highest closing level since June, as investors focused on the inflationary aspects in mixed September employment data. China's10-year government bond futures declined to a three-month low while the yuan advanced as the central bank’s latest liquidity draining weakened expectations of fresh monetary policy easing. Futures contracts on 10-year notes fall 0.4% to 99.14, the lowest level since July 12. It dropped 0.4% on Friday. 10-year sovereign bond yields rose 5bps, the biggest gains in two months, to 2.96%. Looking ahead, upcoming reports on third-quarter company profits which start this week are seen as the next potential pressure point in a market already under siege from slowing global growth, sticky inflation and tighter monetary policies. Global earnings revisions are sliding - an omen for U.S. stocks that have taken their cue from rising earnings estimates all year. “The coming earnings’ season in the U.S. will be heavily scrutinized for pricing power, margins and clues on the shortage situation, as well as wage pressures,” according to Geraldine Sundstrom, a portfolio manager at  Pacific Investment Management Co. in London. “Already a number of large multinationals have issued warnings about production cuts and downgraded their Q3 outlook due to supply chain and labor shortages.” Market Snapshot S&P 500 futures down 0.3% to 4,371.25 STOXX Europe 600 down 0.2% to 456.41 German 10Y yield up 1.5 bps to -0.135% Euro little changed at $1.1568 MXAP up 0.8% to 196.45 MXAPJ up 0.7% to 642.13 Nikkei up 1.6% to 28,498.20 Topix up 1.8% to 1,996.58 Hang Seng Index up 2.0% to 25,325.09 Shanghai Composite little changed at 3,591.71 Sensex up 0.5% to 60,358.30 Australia S&P/ASX 200 down 0.3% to 7,299.79 Kospi down 0.1% to 2,956.30 Brent Futures up 1.9% to $83.98/bbl Gold spot down 0.1% to $1,755.02 U.S. Dollar Index up 0.11% to 94.17 Top Overnight News from Bloomberg The U.S. labor market will see “ups and downs” as the pandemic lingers, but it’s premature to judge that the recovery is in peril, said San Francisco Federal Reserve President Mary Daly Treasury Secretary Janet Yellen said she expects Congress to take action soon to bring the U.S. into line with a global minimum tax agreed on last week by 136 countries Chinese builders are looking to payment extensions or debt exchanges to avoid default on imminent bond obligations as liquidity conditions tighten for the real estate sector Austria will get a new chancellor, though the career diplomat stepping into Sebastian Kurz’s shoes is a close ally of the departing conservative leader who resigned over a corruption scandal Just because pandemic inflation is transitory doesn’t mean it’s going away anytime soon. That’s the awkward conclusion that policy makers and investors are arriving at, as prices accelerate all over the world. European natural gas has climbed 25% in two weeks, and oil topped $80 for the first time since 2014. Fertilizers hit a record on Friday, which means food prices -- already at a 10- year peak -- will likely rise even higher A more detailed summary of overnight news from Newsquawk Asia-Pac stocks traded mostly positive but ended the day somewhat mixed after having shrugged off the early weakness stemming from last Friday’s lacklustre performance stateside and disappointing NFP jobs data. Note, markets in Taiwan and South Korea were closed. ASX 200 (-0.3%) was the laggard with underperformance in tech, consumer stocks and defensives overshadowing the gains in commodities and with Star Entertainment the worst hit with losses of more than 20% after media outlets alleged that it enabled suspected money laundering, organised crime, fraud and foreign interference which the Co. said were misleading reports. However, downside for the index was limited as New South Wales businesses reopened from the lockdown that lasted for over three months. Nikkei 225 (+1.6%) reversed opening losses as exporters cheered a weaker currency and with the government mulling over JPY 100bln financial support for chip factory construction. Hang Seng (+2.0%) and Shanghai Comp. (Unch) were both positive following talks between China's Vice Premier Liu He and USTR Tai on Saturday in which China was said to be negotiating for a cancellation of tariffs and sanctions. The advances in Hong Kong were led by tech stocks including Meituan despite the Co. being fined CNY 3.4bln by China’s market regulator for monopolistic behaviour, as the amount was seen to be a slap on the wrist, while the gains in the mainland were only mild as participants also reflected on the substantial liquidity drains by the PBoC totalling a net CNY 510bln since Saturday. Finally, 10yr JGBs were pressured amid the gains in Japanese stocks and lack of BoJ purchases in the market, while price action was also not helped by the continued weakness in T-note futures amid the semi-holiday conditions in US for Columbus Day in which the NYSE and the Nasdaq will open but bonds trading will remain shut. Top Asian News Australian IPOs Heading for Biggest Haul Since 2014: ECM Watch Syngenta’s Shanghai IPO Proposal Suspended For Earnings Update China Junk-Rated Dollar Bond Rout Deepens Amid Builder Worries China’s 10-Year Bond Yield Jumps By The Most Since August Bourses in Europe are mostly but modestly lower (Euro Stoxx 50 -0.1%, Stoxx 600 -0.2%) whilst the FTSE 100 (+0.2%) bucks the trend, owing to firm performances in its heavyweight sectors. US equity futures meanwhile trade within tight ranges with broad-based losses of some 0.3-0.4%. Fresh fundamental catalysts have remained light, although inflation and stagflation remain on traders' minds heading into this week's US and Chinese inflation metrics and against the backdrop of rising energy prices. Thus, the sector configuration sees Basic Resources, Oil & Gas and Banks at the top of the bunch, whilst the downside sees Travel & Leisure, Real Estate and Retail, with no overarching theme to be derived. Basic Resources is the marked outperformer as base metals are bolstered in what seems to be a function of the coal shortage in Asia, with iron ore contracts also surging overnight and copper following suit, in turn boosting the likes of Rio Tino (+3.2%), Antofagasta (+3.1%), Glencore (+3.1%), BHP (+2.8%). The top of the Stoxx 600 is dominated by metal names. In terms of individual movers, Carrefour (-2.2%) is softer after sources stated that exploratory talks over a Carrefour-Auchan tie-up ended due to the complexity of the deal. Evotec (+0.7%) holds onto gains as it seeks a Nasdaq listing. Roche (+0.6%) and Morphosys (+3.7%) underpin the health sector after the Cos received Breakthrough Therapy Designation from the US FDA for gantenerumab for the treatment of Alzheimer's disease. Top European News BOE Officials Double Down on Signals of Imminent Rate Hike Brexit Clash on Northern Ireland Means Headaches for Johnson Asos CEO Beighton Steps Down as Sales Growth Slows Adler Shares Flounder After Asset Disposal Plan, Past M&A Report In FX, the Aussie has secured a considerably firmer grip of the 0.7300 handle vs its US rival as COVID-19 restrictions are relaxed in NSW and base metals tread water after a mostly positive APAC equity session overnight. However, Aud/Usd is also firmer on the back of ongoing Greenback weakness and long liquidation from what some are calling ‘stretched’ levels of IMM positioning going in to Friday’s NFP release, while the Aud/Nzd cross has rebounded further above 1.0550 in wake of a rise in NZ virus cases that has prompted the PM to keep Auckland on level 3 alert for another week pending review. Hence, Nzd/Usd is capped around 0.6950 and continues to lag on the unwinding of Kiwi longs built up in advance of last week’s universally anticipated 25 bp RBNZ hike. Back to the Buck, but looking at the index in relation to where it was before and after the latest BLS report, 94.000 is providing some underlying support on Columbus Day that is not a full US market holiday, but will see cash Treasuries remain closed. Moreover, the DXY is gleaning momentum within a narrow 94.028-214 range via marked Yen underperformance amidst the latest rout in bonds and more pronounced technical impulses as Usd/Jpy extends beyond 112.50 and sets yet another 2021 peak around 112.95. GBP - Sterling is taking up post-payrolls Dollar slack as well, but firmer in its own right too as comments from BoE Governor Bailey and MPC member Saunders add to the growing expectation that rate hikes may be delivered sooner than had been expected before the former revealed that policy-setters were evenly divided at 4-4 in August on the subject of minimum criteria being achieved for tightening. Cable is hovering under 1.3650 and Eur/Gbp is sub-0.8500 in response, with the latter not really fazed by the UK-EU rift on NI protocol. CAD/NOK - The Loonie remains firm against its US peer after the stellar Canadian jobs data and Usd/Cad continues to probe support/bids at 1.2450 against the backdrop of strength in oil prices that is also keeping the Norwegian Krona afloat and Eur/Nok eyeing deeper sub-10.0000 lows irrespective of marginally mixed vs consensus inflation metrics. CHF/EUR/SEK - All rather rangy, aimless and looking for inspiration or clearer direction as the Franc straddles 0.9275 vs the Greenback, but remains firmer against the Euro above 1.0750 following only a faint rise in Swiss domestic bank sight deposits. Meanwhile, the Euro is pivoting 1.1575 vs the Buck and looks hemmed in by decent option expiry interest just outside the range given.1 bn rolling off between 1.1540-50 and 1.6 bn from 1.1590-1.1600 at the NY cut. Elsewhere, the Swedish Crown is slipping on risk-off grounds towards 10.1250 having tested resistance circa 10.1000. In commodities, WTI and Brent front-month futures continue the upward trajectory seen during the APAC session, with the complex underpinned heading into the winter period and against the backdrop of higher gas prices. The gains have been more pronounced in the US counterpart vs the global benchmark with no clear catalysts behind the outperformance, although this may be a continuation of the unwind seen after reports suggested a release of the US SPR (Strategic Petroleum Reserve) is unlikely. For context, reports of such a release last week took the WTI-Brent arb to almost USD 4.2/bbl vs USD 2.7/bbl at the time of writing. Furthermore, there have also been reports of lower US production under President Biden's "build back better" initiative, which puts more weight on renewable energy, with some energy analysts also suggesting that OPEC+ sees less of a threat from a "shale boom" as a result. Back to price action, WTI has been in the limelight after topping the USD 80/bbl overnight and extending gains to levels north of USD 81.50/bbl (vs low 79.55/bbl), whilst the Brent Dec contract topped USD 84.00/bbl (vs low USD 82.50/bbl). In terms of other news flow, sources suggested the fire at Lebanon's Zahrani fuel tank has been put out after the energy minister suggested the fire was contained – the cause of the fire is not yet known. Gas prices also remain elevated with UK nat gas futures relatively flat on the day but still north of GBP 2/Thm vs GBP 1/Thm mid-August and vs GBP 4/Thm last week, whilst the Qatari Energy Minister said he is unhappy about gas prices being high amid negative follow-through to customers. Over to metals, spot gold and silver are somewhat lacklustre, but with magnitudes of price action contained, with the former meandering just north of USD 1,750/oz and the latter above USD 22.50/oz heading into this week's key risk events. Overnight, iron ore futures were bolstered some 10% in Dalian and Singapore Exchanges amid fears of coking coal supply shortages - coking coal is an essential input to produce iron and steel. Traders should also be cognizant of the Chinese metrics released this week as another elevated PPI metric could see the release of more state reserves, as had been the case over the recent months. Using the Caixin PMIs as a proxy for the release, the PMI suggested sharp increases in both input costs and output prices – largely owed to supply chain delays, with the "rate of inflation was the quickest seen for four months, amid reports of greater energy and raw material costs. This, in turn, led to a solid increase in prices charged". The measure for output prices its highest in three months, whilst "the pressure of rising costs was partly transmitted downstream to consumers, as the demand was not weak." US Event Calendar Nothing major scheduled DB's Jim Reid concludes the overnight wrap A reminder that it’s Columbus Day today where US bond markets are closed. Equity markets are open but expect it to be quiet. Ahead of this, this morning we have published our latest monthly survey results covering over 600 global market participants. See here for more. For the first time since June, the biggest perceived risk to markets is now higher yields and inflation, whilst direct Covid-19 risks are out of the top 3 for the first time. A further equity correction before YE remains the consensus now. 71% expect at least another 5% off equities at some point before YE (68% correctly suggested that last month). A very overwhelming 84% thought the next 25bps move in 10yr US Treasury yields would be up. Of some additional interest is that the definition of stagflation is varied but that the majority think it’s a high or very high risk for the next 12 months. The extreme of this view surprised me. While I’ve long thought the market has underestimated the inflation risks I would still say there is enough of a growth cushion for 2022. However it’s clear the risks have built. Anyway, lots more in the survey. Thanks for filling it in and see the results for details. The week ahead will centre around the US CPI release on Wednesday but it might be a touch backward looking given that energy has spiked more recently and that used car prices are again on the march after a late summer fall that will likely be captured in this week’s release. Elsewhere, we’ve got a potentially more challenging US earnings season than that seen over the last year will commence with the big financials from Wednesday. In addition minutes from the last FOMC will give clues to the latest taper thinking on Wednesday as well. The IMF/World Bank meetings will generate plenty of headlines this week with their latest world outlook update tomorrow the highlight. The best of the rest data wise consists of JOLTS (Tuesday),which we think is a better labour market indicator than payrolls albeit a month behind, US PPI (Thursday) which will give a scale of building pipeline price pressures, US retail sales and UoM consumer sentiment (Friday), and China’s CPI and PPI (Thursday). With all that to look forward to, markets have started the week on a strong note, with equity indices including the Hang Seng (+2.02%), Nikkei (+1.57%), CSI (+0.32%) and Shanghai Composite (+0.32%) all moving higher, whilst the Kospi (-0.11%) has seen a slight decline. Japanese stocks have been buoyed by comments from new PM Kishida over the weekend that he isn’t currently considering changes to the country’s capital-gains tax. That comes with just 20 days remaining until the country’s general election. Separately in China, the country’s energy woes continue with 60 of 682 coal mines closed in the Shanxi province due to heavy floods, with Chinese coal futures up +8.00% this morning. And the property market issues are continuing to persist, with a new Chinese developer Modern Land seeking a 3 month extension to a $250 million dollar bond due to mature on October 25. By the end of last week, a Bloomberg index of Chinese junk-rated dollar bonds had seen yields climb to a decade-high above 17%, so clearly one to still look out for. Unlike in Asia, equity futures are pointing lower in the US and Europe this morning, with those on the S&P 500 down -0.21%. In terms of the main highlight it’s clearly US CPI mid-week. Given my views that inflation risks have been massively understated this year I’ve been saying for months that these reports have potentially been the most important monthly data we have seen for years. But since they mostly come and go with a “meh… mostly transitory” and a relative whimper, I’ve clearly been wrong to over hype them. So ignore me when I say that this month’s report might not be that interesting. With energy soaring over the last month and signs of inflation pressures continuing to build elsewhere then I’m not sure we can read too much into this month’s figures. Take used cars. Given the 2-3 month lag between actual prices and their CPI impact, this month will more than likely reflect a softening of prices in the summer. However September saw prices rise +5.4% so this will probably show up towards the end of the year along with the recent rise in energy costs. Our economists expect a +0.41% headline (vs. +0.27% previously) and +0.27% core (vs. +0.10%) mom rate. This is a bit above consensus and would take the yoy rate to 5.4% (up a tenth) and 4.1% (unch) respectively. Speaking of inflationary pressures, this morning has seen energy prices take a further leg higher, with WTI oil (+1.90%) moving back above $80/bbl for the first time since late 2014, whilst Brent crude (+1.42%) has moved above $83/bbl. European natural gas prices will continue to be an important one to follow amidst the astonishing price surge there, but the declines at the end of last week mean prices finished the week down by more than -45% since their intraday peak on Wednesday, before the comments from Russian President Putin that brought down prices. The rest of the day-by-day calendar is at the end as usual but although it’s a second tier release normally, tomorrow’s JOLTS will be interesting in as far as it might confirm that the main labour problems in August were a lack of supply rather than demand. The report’s full value is reduced by it being a number of weeks out of date but there’s a reasonable argument for saying that this is a better gauge of the state of the labour market than the payroll release. We go through Friday’s mixed report at the end when looking back at last week. Outside of data, it’s that time again as earnings season gets going, with a number of US financials kicking things off from mid-week. In terms of the highlights, we’ll hear from JPMorgan Chase, BlackRock and Delta Air Lines on Wednesday. Then on Thursday, we’ll get UnitedHealth, Bank of America, Wells Fargo, Morgan Stanley, Citigroup, US Bancorp and Walgreens Boots Alliance. Finally on Friday, we’ll hear from Charles Schwab and Goldman Sachs. For more info on the upcoming earnings season, you can read DB’s equity strategists Q3 S&P 500 preview here. Back to markets, it was interesting over the weekend that the BoE’s Saunders chose to endorse market expectation of an earlier start to the hiking cycle in the UK rather than push back against it. He is on the more hawkish end of the spectrum but it was an important statement. Earlier, Governor Bailey suggested that there could potentially be a very damaging period of higher inflation ahead if policy makers didn’t react. Interestingly our survey showed that the market thinks the BoE is likely to make a policy error by being too hawkish so a battle seems likely to commence over policy here in the UK over the coming weeks and months. The November meeting appears live. Those comments have helped to support the pound this morning, which is up by +0.16% against the US Dollar. Looking back to last week now, risk sentiment was supported in the first full week of Q4 by easing European energy prices and a cease fire on the debt ceiling that avoided disaster and bought Washington lawmakers 8 weeks to find a more permanent solution. Global equity indices thus gained on the week: the S&P 500 picked up +0.79%, with a slight -0.19% pullback on Friday, and European equities kept pace with the STOXX 600 rallying +0.97% (-0.28% on Friday). Cyclical stocks led the way on both sides of the Atlantic; energy stocks were among the best performers whist financials benefitted from higher yields and a steeper curve. Speaking of which, US 10yr Treasury yields gained a punchy +14.1bps to close the week at 1.603%, their highest levels since early June. The benchmark gradually increased 3.0bps after Friday’s employment data. Inflation compensation continued to drive rate increases, as US 10yr breakevens gained +13.5 bps to finish the week at 2.515%. We need to go back to May to find higher levels. The sovereign yield increases were global in nature, with German bunds gaining +7.3bps and UK gilts +15.6bps higher. German 10yr breakevens gained +3.9bps while UK breakevens were +12.0bps higher. US nonfarm payrolls increased +194k in September, well below consensus expectations of a +500k gain, though private payrolls increased +317k and net two month revisions were up +169k. The unemployment rate ticked down to a post-pandemic low of 4.8% on the back of a declining labour force participation rate. Average hourly earnings were robust, increasing +0.6% mom (+0.4% expected). Taken in concert, the print likely cleared the (admittedly low) bar to enable the FOMC to announce tapering at the November meeting, whilst also feeding the creeping stagflation narrative (see survey results). Elsewhere, building on a preliminary July deal, the OECD said 136 nations have signed up to implement a 15% minimum global tax rate to address adequate taxation of multinational tech firms. As part of the deal, countries agreed not to impose any additional digital services taxes.       Tyler Durden Mon, 10/11/2021 - 08:12.....»»

Category: blogSource: zerohedgeOct 11th, 2021

Futures Slide On Growing Stagflation Fears As Treasury Yields Surge

Futures Slide On Growing Stagflation Fears As Treasury Yields Surge US index futures, European markets and Asian stocks all turned negative during the overnight session, surrendering earlier gains as investors turned increasingly concerned about China's looming slowdown - and outright contraction - amid a global stagflationary energy crunch, which sent 10Y TSY yields just shy of 1.50% this morning following a Goldman upgrade in its Brent price target to $90 late on Sunday. At 745 a.m. ET, S&P 500 e-minis were down 4.75 points, or 0.1% after rising as much as 0.6%, Nasdaq 100 e-minis were down 83 points, or 0.54% and Dow e-minis were up 80 points, or 0.23%. The euro slipped as Germany looked set for months of complex coalition talks. While the market appears to have moved beyond the Evergrande default, the debt crisis at China's largest developer festers (with Goldman saying it has no idea how it will end), and data due this week will show a manufacturing recovery in the world’s second-largest economy is faltering faster. A developing energy crisis threatens to crimp global growth further at a time markets are preparing for a tapering of Fed stimulus. The week could see volatile moves as traders scrutinize central bankers’ speeches, including Chair Jerome Powell’s meetings with Congressional panels. “Most bad news comes from China these days,” Ipek Ozkardeskaya, a senior analyst at Swissquote Group Holdings, wrote in a note. “The Evergrande debt crisis, the Chinese energy crackdown on missed targets and the ban on cryptocurrencies have been shaking the markets, along with the Fed’s more hawkish policy stance last week.” Oil majors Exxon Mobil and Chevron Corp rose 1.5% and 1.2% in premarket trade, respectively, tracking crude prices, while big lenders including JPMorgan, Citigroup, Morgan Stanley and Bank of America Corp gained about 0.8%.Giga-cap FAAMG growth names such as Alphabet, Microsoft, Amazon.com, Facebook and Apple all fell between 0.3% and 0.4%, as 10Y yield surged, continuing their selloff from last week, which saw the 10Y rise as high as 1.4958% and just shy of breaching the psychological 1.50% level. While growth names were hit, value names rebounded as another market rotation appears to be in place: industrials 3M Co and Caterpillar Inc, which tend to benefit the most from an economic rebound, also inched higher (although one should obviously be shorting CAT here for its China exposure). Market participants have moved into value and cyclical stocks from tech-heavy growth names after the Federal Reserve last week indicated it could begin unwinding its bond-buying program by as soon as November, and may raise interest rates in 2022. Here are some other notable premarket movers: Gores Guggenheim (GGPI US) shares rise 7.2% in U.S. premarket trading as Polestar agreed to go public with the special purpose acquisition company, in a deal valued at about $20 billion. Naked Brand (NAKD US), one of the stocks caught up in the first retail trading frenzy earlier this year, rises 11% in U.S. premarket trading, extending Friday’s gains. Among other so-called meme stocks in premarket trading: ReWalk Robotics (RWLK) +6.5%, Vinco Ventures (BBIG) +18%, Camber Energy (CEI) +2.9% Pfizer (PFE US) and Opko Health (OPK US) in focus after they said on Friday that the FDA extended the review period for the biologics license application for somatrogon. Opko fell 3.5% in post-market trading. Aspen Group (ASPU) climbed 10% in Friday postmarket trading after board member Douglas Kass buys $172,415 of shares, according to a filing with the U.S. Securities & Exchange Commission. Seaspine (SPNE US) said spine surgery procedure volumes were curtailed in many areas of the U.S. in 3Q and particularly in August. Tesla (TSLA US) and other electric- vehicle related stocks globally may be active on Monday after Germany’s election, in which the Greens had their best-ever showing and are likely to be part of any governing coalition. Europe likewise drifted lower, with the Stoxx Europe 600 Index erasing earlier gains and turning negative as investors weighed the risk to global growth from the China slowdown and the energy crunch. The benchmark was down 0.1% at last check. Subindexes for technology (-0.9%) and consumer (-0.8%) provide the main drags while value outperformed, with energy +2.4%, banks +2% and insurance +1.3%.  The DAX outperformed up 0.5%, after German election results avoided the worst-case left-wing favorable outcome.  U.S. futures. Rolls-Royce jumped 12% to the highest since March 2020 after the company was selected to provide the powerplant for the B-52 Stratofortress under the Commercial Engine Replacement Program. Here are some of the other biggest European movers today IWG rises as much as 7.5% after a report CEO Mark Dixon is exploring a multibillion-pound breakup of the flexible office-space provider AUTO1 gains as much as 6.1% after JPMorgan analyst Marcus Diebel raised the recommendation to overweight from neutral Cellnex falls as much as 4.3% to a two-month low after the tower firm is cut to sell from neutral at Citi, which says the stock is “priced for perfection in an imperfect industry” European uranium stocks fall with Yellow Cake shares losing as much as 6% and Nac Kazatomprom shares declining as much as 4.7%. Both follow their U.S. peers down following weeks of strong gains as the price of uranium ballooned For those who missed it, Sunday's closely-watched German elections concluded with the race much closer than initially expected: SPD at 25.7%, CDU/CSU at 24.1%, Greens at 14.8%, FDP at 11.5%, AfD at 10.3% Left at 4.9%, the German Federal Returning Officer announced the seat distribution from the preliminary results which were SPD at 206 seats, CDU/CSU at 196. Greens at 118, FDP at 92, AfD at 83, Left at 39 and SSW at 1. As it stands, three potential coalitions are an option, 1) SPD, Greens and FDP (traffic light), 2) CDU/CSU, Greens and FDP (Jamaica), 3) SPD and CDU/CSU (Grand Coalition but led by the SPD). Note, option 3 is seen as the least likely outcome given that the CDU/CSU would be unlikely willing to play the role of a junior partner to the SPD. Therefore, given the importance of the FDP and Greens in forming a coalition for either the SPD or CDU/CSU, leaders of the FDP and Greens have suggested that they might hold their own discussions with each other first before holding talks with either of the two larger parties. Given the political calculus involved in trying to form a coalition, the process is expected to play out over several months. From a markets perspective, the tail risk of the Left party being involved in government has now been removed due to their poor performance and as such, Bunds trade on a firmer footing. Elsewhere, EUR is relatively unfazed due to the inconclusive nature of the result. We will have more on this in a subsequent blog post. Asian stocks fell, reversing an earlier gain, as a drop in the Shanghai Composite spooked investors in the region by stoking concerns about the pace of growth in China’s economy.  The MSCI Asia Pacific Index wiped out an advance of as much as 0.7%, on pace to halt a two-day climb. Consumer discretionary names and materials firms were the biggest contributors to the late afternoon drag. Financials outperformed, helping mitigate drops in other sectors.  “Seeing Shanghai shares extending declines, investors’ sentiment has turned weak, leading to profit-taking on individual stocks or sectors that have been gaining recently,” said Shoichi Arisawa, an analyst at Iwai Cosmo Securities. “The drop in Chinese equities is reminding investors about a potential slowdown in their economy.”  The Shanghai Composite was among the region’s worst performers along with Vietnam’s VN Index. Shares of China’s electricity-intensive businesses tumbled after Beijing curbed power supplies in the country’s manufacturing hubs to cut emissions. The CSI 300 still rose, thanks to gains in heavily weighted Kweichow Moutai and other liquor makers. Asian equities started the day on a positive note as financials jumped, tracking gains in U.S. peers and following a rise in Treasury yields. Resona Holdings was among the top performers after Morgan Stanley raised its view on the stock and Japanese banks. The regional market has been calmer over the past few trading sessions after being whipsawed by concerns over any fallout from China Evergrande Group’s debt troubles. While anxiety lingers, many investors expect China will resolve the distressed property developer’s problems rather than let them spill over into an echo of 2008’s Lehman crisis. Japanese equities closed lower, erasing an earlier gain, as concerns grew over valuations following recent strength in the local market and turmoil in China. Machinery and electronics makers were the biggest drags on the Topix, which fell 0.1%. Daikin and Bandai Namco were the largest contributors to a dip of less than 0.1% in the Nikkei 225. Both gauges had climbed more 0.5% in morning trading. Meanwhile, the Shanghai Composite Index fell as much as 1.5% as industrials tumbled amid a power crunch. “Seeing Shanghai shares extending declines, investors’ sentiment has turned weak, leading to profit-taking on individual stocks or sectors that have been gaining recently,” said Shoichi Arisawa, an analyst at Iwai Cosmo Securities Co. “The drop in Chinese equities is reminding investors about a potential slowdown in their economy. That’s why marine transportation stocks, which are representative of cyclical sectors, fell sharply.” Shares of shippers, which have outperformed this year, fell as investors turned their attention to reopening plays. Travel and retail stocks gained after reports that the government is making final arrangements to lift all the coronavirus state of emergency order in the nation as scheduled at the end of this month. Australia's commodity-heavy stocks advanced as energy, banking shares climb. The S&P/ASX 200 index rose 0.6% to close at 7,384.20, led by energy stocks. Banks also posted their biggest one-day gain since Aug. 2. Travel stocks were among the top performers after the prime minister said state premiers must not keep borders closed once agreed Covid-19 vaccination targets are reached. NextDC was the worst performer after the company’s CEO sold 1.6 million shares. In New Zealand, the S&P/NZX 50 index. In FX, the U.S. dollar was up 0.1%, while the British pound, Australian dollar, and Canadian dollar lead G-10 majors, with the Swedish krona and Swiss franc lagging. •    The Bloomberg Dollar Spot Index was little changed and the greenback traded mixed versus its Group-of-10 peers o    Volatility curves in the major currencies were inverted last week due to a plethora of central bank meetings and risk-off concerns. They have since normalized as stocks stabilize and traders assess the latest forward guidance on monetary policy •    The yield on two-year U.S. Treasuries touched the highest level since April 2020, as tightening expectations continued to put pressure on front-end rates and ahead of debt sales later Monday •    The pound advanced, with analyst focus on supply chain problems as Prime Minister Boris Johnson considers bringing in army drivers to help. Bank of England Governor Andrew Bailey’s speech later will be watched after last week’s hawkish meeting •    Antipodean currencies, as well as the Norwegian krone and the Canadian dollar were among the best Group-of-10 performers amid a rise in commodity prices •    The yen pared losses after falling to its lowest level in six weeks and Japanese stocks paused their rally and amid rising Treasury yields   In rates, treasuries extended their recent drop, led by belly of the curve ahead of this week’s front-loaded auctions, which kick off Monday with 2- and 5-year note sales.  Yields were higher by up to 4bp across belly of the curve, cheapening 2s5s30s spread by 3.2bp on the day; 10-year yields sit around 1.49%, cheaper by 3.5bp and underperforming bunds, gilts by 1.5bp and 0.5bp while the front-end of the curve continues to sell off as rate-hike premium builds -- 2-year yields subsequently hit 0.284%, the highest level since April 2020. 5-year yields top at 0.988%, highest since Feb. 2020 while 2-year yields reach as high as 0.288%; in long- end, 30-year yields breach 2% for the first time since Aug. 13. Auctions conclude Tuesday with 7-year supply. Host of Fed speakers due this week, including three scheduled for Monday. In commodities, Brent futures climbed 1.4% to $79 a barrel, while WTI futures hit $75 a barrel for the first time since July, amid an escalating energy crunch across Europe and now China. Base metals are mixed: LME copper rises 0.4%, LME tin and nickel drop over 2%. Spot gold gives back Asia’s gains to trade flat near $1,750/oz In equities, Stoxx 600 is up 0.6%, led by energy and banks, and FTSE 100 rises 0.4%. Germany’s DAX climbs 1% after German elections showed a narrow victory for social democrats, with the Christian Democrats coming in a close second, according to provisional results. S&P 500 futures climb 0.3%, Dow and Nasdaq contracts hold in the green. In FX, the U.S. dollar is up 0.1%, while the British pound, Australian dollar, and Canadian dollar lead G-10 majors, with the Swedish krona and Swiss franc lagging. Base metals are mixed: LME copper rises 0.4%, LME tin and nickel drop over 2%. Spot gold gives back Asia’s gains to trade flat near $1,750/oz Investors will now watch for a raft of economic indicators, including durable goods orders and the ISM manufacturing index this week to gauge the pace of the recovery, as well as bipartisan talks over raising the $28.4 trillion debt ceiling. The U.S. Congress faces a Sept. 30 deadline to prevent the second partial government shutdown in three years, while a vote on the $1 trillion bipartisan infrastructure bill is scheduled for Thursday. On today's calendar we get the latest Euro Area M3 money supply, US preliminary August durable goods orders, core capital goods orders, September Dallas Fed manufacturing activity. We also have a bunch of Fed speakers including Williams, Brainard and Evans. Market Snapshot S&P 500 futures down 0.1% to 4,442.50 STOXX Europe 600 up 0.3% to 464.54 MXAP little changed at 200.75 MXAPJ little changed at 642.52 Nikkei little changed at 30,240.06 Topix down 0.1% to 2,087.74 Hang Seng Index little changed at 24,208.78 Shanghai Composite down 0.8% to 3,582.83 Sensex up 0.2% to 60,164.70 Australia S&P/ASX 200 up 0.6% to 7,384.17 Kospi up 0.3% to 3,133.64 German 10Y yield fell 3.1 bps to -0.221% Euro down 0.3% to $1.1689 Brent Futures up 1.2% to $79.04/bbl Gold spot little changed at $1,750.88 U.S. Dollar Index up 0.15% to 93.47 Top Overnight News from Bloomberg House Speaker Nancy Pelosi put the infrastructure bill on the schedule for Monday under pressure from moderates eager to get the bipartisan bill, which has already passed the Senate, enacted. But progressives -- whose votes are likely vital -- are insisting on progress first on the bigger social-spending bill Olaf Scholz of the center-left Social Democrats defeated Chancellor Angela Merkel’s conservatives in an extremely tight German election, setting in motion what could be months of complex coalition talks to decide who will lead Europe’s biggest economy China’s central bank pumped liquidity into the financial system after borrowing costs rose, as lingering risks posed by China Evergrande Group’s debt crisis hurt market sentiment toward its peers as well Global banks are about to get a comprehensive blueprint for how derivatives worth several hundred trillion dollars may be finally disentangled from the London Interbank Offered Rate Economists warned of lower economic growth in China as electricity shortages worsen in the country, forcing businesses to cut back on production Governor Haruhiko Kuroda says it’s necessary for the Bank of Japan to continue with large-scale monetary easing to achieve the bank’s 2% inflation target The quant revolution in fixed income is here at long last, if the latest Invesco Ltd. poll is anything to go by. With the work-from-home era fueling a boom in electronic trading, the majority of investors in a $31 trillion community say they now deploy factor strategies in bond portfolios A more detailed look at global markets courtesy of Newsquawk Asian equity markets traded somewhat mixed with the region finding encouragement from reopening headlines but with gains capped heading towards month-end, while German election results remained tight and Evergrande uncertainty continued to linger. ASX 200 (+0.6%) was led higher by outperformance in the mining related sectors including energy as oil prices continued to rally amid supply disruptions and views for a stronger recovery in demand with Goldman Sachs lifting its year-end Brent crude forecast from USD 80/bbl to USD 90/bbl. Furthermore, respectable gains in the largest weighted financial sector and details of the reopening roadmap for New South Wales, which state Premier Berijiklian sees beginning on October 11th, further added to the encouragement. Nikkei 225 (Unch) was kept afloat for most of the session after last week’s beneficial currency flows and amid reports that Japan is planning to lift emergency measures in all areas at month-end, although upside was limited ahead of the upcoming LDP leadership race which reports noted are likely to go to a run-off as neither of the two main candidates are likely to achieve a majority although a recent Kyodo poll has Kono nearly there at 47.4% of support vs. nearest contender Kishida at 22.4%. Hang Seng (+0.1%) and Shanghai Comp. (-0.8%) were varied with the mainland choppy amid several moving parts including back-to-back daily liquidity efforts by the PBoC since Sunday and with the recent release of Huawei’s CFO following a deal with US prosecutors. Conversely, Evergrande concerns persisted as Chinese cities reportedly seized its presales to block the potential misuse of funds and its EV unit suffered another double-digit percentage loss after scrapping plans for its STAR Market listing. There were also notable losses to casino names after Macau tightened COVID-19 restrictions ahead of the Golden Week holidays and crypto stocks were hit after China declared crypto activities illegal which resulted in losses to cryptoexchange Huobi which dropped more than 40% in early trade before nursing some of the losses, while there are also concerns of the impact from an ongoing energy crisis in China which prompted the Guangdong to ask people to turn off lights they don't require and use air conditioning less. Finally, 10yr JGBs were flat but have clawed back some of the after-hour losses on Friday with demand sapped overnight amid the mild gains in stocks and lack of BoJ purchases in the market. Elsewhere, T-note futures mildly rebounded off support at 132.00, while Bund futures outperformed the Treasury space amid mild reprieve from this month’s losses and with uncertainty of the composition for the next German coalition. Top Asian News Moody’s Says China to Safeguard Stability Amid Evergrande Issues China’s Tech Tycoons Pledge Allegiance to Xi’s Vision China Power Crunch Hits iPhone, Tesla Production, Nikkei Reports Top Netflix Hit ‘Squid Game’ Sparks Korean Media Stock Surge Bourses in Europe have trimmed the gains seen at the open, albeit the region remains mostly in positive territory (Euro Stoxx 50 +0.4%; Stoxx 600 +0.2%) in the aftermath of the German election and amid the looming month-end. The week also sees several risk events, including the ECB's Sintra Forum, EZ CPI, US PCE and US ISM Manufacturing – not to mention the vote on the bipartisan US infrastructure bill. The mood in Europe contrasts the mixed handover from APAC, whilst US equity futures have also seen more divergence during European trade – with the yield-sensitive NQ (-0.3%) underperforming the cyclically-influenced RTY (+0.4%). There has been no clear catalyst behind the pullback since the Cash open. Delving deeper into Europe, the DAX 40 (+0.6%) outperforms after the tail risk of the Left party being involved in government has now been removed. The SMI (-0.6%) has dipped into the red as defensive sectors remain weak, with the Healthcare sector towards to bottom of the bunch alongside Personal & Household Goods. On the flip side, the strength in the price-driven Oil & Gas and yield-induced Banks have kept the FTSE 100 (+0.2%) in green, although the upside is capped by losses in AstraZeneca (-0.4%) and heavy-weight miners, with the latter a function of declining base metal prices. The continued retreat in global bonds has also hit the Tech sector – which resides as the laggard at the time of writing. In terms of individual movers, Rolls-Royce (+8.5%) trades at the top of the FTSE 100 after winning a USD 1.9bln deal from the US Air Force. IWG (+6.5%) also extended on earlier gains following reports that founder and CEO Dixon is said to be mulling a multibillion-pound break-up of the Co. that would involve splitting it into several distinct companies. Elsewhere, it is worth being cognizant of the current power situation in China as the energy crisis spreads, with Global Times also noting that multiple semiconductor suppliers for Tesla (Unch), Apple (-0.4% pre-market) and Intel (Unch), which have manufacturing plants in the Chinese mainland, recently announced they would suspend their factories' operations to follow local electricity use policies. Top European News U.K. Relaxes Antitrust Rules, May Bring in Army as Pumps Run Dry Magnitude 5.8 Earthquake Hits Greek Island of Crete German Stocks Rally as Chances Wane for Left-Wing Coalition German Landlords Rise as Left’s Weakness Trumps Berlin Poll In FX, the Aussie is holding up relatively well on a couple of supportive factors, including a recovery in commodity prices overnight and the Premier of NSW setting out a timetable to start lifting COVID lockdown and restrictions from October 11 with an end date to completely re-open on December 1. However, Aud/Usd is off best levels against a generally firm Greenback on weakness and underperformance elsewhere having stalled around 0.7290, while the Loonie has also run out of momentum 10 pips or so from 1.2600 alongside WTI above Usd 75/brl. DXY/EUR/CHF - Although the risk backdrop is broadly buoyant and not especially supportive, the Buck is gleaning traction and making gains at the expense of others, like the Euro that is gradually weakening in wake of Sunday’s German election that culminated in narrow victory for the SPD Party over the CDU/CSU alliance, but reliant on the Greens and FDP to form a Government. Eur/Usd has lost 1.1700+ status and is holding a fraction above recent lows in the form of a double bottom at 1.1684, but the Eur/Gbp cross is looking even weaker having breached several technical levels like the 100, 21 and 50 DMAs on the way down through 0.8530. Conversely, Eur/Chf remains firm around 1.0850, and largely due to extended declines in the Franc following last week’s dovish SNB policy review rather than clear signs of intervention via the latest weekly Swiss sight deposit balances. Indeed, Usd/Chf is now approaching 0.9300 again and helping to lift the Dollar index back up towards post-FOMC peaks within a 93.494-206 range in advance of US durable goods data, several Fed speakers, the Dallas Fed manufacturing business index and a double dose of T-note supply (Usd 60 bn 2 year and Usd 61 bn 5 year offerings). GBP/NZD/JPY - As noted above, the Pound is benefiting from Eur/Gbp tailwinds, but also strength in Brent to offset potential upset due to the UK’s energy supply issues, so Cable is also bucking the broad trend and probing 1.3700. However, the Kiwi is clinging to 0.7000 in the face of Aud/Nzd headwinds that are building on a break of 1.0350, while the Yen is striving keep its head afloat of another round number at 111.00 as bond yields rebound and curves resteepen. SCANDI/EM - The Nok is also knocking on a new big figure, but to the upside vs the Eur at 10.0000 following the hawkish Norges Bank hike, while the Cnh and Cny are holding up well compared to fellow EM currencies with loads of liquidity from the PBoC and some underlying support amidst the ongoing mission to crackdown on speculators in the crypto and commodity space. In commodities, WTI and Brent front-month futures kicked the week off on a firmer footing, which saw Brent Nov eclipse the USD 79.50/bbl level (vs low 78.21/bbl) whilst its WTI counterpart hovers north of USD 75/bbl (vs low 74.16/bbl). The complex could be feeling some tailwinds from the supply crunch in Britain – which has lead petrol stations to run dry as demand outpaces the supply. Aside from that, the landscape is little changed in the run-up to the OPEC+ meeting next Monday, whereby ministers are expected to continue the planned output hikes of 400k BPD/m. On that note, there have been reports that some African nations are struggling to pump more oil amid delayed maintenance and low investments, with Angola and Nigeria said to average almost 300k BPD below their quota. On the Iranian front, IAEA said Iran permitted it to service monitoring equipment during September 20th-22nd with the exception of the centrifuge component manufacturing workshop at the Tesa Karaj facility, with no real updates present regarding the nuclear deal talks. In terms of bank commentary, Goldman Sachs raised its year-end Brent crude forecast by USD 10 to USD 90/bbl and stated that Hurricane Ida has more than offset the ramp-up in OPEC+ output since July with non-OPEC+, non-shale output continuing to disappoint, while it added that global oil demand-deficit is greater than expected with a faster than anticipated demand recovery from the Delta variant. Conversely, Citi said in the immediate aftermath of skyrocketing prices, it is logical to be bearish on crude oil and nat gas today and forward curves for later in 2022, while it added that near-term global oil inventories are low and expected to continue declining maybe through Q1 next year. Over to metals, spot gold and silver have fallen victim to the firmer Dollar, with spot gold giving up its overnight gains and meandering around USD 1,750/oz (vs high 1760/oz) while spot silver briefly dipped under USD 22.50/oz (vs high 22.73/oz). Turning to base metals, China announced another round of copper, zinc and aluminium sales from state reserves – with amounts matching the prior sales. LME copper remains within a tight range, but LME tin is the outlier as it gave up the USD 35k mark earlier in the session. Finally, the electricity crunch in China has seen thermal coal prices gain impetus amid tight domestic supply, reduced imports and increased demand. US Event Calendar 8:30am: Aug. Cap Goods Ship Nondef Ex Air, est. 0.5%, prior 0.9% 8:30am: Aug. Cap Goods Orders Nondef Ex Air, est. 0.4%, prior 0.1% 8:30am: Aug. -Less Transportation, est. 0.5%, prior 0.8% 8:30am: Aug. Durable Goods Orders, est. 0.6%, prior -0.1% 10:30am: Sept. Dallas Fed Manf. Activity, est. 11.0, prior 9.0 Central Banks 8am: Fed’s Evans Speaks at Annual NABE Conference 9am: Fed’s Williams Makes Opening Remarks at Conference on... 12pm: Fed’s Williams Discusses the Economic Outlook 12:50pm: Fed’s Brainard Discusses Economic Outlook at NABE Conference DB's Jim Reid concludes the overnight wrap Straight to the German elections this morning where unlike the Ryder Cup the race was tight. The centre-left SPD have secured a narrow lead according to provisional results, which give them 25.7% of the vote, ahead of Chancellor Merkel’s CDU/CSU bloc, which are on 24.1%. That’s a bit narrower than the final polls had suggested (Politico’s average put the SPD ahead by 25-22%), but fits with the slight narrowing we’d seen over the final week of the campaign. Behind them, the Greens are in third place, with a record score of 14.8%, which puts them in a key position when it comes to forming a majority in the new Bundestag, and the FDP are in fourth place currently on 11.5%. Although the SPD appear to be in first place the different parties will now enter coalition negotiations to try to form a governing majority. Both Olaf Scholz and the CDU’s Armin Laschet have said that they will seek to form a government, and to do that they’ll be looking to the Greens and the FDP as potential coalition partners, since those are the most realistic options given mutual policy aims. So the critical question will be whether it’s the SPD or the CDU/CSU that can convince these two to join them in coalition. On the one hand, the Greens have a stronger policy overlap with the SPD, and governed with them under Chancellor Schröder from 1998-2005, but the FDP seems more in line with the Conservatives, and were Chancellor Merkel’s junior coalition partner from 2009-13.  So it’s likely that the FDP and the Greens will talk to each other before talking to either of the two biggest parties. For those wanting more information, our research colleagues in Frankfurt have released a post-election update (link here) on the results and what they mean. An important implication of last night’s result is that (at time of writing) it looks as though a more left-wing coalition featuring the SPD, the Greens and Die Linke would not be able for form a majority in the next Bundestag. So the main options left are for the FDP and the Greens to either join the SPD in a “traffic light” coalition or instead join the CDU/CSU in a “Jamaica” coalition. The existing grand coalition of the SPD and the CDU/CSU would actually have a majority as well, but both parties have signalled that they don't intend to continue this. That said, last time in 2017, a grand coalition wasn’t expected after that result, and there were initially attempts to form a Jamaica coalition. But once those talks proved unsuccessful, discussions on another grand coalition began once again. In terms of interesting snippets, this election marks the first time the SPD have won the popular vote since 2002, which is a big turnaround given that the party were consistently polling in third place over the first half of this year. However, it’s also the worst ever result for the CDU/CSU, and also marks the lowest combined share of the vote for the two big parties in post-war Germany, which mirrors the erosion of the traditional big parties we’ve seen elsewhere in continental Europe. Interestingly, the more radical Die Linke and AfD parties on the left and the right respectively actually did worse than in 2017, so German voters have remained anchored in the centre, and there’s been no sign of a populist resurgence. This also marks a record result for the Greens, who’ve gained almost 6 percentage points relative to four years ago, but that’s still some way down on where they were polling earlier in the spring (in the mid-20s), having lost ground in the polls throughout the final weeks of the campaign. Markets in Asia have mostly started the week on a positive note, with the Hang Seng (+0.28%), Nikkei (+0.04%), and the Kospi (+0.25%) all moving higher. That said, the Shanghai Comp is down -1.30%, as materials (-5.91%) and industrials (-4.24%) in the index have significantly underperformed, which comes amidst power curbs in the country. In the US and Europe however, futures are pointing higher, with those on the S&P 500 up +0.37%, and those on the DAX up +0.51%. Moving onto another big current theme, all the talk at the moment is about supply shocks and it’s not inconceivable that things could get very messy on this front over the weeks and months ahead. However, I think the discussion on supply in isolation misses an important component and that is demand. In short we had a pandemic that effectively closed the global economy and interrupted numerous complicated supply chains. The global authorities massively stimulated demand relative to where it would have been in this environment and in some areas have created more demand than there would have been at this stage without Covid. However the supply side has not come back as rapidly. As such you’re left with demand outstripping supply. So I think it’s wrong to talk about a global supply shock in isolation. It’s not as catchy but this is a “demand is much higher than it should be in a pandemic with lockdowns, but supply hasn't been able to fully respond” world. If the authorities hadn’t responded as aggressively we would have plenty of supply for the demand and a lot of deflation. Remember negative oil prices in the early stages of the pandemic. So for me every time you hear the phrase “supply shock” remember the phenomenal demand there is relative to what the steady state might have been. This current “demand > supply” at lower levels of activity than we would have had without covid is going to cause central banks a huge headache over the coming months. Should they tighten due to what is likely to be a prolonged period of higher prices than people thought even a couple of months ago or should they look to the potential demand destruction of higher prices? The risk of a policy error is high and the problem with forward guidance is that markets demand to know now what they might do over the next few months and quarters so it leaves them exposed a little in uncertain times. This problem has crept up fast on markets with an epic shift in sentiment in the rates market after the BoE meeting Thursday lunchtime. I would say they were no more hawkish than the Fed the night before but the difference is that the Fed are still seemingly at least a year from raising rates and a lot can happen in that period whereas the BoE could now raise this year (more likely February). That has focused the minds of global investors, especially as Norway became the first central bank among the G-10 currencies to raise rates on the same day. Towards the end of this note we’ll recap the moves in markets last week including a +15bps climb in US 10yr yields in the last 48 hours of last week. One factor that will greatly influence yields over the week ahead is the ongoing US debt ceiling / government shutdown / infrastructure bill saga that is coming to a head as we hit October on Friday - the day that there could be a partial government shutdown without action by the close on Thursday. It’s a fluid situation. So far the the House of Representatives has passed a measure that would keep the government funded through December 3, but it also includes a debt ceiling suspension, so Republicans are expected to block this in the Senate if it still includes that. The coming week could also see the House of Representatives vote on the bipartisan infrastructure bill (c.$550bn) that’s already gone through the Senate, since Speaker Pelosi had previously committed to moderate House Democrats that there’d be a vote on the measure by today. She reaffirmed that yesterday although the timing may slip. However, there remain divisions among House Democrats, with some progressives not willing to support it unless the reconciliation bill also passes. In short we’ve no idea how this get resolved but most think some compromise will be reached before Friday. Pelosi yesterday said it “seems self-evident” that the reconciliation bill won’t reach the $3.5 trillion hoped for by the administration which hints at some compromise. Overall the sentiment has seemingly shifted a little more positively on there being some progress over the weekend. From politics to central banks and following a busy week of policy meetings, there are an array of speakers over the week ahead. One of the biggest highlights will be the ECB’s Forum on Central Banking, which is taking place as an online event on Tuesday and Wednesday, and the final policy panel on Wednesday will include Fed Chair Powell, ECB President Lagarde, BoE Governor Bailey and BoJ Governor Kuroda. Otherwise, Fed Chair Powell will also be testifying before the Senate Banking Committee on Tuesday, alongside Treasury Secretary Yellen, and on Monday, ECB President Lagarde will be appearing before the European Parliament’s Committee on Economic and Monetary Affairs as part of the regular Monetary Dialogue. There are lots of other Fed speakers this week and they can add nuances to the taper and dot plot debates. Finally on the data front, there’ll be further clues about the state of inflation across the key economies, as the Euro Area flash CPI estimate for September is coming out on Friday. Last month's reading showed that Euro Area inflation rose to +3.0% in August, which was its highest level in nearly a decade. Otherwise, there’s also the manufacturing PMIs from around the world on Friday given it’s the start of the month, along with the ISM reading from the US, and Tuesday will see the release of the Conference Board’s consumer confidence reading for the US as well. For the rest of the week ahead see the day-by-day calendar of events at the end. Back to last week now and the highlight was the big rise in global yields which quickly overshadowed the ongoing Evergrande story. Bonds more than reversed an early week rally as yields rose for a fifth consecutive week. US 10yr Treasury yields ended the week up +8.9bps to finish at 1.451% - its highest level since the start of July and +15bps off the Asian morning lows on Thursday. The move saw the 2y10y yield curve steepen +4.5bps, with the spread reaching its widest point since July as well. However, at the longer end of the curve the 5y30y spread ended the week largely unchanged after a volatile week. It was much flatter shortly following the FOMC and steeper following the BoE. Bond yields in Europe moved higher as well with the central bank moves again being the major impetus especially in the UK. 10yr gilt yields rose +7.9bps to +0.93% and the short end moved even more with the 2yr yield rising +9.4bps to 0.38% as the BoE’s inflation forecast and rhetoric caused investors to pull forward rate hike expectations. Yields on 10yr bunds rose +5.2bps, whilst those on the OATs (+6.3bps) and BTPs (+5.7bps) increased substantially as well, but not to the same extent as their US and UK counterparts. While sovereign debt sold off, global equity markets recovered following two consecutive weeks of declines. Although markets entered the week on the back foot following the Evergrande headlines from last weekend, risk sentiment improved at the end of the week, especially toward cyclical industries. The S&P 500 gained +0.51% last week (+0.15% Friday), nearly recouping the prior week’s loss. The equity move was primarily led by cyclicals as higher bond yields helped US banks (+3.43%) outperform, while higher commodity prices saw the energy (+4.46%) sector gain sharply. Those higher bond yields led to a slight rerating of growth stocks as the tech megacap NYFANG index fell back -0.46% on the week and the NASDAQ underperformed, finishing just better than unchanged (+0.02). Nonetheless, with four trading days left in September the S&P 500 is on track for its third losing month this year, following January and June. European equities rose moderately last week, as the STOXX 600 ended the week +0.31% higher despite Friday’s -0.90% loss. Bourses across the continent outperformed led by particularly strong performances by the IBEX (+1.28%) and CAC 40 (+1.04%). There was limited data from Friday. The Ifo's business climate indicator in Germany fell slightly from the previous month to 98.8 (99.0 expected) from 99.4 on the back a lower current assessment even though business expectations was higher than expected. In Italy, consumer confidence rose to 119.6 (115.8 expected), up just over 3pts from August and at its highest level on record (since 1995). Tyler Durden Mon, 09/27/2021 - 08:09.....»»

Category: personnelSource: nytSep 27th, 2021

Futures Rise As Dip Buyers Emerge To Cap Best Week Since Mid-March

Futures Rise As Dip Buyers Emerge To Cap Best Week Since Mid-March Unless stocks crater today, and the S&P tumbles by 4.3%, the streak of seven consecutive weekly declines in the S&P is about to end... ... as US stock futures rose again on Friday, their third consecutive gain, setting up the underlying indexes for the first strong weekly finish since late March on signs consumers remain resilient despite inflationary pressures, as upbeat earnings from Alibaba and Baidu eased some fears on the economic impact of China’s Covid lockdowns, and as investors (mostly retail) have staged a cautious return to the market hoping that the selloff earlier this month left valuations at bargain levels. Nasdaq 100 contracts rose 0.5% by 7:15 a.m. in New York, while S&P 500 futures were up 0.4%. Still, even after the recent rout, upside may be limited as the S&P 500’s 12-month fwd P/E ratio is now near its 10-year average. Among notable moves in premarket trading, Gap Inc. shares sank as much as 17% as analysts after analysts said that the retailer’s guidance cut was worse than expected, prompting brokers to lower their targets and downgrade the stock given a worsening macroeconomic environment could trigger further bad news. China's Uber, Didi Chuxing, jumped after a Bloomberg News report that state-owned automaker China FAW Group is considering acquiring a significant stake in the ride-hailing company. Zscaler Inc. rose after the security software company reported results above expectations.  Here are some other notable premarket movers: Gap (GPS US) shares dropped as much as 17% in US premarket trading with analysts saying that the retailer’s guidance cut was more than expected, prompting brokers to lower their targets and downgrade the stock given a worsening macroeconomic environment could trigger further bad news. Costco (COST US) shares dropped 2.1% in US after-hours trading on Thursday. While Costco’s margins disappointed analysts, brokers were generally positive on how the wholesale retailer is navigating an environment with rising inflation by controlling expenses. Zscaler (ZS US) shares rose 2% in extended trading on Thursday, after the security software company reported third- quarter results that beat expectations and raised its full-year forecast. Analysts lauded strength in multi-product deals. Marvell Technology (MRVL US) shares climbed 3.4% in US postmarket trading after results. Analysts highlighted that the semiconductor maker is seeing strength across key markets, in particular across data center and carrier infrastructure. 23andMe Holding Co. (ME US) dropped 8.3% in postmarket trading Thursday. It is in a “tough spot,” Citi says in note after the consumer genetics firm gave a fiscal 2023 revenue forecast that missed expectations. Workday (WDAY US) shares fell 9% in extended trading on Thursday, after the software company reported adjusted first-quarter earnings that missed expectations. Analysts noted that software deals were pushed out of the quarter and cut their price targets as they factored in the increased global uncertainty. The latest round of retail earnings have restored some confidence in consumer demand, lifting appetite for risk assets, while speculation is growing that the Federal Reserve will pause its rate hikes later this year as inflation shows signs of peaking. Still, Citigroup strategists on Friday cut their recommendation on US stocks to neutral on the risk of a recession, joining an increasing number of banks in warning of a growth slowdown. The path for the Federal Reserve to successfully bring inflation down while keeping the rate of economic growth above zero is narrow, according to Mark Haefele, chief investment officer at UBS Global Wealth Management. “If Fed policymakers underestimate the strength of the US economy, we face an extended period of above-target inflation. If they overestimate it, we face a recession. And we can’t know with great conviction which path we’re on,” he wrote in a note. Global stock funds saw their biggest inflows in 10 weeks, led by US stocks, according to EPFR data, as cheaper valuations lured buyers after a steep selloff on recession fears. The selloff made valuations attractive and enticed investors back into a market still shadowed by worries about inflation and higher interest rates, China’s downbeat economic outlook and the war in Ukraine. “We may see a little bit more stability here because we have repriced the stocks so much already,” Anastasia Amoroso, iCapital chief investment strategist, said on Bloomberg Television. “In the next three to six months it’s still going to be a constrained market environment.” Meanwhile, China-US tensions are once again being played out after direct comments from Secretary of State Antony Blinken aimed at Chinese President Xi Jinping. And in a fresh challenge to Beijing, the US and Taiwan are planning to announce negotiations to deepen economic ties. And elseshwere, as the Russins war in Ukraine approaches 100 days, the US may announce a new package of aid for Kyiv as soon as next week that would include long-range rocket systems and other advanced weapons. Boris Johnson urged further military support for Ukraine, including sending it more offensive weapons such as Multiple Launch Rocket Systems that can strike targets from much further away. Russia’s efforts to avoid its first foreign default in a century are back in focus on Friday, when investors are supposed to receive about $100 million in interest on Russian debt. Turning back to markets, consumer and technology sectors led gains in Europe’s Stoxx 600 which rose 0.9%, and was headed for its best weekly advance since mid-March, while utilities and energy shared lagged after the UK government announced windfall tax plans on oil and gas companies on Thursday. BP Plc said it will look again at its plans in the country. Here are some of the more notable movers in Europe: Cantargia gains as much as 23%, the largest intraday rise since December, after releasing three research updates late Thursday. The interim readout for the company’s nadunolimab (CAN04), used in combination with gemcitabine and nab-paclitaxel as a first line treatment of PDAC, a type of pancreatic cancer, was the most interesting of the data releases, according Kempen. FirstGroup shares jump as much as 9.8%, extending the gains from yesterday’s confirmation that the public transport operator received an unsolicited takeover approach from I Squared. Richemont shares rise as much as 8.3%, heading for their best weekly advance since November, pushing the Swiss Market Index higher as dip buyers returned more broadly this week. European miners advance for a third day, outperforming all other sectors on the Stoxx 600 on Friday as iron ore futures climb and metals posted broad gains. Hapag-Lloyd falls as much as 7.1% after Citi cut the recommendation to neutral from buy due to valuation versus peers. In note on European shipping, broker says it expects the supply and demand dynamics to remain favorable in the near term. Rieter Holding falls as much as 5.4% as Baader Helvea downgrades its recommendation to reduce from add after the manufacturer of chemical fiber systems said that it’s seeing a challenging first half. Earlier in the session, Asian stocks also advanced as upbeat earnings from Alibaba and Baidu eased some fears on the economic impact of China’s Covid lockdowns and fueled risk-on sentiment. The MSCI Asia Pacific Index rose 1.6%, poised for its first gain in four sessions, led by consumer discretionary and technology shares. Most markets in the region were up, led by Hong Kong.  Alibaba and Baidu both delivered better-than-expected quarterly sales growth, providing investors with some relief after Tencent’s recent lackluster report and amid concerns over China’s virus measure and regulatory crackdowns. The Hang Seng Tech Index, which tracks the nation’s tech giants listed in Hong Kong, surged 3.8%. Asian equities have gained about 0.7% this week, set for a back-to-back weekly advance as dip buyers emerged. The regional MSCI benchmark is still down about 14% this year amid ongoing market concerns over global inflation and higher US interest rates, China’s economic outlook and the war in Ukraine. “The risk of a bull trap cannot be dismissed,” Vishnu Varathan, the head of economics and strategy at Mizuho Bank, wrote in a note. “Bear markets are famous for the pockets of relief rallies,” and increasing strains on liquidity in the coming quarters “may not pass without pain.” Japan’s stocks likewise advanced as the nation prepared to reopen to foreign tourists and China’s tech shares jumped.    The Topix rose 0.5% to 1,887.30 as of the 3pm close in Tokyo, while the Nikkei 225 advanced 0.7% to 26,781.68. Tokyo Electron Ltd. contributed the most to the Topix’s gain, increasing 3.2%. Out of 2,171 shares in the index, 1,480 rose and 615 fell, while 76 were unchanged In Australia, the S&P/ASX 200 index rose 1.1% to close at 7,182.70, the highest level since May 6, led by energy and consumer discretionary shares. Woodside Energy Group was among the biggest gainers as US crude and gasoline stockpiles showed signs of continuing decline ahead of the summer driving season. Appen was the top decliner after saying that Telus revoked its indicative proposal for a takeover. In New Zealand, the S&P/NZX 50 index fell 0.3% to 11,065.15 In FX, the Bloomberg Dollar Spot Index slumped as the dollar was steady to weaker against all of its Group-of-10 peers. Treasuries were steady across the curve. The euro inched up to touch a fresh one- month high of 1.0765 before paring. The bund yield curve bull- flattened slightly, drawing the 10-year yield away from 1%. Risk- sensitive Antipodean and Scandinavian currencies led gains. The Australian dollar climbed as a decent retail sales print brightened the outlook and a drop in the greenback triggered buy-stops. Benchmark bonds slipped. Australian retail sales rose 0.9% m/m in April vs estimate +1% and prior +1.6%. The pound ticked higher, touching its highest level in a month against the dollar, while gilts advanced. Chancellor of the Exchequer Rishi Sunak said that his package of support for the UK economy will have a “minimal” impact on inflation. The yen advanced for a second day as lower Treasury yields weighed on the dollar. Japanese bonds rise after being sold off on Thursday In rates, Treasuries were steady, following gains in European markets where bull-flattening was observed across bunds and gilts. Yields were richer by 1bp-3bp across the curve, the 10-year yield dropped by ~2bp to 2.72%, underperforming bunds by 1.5bp, gilts by ~3bp. IG dollar issuance slate still blank in what has so far been the slowest week of the year for new deals; next week’s calendar is expected to total $25b- $30b. Focal points for US session include several economic data releases including April personal income/spending with PCE deflator. Sifma recommended 2pm close of trading for dollar-denominated fixed income ahead of US holiday weekend.    In commodities, WTI drifts 0.7% higher to trade below $115. Spot gold rises roughly $7 to trade at $1,858/oz. Most base metals are in the green; LME nickel rises 6.6%, outperforming peers. Looking to the day ahead, and data releases include US personal income and personal spending for April, as well as the preliminary wholesale inventories for that month, and the final University of Michigan consumer sentiment index for May. In the Euro Area, there’s also the M3 money supply for April. Otherwise, central bank speakers include ECB Chief Economist Lane. Market Snapshot S&P 500 futures up 0.3% to 4,068.25 STOXX Europe 600 up 0.7% to 440.64 MXAP up 1.6% to 165.89 MXAPJ up 2.1% to 542.44 Nikkei up 0.7% to 26,781.68 Topix up 0.5% to 1,887.30 Hang Seng Index up 2.9% to 20,697.36 Shanghai Composite up 0.2% to 3,130.24 Sensex up 1.2% to 54,919.92 Australia S&P/ASX 200 up 1.1% to 7,182.71 Kospi up 1.0% to 2,638.05 German 10Y yield little changed at 0.99% Euro up 0.1% to $1.0737 Brent Futures up 0.4% to $117.91/bbl Gold spot up 0.5% to $1,859.48 U.S. Dollar Index down 0.16% to 101.67 Top Overnight News from Bloomberg The path for Russia to keep sidestepping its first foreign default in a century is turning more onerous as another coupon comes due on the warring nation’s debt. Investors are supposed to receive about $100 million of interest on Russian foreign debt in their accounts by Friday, payments President Vladimir Putin’s government says it has already made China’s oil trading giant Unipec has significantly increased the number of hired tankers to ship a key crude from eastern Russia A central bank legal proposal envisages Russian eurobond issuers placing “substitute” bonds in order to ensure debt payments come through to local investors, Interfax reported The US and Taiwan are planning to announce negotiations to deepen economic ties, people familiar with the matter said, in a fresh challenge to Beijing, which has cautioned Washington on its relationship with the island. Profits at Chinese industrial firms shrank last month for the first time in two years as Covid outbreaks and lockdowns disrupted factory production, transport logistics and sales “The process of increasing interest rates should be gradual,” ECB Governing Council member Pablo Hernandez de Cos comments in op- ed in Expansion. “The aim is to avoid abrupt movements, which could be particularly damaging in a context of high uncertainty such as the current one” The RBA is poised for its first review in a generation as new Treasurer Jim Chalmers makes good on a pledge to ensure the nation’s monetary and fiscal regimes are fit for purpose The UK signed its first trade agreement with a US state, amid warnings that Prime Minister Boris Johnson’s stance on Brexit is hindering progress on a broader deal with Joe Biden’s administration A more detailed look at global markets courtesy of Newsquawk Asia-Pac stocks took impetus from the risk-on mood on Wall St where all major indices were lifted amid month-end flows and encouraging retailer earnings.  ASX 200 was led higher by outperformance in the commodity and resources industries, while consumer stocks were mixed after Retail Sales printed in line with expectations, albeit at a slowdown from the prior month. Nikkei 225 traded positively but with upside capped by a mixed currency and weakness in energy and power names after increases in international prices and with the government looking to address the tight energy market. Hang Seng and Shanghai Comp were firmer with notable outperformance in Hong Kong amid a euphoric tech sector after earnings from Alibaba and Baidu topped estimates which also inspired the NASDAQ Golden Dragon China Index during the prior US session, while advances in the mainland were moderated by the contraction in April Industrial Profits and after Premier Li’s unpublished comments from Wednesday’s emergency meeting came to light in which he warned of dire consequences for the economy. Top Asian News China’s State Council will seek specific implementation rules by May 31st regarding necessary measures at all levels of government and will dispatch inspection teams to all 31 provinces, municipalities and autonomous regions to oversee the rollout amid an urgent need for national economic mobilisation, according to SGH Macro Advisors. US is seeking to hold economic discussions with Taiwan in the latest test with China, while supply chains and agriculture are said to be among the topics, according to Bloomberg. Furthermore, reports noted that bilateral economic talks will be announced in the upcoming weeks. Evergrande (3333 HK) is reportedly considering repaying offshore bondholders in instalments, according to Reuters sources; discussing giving the option of converting part of debt into equity of property management and EV units. China's Health Official says some areas along the Jilin border report local infections without a clear source, close attention should be paid to the risk of importing the virus; COVID infections show a trend of gradual spread from border to inland areas, via Reuters European bourses are firmer, Euro Stoxx 50 +0.9%, drawing impetus from APAC strength into month-end with catalysts thin thus far. Stateside, futures are supported across the board with familiar themes in play pre-PCE Price Index for insight into the 'peak' inflation narrative; ES +0.3%. Note, the FTSE 100 Unch. is the mornings underperformer amid pressure in energy names after Chancellor Sunak's windfall tax announcement on Thursday. DiDi (DIDI) has reportedly drawn interest from FAW Group, regarding a stake purchase, according to Bloomberg. +7.5% in the pre-market Top European News UK Oil Windfall Tax Prompts BP to Review Investment Plans; UK Energy Stocks Extend Windfall Declines as Retailers Gain Richemont Leads Swiss Stocks Higher as Dip Buyers Return Hapag-Lloyd Drops; Cut to Neutral at Citi on Valuation Big Dividend Payers May Be Next After UK Windfall Tax on Energy FX Greenback grinds higher ahead of PCE inflation metrics with month end rebalancing flows providing impetus, DXY bounces from fresh WTD base just under 101.500 to 101.800. Kiwi and Aussie propped by bounce in commodities and Loonie protected by further gains in crude; NZD/USD tests Fib retracement at 0.7129, AUD/USD eyes 0.7150 and USD/CAD probes 1.2750. Big option expiries in the mix and potentially supportive for the Dollar into long US holiday weekend, +1bln rolling off at NY cut not far from spot in EUR/USD, USD/JPY, AUD/USD and USD/CAD. Rand firmer as Gold touches Usd 1860/oz after 200 DMA breach, USD/ZAR below 15.7000. Fixed Income Debt futures on a firmer footing ahead of US PCE price metrics, but some way below weekly peaks. Bunds sub-154.00, Gilts under 119.00 and 10 year T-note below 121-00. Curves a tad flatter following hot reception for 7 year US issuance. Commodities Crude benchmarks are underpinned, but off best levels, by broader sentiment and initial USD weakness going into a long US weekend with Memorial Day touted as the driving seasons commencement. WTI July and Brent August, at best, were in proximity to USD 115/bbl vs troughs of USD 113.61/bbl and USD 113.77/bbl respectively. US Treasury is reportedly expected to renew Chevron’s (CVX) license to operate in Venezuela as soon as Friday, according to Reuters citing sources. China's State Planner has approved a coal mine in the Shanxi area to bolster annual output to 12mln tonnes per annum from 8mln; investment of CNY 5.35bln, via Reuters. Spot gold is steady and holding onto the bulk of overnight upside after breaching the 21-DMA at USD 1850.80/oz; USD 1860.19/oz peak, thus far. US Event Calendar 08:30: April Advance Goods Trade Balance, est. -$114.8b, prior -$125.3b, revised -$127.1b 08:30: April Retail Inventories MoM, est. 2.0%, prior 2.0% April Wholesale Inventories MoM, est. 2.0%, prior 2.3% 08:30: April Personal Income, est. 0.5%, prior 0.5%; April Personal Spending, est. 0.8%, prior 1.1% 08:30: April PCE Deflator MoM, est. 0.2%, prior 0.9%; PCE Deflator YoY, est. 6.2%, prior 6.6% April PCE Core Deflator MoM, est. 0.3%, prior 0.3%; PCE Core Deflator YoY, est. 4.9%, prior 5.2% April Real Personal Spending, est. 0.7%, prior 0.2% 10:00: May U. of Mich. Current Conditions, est. 63.6, prior 63.6; Expectations, est. 56.3, prior 56.3; Sentiment, est. 59.1, prior 59.1 10:00: May U. of Mich. 1 Yr Inflation, est. 5.4%, prior 5.4%; 5-10 Yr Inflation, prior 3.0% DB's Jim Reid concludes the overnight wrap A reminder that it’s your last chance to answer our latest monthly survey, where we try to ask questions that aren’t easy to derive from market pricing. This time we ask if you think the Fed would be willing to push the economy into recession in order to get inflation back to target. We also ask whether you think there are still bubbles in markets and whether equities have bottomed out yet. And there’s another on which is the best asset class to hedge against inflation. The more people that fill it in the more useful so all help from readers is very welcome. The link is here. I did have tickets available for tomorrow night's Champions League final but there is a big 36 hole golf tournament at my club so I decided that at my age you never know when your body will fail next so playing sport now pips watching it live. So I'll be playing golf all day, trying to rescue my marriage for an hour when I get home, and then blaring out the final on the TV at home with a couple of glasses of wine for good measure. I can't honestly think of a better day. However I may come last and Liverpool may lose so let's see what happens! The market comeback this week is on a par with some of Madrid's remarkable ones this year and indeed it’s been another strong performance over the last 24 hours, with better-than-expected outlooks from US retailers helping to bolster sentiment, coupled with growing hopes that the Fed won’t take policy much into restrictive territory, if at all. Those developments helped the S&P 500 to post a +1.99% advance yesterday, bringing its gains for the week to +4.01%, and means we should finally be on the verge of ending a run of 7 consecutive weekly losses. Obviously it’s not impossible things could end up in negative territory given recent volatility, and it was only last week the index posted a one-day decline of more than -4%, but it would still take a massive slump today to get an 8th consecutive week in the red for only the third time since the Great Depression. That advance grew stronger as the day went on, with S&P futures having actually been negative when we went to press yesterday. But sentiment was aided by a number of positive earnings developments, with Macy’s (+19.31%) boosting its adjusted EPS guidance before the US open, whilst the discount retailers Dollar Tree (+21.87%) and Dollar General (+13.72%) both surged as well thanks to decent reports of their own. That helped consumer discretionary (+4.78%) to be the top performing sector in the S&P, and in fact Dollar Tree was the top performing company in the entire index. Cyclicals were the outperformers, but defensives also shared in the advance that saw around 90% of the index’s members move higher on the day. As well as that news on the retail side, risk appetite has been further supported by growing speculation that the Fed won’t be as aggressive in hiking rates as had been speculated just a few weeks ago. I'm not sure I agree with that conclusion but if you look at the futures-implied rate by the December 2022 meeting of 2.64%, that is some way down from its peak of 2.88% back on May 3rd, and in fact means that markets have now taken out just shy of one 25bp hike from the rate implied by year end, which makes a change from that pretty consistent move higher we’ve seen over recent months. Yesterday also brought fresh signs that this re-pricing is beginning to filter its way through to the real economy, with data from Freddie Mac showing that the average rate for a 30-year mortgage fell to 5.10% last week, down from 5.25% the week before. For reference that’s the biggest weekly decline since April 2020, and comes on the back of recent housing data that’s underwhelmed against the backdrop of higher rates. There was another report fitting that pattern yesterday too, with pending home sales for April dropping by a larger than expected -3.9% (vs. -2.1% expected). But as with the retail outlooks, the more timely data was much more positive, with the weekly initial jobless claims falling to 210k (vs. 215k expected) in the week ending May 21, whilst the Kansas City Fed’s manufacturing index for May came in at 23 (vs. 15 expected). Treasuries swung back and forth against this backdrop, but ultimately the more bullish outlook led to a small steepening in the curve, with the 2yr yield down -1.6bps as 10yr yields were essentially flat at 2.75%. In a change from recent weeks, breakevens marched higher despite the little changed headline, with the 10yr breakeven up +7.0bps to come off its two-month low the previous day. But to be fair, that came amidst a big surge in oil prices after US data showed gasoline stockpiles fell to their lowest seasonal level since 2014, with Brent Crude (+2.96%) up to a 2-month high of $117.40/bbl, whilst WTI (+3.41%) rose to $114.09/bbl. European markets followed a pretty similar pattern to the US, with the STOXX 600 advancing +0.78% on the day. However, utilities (-1.12%) were the worst-performing after the UK government moved to impose a temporary windfall tax on oil and gas firms’ profits at a rate of 25%. That came as part of a wider package of measures to help with the cost of living, adding up to £15bn in total. They included a one-off payment of £650 to 8mn households in receipt of state benefits, with separate payments of £300 to pensioner households and £150 to those receiving disability benefits. There was also a doubling in the energy bills discount from £200 to £400, whilst the requirement to pay it back over five years has been removed as well. See Sanjay Raja’s blog on it here and where he also compares the measures to similar ones seen in the big 4 EuroArea economies. With more fiscal spending in the pipeline, UK gilts underperformed their counterparts elsewhere in Europe, with 10yr yields ending the day up +5.9bps. Those on bunds (+4.6bps) and OATs (+3.2bps) also rose too, but the broader risk-on tone led to a tightening in peripheral spreads, with the gap between 10yr BTPs over bunds falling -10.4bps yesterday to 189bps. There was a similar pattern on the credit side, with iTraxx crossover coming down -23.9bps to 439bps, which was its biggest daily decline in nearly 2 months. Asian equity markets are joining in the rally this morning with the Hang Seng rising +2.93% as Chinese listed tech stocks are witnessing big gains after Alibaba (+12.21%) posted better than expected Q4 earnings yesterday. Mainland Chinese stocks are also trading higher with the Shanghai Composite (+0.52%) and CSI (+0.63%) up. Elsewhere, the Nikkei (+0.63%) and Kospi (+0.89%) are also in the green. Outside of Asia, futures contracts on the S&P 500 (-0.11%) and NASDAQ 100 (-0.14%) are seeing mild losses. Data released earlier showed that Tokyo’s core CPI rose +1.9% y/y in May versus +2.0% expected. Core core was +0.9% y/y as expected with nothing here at the moment to change the BoJ's stance. Elsewhere, China’s industrial profits (-8.5% y/y) shrank at the fastest pace in two years in April, swinging from a +12.2% gain in March. On the geopolitical front, we heard from US Secretary of State Blinken yesterday, who gave a significant speech on the Biden Administration’s China policy. Blinken zoomed out to give a view of the forest from the trees, noting that the Russia-Ukraine conflict was not as strategically important as America’s relationship with China over the long-run. He offered a three pillar strategy for managing the relationship with China that involved investing in US competitiveness, aligning strategy with allies to enhance effectiveness, and to compete with China across economic, military, and technological frontiers. He noted the countries’ two different political systems need not impair connection between its peoples, or inhibit dialogue. Staying on the US-China front but switching gears, a bi-partisan group of US senators sent a letter to President Biden urging him to keep tariffs on China, to improve the US’s negotiating position in future deals, pouring cold water on the prospects for tariff relief to provide a temporary salve to raging price pressures. To the day ahead, and data releases include US personal income and personal spending for April, as well as the preliminary wholesale inventories for that month, and the final University of Michigan consumer sentiment index for May. In the Euro Area, there’s also the M3 money supply for April. Otherwise, central bank speakers include ECB Chief Economist Lane.   Tyler Durden Fri, 05/27/2022 - 07:54.....»»

Category: blogSource: zerohedgeMay 27th, 2022

Intertape Polymer Group Reports 2022 First Quarter Results

MONTREAL and SARASOTA, Fla., May 11, 2022 (GLOBE NEWSWIRE) -- Intertape Polymer Group Inc. (TSX:ITP) ("IPG" or the "Company") today released results for its first quarter ended March 31, 2022. All amounts in this press release are denominated in US dollars ("USD") unless otherwise indicated and all percentages are calculated on unrounded numbers. For more information, refer to the Company's management's discussion and analysis ("MD&A") and unaudited interim condensed consolidated financial statements and notes thereto as of and for the three months ended March 31, 2022. "The demand environment for our packaging and protective solutions remained strong through Q1 2022 and continues into Q2 as demonstrated by our revenue growth and ability to protect our dollar contribution spread with price increases," said Greg Yull, President and CEO of IPG. "The rapid rise in the cost of raw materials during the past 18 months resulted in price increases of approximately $70 million in Q1 2022 compared to the same period last year for total revenue of more than $406 million. The global supply chain challenges and isolated labor constraints at specific manufacturing facilities impacted our volume/mix growth despite the strong demand. The team has done a great job in a difficult environment ensuring we meet the needs of key customers, secure sufficient supply of raw materials and operate the assets safely in a healthy environment. The improvements we have made during the past five years through efficiencies, capital investments and acquisitions provide a foundation for growth. We are in a great position with the team, the experience, and the strategy to meet demand with our world class, low cost manufacturing assets." First Quarter 2022 Highlights (as compared to first quarter 2021): Revenue increased 17.6% to $406.4 million primarily due to the impact of higher selling prices in tape, film, woven, and protective packaging products driven by increases in the cost of many raw materials and freight. Gross margin decreased to 21.0% from 23.9% primarily due to the unfavourable mathematical impact of Dollar Spread Maintenance(1) and increased plant operating costs. Net earnings attributable to the Company shareholders ("IPG Net Earnings") decreased $75.7 million to a net loss ("IPG Net Loss") of $56.7 million ($0.96 basic and diluted loss per share) primarily due to charges related to the Arrangement(2) for contingent consulting fees payable upon completion as well as a significant increase in the fair value of share-based compensation awards in selling, general and administrative expenses ("SG&A"). Adjusted net earnings(3) increased $0.4 million to $29.3 million ($0.49 basic and $0.48 diluted adjusted earnings per share)(3) primarily due to an increase in gross profit, an increase in foreign exchange gains and a decrease in income tax expense. These favourable impacts were partially offset by an increase in SG&A mainly due to increases in (i) employee- and technology-related costs, (ii) professional consulting services and (iii) additional SG&A from the Nuevopak(4) and Syfan USA(5) acquisitions. Adjusted EBITDA(3) decreased $1.7 million to $58.5 million from $60.3 million primarily due to an increase in SG&A, partially offset by an increase in gross profit. Cash flows used for operating activities increased $26.9 million to $55.8 million primarily due to a greater decrease in accounts payable, partially offset by a decrease in accounts receivable and non-recurrence of share-based compensation settlements in the first quarter of 2021 related to cash-settled awards. Free cash flows(3) decreased by $38.1 million to negative $76.4 million primarily due to an increase in cash flows used for operating activities and an increase in capital expenditures. (1)   The "Dollar Spread Maintenance" refers to the Company's objective of maintaining the dollar spread between selling prices and the cost of raw materials and freight in an inflationary environment by attempting to increase selling prices to offset those higher costs. When this objective is successfully met, the result is a reduction in margin percentages due to the mathematical effect of having a constant dollar profit per unit on a higher revenue per unit. The opposite would be expected to occur in a deflationary input cost environment. (2)   Refers to the plan of arrangement (the "Arrangement") contemplated by an arrangement agreement dated March 7, 2022 pursuant to which the Company is to be acquired by 1351693 B.C. Ltd., an affiliate of Clearlake Capital Group, L.P. See the section below entitled "The Arrangement" for more information. (3)   Non-GAAP financial measure. A non-GAAP financial measure is not a standardized financial measure under GAAP and therefore may not be comparable to similar financial measures disclosed by other issuers. For definitions and reconciliations of non-GAAP financial measures to their most directly comparable GAAP financial measures, see "Non-GAAP and Other Specified Financial Measures" below. (4)   The "Nuevopak Acquisition" refers to the acquisition by the Company of Nuevopak Global Limited ("Nuevopak") on July 30, 2021. (5)   The "Syfan USA Acquisition" refers to the acquisition by the Company of substantially all of the operating assets of Syfan Manufacturing, Inc. ("Syfan USA") on January 13, 2022. Other Highlights: Dividend Declaration On May 10, 2022, the Company declared a quarterly cash dividend of $0.17 per common share payable on June 30, 2022 to shareholders of record at the close of business on June 15, 2022. Sustainability The Company continues to make contributions towards its sustainability goals and commitments. In the first quarter of 2022, the Company achieved Cradle to Cradle Certified™ Silver level for another Curby® product, the Curby Mailer™, and published the Environmental Product Declaration ("EPD") for all Curby® mailers on the public Environdec database. Environdec is a global programme for EPDs. EPDs present transparent, verified and comparable information about the life-cycle environmental impact of products and services. The Arrangement On March 7, 2022, the Company entered into an agreement to be acquired by way of a plan of arrangement (the "Arrangement") by 1351693 B.C. Ltd., an affiliate of Clearlake Capital Group, L.P. (the "Purchaser"). Under the terms of the Arrangement, the Purchaser will acquire all of the outstanding shares of the Company for CDN$40.50 per share in an all-cash transaction valued at approximately US$2.6 billion, including net debt. Upon completion of the transaction, the Company will become a privately held company and be delisted from the TSX. The transaction, which will be effected pursuant to a court-approved plan of arrangement, is expected to close early in the third quarter of 2022. The transaction is not subject to a financing condition but is subject to customary closing conditions, including receipt of shareholder, regulatory and court approvals. The Arrangement agreement was filed by the Company under its profile on SEDAR at www.sedar.com and on the EDGAR website at www.sec.gov on March 10, 2022. Syfan USA Acquisition On January 13, 2022, the Company acquired substantially all of the operating assets of Syfan USA for $18.0 million, subject to post-closing adjustments. The Company financed the acquisition with funds available under its 2021 Credit Facility (defined later in this document). Following the Syfan USA Acquisition, the Company now also manufactures polyolefin shrink film products at a facility in Everetts, North Carolina, serving customers in a variety of end use applications. The Company expects the Syfan USA Acquisition to expand its existing shrink film production capacity in North America, allowing the Company to better service the growing demand of its customer base. About Intertape Polymer Group Inc. Intertape Polymer Group Inc. is a recognized leader in the development, manufacture and sale of a variety of paper and film based pressure-sensitive and water-activated tapes, shrink and stretch films, protective packaging, woven and non-woven products and packaging machinery for industrial and retail use. Headquartered in Montreal, Quebec and Sarasota, Florida, the Company employs approximately 4,200 employees with operations in 34 locations, including 22 manufacturing facilities in North America, five in Asia and two in Europe. For information about the Company, visit www.itape.com.  Forward-Looking Statements This press release contains "forward-looking information" within the meaning of applicable Canadian securities legislation and "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (collectively, "forward-looking statements"), which are made in reliance upon the protections provided by such legislation for forward-looking statements. All statements other than statements of historical facts included in this press release, including statements regarding the Company's foundation for growth, the Company's ability to meet demand, future dividend payments and the closing, and expected timing of the closing, of the Arrangement, may constitute forward-looking statements. These forward-looking statements are based on current beliefs, assumptions, expectations, estimates, forecasts and projections made by the Company's management. Words such as "may," "will," "should," "expect," "continue," "intend," "estimate," "anticipate," "plan," "foresee," "believe" or "seek" or the negatives of these terms or variations of them or similar terminology are intended to identify such forward-looking statements. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, these statements, by their nature, involve risks and uncertainties and are not guarantees of future performance. Such statements are also subject to assumptions concerning, among other things: business conditions and growth or declines in the Company's industry, the Company's customers' industries and the general economy, including as a result of the impact of COVID-19; the anticipated benefits from the Company's greenfield projects and manufacturing facility expansions; the availability of raw materials; the impact of fluctuations in raw material prices and freight costs; the anticipated benefits from the Company's acquisitions and partnerships; the anticipated benefits from the Company's capital expenditures; the quality and market reception of the Company's products; the Company's anticipated business strategies; risks and costs inherent in litigation; legal and regulatory developments, including as related to COVID-19; the Company's ability to maintain and improve quality and customer service; anticipated trends in the Company's business; anticipated cash flows from the Company's operations; availability of funds under the Company's 2021 Credit Facility; the Company's flexibility to allocate capital as a result of the Senior Unsecured Notes offering; and the Company's ability to continue to control costs. The Company can give no assurance that these estimates and expectations will prove to have been correct. Actual outcomes and results may, and often do, differ from what is expressed, implied or projected in such forward-looking statements, and such differences may be material. Readers are cautioned not to place undue reliance on any forward-looking statement. For additional information regarding important factors that could cause actual results to differ materially from those expressed in these forward-looking statements and other risks and uncertainties, and the assumptions underlying the forward-looking statements, you are encouraged to read "Item 3 Key Information - Risk Factors", "Item 5 Operating and Financial Review and Prospects (Management's Discussion & Analysis)" and statements located elsewhere in the Company's annual report on Form 20-F for the year ended December 31, 2021 and the other statements and factors contained in the Company's filings with the Canadian securities regulators and the US Securities and Exchange Commission. Each of these forward-looking statements speaks only as of the date of this press release. The Company will not update these statements unless applicable securities laws require it to do so. Note to readers: Complete consolidated financial statements and MD&A are available on the Company's website at www.itape.com in the Investor Relations section and under the Company's profile on SEDAR at www.sedar.com.  FOR FURTHER INFORMATION PLEASE CONTACT:Ross MarshallInvestor Relations (T) (416) 526-1563(E) ross.marshall@loderockadvisors.com  Intertape Polymer Group Inc.Consolidated EarningsPeriods ended March 31, (In thousands of USD, except per share amounts)(Unaudited)     Three months ended March 31,     2022    2021     $   $ Revenue   406,397     345,566 Cost of sales   321,172     263,016 Gross profit   85,225     82,550 Selling, general and administrative expenses   88,550     46,743 Research expenses   2,839     3,048     91,389     49,791 Operating (loss) profit before other charges (recoveries)   (6,164 )   32,759 Charges related to the Arrangement   48,556     — Manufacturing facility closures, restructuring and other related recoveries   (1,539 )   —     47,017     — Operating (loss) profit   (53,181 )   32,759 Finance costs         Interest   6,150     5,368 Other finance (income) expense, net   (634 )   1,342     5,516     6,710 (Loss) earnings before income tax (benefit) expense   (58,697 )   26,049 Income tax (benefit) expense         Current   1,007     2,184 Deferred   (3,628 )   4,076     (2,621 )   6,260 Net (loss) earnings   (56,076 )   19,789 Net (loss) earnings attributable to:         Company shareholders   (56,689 )   19,052 Non-controlling interests   613     737     (56,076 )   19,789 (Loss) earnings per share attributable to Company shareholders         Basic   (0.96 )   0.32 Diluted   (0.96 )   0.32   Intertape Polymer Group Inc.Consolidated Cash FlowsPeriods ended March 31, (In thousands of USD)(Unaudited)     Three months ended March 31,     2022    2021      $   $ OPERATING ACTIVITIES         Net (loss) earnings   (56,076 )   19,789   Adjustments to net (loss) earnings         Depreciation and amortization   17,052     16,309   Income tax (benefit) expense   (2,621 )   6,260   Interest expense   6,150     5,368   Non-cash charges in connection with manufacturing facility closures, restructuring and other related recoveries   (1,735 )   —   Impairment of inventories   1,370     964   Share-based compensation expense   44,626    .....»»

Category: earningsSource: benzingaMay 11th, 2022

Futures Slide Ahead Of Payrolls And Six Fed Speakers

Futures Slide Ahead Of Payrolls And Six Fed Speakers The market crash will continue until Biden's approval rating improves. US futures extended their slide on Friday, signaling continuation of a drop in tech stocks following the Nasdaq 100’s biggest selloff since September 2020, ahead of today's jobs report (which bulls pray comes in at around minus 1 million to put a premature end to Powell's market-crashing tightening) and ahead of no less than six Fed speakers, as investors grappled with fears of a stagflationary recession against tightening monetary policy. Nasdaq 100 futures were 0.9% lower and S&P 500 futures traded at session lows, down 0.7% as of 7:30 a.m. EDT as panicked traders sell first and don't even bother to ask questions. Ten-year U.S. Treasury yield continued to climb, trading at 3.1%, near the highest since November 2018. The dollar continued its relentless ascent, while cryptos continued to tumble. Perhaps even more concerning to traders than the jobs report is that six Fed speakers are lined up including Williams, Kashkari, Bostic, Bullard, Waller and Daly. Stocks plunged on Thursday, completely erasing their gains from the prior session amid a broad-based selloff in risk assets. The S&P 500 Index sank 3.6% on Thursday, while the tech-heavy Nasdaq 100 Index plunged 5.1%, its biggest decline since September 2020.  Still, some investors say that concerns may be overblown. “Looking back at just the past two days, it’s not really all that dramatic,” said Mattias Isakson, head of strategy and allocation at Swedbank, adding that indexes were roughly back to where they were compared to before the Fed press conference. “The overall market outlook hasn’t changed at all: interest rates and inflation worries will continue to create volatility in the short term,” Isakson said. On Friday, shares of US-listed Chinese firms extended losses in premarket trading amid growing concerns about the country’s economic growth prospects and continued weakness in tech shares. Peloton shares dropped premarket after the company was said to be considering selling a stake of around 20%. Meanwhile, DoorDash jumped after earnings and Tesla gained after planning to boost car production at its Shanghai plant. Here are some more details on the biggest premarket movers today: Tesla (TSLA US) shares gain as much as 1.1% in U.S. premarket trading, leaving them set to bounce back following Thursday’s losses, after the electric-vehicle maker was said to be making plans to boost car production at its Shanghai plant as soon as mid-May. Shares of U.S.-listed Chinese firms extend losses in premarket trading amid growing concerns about the country’s economic growth prospects and continued weakness in tech shares. Alibaba (BABA US) -1.9%, Baidu (BIDU US) -2.4%, JD.com (JD US) -2%. Peloton (PTON US) shares fall as much as 1.7% in U.S. premarket trading after the maker of indoor exercise bikes was said to be considering selling a stake of around 20% as part of a turnaround. Cloudflare (NET US) shares drop 9.3% in U.S. premarket despite a boosted full-year revenue guidance; analysts say the outlook implies a significant deceleration for lead metrics. At least 3 analysts cut their price targets on the stock. Digital Brands Group (DBGI US) shares decline 50% in U.S. premarket trading after pricing an offering of 37.4m shares at $0.25 apiece, representing a discount of ~50% to Thursday’s close. DoorDash (DASH US) shares jump as much as 6.9% in U.S. premarket trading, with analysts positive on the food-delivery firm’s first-quarter update given tough pandemic comparisons and a difficult macroeconomic environment, though some trimmed price targets amid higher investments. Block Inc. (SQ US) shares rise 7% after 1Q results, with analysts upbeat on demand for the company’s Square and Cash App payment services as the fintech company displays resilience amid a challenging market. Live Nation (LYV US) shares gained 4% in postmarket trading. Its leading indicators like ticket sales, show counts and committed sponsorships remain robust, according to Guggenheim analyst Curry Baker. Opendoor (OPEN US) jumps as much as 16% in U.S. premarket trading after the real estate platform provider forecast revenue for the second quarter that beat the average analyst estimate. Zillow (ZG US) shares decline 6.7% in U.S. premarket trading after underwhelming guidance disappoints analysts, who believe that rising mortgage rates will cool the U.S. housing market. At least 3 analysts cut their price targets with one saying he doubts the real-estate technology firm’s ability to achieve its 2025 targets. According to BofA, the global market selloff has further to run, as every asset class saw outflows in the week prior to the Federal Reserve’s meeting this week, with real estate posting its biggest outflow on record - $2.2 billion - and investors piling into safe havens like Treasuries although one wouldn't know it judging by where yields are trading. “The Fed is attempting to land a B52 bomber on a piece of string and most risk markets still have their fingers in their ears and their hands over their eyes,” said James Athey, a London-based investment director at abrdn. “Hope is not a strategy.” The next key event for markets is Friday’s U.S. jobs report (full preview here), which will be closely watched for signs that rising wage costs are adding to the inflationary pressures rattling investors. Estimates by economists are looking for payrolls to expand by 380,000 in April, and the unemployment rate to fall to 3.5%, although whisper numbers are lower. A print higher than 500,000 in non-farm payrolls will provoke U.S. dollar buying as equities and bonds sell-off, while less than 300,000 should see the reverse, says Jeffrey Halley at OANDA. “A sharp divergence, up or down, from the median forecast, should produce a very binary outcome,” he says. “It’s that sort of market.” “Any upward pressure on the average hourly earnings could lead to another spike of U.S. yields and therefore add negative pressure on equities and especially tech stocks,” said Christophe Barraud, chief economist at Market Securities LLP in Paris. In Europe, the Stoxx 600 Index followed the Wall Street rout and was set for its worst weekly drop in two months, with consumer, retail and travel and leisure among the biggest decliners. FTSE MIB posts the smallest decline. Retailers, consumer products and media are the worst performing sectors. Traders will be watching job data, while Cigna, Dish, NRG Energy and Under Armour are among companies reporting earnings. Here are the biggest European movers today: Grifols rose as much as 9.3%, to the highest since November, after the Spanish maker of pharmaceutical products derived from blood plasma gave a business update that Citi said supports its buy rating on the stock. Leonardo rose as much as 4.4% after reporting earnings. Deutsche Bank said 1Q numbers were solid, while Intesa Sanpaolo said the company delivered “a sound start” to 2022. S4 Capital shares gained as much as 9.9% after the digital advertising agency released delayed FY results that showed limited audit adjustments. Revenue was ahead of analyst expectations. SKF shares advanced, breaking a seven-session declining streak, after Danske Bank upgraded the shares to buy, saying they “could generate good return in the coming 3-12 months.” Krones shares surged as much as 11%, the most since October 2019, after the machinery company reported 1Q Ebitda that beat estimate, with analysts noting scope for upgrades. Ambu shares dropped as much as 17% after the Danish health care equipment firm cut its outlook. Handelsbanken says the new guidance may lead to a 30% drop in FY Ebit estimates. Adidas shares fell more than 6% after the German sportswear maker cut its margin outlook for the year. Analysts noted the impact of lockdowns in China. Peer Puma also fell. IAG fell as much as 12%, the most intraday since November. The British Airways parent posted a 1Q operating loss that Citi analysts said was worse than consensus and their own expectations. JCDecaux shares slumped as much as 12% after its 2Q organic revenue growth target of more than 15% fell short of analyst expectations amid lockdowns in China. Earlier in the session, Asian stocks were on track for five straight days of losses, as traders questioned whether the Federal Reserve’s interest rate hike was enough to tackle inflation and Chinese leaders warned against doubting their Covid-Zero stance. The MSCI Asia Pacific Index declined by as much as 1.8%, poised for its longest losing streak since January and lowest closing level since July 2020. The broad-based selloff followed steep declines in U.S. shares overnight, with benchmarks in Australia, Taiwan and Vietnam each declining more than 1.7%. “Volatility comes from doubts whether the 50 basis-point hike can be enough to curb inflation,” said Lee Han-Young, chief fund manager at DS Asset Management, a Seoul-based hedge fund.  For market volatility to ease, CPI or other inflation-related data needs to peak or slow down, he said. “Before that, volatility seems inevitable.” Stock indexes in Hong Kong and mainland China were the worst performers in the region after the Politburo’s supreme Standing Committee reaffirmed its support for a lockdown-dependent approach on Thursday. Still, declines in Asia were less than the rout in U.S. shares, with generally smaller-sized market reactions to the Fed’s policy statement Wednesday. China’s economic slowdown and regulation of its tech industry are also playing on investors’ minds, with the Hang Seng Tech Index sliding amid a lack of concrete steps to support the industry.  Overall, tech and financial stocks were among the biggest drags on the MSCI Asia Pacific Index. The measure is on track to fall about 2.6% this week, the largest weekly slide since mid-March. Bucking the regional trend, Japanese equities rose after a three-day holiday. India’s benchmark stocks index registered its worst weekly decline in more than five months as growing concerns over higher borrowing costs to curb inflation dented risk sentiment.  The S&P BSE Sensex declined 1.6% to 54,835.58 in Mumbai on Friday, taking its loss this week to 3.9%, the biggest five-day drop since the period ended Nov. 26. The NSE Nifty 50 Index slipped 1.6% to 16,411.25.  HDFC Bank Ltd. fell 2.6% and was the biggest drag on the Sensex, which had 24 of the 30 member stocks trading lower. All but two of 19 sectoral sub-indexes compiled by BSE Ltd. fell, led by a gauge of realty companies.  The Reserve Bank of India raised its policy rate by 40 basis points in an out-of-cycle move this week after keeping it at a record-low level of 4% for the past two years.  “This suggests that the scales of growth versus inflation is tilted towards inflation and can be leading indicator of further rate hikes in FY23,” Shibani Kurian, head of equity research at Kotak Mahindra Asset Management Co. wrote in a note. She expects market participants to focus on earnings and commentary on demand and margins from companies.  The U.S. Federal Reserve and Bank of England also raised rates to tackle rising inflation.     In earnings, of the 24 Nifty 50 firms that have announced results so far, 17 either met or exceeded analysts’ estimates, while seven missed forecasts. Reliance Industries Ltd., the nation’s largest company, is scheduled to announce its results Friday.  In rates, Treasuries extended Thursday’s bear-steepening move, with yields cheaper by 2bp to 4bp across the curve, amid bigger losses for German bonds after ECB’s Villeroy said above-zero rates are “reasonable” by year-end, and that there are signs inflation expectations are less anchored. US 10-year yields around 3.09%, cheaper by ~3bp on the day with 2s10s steeper by ~2.5bp; front-end yields outperform, higher by ~2bp at around 2.72%. Dollar issuance slate empty so far and expected to be muted because of jobs report; four names priced $7.6b Thursday taking weekly total above $16b, shy of $20b-$25b expected range. Peripheral spreads eventually tighten slightly to core after 10y BTP/Bund briefly widening through 200bps In FX, a gauge of the dollar’s strength was little changed as traders awaited a U.S. jobs report on Friday. Bloomberg Dollar Spot Index gained 0.2% as traders awaited the U.S. jobs report due on Friday. Ten-year Treasury yields rose 2 basis points to 3.05%. The yen underperformed most G-10 currencies as Japan’s markets reopened following a three-day holiday. Leveraged funds initiated long dollar-yen positions heading into U.S. payrolls data, according to an Asia-based FX trader Long gamma exposure in the major currencies meets a fresh round of demand following the Bank of England’s policy decision, which is contributing to continued erratic moves in the options space into the U.S. report. Real money and hedge funds both net USD buyers, according to three Europe-based traders, with demand for USD calls in the likes of EUR, AUD and MXN. In commodities, WTI trades within Thursday’s range, adding 1.6% to trade near $110. Spot gold rises roughly $5 to trade above $1,880/oz. Most base metals trade in the red. Bitcoin continues to slide, and was last trading below $36,000, after cracking to key support levels yesterday. Looking at the day ahead now, the main highlight will be the aforementioned US jobs report for April. Other data releases include German industrial production and Italian retail sales for March. From central banks, we’ll hear from the ECB’s Villeroy, Nagel, Elderson and Rehn, the Fed’s Williams, Kashkari and Bostic, and the BoE’s Pill and Tenreyro. Market Snapshot S&P 500 futures little changed at 4,140.00 STOXX Europe 600 down 0.9% to 434.26 MXAP down 1.6% to 164.46 MXAPJ down 2.7% to 538.32 Nikkei up 0.7% to 27,003.56 Topix up 0.9% to 1,915.91 Hang Seng Index down 3.8% to 20,001.96 Shanghai Composite down 2.2% to 3,001.56 Sensex down 1.4% to 54,941.03 Australia S&P/ASX 200 down 2.2% to 7,205.64 Kospi down 1.2% to 2,644.51 German 10Y yield little changed at 1.07% Euro up 0.3% to $1.0570 Brent Futures up 1.3% to $112.39/bbl Gold spot up 0.1% to $1,879.09 U.S. Dollar Index down 0.31% to 103.43 Top Overnight News from Bloomberg European Central Bank Governing Council member Francois Villeroy de Galhau said interest rates may be raised back above zero this year if the euro-zone economy doesn’t suffer another setback. The European Union has proposed a revision to its Russia oil sanctions ban that would give Hungary and Slovakia an extra year, until the end of 2024, to comply, according to people familiar with the matter. China has ordered central government agencies and state-backed corporations to replace foreign- branded personal computers with domestic alternatives within two years, marking one of Beijing’s most aggressive efforts so far to eradicate key overseas technology from within its most sensitive organs. Germany is ready to support eastern European nations in their efforts to wean themselves off Russian energy to secure broader support for sanctions targeting the country’s oil and gas sector, Chancellor Olaf Scholz said Thursday The cost of living in Tokyo rose at the fastest pace in almost three decades in April, as the impact of soaring energy prices became clearer, an outcome that complicates the Bank of Japan’s messaging on inflation and the need for continued stimulus China’s top leaders warned against questioning Xi Jinping’s Covid Zero strategy, as pressure builds to relax virus curbs and protect the economic growth that has long been a source of Communist Party strength An escalating selloff in long-end Treasuries pushed yields to fresh multi-year highs Thursday, with the benchmark 10-year rate closing above 3% for the first time since 2018 as concern over inflation rattled the bond market Having plunged by the most on record in offshore trade last month, China’s yuan is now facing the threat of selling pressure from the nation’s companies The Federal Reserve will need to raise short-term interest rates to at least 3.5% to bring surging inflation under control, former Vice Chairman Richard Clarida said South Korea needs to act preemptively on risk factors while monitoring situations in the economy and markets, as there are concerns local financial and FX markets will react sensitively according to various factors, Vice Finance Minister Lee Eog-weon says A more detailed look at global markets courtesy of Newsquawk Asia-Pac stocks were mostly lower amid spillover selling from the sharp declines on Wall Street. ASX 200 was heavily pressured in which the losses in tech led the broad declines across all sectors. Nikkei 225 initially declined on return from the Golden Week holidays but then pared all its losses as currency weakness persisted with Japan also planning to introduce tax incentives, as well as ease border measures in June. Hang Seng and Shanghai Comp conformed to the downbeat mood with tech and property names dragging the Hong Kong benchmark lower, while China also remained steadfast in its "dynamic COVID clearance" policy. Top Asian News Adidas Shares Drop Amid ‘Dialed-Down’ Outlook: Street Wrap JAL Sees Return to Profit as Japan Moves to Reopen Borders Food Prices Hold Near Record as Ukraine War Upends Global Trade Nine in 10 Central Banks Exploring Own Digital Money, BIS Says European bourses are subdued across the board, Euro Stoxx 50 -1.1%, reacting to the late-doors pressure in Wall Street. Currently, US futures are modestly softer but relatively tentative overall going into the NFP release and subsequent Fed speak. US regulatory officials have arrived in China for "late-stage" audit deal talks, according to Reuters sources. China's auto sales in April are estimated to have plunged 48.1% y-o-y to 1.17 million units, data from CAAM revealed. The recent Omicron outbreak has disrupted the auto sector, in particular in the Yangtze River Delta region, according to Global Times. Top European News EU Plan to Ban Russian Oil Means Windfall for Hungarian Refiner BNP Paribas Offers Up to EU400m Non-Dilutive Convertible Bonds ECB’s Villeroy Says Above-Zero Rates ‘Reasonable’ This Year Sorrell Pledges Changes After S4’s ‘Embarassing’ Results Lag In FX ECB officials ramp up hawkish rhetoric to boost Euro; EUR/USD makes round trip to high 1.0580 area from sub-1.0500. Pound continues to flounder as UK election results spell trouble for already under pressure PM Johnson and Tory Party, Cable under 1.2300 at one stage and EUR/GBP cross over 0.8550. Buck reverses all and more post-Fed losses pre-payrolls before Euro rebound knocks DXY back below 104.000, index down to new 103.340 low vs 104.070 peak. Aussie slumps despite hawkish RBA SOMP, Yen weak regardless of firmer than forecast Tokyo inflation data and return of Japanese markets from Golden Week; AUD/USD under 0.7100 and USD/JPY over 130.00. Loonie cushioned by strong crude prices ahead of Canadian LFS, USD/CAD within 1.2814-67 range and close to 1.29bln option expiries between 1.2835-40. Swedish Krona rangy after Riksbank minutes highlighting divergent views; EUR/SEK straddling 10.5000. Fixed Income EZ debt downed by latest hawkish ECB guidance, Bunds below 152.00 and periphery underperforming. Gilts hold up better on the 118-00 handle awaiting BoE commentary after super Thursday. US Treasuries dragged down by Eurozone bonds to an extent, as 10 year T-note pivots 118-00 ahead of NFP. Commodities WTI and Brent are bid in an exacerbation of APAC price action although, specific bullish-drivers have been somewhat sparse. Much of the focus has been on the potential EU Russian oil import embargo, particularly Hungary's ongoing opposition and the EU's attempts to appease them. Brazilian President Bolsonaro said a fresh hike in fuel prices by Petrobras could bankrupt Brazil and urged Petrobras not to increase fuel prices again, according to Reuters. PetroChina (0857 HK) says they have no plans to buy discounted Russian oil or gas, according to an executive. China is to sell 341k tonnes of imported soybeans from state reserve on May 13, according to the trade centre. Spot gold is bid but has failed to derive much traction above the 100- and 10-DMAs at USD 1883.08/oz and USD 1885.1/oz respectively. Central Banks ECB's Villeroy says too weak EUR would go against ECB inflation target; inflation is not only higher but broader; core inflation is firmly above target. Case for APP beyond June is not obvious. Adds, it is possible to raise rates into positive territory (i.e. above zero) by year-end. ECB's Nagel says current inflation too high, confident it can get back to 2% target in the medium-term; adds, window to act is closing. Is optimistic re. a 2022 move. Does not buy the argument that policy should hold back because of the economy right now, via FAZ. ECB's Holzmann said the ECB is planning to raise rates which they will discuss and probably do at the June meeting, while he added that rates will rise this year, by how much and when, will be discussed intensively in June, according to Reuters. ECB's Vasle says appropriate timing to start ECB hikes is "before summer"; inflation is becoming broad-based, cannot claim that monetary policy cannot curb inflation. BoE's Pill: says the BoE does not have a forex target or objective; when questioned on what would cause them to pause (re. hikes), says more evidence of factors becoming more consistent with target(s). If we don't see this, will have to act further. Market Snapshot 08:30: April Change in Nonfarm Payrolls, est. 380,000, prior 431,000 April Change in Private Payrolls, est. 378,000, prior 426,000 April Change in Manufact. Payrolls, est. 35,000, prior 38,000 April Unemployment Rate, est. 3.5%, prior 3.6% April Underemployment Rate, prior 6.9% April Labor Force Participation Rate, est. 62.5%, prior 62.4% April Average Hourly Earnings YoY, est. 5.5%, prior 5.6% April Average Weekly Hours All Emplo, est. 34.7, prior 34.6 April Average Hourly Earnings MoM, est. 0.4%, prior 0.4% 15:00: March Consumer Credit, est. $25b, prior $41.8b Fed Speakers 09:15: Fed’s Williams Gives Opening Remarks 11:00: Fed’s Kashkari Takes Part in Moderated Discussion 15:00: Fed’s Bostic Gives Commencement Address at Georgia Tech 19:15: Fed’s Bullard and Waller Speak on Hoover Institute Panel 20:00: Fed’s Daly Gives Commencement Speech DB's Jim Reid concludes the overnight wrap What’s dangerous about yesterday’s huge market slump is that there must be an element of doubting the ability of there to be an effective "Fed Put" in this cycle following a 30-40 year period where the central bank has almost always been able to come to the market's rescue. As we know, Wednesday saw a strong post-FOMC rally (S&P 500 +2.99%) on a belief that the Fed would be relatively measured in their tightening cycle after Chair Powell pushed back against 75bp hikes. However in a remarkable turnaround yesterday (S&P 500 -3.56%) the only conclusion you can draw is that the market quickly realised that the Fed really aren't going to be able to control this cycle very easily. As you know our view is that the Fed won't be able to achieve a soft landing and that a recession is coming. This was something we dwelt on in our recent “What’s in the Tails?” piece (link here), where we expressed surprise that our call for a US recession in late-2023 was the outlier rather than the consensus given how far inflation is from target and the tightness of the US labour market right now (more today on this in the payrolls report). I can't help but think that a great deal of the reaction yesterday was the appreciation that whilst the Fed can make soothing pronouncements, they are starting from an extraordinary difficult starting point, and with limited flexibility to respond to market or economy concerns whilst they fight inflation. The Bank of England couldn't have helped either, as they became the first major central bank to forecast a contraction in 2023 alongside double-digit inflation later this year. In terms of the moves themselves, US Treasury yields soared to fresh highs for this cycle at the long end, with those on 10yr Treasuries up +10.2bps at 3.04%, after a volatile day that saw 10yr yields increase as much as +17.2bps to 3.11% intra-day, meaning the 10yr range since the FOMC has been +21bps wide. Yesterday’s increase was driven entirely by real yields, which snapped back up by +12.2bps to 0.18%, thus closing at their highest levels since the Covid-related tumult in March 2020. Real yields were also as much as +17.2bps higher intraday, showing they were a large component of yesterday’s volatility. The rise in yields came as investors retraced some of their expectations from the previous day about a shallower pace of monetary tightening, raising the expected rate at the Fed’s December meeting by +5.0bps. And there was further evidence that the Fed’s tightening cycle is already having an effect on the real economy, with Freddie Mac reporting that the average rate for a 30-year mortgage had risen to 5.27%, which is the highest its been since 2009. It also marks a +231bp increase over the last year, which is the largest annual increase in mortgage rates since 1982. Those trends have continued this morning, with yields on 10yr USTs up +1.9bps to 3.06%, and the policy rate priced for December’s meeting up a further +1.3bps. With yields bouncing higher, US equities were hammered once again with the more interest-sensitive tech stocks leading the way. As mentioned at the top, the S&P 500 fell back by -3.56%, which would be more newsworthy were it not for the fact that Friday’s -3.63% decline was even larger! Tech and mega-cap stocks really bore the brunt of the sell-off, as the NASDAQ slumped -4.99%, the largest since June 2020, and the FANG+ index fell -6.43%, the largest since September 2020, with all those indices ending a run of 3 consecutive advances. The sharp turnaround sent the VIX +6.07pts higher, and back above 30 at 31.49. It was a somewhat better picture in Europe, but that reflected the fact they hadn’t participated in the massive US rally after the Fed. However the major indices lost ground continuously through the day, with the STOXX 600 erasing an initial gain of +1.84% immediately after the open to end the day -0.70% lower. Yesterday’s volatility came alongside a fresh round of central bank news, with the Bank of England continuing its recent series of rate hikes. In terms of the main headlines, they hiked by 25bps as expected to take Bank Rate up to 1%, and 3 of the 9 members on the Committee were even in favour of a larger 50bps move. Nevertheless, the decision was interpreted in a very dovish light, as two members did not find it appropriate to provide guidance for more rate hikes going forward, so potentially a three-way split on the committee. Adding to the dovish interpretation, the growth forecasts produced by the BoE were significantly downgraded, and now see an annual economic contraction occurring in 2023. Furthermore, they upgraded their inflation forecasts once again, seeing CPI rising further over the rest of 2022, and averaging “slightly over 10% at its peak” in Q4. For more info on the BoE, see our economist’s full reaction note (link here). The more downbeat news on the economy led investors to reappraise the likely path of future hikes from the BoE, and overnight index swaps took out -17bps worth of tightening by the December meeting in response. In turn, sterling was the worst-performing G10 currency yesterday, with a -2.13% move against the US Dollar, which came as investors took stock of the potential for a more gradual tightening, as well as the prospect of a UK recession. The developments also meant that gilts outperformed their counterparts elsewhere in Europe, with the 10yr yield coming down -0.3bps on the day, a big contrast to those on bunds (+7.3bps), OATs (+7.2bps) and BTPs (+8.3bps) which all moved higher. These losses were witnessed over on the credit side as well, where the iTraxx Crossover index moved up +19.3bps to 453bps, the highest its been since May 2020. Those moves higher in Euro Area yields came as the drum beat for an ECB rate hike as soon as July continued, with Bank of Finland’s Governor Rehn endorsing a hike in July. This is a world away from the situation just after Russia’s invasion of Ukraine, when there was serious scepticism among many that the ECB would be able to hike at all this year given the growth shock. But the inflation developments have outweighed that, and overnight index swaps are still pricing in 89bps worth of hikes this year, enough to take the current -0.5% deposit rate firmly into positive territory. Remember DB is forecasting +100bps of hikes before year end. Overnight in Asia, equities have similarly begun the day deep in negative territory, tracking those sharp overnight losses on Wall Street. Across the region, the Hang Seng (-3.67%) is the largest underperformer with tech firms among the worst hit. In mainland China, the Shanghai Composite (-2.31%) and CSI 300 (-2.59%) have also seen a large slide as COVID-19 lockdowns continue to darken the economic outlook and weigh on investor sentiment. There’ve been further signs they’ll be continuing their zero Covid strategy overnight, with state broadcaster CCTV reporting that the Politburo’s seven-member Standing Committee reaffirmed their support for the approach. The only place not seeing large slides overnight are Japanese markets, where the Nikkei is up +0.92%, but that reflects the fact they’ve come back to trade today after 3 days of holidays. Looking forward, US stock futures are pointing to a stabilization today, with contracts on the S&P 500 (-0.02%) and NASDAQ 100 (-0.02%) marginally lower. From the perspective of the major central banks, another negative development over the last 24 hours has been the continued rise in oil prices, with Brent Crude up another +0.69% yesterday to reach $110.90/bbl. The move was driven by the news that the US Energy Department would begin the process of replenishing its oil reserves, with a process to buy 60m barrels in the autumn. That said, prices pared back their gains in the European afternoon as the more negative risk-off move took hold, with prices declining from an intraday high of $114/bbl at one point. This morning in Asian trading hours, Brent crude (+0.50%) is extending its gains again, now at $111.46/bbl. Looking forward now, the main highlight today will likely be the US jobs report for April, which along with next Wednesday’s CPI reading will help frame the policy debate over the 6 weeks ahead of the next FOMC meeting in mid-June. In terms of what to expect, our economists think that nonfarm payrolls will have risen by +465k, which in turn will lower the unemployment rate by a tenth to 3.5%. That would be a significant milestone, since 3.5% was the pre-pandemic low in the unemployment rate. On the data side, the US weekly initial jobless claims came in at 200k in the week through April 30 (vs. 180k expected). Elsewhere, German factory orders fell by a larger-than-expected -4.7% in March (vs. -1.1% expected). To the day ahead now, and the main highlight will be the aforementioned US jobs report for April. Other data releases include German industrial production and Italian retail sales for March. From central banks, we’ll hear from the ECB’s Villeroy, Nagel, Elderson and Rehn, the Fed’s Williams, Kashkari and Bostic, and the BoE’s Pill and Tenreyro. Tyler Durden Fri, 05/06/2022 - 08:01.....»»

Category: smallbizSource: nytMay 6th, 2022

5G Radiation Studied In South Carolina

Study Finds High Radiofrequency Radiation on Streets of Downtown Columbia, South Carolina from Cell Antennas, including 4G and 5G. WASHINGTON, April 28, 2022–A recent study in the World Academy of Sciences Journal measured levels of radiofrequency radiation (RFR), from wireless networks including 5G, in the city of Columbia, South Carolina and found the highest RFR […] Study Finds High Radiofrequency Radiation on Streets of Downtown Columbia, South Carolina from Cell Antennas, including 4G and 5G. WASHINGTON, April 28, 2022–A recent study in the World Academy of Sciences Journal measured levels of radiofrequency radiation (RFR), from wireless networks including 5G, in the city of Columbia, South Carolina and found the highest RFR levels in areas where the cell phone base station antennas were placed on top of utility poles, street lamps, traffic lights or other posts near to the street. Wireless installations called  “small cells” often encapsulate cell antennas in cylinders on short poles and are designed not to be noticeable. The paper included several graphics showing how the RFR is emitted out from the antennas and exposes people walking down the street. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get Our Activist Investing Case Study! Get the entire 10-part series on our in-depth study on activist investing in PDF. Save it to your desktop, read it on your tablet, or print it out to read anywhere! Sign up below! (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q1 2022 hedge fund letters, conferences and more On the whole, 3,943 single measurements were conducted all over the downtown area over five days in 2021 with the aim of measuring public exposure from the city’s RF infrastructure. When the study’s authors compared their findings to a 2019 published review on the mean outdoor exposure level of European cities (0.07 to 1.27 V/m) to the mean of Columbia, South Carolina (1,240 V/m), it placed Columbia on top of the European scale. The Columbia, S.C. study concluded that the highest exposure areas were due to two reasons:  cell phone base antennas on top of high-rise buildings provide “good cell coverage reaching far away, but creating elevated exposure to the radiofrequency electromagnetic fields at the immediate vicinity; and cell phone base station antennas installed on top of utility poles have placed the radiation source closer to humans walking on street level.” The conclusion continued, “RF exposure levels from mobile phone base stations antennas near the street level reached high levels. It is thus recommended that all such close proximity transmitters should be labeled with relevant signs to warn of high RF exposure in the area. The study pointed to a the New Hampshire State Commission Report on 5G which has 15 recommendations including that warnings that be posted near antennas. The Expansion Of 5G Network The Columbia, S.C. study conclusion continued, “Cell phone base station antennas should be distinct and noticeable so that people who need to limit their exposure, have been given a chance to do so by distancing themselves from the RF sources. Considering the current trend of cell phone service providers expanding their 5G network, more utility pole base station antennas are expected. Consequently, the public exposure is also likely to increase in coming years.” When asked about this and prior studies, Lennart Hardell, M.D. (co-author of this study,) stated “Our published research has concluded that RF radiation is a human carcinogen. We recommend that 5G is not rolled out since the full consequences for human health and the environment have not been adequately investigated. Studies are urgently needed.” Hardell is an oncologist and professor and is also with the Environment and Cancer Research Foundation Sweden. Hardell also served in an expert working group of the World Health Organization International Agency for Research in Cancer in reviewing radiofrequency radiation and health. Dr. Hardell is one of the more than  400 scientists and physicians who have signed the European Union 5G Appeal which states, “5G will substantially increase exposure to radiofrequency electromagnetic fields (RF-EMF) on top of the 2G, 3G, 4G, Wi-Fi, etc. for telecommunications already in place. RF-EMF has been proven to be harmful for humans and the environment.” Over 3,500 medical doctors signed onto a 2020 Consensus statement that wireless RF has been proven to damage biological systems at intensities below government limits (See signatures here, PDF of Consensus Statement). “The proliferation of “small cells” is increasing public exposure to cell tower RF radiation. The Court ruling in our successful lawsuit against the FCC confirms that the research has not been adequate reviewed and government limits for RF exposure are not science based.   The Environmental Health Trust continues to call on the government to thoroughly review all of the recent, peer-reviewed research that demonstrates harm from wireless radiation,” said Devra Davis, Ph.D., epidemiologist and president of the EHT. Davis has spoken before Congress on the science of cell phone radiation. “The FCC is using studies that were done back when most of the public still had flip phones. It’s far outdated.” About Environmental Health Trust Founded in 2007, Environmental Health Trust, a 501(c)3 nonprofit, is a think tank that promotes a healthier environment through research, education and policy. EHT conducts cutting edge research on environmental health hazards and works with communities, health, education professionals and policymakers to understand and mitigate these hazards. Currently, EHT works with scientists, policymakers, teachers, parents and students to promote awareness on how to practice safe technology. The Environmental Health Trust has worked on the issue of wireless radiation for over a decade submitting thousands of pages of evidence to the FCC in the years leading up to the court's decision. EHT scientists testified in 2009 Senate hearings and 2008 congressional hearing on cell phone radiation- the last ever held. EHT scientists have continued to publish research on the health effects of non -ionizing electromagnetic radiation and organized numerous national and international scientific conferences on the issue. Visit  www.ehtrust.org for more information. Updated on Apr 29, 2022, 2:47 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkApr 29th, 2022

Futures Slide As Amazon, Apple Slump; Nasdaq Set For Worst Month Since Nov 2008

Futures Slide As Amazon, Apple Slump; Nasdaq Set For Worst Month Since Nov 2008 It has been an illiquid, rollercoaster session on the last day of the week and month, which first saw US index futures modestly rise alongside European stocks propped up by surging Chinese and Asian markets following Beijing's latest vow to use new tools and policies to spur growth, however the initial move higher quickly faded as markets remembered that not only did Amazon report dismal earnings (with Apple also sliding on weak guidance) but the Fed is set to hike 50bps (or maybe 75bps) next week, and put a lit on any upside follow through. As a result, S&P500 futures dropped 0.9%, while Nasdaq futures retreated 1.1% on the last trading day of April, adding to their 9.3% decline so far this month and on pace for the worst monthly performance since November 2008 as fears of rising rates hurt bubbly growth shares and fuel risks for future profits. The yen snapped a slide while staying near 20-year lows. The yuan, euro, pound and commodity-linked currencies made gains while the dollar dipped. 10Y TSY yields rose, rising by about 4bps to 2.87% while gold moved back above $1900. Bitcoin tumbled as usual, and last traded back under $39,000. In premarket trading, Amazon.com plunged 9%, after projecting dismal second-quarter sales growth, while the world's largest company Apple dropped 2.8% after warning on supply constraints. Meanwhile, Tesla shares gained 3.1% premarket after CEO Elon Musk said he doesn’t plan on selling any more stock after a $4 billion stake sale. Here are some other notable premarket movers: Intel (INTC US) shares slide 3.1% premarket as analysts flag “light” guidance for the chipmaker’s second quarter, stoking worries over the impact of waning demand for PCs. Intel’s second-quarter forecast missed the average estimate. Robinhood (HOOD US) shares are set to open at a record low Friday as a lockdown-driven boom in retail trading continues to fade and a stock market selloff squeezes out some clients. Tesla (TSLA US) shares rise as much as 4.2% premarket, after CEO Elon Musk said he doesn’t plan on offloading any more Tesla stock after selling ~$4b of shares in the electric vehicle maker following his deal to buy Twitter. Accolade (ACCD US) plummets 36% premarket after the company’s 2023 revenue forecast fell short of estimates, with Morgan Stanley downgrading the healthcare software provider to equal-weight after the loss of a key customer. Finch Therapeutics (FNCH US) shares soar as much as 54% premarket after the biotech announced that the FDA removed the clinical hold on Finch’s investigational new drug application for CP101. Piper Sandler cut its recommendation on Mastercard (MA US) to underweight, becoming the first broker to downgrade the company with a sell-equivalent rating since August. Shares down 1.1% premarket. U.S.-listed Chinese stocks rally across the board in premarket trading after China’s top leaders pledged more support to spur economic growth and vowed to contain Covid outbreaks. Alibaba (BABA US) +13%, JD.com (JD US) +16%. Zymeworks (ZYME US) climbs 30% premarket; All Blue Capital made a non-binding offer at $10.50 per share in cash for the biotech company, Reuters reports, citing people familiar with the matter. Outside of the flagship tech giant earnings misses, the results season has been reassuring so far. S&P 500 earnings growth is tracking 4.3% year-on-year, with 86% of companies beating estimates, according to Barclays strategists. “With continued solid U.S. growth prospects, robust earnings, and relatively strong household balance sheets, a recession in the next 12 months is not in our base case,” said UBS Wealth Management CIO Mark Haefele.  Meanwhile, as reported earlier, China’s top leaders promised to boost economic stimulus to spur growth.  While China’s announcement brought some relief for markets, many risks remain. They span China’s ongoing Covid challenges, the impact of the Fed on the U.S. economy and Russia’s war in Ukraine. “The Fed’s record on soft landings is not that strong,” Carol Schleif, deputy chief investment officer at BMO Family Office LLC, said on Bloomberg Television. “Markets are watching very, very carefully to see if we can thread that needle.” The latest U.S. data showed that the world’s largest economy unexpectedly shrank for the first time since 2020. That reflected an import surge tied to solid consumer demand, suggesting growth will return imminently.  The figures underscore the debate about how much scope the U.S. central bank has to tighten policy before the economy cracks. Markets continue to project a half-point Fed rate hike next week. “A year from now, 10-year yields are most likely going to be lower than where we are today,” Jimmy Chang, chief investment officer at Rockefeller Financial LLC, said on Bloomberg Television, referring to Treasuries. “I do believe at some point the economy starts to weaken, the Fed will be less hawkish, perhaps even go into a pause mode by, say, early next year.” Meanwhile, China's latest vow to prop up markets helped support European stocks (in addition to Asian and Chinese stocks of course), also spurred by a robust earnings season. The Stoxx Europe 600 Index climbed 0.8%, trimming a monthly decline. The Euro Stoxx 50 gains as much as 1.5% with most cash equity indexes gaining over 1% before stalling. Tech, consumer products and financial services are the strongest performing sectors. Here are some of the biggest European movers today: Novo Nordisk shares gain as much as 7.3% after the Danish pharmaceutical giant reported its latest earnings, which included a large beat on its blockbuster obesity drug Wegovy. The company also hiked its outlook. BBVA rises as much as 5.6% after better-than-expected first-quarter earnings, as the Spanish lender’s performance in Turkey showed signs of vindicating Chief Executive Officer Onur Genc’s bet on the country. Johnson Matthey jumps as much as 36%, the steepest gain since at least 1989 when Bloomberg’s records started, after Standard Industries Inc. bought a stake in the company. Remy Cointreau climbs as much as 3.8% after the French distiller reported 4Q sales that were in line with consensus. Analysts noted the strong start to the current fiscal year and a limited impact so far from a Covid-19 resurgence in the key Chinese market. Spie shares climb as much as 5.1% after the French company reported 1Q figures that Bryan Garnier said were “substantially” above expectations, with planned European investments for energy independence also viewed as a potential headwind. AstraZeneca shares decline as much as 1.3% after the company’s first-quarter earnings included a beat on core EPS and overall revenue, but also a slight miss on Alexion rare disease medication and key growth drugs such as Imfinzi. Neste falls as much as 8.7% even as the Finnish maker of renewable diesel reported first-quarter results that beat estimates. Jefferies (hold) said the lack of longer-term (full-year 2022) margin guidance could disappoint. Henkel tumbles as much as 10% after what RBC says was a “substantial profit warning” for 2022. NatWest falls as much as 6% after its 1Q results got a mixed response from analysts. Some were impressed with the performance of the bank’s Go-Forward business, while others highlighted the very low mortgage spread and miss in the CET1 capital ratio. Orsted drop as much as 3.2% despite reporting a 1Q profit beat, with analysts focusing on the project delays due to supply chain shortages as well as the impact of high input costs. Earlier in the session, Asian stocks climbed for a second day led by a jump in Chinese technology shares, amid a series of new policy promises from the country’s top leaders to bolster the economy and markets.  The MSCI Asia Pacific Index advanced as much as 1.7%, with Tencent and Alibaba among the biggest gainers. The Hang Seng Tech Index soared more than 10%, rebounding from earlier losses, as the country vowed to support healthy growth of platform companies. As reported earlier, China’s Politburo, led by President Xi Jinping, vowed to meet economic targets in a sign that it may step up stimulus to support growth. Shortly before the measures were unveiled, Chinese tech stocks reversed earlier losses as traders speculated about a possible relaxation of the yearlong regulatory clampdown. Chipmakers in Taiwan and South Korea also climbed, helping the region’s tech sector. A Bloomberg index of Asian semiconductor stocks rallied as much as 2.4%, its biggest gain in more than two weeks. A key technical indicator suggested that the sector is still oversold after Intel’s disappointing profit forecast. “After recent selloffs in the semiconductor sector, the price levels have become attractive for dip buyers,” said Seo Jung-Hun, a strategist at Samsung Securities, adding that the rebound may be limited ahead of the U.S. Federal Reserve meeting next week.   Stocks in South Korea, Taiwan and Australia advanced while those in Japan were closed for a holiday. Asia’s equity benchmark was still poised for its steepest monthly drop since March 2020 and its fourth monthly decline. Australian stocks also advanced, paring the week's decline. The S&P/ASX 200 index rose 1.1% to 7,435.00, paring the week’s loss. Technology and communications sectors gained the most Friday. Pointsbet gained the most in almost a month, snapping a five day losing streak after reporting turnover for the third quarter. Domino’s Pizza fell for a fourth day, dropping the most in a month. New Zealand, the S&P/NZX 50 index was little changed at 11,884.30. India’s benchmark equities index completed a third monthly slide this year as higher oil prices weighed on sentiment.  The S&P BSE Sensex fell 0.8% to 57,060.87 in Mumbai on Friday, taking its loss in April to 2.6%. Axis Bank Ltd. dropped 6.6% after reporting earnings and was the biggest drag on the Sensex, which saw 23 of 30 member-stocks fall. The NSE Nifty 50 Index also slipped 0.8% to 17,102.55. All 19 sectoral sub-indexes compiled by BSE Ltd. slipped, led by a gauge of oil and gas companies.  “We’ve been seeing the index oscillating in a broader range for the last two weeks and there’s no clarity over the next directional move yet,” Ajit Mishra, vice president for research at Religare Broking Ltd., wrote in a note.  The brokerage maintains a cautious view, with focus on earnings, auto sales data and the initial share sale of Life Insurance Corporation next week.  Of the 15 Nifty 50 firms that have announced earnings results so far, 10 either met or exceeded analysts’ expectations, while five missed.  In FX, the Bloomberg Dollar Spot Index fell after touching an almost two-year high yesterday as the greenback weakened against all of its Group-of-10 peers. Treasuries underperformed European bonds, with 3-year yields rising by 7bps. Scandinavian currencies were the top performers as they were supported by month-end flows. The Australian dollar extended intra-day gains after China’s top leaders promised to boost economic stimulus to spur growth and vowed to contain the country’s worst Covid outbreak since 2020, which is threatening official targets for this year. The euro snapped six days of losses against the dollar but was still set for its worst monthly performance in almost four years. Bunds extended losses and yields rose by up to 5 bps after data showed euro-area consumer prices rose by 7.5% from a year earlier in April, in line with the median estimate in a Bloomberg survey. A gauge excluding volatile items such as food and energy jumped to 3.5%. The pound advanced against the dollar, trimming a weekly decline of 2.2%. The cost of hedging against swings in the pound over a one-week period rose to the highest since December 2020. Gilts outperformed bunds and Treasuries, as money markets pared BOE tightening wagers. The yen rose on demand over the currency fix in Tokyo but it remains on track for its worst monthly performance since 2016 In rates, Treasuries hold losses into the U.S. session leaving yields down by as much as 6bps across front-end as the curve flattens. 10-year TSY yields were around 2.86%, cheaper by 4bp vs. Thursday close while 2s10s, 5s30s spreads flatten 2bp and 2.5bp amid front-end and belly-led weakness. German short-end cheapens roughly 5 bps to 0.24% as euro-area core inflation accelerated higher than expected. In Europe, peripherals underperform and lead bond losses while Estoxx50 climbs following better sentiment across Asia stocks after China’s pledge to ramp up stimulus.  Dollar issuance slate empty so far; two names priced $4.5b Thursday, taking weekly volumes through $8b vs. $20b forecast. Expectations are for $20b to $25b next week and a total of $125b to $150b for the month of May In commodities, WTI rose 1.2% higher to trade near $107. Saudi Aramco is expected to lower its official selling prices for June-loading crudes, market sources told S&P Global Commodity Insights; following tepid Asian demand fundamentals, with the OSP differentials retreating from the record highs. North Sea Crude oil grades underpinning dated Brent Benchmark to average 540k BPD in June (prev. 755k BPD), according to programmes. Indian firms are reportedly seeking oil import deals with Russia, according to sources cited by Reuters; three refiners looking to buy up to 16mln bbl per month of oil from Russia. Spot gold rises roughly $20 to trade around $1,915/oz. Most base metals trade in the green. Bitcoin prices are softer as usual and briefly retreated beneath the 39,000 level. Looking at the day ahead now, and data releases include the flash CPI estimate for the Euro Area in April, as well as the first look at Q1 GDP for the Euro Area, Germany, France and Italy. Otherwise from the US, we’ll get March’s data on personal spending and personal income, the Q1 employment cost index, the NI Chicago PMI for April, and the University of Michigan’s final consumer sentiment index for April. From central banks, we’ll hear from the ECB’s de Cos, and the Central Bank of Russia will be making its latest policy decision. Finally, earnings releases include ExxonMobil, Chevron, AbbVie, Bristol-Myers Squibb, Honeywell International, Charter Communications, Aon and NatWest. Market Snapshot S&P 500 futures down 0.9% to 4,242.00 STOXX Europe 600 up 1.0% to 451.55 MXAP up 2.0% to 169.00 MXAPJ up 2.6% to 561.33 Nikkei up 1.7% to 26,847.90 Topix up 2.1% to 1,899.62 Hang Seng Index up 4.0% to 21,089.39 Shanghai Composite up 2.4% to 3,047.06 Sensex up 0.5% to 57,796.94 Australia S&P/ASX 200 up 1.1% to 7,435.01 Kospi up 1.0% to 2,695.05 German 10Y yield little changed at 0.88% Euro up 0.7% to $1.0574 Brent Futures up 0.9% to $108.51/bbl Brent Futures up 0.9% to $108.51/bbl Gold spot up 1.1% to $1,915.10 U.S. Dollar Index down 0.66% to 102.94 Top Overnight News from Bloomberg More than six years after China’s shock 2015 devaluation roiled global markets and spurred an estimated $1 trillion in capital flight, the yuan is weakening at a similar pace. Onshore it’s lost nearly 4% in eight days, while the offshore rate is heading for its worst month relative to the greenback in history. Selling momentum is the strongest since the height of Donald Trump’s trade war in 2018 Geopolitical turmoil is reviving the dollar’s status as a haven, extending gains seen earlier this year as traders shifted to the U.S. to seize on rising interest rates from the Federal Reserve. On Thursday, one gauge of the greenback pushed through to the strongest level since 2002, swept up by a wave of demand for the world’s reserve currency Russia’s war with Ukraine may persuade the Swiss National Bank to adjust its monetary policy if inflation accelerates, SNB President Thomas Jordan said Economic expansion in the euro zone began 2022 on a weak footing -- underscoring the damage from soaring energy costs and worsening supply snarls following Russia’s invasion of Ukraine. Output increased 0.2% from the previous quarter in the three months through March -- matching the median estimate in a Bloomberg survey U.K. house prices rose for a ninth consecutive month in April as the housing market continued to defy an escalating cost of living crisis. The 0.3% gain marked the longest winning streak since 2016 Oil is poised for a fifth monthly gain after another tumultuous period of trading that saw prices whipsawed by the fallout from Russia’s war in Ukraine and the resurgence of Covid-19 in China A More detailed look at global markets courtesy of Newsquawk APAC stocks gained after the firm lead from the US where stocks looked past the surprise contraction in US GDP, but with advances in the region capped heading into month-end and next week's mass closures. ASX 200 was firmer as tech mirrored the outperformance of the Nasdaq stateside and with gold miners following closely behind after the precious metal reclaimed the psychological USD 1900/oz level. Hang Seng and Shanghai Comp were initially indecisive ahead of next week’s holiday closures including in the mainland where markets will remain closed through to Wednesday, while participants also digested the surprise contraction in Hong Kong’s exports and imports data. However, a surge in Hong Kong tech stocks and policy pledges by China's Politburo helped shake off the indecision. Top Asian News Bets of Easing Crackdown Spur Dizzying Jump in China Tech Stocks Grab Gets Malaysia Digital Bank License as Five Bids Win CATL Posts Sharp Drop in Earnings in Abrupt Reversal of Fortune China Plans Symposium With Big Tech Firms After Labor Day: SCMP European equities remained on the front foot on the last trading day of the month.   In terms of sectors, tech currently stands as the clear outperformer amid the sectoral gains on Wall Street yesterday alongside the surge in Chinese Tech. Overall, sectors have a slight anti-defensive bias. State-side futures were dented overnight amid after-hours losses in Amazon (-9% pre-market) and Apple (-2.4% pre-market) following disappointing guidance and inflationary headwinds. Thus, the NQ (-0.8%) currently lags. Top European News Russia Offers Dual-Payment Plan for Oil, Other Trade With India Germany Says Won’t Block Embargo on Russian Oil to Punish Putin UBS Wealth Says Too Early to Bet on Recession, Fed’s Failure U.K. House Prices Deliver Longest Winning Streak Since 2016 FX Dollar bulls book profits into month end and DXY pulls back further from near 104.000 peak in the process. High betas, cyclical and activity currencies grab the chance to recoup losses vs Buck. Euro rebounds amidst more hot Eurozone inflation data, but could be hampered by big option expiries. Yuan regroups as Chinese Government promises stimulus measures and aid for sectors of the economy suffering worst covid contagion Central Bank of Russia (CBR) cuts key rate by 300bps to 14.00% (exp. 15.00%); sees key rate in 12.5-14.00% range this year (prev. 9.0-11.0%). Russia's Kremlin, when asked about the idea of pegging the RUB to gold prices, says it is under discussion, according to Reuters. Fixed Income Bonds suffer another inflation setback after early EU rebound. Bunds some 100 ticks down from 154.69 peak, Gilts flattish between 119.34-118.73 parameters and 10 year T-note nearer 119-04+ low than 19-24 high. BTPs weak after so-so reception at end of month Italian auctions - US PCE data also adds to caution as Fed's preferred measure of inflation. Commodities WTI and Brent front-month futures have been gaining during the European morning. Saudi Aramco is expected to lower its official selling prices for June-loading crudes, market sources told S&P Global Commodity Insights; following tepid Asian demand fundamentals, with the OSP differentials retreating from the record highs. (S&PGlobal) North Sea Crude oil grades underpinning dated Brent Benchmark to average 540k BPD in June (prev. 755k BPD), according to programmes. Indian firms are reportedly seeking oil import deals with Russia, according to sources cited by Reuters; three refiners looking to buy up to 16mln bbl per month of oil from Russia. Spot gold has been rising in tandem with a pullback in the Buck but ahead of the US March PCE metric. Overnight, base metals saw gains in Shanghai, with some also citing a demand front-load ahead of the Chinese Labour Day. US Event Calendar 08:30: 1Q Employment Cost Index, est. 1.1%, prior 1.0% 08:30: March Personal Income, est. 0.4%, prior 0.5% March Personal Spending, est. 0.6%, prior 0.2% March Real Personal Spending, est. -0.1%, prior -0.4% March PCE Deflator MoM, est. 0.9%, prior 0.6% March PCE Deflator YoY, est. 6.7%, prior 6.4% March PCE Core Deflator MoM, est. 0.3%, prior 0.4% March PCE Core Deflator YoY, est. 5.3%, prior 5.4% 09:45: April MNI Chicago PMI, est. 62.0, prior 62.9 10:00: April U. of Mich. Sentiment, est. 65.7, prior 65.7 U. of Mich. Expectations, est. 64.1, prior 64.1 U. of Mich. Current Conditions, est. 68.0, prior 68.1 U. of Mich. 1 Yr Inflation, est. 5.5%, prior 5.4%; 5-10 Yr Inflation, prior 3.0% DB's Jim Reid concludes the overnight wrap By the time you're reading this I'll be lying down with straps around my ankles and wrists and making strange noises while I get manipulated by someone very strict. No I'm not remaking "50 Shades" but instead starting "Reformer Pilates" for the first time at a very early physio appointment. The miracle worker of a back consultant that has for now cured my debilitating sciatica with one simple injection has recommended it as a way of preventing a relapse. At this point, I will do absolutely anything he says so I’m prepared to humiliate myself on a regular basis going forward. So feel free to picture this as you read this. Some of the bearish chains have been loosened in risk markets over the last 24 hours but volatility remains elevated. We’ve seen another major European bond selloff, the highest German inflation since 1950, a further surge in the dollar, an unexpected US economic contraction in Q1, poor Amazon earnings, as well as growing geopolitical tensions as speculation continues about a Russian oil embargo in Europe. In spite of all that however, major equity indices have continued to advance from their Tuesday lows, with the S&P 500 (+2.47%) staging a huge comeback as investors focused on the more positive stories from recent corporate earnings releases. This was before Amazon missed sales expectations after the bell and revised down sales expectations for the second-quarter, fueling fears that consumer spending may slow despite evidence of robust activity in yesterday's GDP data. Amazon shares were -9.15% lower after hours. However, Apple reported earnings that beat estimates on strong iPhone sales, despite supply chain issues coinciding with China’s lockdowns. Shares were -2.19% lower after hours. Overall sentiment still remains fragile with NASDAQ 100 futures (-1.04%) and S&P 500 futures (-0.43%) moving lower in the overnight trade. This followed the best day for the S&P 500 (+2.47%) since the bounceback after the initial invasion in early March, with every sector more than +1.00% higher. Megacap tech stocks led the way as the FANG+ index rose +4.78%, its best day since mid-March. Europe also saw decent gains, although missing most of the rally that took place in the New York afternoon, with the STOXX 600 (+0.62%), the DAX (+1.35%) and the FTSE 100 (+1.13%) all higher. Given the big run-up in the New York afternoon, the S&P 500 was 'only' around +0.8% higher as Europe closed. Bond markets were again lively with most of the action in Europe, with a significant selloff after the German CPI print for April surprised on the upside yet again. Looking at the details, the year-on-year measure rose to +7.8% using the EU-harmonised method (vs. +7.6% expected), which is certainly the fastest pace of inflation since German reunification, and at the same level briefly seen in West Germany after the first oil shock in 1973. Indeed if you’re looking for German inflation faster than that, you’ve got to go all the way back to the 1950s, since West Germany had much more success than the US or UK for example in keeping inflation in the single-digits even during the 1970s. We’ll have to see what the flash CPI reading for the entire Euro Area brings today, but as I mentioned in my Chart of the Day yesterday (link here), this brings home just how far the ECB is behind the curve, since the last time inflation was around these levels in the 70s, the Bundesbank certainly didn’t have a negative deposit rate. With the inflation reading coming in above expectations, that catalysed a fresh bond selloff that took the 10yr bund yield up by +9.8bps to 0.89%. This echoes some of the other big moves higher in yields we’ve seen over the last couple of months, but it still leaves them beneath the peak of 0.97% at the end of last week. What was also noticeable was the fresh widening in spreads that speaks to the building minor stresses in European markets right now, with the gap between Italian and German 10yr yields up a further +4.2bps to 181bps, a level not seen since June 2020. As in the previous session, those moves were seen in the credit space too, with the iTraxx Crossover widening +3.7bps to 418bps, leaving it just shy of its recent peak at 421bps in early March. Another cause for concern in European markets have been the ongoing tensions between Russia and the West over Ukraine, with the Euro falling by a further -0.55% yesterday to $1.0499, the first close below $1.05 since early 2017, although this morning it has moved back up to $1.0514. Conversely the dollar index (+0.65%) continued its upward march, strengthening for the 19th time in the last 21 sessions, and closing at its strongest level since 2002. That comes as the latest reports indicate that a Russian oil embargo is moving closer, with Brent crude ending the day up +2.16% at $107.59/bbl after Dow Jones reported that Germany had dropped its opposition to an embargo, and this morning, Brent has risen further to $108.00/bbl. We also heard from President Biden, who requested $33bn from Congress for further assistance to Ukraine, including $20.4bn on security and military assistance, $8.5bn on economic assistance, and $3bn on humanitarian assistance. Overnight in Asia, equity markets are mostly trading higher following the strong performance on Wall Street, with tech stocks leading the way. The Hang Seng (+2.04%) has seen one of the strongest performances, far outpacing mainland Chinese indices including the Shanghai Composite (+0.37%) and the CSI 300 (-0.06%). That comes amidst persistent concerns over the country’s lockdowns, with Shanghai seeing an increase in Covid-19 cases for the first time in 6 days, and overnight we also heard from China’s Politburo, with CCTV reporting that they’re urging efforts to meet the economic growth targets. Elsewhere, the Kospi (+0.78%) is trading up while markets in Japan are closed for a holiday today. Back on the data front, another notable release yesterday came from the US GDP reading for Q1. On one level it’s a fairly backward-looking reading, but the print saw an unexpected contraction, with the economy shrinking at an annualised rate of -1.4%, marking the first quarterly contraction since the lockdowns of Q2 2020. That said, there are no indications this is going to derail the Fed from their path of rate hikes, with a 50bps move next week still fully priced in. In fact, there was a massive drag coming from the surprisingly large trade deficit, while underlying consumption was actually very robust, suggesting rates need to get even higher to slow demand, as we’ve been arguing. In turn, the amount of Fed hikes priced for the rest of the year moved up +2.2bps to 239bps, and this morning they’re up to 242bps, just shy of their closing high last Friday at 244bps. That led to a renewed flattening in the yield curve, and 2yr yields gained +2.6bps while 10yr yields fell -0.9bps. Despite the tepid headline nominal move, there was a big divergence in 10yr inflation breakevens and real yields. Breakevens gained +7.3bps to 2.98%, a few bps shy of their highest levels on record from last week. By contrast, real yields fell -8.2bps to -0.16%, taking them a further from positive territory ahead of next week’s FOMC where its also widely-anticipated they will announce the beginning of their QT program. To the day ahead now, and data releases include the flash CPI estimate for the Euro Area in April, as well as the first look at Q1 GDP for the Euro Area, Germany, France and Italy. Otherwise from the US, we’ll get March’s data on personal spending and personal income, the Q1 employment cost index, the MNI Chicago PMI for April, and the University of Michigan’s final consumer sentiment index for April. From central banks, we’ll hear from the ECB’s de Cos, and the Central Bank of Russia will be making its latest policy decision. Finally, earnings releases include ExxonMobil, Chevron, AbbVie, Bristol-Myers Squibb, Honeywell International, Charter Communications, Aon and NatWest. Tyler Durden Fri, 04/29/2022 - 07:33.....»»

Category: personnelSource: nytApr 29th, 2022

Correction - Eagle Bancorp Montana Earns $2.2 Million, or $0.34 per Diluted Share, in First Quarter of 2022; Declares Quarterly Cash Dividend of $0.125 per Share and Renews Stock Repurchase Plan

HELENA, Mont., April 27, 2022 (GLOBE NEWSWIRE) -- Eagle Bancorp Montana, Inc.  (NASDAQ:EBMT), (the "Company," "Eagle"), the holding company of Opportunity Bank of Montana (the "Bank"), today announced a correction of its earnings press release issued on April 26, 2022, and reported net income of $2.2 million, or $0.34 per diluted share, in the first quarter of 2022, compared to $5.3 million, or $0.78 per diluted share, in the first quarter a year ago, and increased 19.5% compared to $1.7 million, or $0.26 per diluted share, in the preceding quarter.  Financial results for the past few quarters reflect a mortgage market that is returning to more normal levels and reduced origination fees for Paycheck Protection Program ("PPP") loan forgiveness. Eagle's board of directors declared a quarterly cash dividend of $0.125 per share on April 21, 2022. The dividend will be payable June 3, 2022 to shareholders of record May 13, 2022. The current annualized dividend yield is 2.26% based on recent market prices. "We delivered strong first quarter earnings, fueled by continuing strength in asset quality and balance sheet expansion," said Peter J. Johnson, CEO. "We achieved double digit loan and deposit growth compared to a year ago, while keeping expenses in check. While lower volumes of mortgage activity impacted earnings compared to the year ago quarter, we remain optimistic for our growth prospects for the year ahead." On October 1, 2021, Eagle announced that it had reached an agreement to acquire First Community Bancorp, Inc. and its subsidiary, First Community Bank ("First Community"). "Our proposed merger recently received all regulatory approvals and is on schedule to close at the end of April," said Laura F. Clark, President. "First Community is an experienced agriculture and commercial lender with a 130-year operating history in Montana and deep roots in the communities it serves. This transaction will expand our presence across the state of Montana and build on our reputation as an experienced and preferred agricultural lender. We foresee this merger, like other recent acquisitions, resulting in significant benefits to our expanding group of clients, communities, employees and shareholders." Headquartered in Glasgow, Montana, First Community is the largest bank headquartered in Northeast Montana, and currently operates nine branches and two mortgage loan production offices, including commercial-focused branches in Helena and Three Forks in Gallatin County. Upon completion of the acquisition, Opportunity Bank of Montana will have 32 retail branches in key commercial and agricultural markets across Montana. First Quarter 2022 Highlights (at or for the three-month period ended March 31, 2022, except where noted): Net income was $2.2 million, or $0.34 per diluted share, in the first quarter of 2022, compared to $1.7 million, or $0.26 per diluted share, in the preceding quarter, and $5.3 million, or $0.78 per diluted share, in the first quarter a year ago. Net interest margin ("NIM") was 3.64% in the first quarter of 2022, compared to 3.75% in the preceding quarter, and 3.97% in the first quarter a year ago. Revenues (net interest income before the loan loss provision, plus noninterest income) were $20.1 million in the first quarter of 2022, compared to $21.8 million in the preceding quarter and $24.5 million in the first quarter a year ago.   Remaining purchase discount on loans from acquisitions prior to 2021 totaled $884,000 as of March 31, 2022. The accretion of the loan purchase discount into loan interest income from the Western Bank of Wolf Point, and previous acquisitions was $108,000 in the first quarter of 2022, compared to interest accretion on purchased loans from acquisitions of $171,000 in the preceding quarter. The allowance for loan losses represented 202.9% of nonperforming loans at March 31, 2022, compared to 146.7% a year earlier. Total loans increased 15.6% to $958.7 million, at March 31, 2022, compared to $829.3 million a year earlier and increased 2.7% compared to $933.1 million at December 31, 2021. Total deposits increased 16.2% to $1.27 billion at March 31, 2022, from $1.09 billion a year ago, and increased 3.9% compared to $1.22 billion at December 31, 2021. Eagle remained well capitalized with a tangible common shareholders' equity ratio of 8.24% at March 31, 2022. Paid a quarterly cash dividend of $0.125 per share on March 4, 2022 to shareholders of record February 11, 2022. Balance Sheet Results Eagle's total assets increased 13.8% to $1.49 billion at March 31, 2022, compared to $1.31 billion a year ago, and increased 3.9% from $1.44 billion three months earlier.   Strong commercial real estate and commercial construction activity more than offset PPP loan forgiveness, causing the loan portfolio to grow approximately 15.6% compared to a year ago and grow approximately 2.7% from the previous quarter end. Eagle originated $177.5 million in new residential mortgages during the quarter and sold $172.1 million in residential mortgages, with an average gross margin on sale of mortgage loans of approximately 3.62%. This production compares to residential mortgage originations of $235.4 million in the preceding quarter with sales of $239.0 million and an average gross margin on sale of mortgage loans of approximately 4.11%. There has been some margin compression due to increased competition. Commercial real estate loans increased 31.3% to $433.0 million at March 31, 2022, compared to $329.8 million a year earlier. Commercial construction and development loans increased 58.5% to $105.8 million, compared to $66.7 million a year ago. Construction projects were slow to start in early 2021 due to COVID-19 concerns and initial supply chain issues, but have picked up in recent quarters. Agricultural and farmland loans decreased 6.0% to $110.2 million at March 31, 2022, compared to $117.2 million a year earlier. Residential mortgage loans decreased 1.7% to $99.2 million, compared to $100.9 million a year earlier. Commercial loans decreased 9.6% to $98.5 million, compared to $109.0 million a year ago, reflecting SBA PPP loan forgiveness. Home equity loans increased 1.0% to $53.8 million, residential construction loans increased 15.2% to $41.0 million, and consumer loans decreased 3.0% to $18.8 million, compared to a year ago.   Total deposits increased 16.2% to $1.27 billion at March 31, 2022, compared to $1.09 billion at March 31, 2021, and increased 3.9% from $1.22 billion at December 31, 2021. Noninterest-bearing checking accounts represented 29.3%, interest-bearing checking accounts represented 16.5%, savings accounts represented 18.3%, money market accounts comprised 24.6% and time certificates of deposit made up 11.3% of the total deposit portfolio at March 31, 2022. Shareholders' equity was $143.5 million at March 31, 2022, compared to $155.8 million a year earlier and $156.7 million three months earlier. The decrease compared to both the prior quarter and the first quarter a year ago is primarily due to unrealized losses on securities available-for-sale caused by the recent increase in interest rates. Tangible book value was $18.08 per share, at March 31, 2022, compared to $19.60 per share a year earlier and $19.74 per share three months earlier.   Operating Results "Lower yields on interest earning assets continued to put pressure on our NIM during the first quarter," said Johnson. "However, with the recent rate increase enacted by the Federal Reserve at the end of the quarter, we anticipate improvement in our NIM in future quarters, especially with the possibility of additional rate increases throughout the year."   Eagle's NIM was 3.64% in the first quarter of 2022, compared to 3.75% in the preceding quarter, and 3.97% in the first quarter a year ago. The interest accretion on acquired loans totaled $108,000 and resulted in a three basis-point increase in the NIM during the first quarter of 2022, compared to $171,000 and a five basis-point increase in the NIM during the preceding quarter. PPP fee income on loans totaled $177,000 and resulted in a five basis-point increase in the NIM during the first quarter of 2022, compared to $407,000 and a 13 basis-point increase in the NIM during the previous quarter. PPP fee income of $500,000 in the first quarter of 2021 resulted in an 18 basis-point increase in the NIM. The investment securities portfolio decreased to $264.6 million at March 31, 2022, compared to $271.3 million at December 31, 2021, which was driven by changes in market values. However, the portfolio increased $84.4 million from $180.3 million at March 31, 2021 due to purchases resulting from excess liquidity levels. Average yields on earning assets for the first quarter decreased to 3.92% from 4.28% a year ago. Eagle's first quarter revenues decreased to $20.1 million, compared to $21.8 million in the preceding quarter and $24.5 million in the first quarter a year ago. The decrease compared to the first quarter a year ago was largely due to lower volumes in mortgage banking activity. Net interest income, before the loan loss provision, decreased 1.7% to $11.8 million in the first quarter, compared to $12.0 million in the fourth quarter of 2021, and increased 6.3% compared to $11.1 million in the first quarter of 2021. The decrease compared to the prior quarter reflected lower origination fees for PPP loan payoffs or forgiveness during the current quarter, compared to the prior quarter. Eagle's total noninterest income decreased 14.6% to $8.3 million in the first quarter of 2022, compared to $9.7 million in the preceding quarter, and decreased 38.1% compared to $13.4 million in the first quarter a year ago. Net mortgage banking, the largest component of noninterest income, totaled $6.2 million in the first quarter of 2022, compared to $7.7 million in the preceding quarter and $11.8 million in the first quarter a year ago. These decreases were driven by a decline in net gain on sale of mortgage loans, as well as changes in the fair value of loans held-for sale and derivatives. These changes are largely driven by the reduced volumes in mortgage activity. First quarter noninterest expense decreased to $16.9 million, compared to $19.1 million in the preceding quarter and $17.2 million in the first quarter a year ago. The decrease compared to both the prior quarter and the year ago quarter reflects lower commissions paid on residential mortgage originations. Acquisition costs were also down for the first quarter of 2022 compared to the preceding quarter related to the proposed merger with First Community. For the first quarter of 2022, the income tax provision totaled $695,000, for an effective tax rate of 23.9%, compared to $632,000 in the preceding quarter, and $1.8 million in the first quarter of 2021.   Credit Quality The loan loss provision was $279,000 in the first quarter of 2022, compared to $285,000 in the preceding quarter and $299,000 in the first quarter a year ago. The allowance for loan losses represented 202.9% of nonperforming loans at March 31, 2022, compared to 177.1% three months earlier and 146.7% a year earlier. Nonperforming loans decreased to $6.3 million at March 31, 2022, compared to $7.1 million at December 31, 2021, and $8.1 million a year earlier. Local economies continue to rebound from the pandemic and loan quality has remained strong. Eagle had $346,000 in other real estate owned and other repossessed assets on its books at March 31, 2022. This compared to $4,000 at December 31, 2021, and none at March 31, 2021. Net loan charge-offs totaled $79,000 in the first quarter of 2022, compared to net loan recoveries of $15,000 in the preceding quarter and net loan recoveries of $1,000 in the first quarter a year ago. The allowance for loan losses was $12.7 million, or 1.32% of total loans, at March 31, 2022, compared to $12.5 million, or 1.34% of total loans, at December 31, 2021, and $11.9 million, or 1.43% of total loans, a year ago.   Capital Management Eagle Bancorp Montana, Inc. continues to be well capitalized with the ratio of tangible common shareholders' equity (shareholders' equity, less goodwill and core deposit intangible) to tangible assets (total assets, less goodwill and core deposit intangible) of 8.24% as of March 31, 2022. Stock Repurchase Authority Eagle announced that its Board of Directors has authorized repurchase of up to 400,000 shares of its common stock, representing approximately 5.0% of outstanding shares, assuming the issuance of shares pursuant to the First Community acquisition scheduled to close at the end of April. Under the plan, shares may be purchased by the company on the open market or in privately negotiated transactions. The extent to which the Company repurchases its shares and the timing of such repurchase will depend upon market conditions and other corporate considerations. The plan is expected to be in place for approximately 12 months, but may be suspended, terminated or modified by the Company's Board of Directors at any time. The plan does not obligate the Company to purchase any particular number of shares. Recent Events On January 21, 2022, the Company completed the issuance of $40.0 million in aggregate principal amount of subordinated notes due in 2032 in a private placement transaction to certain institutional accredited investors and qualified buyers. The notes will bear interest at an annual fixed rate of 3.50% payable semi-annually until August of 2027 at which point interest will accrue at a floating rate payable quarterly. A portion of the net proceeds were used to redeem $10.0 million of 5.75% fixed senior notes due February 15, 2022. About the Company Eagle Bancorp Montana, Inc. is a bank holding company headquartered in Helena, Montana, and is the holding company of Opportunity Bank of Montana, a community bank established in 1922 that serves consumers and small businesses in Montana through 23 banking offices. Additional information is available on the Bank's website at www.opportunitybank.com. The shares of Eagle Bancorp Montana, Inc. are traded on the NASDAQ Global Market under the symbol "EBMT." Forward Looking Statements This release may contain certain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and may be identified by the use of such words as "believe," "will"' "expect," "anticipate," "should," "planned," "estimated," and "potential." These forward-looking statements include, but are not limited to statements of our goals, intentions and expectations; statements regarding our business plans, prospects, mergers, including the proposed transaction with First Community, growth and operating strategies; statements regarding the current global COVID-19 pandemic, statements regarding the asset quality of our loan and investment portfolios; and estimates of our risks and future costs and benefits. These forward-looking statements are based on current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. These factors include, but are not limited to, changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements; general economic conditions and political events, either nationally or in our market areas, that are worse than expected; the duration and impact of the COVID-19 pandemic, including but not limited to the efficiency of the vaccine rollout, new variants, steps taken by governmental and other authorities to contain, mitigate and combat the pandemic, adverse effects on our employees, customers and third-party service providers, the increase in cyberattacks in the current work-from-home environment, the ultimate extent of the impacts on our business, financial position, results of operations, liquidity and prospects, continued deterioration in general business and economic conditions could adversely affect our revenues and the values of our assets and liabilities, lead to a tightening of credit and increase stock price volatility, and potential impairment charges; competition among depository and other financial institutions; loan demand or residential and commercial real estate values in Montana; the concentration of our business in Montana; our ability to continue to increase and manage our commercial real estate, commercial business and agricultural loans; the costs and effects of legal, compliance and regulatory actions, changes and developments, including the initiation and resolution of legal proceedings (including any securities, bank operations, consumer or employee litigation); inflation and changes in the interest rate environment that reduce our margins or reduce the fair value of financial instruments; adverse changes in the securities markets; other economic, governmental, competitive, regulatory and technological factors that may affect our operations; cyber incidents, or theft or loss of Company or customer data or money; the effect of our recent acquisitions, including the failure to achieve expected revenue growth and/or expense savings, the failure to effectively integrate their operations and the diversion of management time on issues related to the integration. In addition, future factors related to the proposed transaction between Eagle and First Community, include, among others: the occurrence of any event, change or other circumstances that could give rise to the right of one or both of the parties to terminate the definitive merger agreement between Eagle and First Community; the outcome of any legal proceedings that may be instituted against Eagle or First Community; the possibility that the proposed transaction will not close when expected or at all because conditions to the closing are not satisfied on a timely basis or at all; the risk that any announcements relating to the proposed combination could have adverse effects on the market price of the common stock of Eagle; the possibility that the anticipated benefits of the transaction will not be realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy and competitive factors in the areas where Eagle and First Community do business; the possibility that the transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; diversion of management's attention from ongoing business operations and opportunities; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the transaction; Eagle's and First Community's success in executing their respective business plans and strategies and managing the risks involved in the foregoing; and other factors that may affect future results of Eagle and First Community; the business, economic and political conditions in the markets in which the parties operate; the risk that the proposed combination and its announcement could have an adverse effect on either or both parties' ability to retain customers and retain or hire key personnel and maintain relationships with customers; the risk that the proposed combination may be more difficult or time-consuming than anticipated, including in areas such as sales force, cost containment, asset realization, systems integration and other key strategies; revenues following the proposed combination may be lower than expected, including for possible reasons such as unexpected costs, charges or expenses resulting from the transactions; the unforeseen risks relating to liabilities of Eagle or First Community that may exist; and uncertainty as to the extent of the duration, scope, and impacts of the COVID-19 pandemic on First Community, Eagle and the proposed combination. Because of these and other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements. All information set forth in this press release is current as of the date of this release and the company undertakes no duty or obligation to update this information. Use of Non-GAAP Financial Measures In addition to results presented in accordance with generally accepted accounting principles utilized in the United States, or GAAP, the Financial Ratios and Other Data contains non-GAAP financial measures. Non-GAAP disclosures include: 1) core efficiency ratio, 2) tangible book value per share, 3) tangible common equity to tangible assets, 4) earnings per diluted share, excluding acquisition costs and 5) return on average assets, excluding acquisition costs. The Company uses these non-GAAP financial measures to provide meaningful supplemental information regarding the Company's operational performance and to enhance investors' overall understanding of such financial performance. In particular, the use of tangible book value per share and tangible common equity to tangible assets is prevalent among banking regulators, investors and analysts. The numerator for the core efficiency ratio is calculated by subtracting acquisition costs and intangible asset amortization from noninterest expense. Tangible assets and tangible common shareholders' equity are calculated by excluding intangible assets from assets and shareholders' equity, respectively. For these financial measures, our intangible assets consist of goodwill and core deposit intangible. Tangible book value per share is calculated by dividing tangible common shareholders' equity by the number of common shares outstanding. We believe that this measure is consistent with the capital treatment by our bank regulatory agencies, which exclude intangible assets from the calculation of risk-based capital ratios and present this measure to facilitate the comparison of the quality and composition of our capital over time and in comparison, to our competitors. Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, and are not audited. Further, the non-GAAP financial measure of tangible book value per share should not be considered in isolation or as a substitute for book value per share or total shareholders' equity determined in accordance with GAAP, and may not be comparable to a similarly titled measure reported by other companies. Reconciliation of the GAAP and non-GAAP financial measures are presented below.     Contacts: Peter J. Johnson, CEO(406) 457-4006 Laura F. Clark, President(406) 457-4007 Balance Sheet                 (Dollars in thousands, except per share data)     (Unaudited)               March 31, December 31, March 31,               2022 2021 2021                       Assets:                   Cash and due from banks       $ 17,516   $ 10,938   $ 17,199       Interest bearing deposits in banks       62,697     43,669     87,165       Federal funds sold           14,889     6,827     6,859         Total cash and cash equivalents     95,102     61,434     111,223       Securities available-for-sale         264,635     271,262     180,276       Federal Home Loan Bank ("FHLB") stock       1,723     1,702     1,977       Federal Reserve Bank ("FRB") stock       2,974     2,974     2,974       Mortgage loans held-for-sale, at fair value       22,295     25,819     60,609       Loans:                   Real estate loans:                 Residential 1-4 family         99,242     101,180     100,948       Residential 1-4 family construction       40,968     45,635     35,558       Commercial real estate         432,976     410,568     329,772       Commercial construction and development     105,754     92,403     66,718       Farmland           60,363     67,005     67,592       Other loans:                   Home equity           53,828     51,748     53,270       Consumer           18,834     18,455     19,424       Commercial           98,471     101,535     108,956       Agricultural           49,836     46,335     49,642       Unearned loan fees         (1,591 )   (1,725 )   (2,541 )       Total loans         958,681     933,139     829,339       Allowance for loan losses         (12,700 )   (12,500 )   (11,900 )       Net loans         945,981     920,639     817,439       Accrued interest and dividends receivable       5,750     5,751     5,451       Mortgage servicing rights, net         14,288     13,693     11,320       Premises and equipment, net         69,536     67,266     61,971       Cash surrender value of life insurance, net       36,681     36,474     27,911       Goodwill           20,798     20,798     20,798       Core deposit intangible, net         1,660     1,780     2,202       Deferred tax asset, net         3,776     -     154       Other assets           6,854     6,334     7,116         Total assets       $ 1,492,053   $ 1,435,926   $ 1,311,421                         Liabilities:                   Deposit accounts:                   Noninterest bearing         371,818     368,846     331,589       Interest bearing           898,758     853,703     761,815         Total deposits       1,270,576     1,222,549     1,093,404       Accrued expenses and other liabilities      .....»»

Category: earningsSource: benzingaApr 27th, 2022

A 40-Year High in Prices Hasn"t Deterred Consumers

Americans aren't happy about rising prices, but they're still pulling out the wallet to spend. Unless you’ve been staying at home eating the BRAT (bananas, rice, applesauce, toast) diet for every meal, you’ve likely taken notice of higher prices in everything from gas at the pump to inflated menu pricing at restaurants. But have rising costs limited consumer spending?The U.S. Census Bureau reported this morning that sales at U.S. retailers rose 0.5% in March. While the measure fell slightly short of the expected 0.6% advance, Easter will occur later than usual this year and will shift some spending that normally would have taken place in March into April.The February data point was also revised upward to show a 0.8% increase instead of the previously reported 0.3%. Spending is still well above pre-pandemic levels. Retail sales broadly rose 6.9% from a year ago, while inflation surged 8.5% over the same period – the highest level since 1981.Americans are still buying lots of goods and services. In fact, domestic retail sales recently hit an all-time high. Meanwhile, consumer sentiment is at its lowest level in over a decade. The graphs below detail the divergence between retail sales and consumer sentiment.Image Source: U.S. Census Bureau, St. Louis Federal ReserveImage Source: U.S. Census Bureau, St. Louis Federal ReserveFor the last ten years these measures have mainly moved in sync, with retail sales normally serving as a reflection of how consumers feel. This past year has been different. Consumers are obviously worried about higher inflation as the sentiment graph depicts. However, that hasn’t yet caused them to reduce spending. The pent-up demand created from the pandemic is still very much in play, with retail sales continuing to soar even in the face of higher prices. Americans aren’t happy about rising prices, but they’re still pulling out the wallet to spend.Part of this rise in U.S. retail sales is simply due to higher prices (particularly at the pump), but real retail sales are still 15% higher than pre-pandemic levels. This illustrates that demand remains strong regardless of higher inflation.Image Source: YChartsWhile inflation continues to surge, the most recent CPI report did show some signs of the rise in prices beginning to wane. The question is – what pockets of the market can we as investors profit from in order to take advantage of this environment?This morning’s report showed that clothing sales rose 2.6%, while sales at general merchandise stores rose 5.4% for the month. Furniture and home furnishings stores posted sales figures of $12.86 billion, up 0.7% from February’s $12.77 billion. March’s figures were up 3.6% relative to the same period last year. If inflation is nearing a peak, that would translate into higher consumer spending on these items.The Zacks Retail – Regional Department stores industry group is currently ranked in the top 3% out of approximately 250 industries. Because it is ranked in the top half of all Zacks Ranked Industries, we expect this group to outperform over the next 3 to 6 months. Also note the favorable valuation characteristics for this group:Image Source: Zacks Investment ResearchDigging a bit deeper, this industry has a +12.23% return year-to-date versus a -6.35% loss for the S&P 500. Quantitative research studies have shown that approximately half of a stock’s future price appreciation is due to its industry grouping. Let’s examine a top stock that is a component of this leading industry.Dillard’s, Inc. (DDS)Dillard’s operates retail department stores where it offers merchandise, cosmetics, home furnishings, and other consumer goods. DDS is also one of the nation’s largest fashion retailers. The company operates approximately 280 stores as well as an online presence. Dillard’s was founded in 1938 and is headquartered in Little Rock, AR.DDS has exceeded earnings estimates in each of the past seven quarters. The retailer most recently reported Q4 EPS back in February of $15.68, a +79.2% surprise over the $8.75 consensus estimate. DDS has posted a trailing four-quarter average earnings surprise of +294.48%, helping push the stock nearly 218% higher in the past year.Dillard's, Inc. Price and EPS Surprise Analysts covering DDS have increased their first-quarter EPS estimates by +62.42% in the past 60 days. The Zacks Consensus Estimate now stands at $5.36/share. Sales are expected to climb 16.52% to $1.55 billion. DDS is slated to report the Q1 results on May 12th. Just Released: Zacks Top 10 Stocks for 2022 In addition to the investment ideas discussed above, would you like to know about our 10 top picks for the entirety of 2022? From inception in 2012 through 2021, the Zacks Top 10 Stocks portfolios gained an impressive +1,001.2% versus the S&P 500’s +348.7%. Now our Director of Research has combed through 4,000 companies covered by the Zacks Rank and has handpicked the best 10 tickers to buy and hold. Don’t miss your chance to get in…because the sooner you do, the more upside you stand to grab.See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Dillard's, Inc. (DDS): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksApr 15th, 2022

They Left Guatemala for Opportunities in the United States. Now They Want to Help Others Stay

'The money all goes back to the U.S. eventually. None of it stays here to develop the local economy. So none of the people want to stay either.' Letty Barán has an uneasy feeling when she gazes at the hills of Quetzaltenango. All around this southwestern highland region of Guatemala, which is the starting point for many of the more than 1,000 Guatemalans who leave the country every day for the U.S., elaborate houses are popping up. Three-story homes with neoclassical facades and French windows tower over their cinder-block neighbors. Dubbed “remittance architecture,” the structures are built with money sent home by migrants. And to Barán, who left the town of El Palmar in Quetzaltenango for the U.S. in 1990 and regularly returns to visit, the houses are a symbol of the trap in which Guatemala is caught. [time-brightcove not-tgx=”true”] “When I look at them, I think, first, how great that someone has been able to build their dream house. But then, how sad,” says Barán, 50. The houses that look so much like investments actually eat cash. Built by remittances, many sit on uneven ground in areas at risk of landslides, or in places disconnected from sewers and roads. Often, the grand homes remain empty, as migrants opt to stay in the U.S. and their families prefer the comfort of their neighborhoods. Read More: The Migration Journey to the U.S. Continues Despite Complicated Border Policy In a country that is losing tens of thousands of its citizens to migration every year, 9 in 10 residents leave because of a lack of economic opportunity. Every year, the estimated 3 million Guatemalans in the U.S. send vast amounts of money home to try to improve life for their families. In 2021, buoyed by the Biden Administration’s stimulus package, remittances to Guatemala reached a record $15.3 billion—making up 17.8% of the nation’s entire economy (compared with 9.2% in 2011). But every year, the remittances, along with tens of millions of dollars in U.S. aid, fail to improve the situation at home. And the flow of people northward gets stronger. The swell of migrants has stirred endless noisy debate in the U.S. But their money moves silently, largely ignored in policy and rhetoric alike. The residents of El Palmar say changing that is key to breaking the cycle of migration. In late 2018, Barán and her son Danny, who stayed in Guatemala, joined around 30 others in setting up the country’s first migrant co-op: organizing via WhatsApp and Zoom, the members, split between people in El Palmar and their relatives in the U.S., pool a portion of their remittances together. They offer loans to members who have less cash, and share knowledge about starting businesses and building homes, enabling all of the members to launch projects that grow both members’ wealth and the local economy. “The co-ops are building a culture of savings and credit between migrants and their families, and creating a new source of leadership on development,” says Rodulfo Santizo, founder of Prima-veral Inc., a U.S.-based nonprofit helping migrants to set up remittance co-ops. Daniele Volpe for TIMEBarán’s stepsister Amelia Ixcoy (not pictured) runs a bakery supported by the El Palmar cooperative The idea borrows from collective remittance programs by Mexican migrants in the late 20th century. If it succeeds, the project could not only change the lives of every person in El Palmar, but also start to transform Guatemala’s economy—and its relationship with the U.S. The co-op holds around 500,000 quetzales—around $65,000—and has so far invested in 10 of its members’ new businesses, including carpentry shops, bakeries, and bookstores. The aim is to eventually enlist all 29,000 of El Palmar’s residents and their relatives, to funnel as much of the money earned in the U.S. as possible into making the town a better place to live. Read More: Title 42 is Ending in May, But These Migrants Can’t Wait That Long El Palmar’s co-op is part of a growing movement to turn Guatemala’s unprecedented flow of remittances into lasting change for the country. Two other southern towns have set up co-ops, and 13 more are in the process of doing so, according to Primaveral Inc. MayaPlus, a Guatemalan mobile-banking app launched in 2021, is reducing the fees migrants pay to send remittances to banks and giving them greater control over their funds. Such efforts are building on financial-education programs that foreign aid groups began running in Guatemala in 2016, aimed at helping remittance recipients formalize and invest their money. The goal of these efforts is simple, says Danny, who used money sent back by his mother to start a successful grocery store in Quetzaltenango: “We want to improve things, to create work for everyone, so people don’t have to leave.” Willy Barreno knows the forces that drive Guatemalans north, and he also knows how hard it is to return. Barreno returned to Guatemala from the U.S. in 2010, with 14 years of experience cooking in successful restaurants from New Mexico to Chicago. Back in Quetzaltenango, he opened his own restaurant, La Red, serving Mexican dishes infused with Guatemalan flavors and ingredients. He dreamed of using produce from local farmers and employing many other returned migrants. But today La Red is hanging by a thread. Barreno says he relies on donations from friends and family to keep it open week to week. “This is the worst failure of my life,” he tells TIME over a Zoom call, shaking his head. Barreno says businesses like his have struggled to compete with the major U.S. chains, like Taco Bell, McDonald’s, and Domino’s, that have proliferated in his city since he left in 1996. And he says the government has failed to support the growth of Guatemalan businesses, focusing instead on attracting foreign companies, like Walmart. Most things in Quetzaltenango come from the U.S.: the clothes in its many thrift stores, the electronics in its markets, the old cars on its streets, the money in people’s pockets. Daniele Volpe for TIMEChef Willy Barreno (center) in the kitchen of his restaurant La Red. “Remittances are like rain,” Barreno says. “Right now it’s raining a lot, but the rain comes from the sea—the U.S.—and the money all goes back there eventually. None of it stays here to develop the local economy. So none of the people want to stay either.” The economics are stark. The average monthly minimum wage in Guatemala is around $420, compared with almost $2,600 before tax in California. Pandemic–related business closures have made even those who were relatively well-off consider migrating, says Rosario Martinez, a researcher at the Guatemala City chapter of the Latin American Social Sciences Institute. “For a long time it was mostly poorer women from rural areas with little education who would go to work in cleaning,” she says. “Now we’re seeing professionals, people with midlevel studies or even university degrees, that because of the pandemic lost their jobs. We’re losing our youth.” Read More: Why Are So Many Migrants Leaving Guatemala? A Crisis in the Coffee Industry But only one-fifth of Guatemalan migrants to the U.S. intend to move there permanently, according to a 2018 survey by the Inter-American Development Bank (IDB); that’s compared with half of Salvadorans and one third of Hondurans. Most Guatemalans, migration experts say, plan to spend only a few years earning money to pay for their children’s education or help their parents build a house, and then return to a new and better life. Barán, who worked as a hotel maid in Washington, D.C., during her early years in the U.S., sent her mother money for a “small, humble” house and to invest in local businesses, which Danny now runs. Barán now lives with her other three children in Arlington, Va., and works mostly as a notary. She’s not sure if she’ll return, but if she did, she could have a comfortable life. It doesn’t always work out that way. “I’ve heard so many painful stories from friends who return home after years and get the shock of their lives when they find their family has spent everything,” Barán says. A 2020 study by the U.N. Economic Commission for Latin America- and the Caribbean, based on surveys in a southern Guatemalan region, found that 57.1% of remittances go toward daily consumption, with 8.2% spent on building or renting homes, and only 5.4% invested or saved. The money spent on consumption is hardly wasted: remittances make up almost half of household income for those who receive them, according to the IDB, crucial for covering the cost of food, clothes, and other necessities. But a lack of financial education can reduce the returns that migrants and their families make on their remittances, says Rut Urizar, financial-education coordinator at the Inter-American Dialogue, a think tank. Ill-fated remittance architecture is a key example, Urizar says, because saving money to build a home is often the first goal for migrants arriving in the U.S. But some recipients lack experience handling large sums. One young mother whom the Dialogue consulted with in Huehuetenango cried after burning through around $13,000 sent by her husband in a year. “She was looking after her 3-year-old daughter, and the daughter had an iPhone. And she said it’s the second phone, because the girl broke the first one,” Urizar says. Since 2016, the Dialogue, working with partners including Cities Alliance, a U.N.-funded coalition on urban poverty; the Swiss Agency for Development and Cooperation; and the U.S. Agency for International Development, has established financial-education programs in more than 30 Guatemalan towns where migration to the U.S. is common. Locals are trained as financial educators, and set up stalls inside bank branches where people go to deposit their remittances or collect wages. In 2020, the programs were responsible for formalizing $2.4 million worth of savings, and opening 3,000 financial products. They also help participants reach mortgage advisers—who will assess the value of their land—and access small-business coaches. This kind of financial education works because it speaks to people in their language, says Jorge Mario de León, who has been consulting since 2016 out of a branch of Micoope, a savings and credit union, in Salcajá, Quetzaltenango. Sometimes that’s literal: the multilingual team offers sessions in Spanish and in local Indigenous languages like Mam and K’iche’. But educators also use their cultural knowledge of their communities to connect and drive their message home. De León has helped people set up businesses and build homes. He also says he has persuaded some not to migrate, drawing on his own experiences with a people trafficker 22 years ago. “When I went to the U.S., it cost 35,000 quetzales [roughly $4,500]. Now it costs three times that,” he says. “So I say to people, is it worth investing that much in the journey? Why don’t you invest it in a business here? I was lost in the mountains for a month. I had to drink water from a puddle to survive. Don’t do it.” Discussing the importance of migration and remittances to the Guatemalan economy puts the national government in an awkward position. President Alejandro Giammattei has vowed to crack down on people smugglers and reduce the exodus, in line with U.S. goals. But at the same time, as the Guatemalan daily Prensa Libre has noted, remittances are a crucial “escape valve” for millions in a country where more than half of families live in poverty. Much of Guatemala’s rapid economic growth over the past decade is due to more citizens going to the U.S. and sending money home. “We’re talking about billions of dollars coming into the economy that the government is just kind of gifted every year,” Kathryn Klaas, then an associate at the Dialogue’s Migration, Remittances, and Development Program, told TIME in 2021. “That means that the urgency of creating sources of income that are enough for people to live on in Guatemala—which means formalizing the economy, creating a living wage for people, having regulations—that’s one agenda point that the government doesn’t have to deal with.” Daniele Volpe for TIMENeighbors of Cajolá come here to receive the remittances from their relatives who live in the United States, on April 8. The government has so far been slow to establish formal programs designed to capitalize on remittances. Its current $200 million plan to reduce undocumented migration, though heavily focused on helping to generate new businesses and jobs for people in high-migration regions, doesn’t mention the money flowing into those areas from abroad and the role it could play. Local development experts are doubtful that the plan will be more successful than previous efforts. But officials may be waking up to remittances’ potential. Guatemala is undergoing a rapid period of urbanization, projected to take the proportion of people living in cities from 54% now—among the lowest in Latin America—to around 65% in 2030, according to U.N. estimates. At an event organized by the Dialogue in July, Guatemala’s vice minister for housing said helping citizens manage the money from remittances to build good, well-ordered neighborhoods would be key to the nation’s development. The ministry plans to work with Guatemalan consulates to make sure migrants are using their money on “supervised projects, with some support [from the state] so they don’t end up being structurally unsound,” he said. Many want more from the government, though, says Quique Godoy, a radio host and economist who discusses remittances once a week on his show on Guatemala’s Radio Infinita. He argues that officials should follow the example of Mexico’s government, which in the 1990s established so-called three-for-one programs: organized groups of migrants in the U.S. would fund projects in their neighborhoods back home, and for every dollar they spent, national, regional, and municipal governments would each put in $1, turbocharging the local development the migrants were leading. “We have to give incentives for migrants, so that instead of giving their money to people for consumption, they decide that they give part of it to a community investment project,” Godoy says. Ideally, Guatemala would start a four-for-one program, supported by local businesses and banks, Godoy says. “Because that will create more consumption in the long run, which benefits business.” But for now the migrants themselves are leading the way, says Primaveral’s Santizo. He wants to see all 340 of Guatemala’s municipalities set up credit co-ops. “We have [aid agencies] expressing interest in working with us,” he says, “but if they don’t, then we the migrants will do it ourselves. We’ll do our own development.” —With reporting by Eloise Barry/London.....»»

Category: topSource: timeApr 14th, 2022

Futures Flat On Last Day Of Dismal Quarter, Oil Tumbles As Biden Preps Massive SPR Release

Futures Flat On Last Day Of Dismal Quarter, Oil Tumbles As Biden Preps Massive SPR Release US equity futures were muted and flat on the last trading day of the month and quarter, fading a modest overnight gain as the underlying index headed for its first quarterly decline in two years on worries about surging inflation, hawkish monetary policy and an economic slowdown. Contracts on the S&P 500 were down 0.1% at 730 a.m. ET while Dow futures were little changed and Nasdaq 100 futures rose 0.2%, while European stocks fell, heading for the first quarterly decline since 2020. Asian equities retreated on lackluster Chinese PMI data and regulatory concerns. Treasuries held gains with the 10Y yield dropping to 2.31% (from 2.50% earlier this week when the 2s10s inverted) and the dollar ticked up against almost all G-10 peers. Fed watchers will be focused on the PCE deflator, which may have sped up in February. The big overnight action was in oil, which plunged following the news late on Wednesday that the White House was (again) mulling a plan to release roughly a million barrels a day from reserves to combat crashing Democrat approval rating ahead of the midterms as a result of soaring gasoline prices coupled with supply shortages in response to US sanctions of Russia. The proposal, which includes 180 million barrels being freed over several months, may help the market rebalance this year but won't solve a structural deficit, Goldman said. The reserve release news came just hours ahead of an OPEC+ supply meeting, where the cartel is expected to stick with its strategy of a modest output boost in May. Equities globally are poised for their worst quarter since the early days of the pandemic on concerns about tightening monetary policy, red-hot inflation and a looming recession. While stocks remained resilient to the historic rout in bond markets this month, some strategists see little room for them to rally this year, partly as high costs threaten corporate profits. French inflation accelerated more than expected to reach another record, following unexpectedly high readings on Wednesday from Germany and Spain. “Our base case now is for only modest upside for stocks,” said Mark Haefele, chief investment officer at UBS Global Wealth Management, adding that he expects the S&P 500 to end the year at 4,700, about 2% higher than current levels. He also trimmed his estimate for global earnings growth to 8% from 10% for 2022. “Aside from quarter-end considerations, oil is very much the center of attention,” Simon Ballard, chief economist at First Abu Dhabi Bank, wrote in a note to investors. Still, “all the usual suspects are still in play, keeping the market in check, including the specter of the Fed pursuing an aggressive path of monetary policy normalization over the coming months.” Elsewhere, officials from Ukraine and Russia are set to resume talks via video conference on Friday, according to a Ukrainian negotiator, though there was no immediate confirmation from Moscow. Friday’s video discussions between Ukraine and Russia would follow in-person talks this week in Turkey that didn’t produce a short-term cease-fire or major progress toward a broader peace deal. Ukraine’s negotiator said the hope was to have enough agreed on paper in another week to be able to move toward a meeting between President Vladimir Putin and President Volodymyr Zelenskiy. Going back to the US market, shares in big U.S. energy companies slumped in premarket trading along with crude prices drop (Exxon Mobil -1.9% and Chevron -1.5% premarket, Occidental Petroleum -2.6%, Gran Tierra Energy -3.1%, Imperial Petroleum -3.8%, Camber Energy -4.3%). Bank stocks are also lower putting them on track to fall for a second straight day as the U.S. 10-year yield falls to 2.31%. Goldman Sachs warned that stagflation could make bank stocks less profitable. U.S.-listed Chinese stocks slipped in premarket trading as Securities and Exchange Commission Chair Gary Gensler dialed down prospects of an imminent deal to allow Chinese firms to keep trading on American exchanges. Russian equities advanced as the nation partly lifted the short-selling ban on local stocks on Thursday, removing one of the measures that helped limit the declines in the market after a record long shutdown. Other notable premarket movers include: Vipshop ADRs (VIPS US) rise 8.4% in premarket trading after the Chinese online retailer announces a $1b share buyback plan. Robinhood Markets (HOOD US) shares rise 1.4% in U.S. premarket trading, set to extend the previous day’s 24% gains after the online brokerage announced plans to expand the trading day by four hours, while Morgan Stanley begins coverage of the stock with an equal-weight rating. Energy companies decline in premarket trading as crude prices drop. The U.S. is considering tapping its reserves again in a potentially massive release aimed at managing inflation and supply shortages. Exxon Mobil (XOM US) -1.9%, Chevron -1.5% (CVX US). U.S.-listed Chinese stocks are heading for a lower open after Securities and Exchange Commission Chair Gary Gensler dialed down prospects of an imminent deal to allow Chinese firms to keep trading on American exchanges. Alibaba (BABA US) fell 1.7% in premarket, while its e-commerce rival JD.com (JD US) lost 2.8%. Advanced Micro Devices (AMD US) shares fall 1.3% in U.S. premarket trading, after the semiconductor maker is downgraded to equal- weight from overweight at Barclays, which says that the growth story “needs a pause.”. IZEA Worldwide (IZEA US) shares surge 27% in U.S. premarket trading after the influencer marketing company reported fourth-quarter earnings and saw total revenue increase 62% to a record of $10.3m. In Europe, the Stoxx 600 reversed initial gains and dropped 0.3%, the Euro Stoxx 50 fell 0.2%, and other major indexes trade flat to slightly lower with retailers, telecoms and energy the worst performing sectors. Retail and telecom stocks led declines while utilities and insurance sectors outperformed. Some notable premarket movers: Brewin Dolphin shares rise as much as 62% and trade slightly below the agreed bid for the firm from RBC Wealth Management. The transaction, being carried out at a high premium, highlights the attractiveness of the U.K. wealth sector, analysts say. Orpea shares climb to their highest level in almost 2 months after Societe Generale says that allegations of mistreatment at its facilities are likely to have “limited” financial impact. Fresenius SE shares rise as much as 3.3% on news that the company’s Kabi intravenous drug unit has bought a majority stake in mAbxience SL and acquired Ivenix. Pernod Ricard shares rise as much as 2.6% as Citi says 3Q sales are likely to beat expectations, also lifting its which lifts EPS estimates and PT, as well as opening a positive catalyst watch. Tate & Lyle shares gain as much as 3.7% after saying it would buy Quantum Hi-Tech, a prebiotic dietary fiber business in China. The deal enhances Tate & Lyle’s portfolio, Goodbody says. Pearson shares rise as much as 3.5%, rebounding from Wednesday’s losses after private equity firm Apollo Global Management said it won’t make an offer for the education publisher. Earlier in the session, Chinese data and regulatory concerns weighed on Asia stocks. China's NBS manufacturing PMI declined to 49.5 in March from 50.2 in February, missing estimates, likely due to Covid-related restrictions and geopolitical tensions. The output sub-index in the NBS manufacturing PMI survey fell by 0.9 points in March, and the new orders sub-index fell by 1.9 points. The NBS non-manufacturing PMI fell to 48.4 in March from 51.6 in February, also missing expectations, and entirely driven by the decline of services sector due to recent Covid outbreaks in multiple provinces. Separately, Bloomberg reported that Chinese authorities are considering a plan to raise several hundred billion yuan for a new fund to backstop troubled financial firms. Asian stocks retreated after a two-day advance, as the U.S. securities regulator’s tough stance on a potential delisting of Chinese firms and weak China manufacturing data worried investors.  The MSCI Asia Pacific Index declined as much as 0.8%, and was poised to finish its worst quarterly performance in two years, with Taiwan Semiconductor Manufacturing and Tencent among the biggest drags. Benchmarks in Hong Kong and China underperformed regional peers. Japanese equities headed for a second day of declines while Australia stocks retreated after seven straight day of gains in response to a stimulatory federal budget.  The U.S. Securities and Exchange Commission’s chief said Chinese firms need to fully comply with audit requirements in order to stay on American exchanges. Meantime, China’s manufacturing contracted in March, underscoring the growing toll of lockdowns. Investors are also watching how a tumble in oil prices can alleviate inflation risks and affect corporate earnings.  “If you look at the PMIs there’s an obvious explanation for why PMIs are weak, which is China pursuing zero-Covid strategy,” Kieran Calder, head of Asia Equity Research at Union Bancaire Privee, said in an interview with Bloomberg Television. “The reality of Covid-19 versus the response in China, the mismatch is too strong right now and I think that’s the biggest worry for us.”  For the quarter, Asian stocks were poised for nearly a 7% loss, the worst performance since early 2020 when the emergence of the pandemic shocked investors. Investors had to grapple with a U.S. rate hike, a war in Ukraine and continued regulatory risks out of China, which caused huge volatility Japanese equities fell for a second day following a rally in the yen. Electronics makers and banks were the biggest drags on the Topix, which fell 1.1%. Recruit and SoftBank were the largest contributors to a 0.7% loss in the Nikkei 225. The yen was little changed after gaining 1.6% against the dollar over the previous two sessions. Both key gauges still capped their first monthly gains of the year. The Nikkei 225 rose 4.9% in March, the most since November 2020, while the Topix climbed 3.2% on the month. India’s benchmark equity index clocked its best monthly advance since August, as buying by local funds amid war-induced volatility supported sentiment. The S&P BSE Sensex fell 0.2% to 58,568.51 in Mumbai, trimming its gain for March to 4.1%. The NSE Nifty 50 Index also slipped 0.2% on Thursday. Stocks swung between gains and losses several times during the day ahead of the expiry of monthly derivative contracts Thursday. Institutional investors in India have bought $5 billion worth of shares this month, while foreign investors are set to extend their selling to a sixth consecutive month. Reliance Industries Ltd. was the biggest drag on the 30-share Sensex, which saw an equal number of shares closing up and down. Twelve of the 19 sectoral indexes compiled by BSE Ltd. gained, led by a gauge of telecom stocks. S&P BSE Healthcare Index was the worst performing sub-index.   “Markets took a breather on a monthly expiry day and ended the last day of the financial year on a flat note,” said Ajit Mishra, vice president of research at Religare Broking Ltd. “We reiterate our positive yet cautious stance citing lingering geopolitical tension between Russia-Ukraine and its impact on the global markets.” In rates, Treasuries extended this week’s rally with yields richer by up to 5bp across belly of the curve, which continues to outperform vs wings. Wider bull-steepening move grips bunds and gilts, as central-bank rate-hike premium is pared. Oil futures are sharply lower, weighing on energy stocks, following reports that Biden is considering a massive release of crude from U.S. reserves to fight inflation. The 10-year yield was around 2.31%, richer by ~4bp vs Wednesday’s close, underperforming bunds in the sector by ~4bp while keeping pace with gilts. Long-end swap spreads are sharply tighter, with 30- year dropping as low as -19.5bp. Euro-area, bonds extended their advance as money markets pare central bank tightening wagers. French bonds underperformed bunds as EU-harmonized CPI rose 5.1% from a year ago in March -- the most since the data series began in 1997 -- and above the 4.9% median estimate in a Bloomberg survey of economists.  The belly of the German curve richened 6-7bps, leading gains. Peripheral spreads are mixed: Italy tightens, Portugal and Spain widen to core. Money markets trim rate hike pricing. Japanese government bonds extended their advance as the central bank’s aggressive bond purchases this week reassured players that an excessive rise in yields won’t be tolerated. Yen was little changed in choppy trade. Bank of Japan’s offer to buy an unlimited amount of 10-year government bonds at fixed yields recorded no takeup, the central bank said. In FX, Bloomberg dollar spot index snapped two days of losses after rebounding in early European session; the dollar advanced versus all of its Group-of-10 peers and commodity currencies were the worst performers. The euro gave up earlier gains after earlier touching a four-week high versus the greenback. Norway’s krone slumped by as much as 1.6% versus the greenback after the central bank announced a ramp-up of FX purchases on behalf of the government. The pound declined for a third day against the euro, touching its weakest level versus the common currency since Dec. 23. A report from the British Retail Consortium gave another glimpse into the cost-of-living crisis, showing prices in U.K. shops rose in March at the fastest annual pace since September 2011. Japan’s factory output eked out its first gain in three months in February, offering only a tepid sign of resilience amid fears the economy has slipped back into reverse. Production inched up 0.1% from the previous month. The Australian dollar declined against most of its Group-of-10 peers as oil prices tumbled on news that the Biden administration is weighing a massive release of crude from U.S. reserves. Sales of Aussie back into euro have seen option-related Australian dollar bids attached to large option strikes get filled, according to Asia-based currency traders In commodities, crude futures hold Asia’s losses triggered by reports that the White House may make an announcement on the U.S. oil reserve release as soon as Thursday. WTI drops over $6.50 near $101.10. European natural gas faded an initial drop after Germany signaled Russia is softening its demand for ruble payments. Precious metals and much of the base metals complex traded heavy. Looking to the day ahead now, data releases include German retail sales for February and unemployment for March, French and Italian CPI for March, and the Euro Area unemployment rate for February. From the US, there’s also February’s personal income and personal spending, the weekly initial jobless claims, and the MNI Chicago PMI for March. Otherwise, central bank speakers include ECB Vice President de Guindos, Chief Economist Lane, and New York Fed President Williams. Market Snapshot S&P 500 futures up 0.1% to 4,601.75 STOXX Europe 600 down 0.2% to 459.49 MXAP down 0.7% to 180.37 MXAPJ down 0.6% to 591.98 Nikkei down 0.7% to 27,821.43 Topix down 1.1% to 1,946.40 Hang Seng Index down 1.1% to 21,996.85 Shanghai Composite down 0.4% to 3,252.20 Sensex down 0.2% to 58,590.32 Australia S&P/ASX 200 down 0.2% to 7,499.59 Kospi up 0.4% to 2,757.65 German 10Y yield little changed at 0.62% Euro down 0.3% to $1.1130 Brent Futures down 3.6% to $109.40/bbl Gold spot down 0.4% to $1,924.94 U.S. Dollar Index up 0.24% to 98.03 Top Overnight News from Bloomberg The Biden administration is weighing a plan to release roughly a million barrels of oil a day from U.S. reserves, for several months, to combat rising gasoline prices and supply shortages following Russia’s invasion of Ukraine, according to people familiar with the matter Bank of Japan Governor Haruhiko Kuroda is determined to stick with targeting long-term bond yields near zero, even as it leaves him increasingly at variance with global peers and propels a depreciating exchange rate The yen has taken a beating in recent weeks but technicals suggest that it may be on the road to a recovery. Japan’s currency may rebound to 116 per dollar in the coming months after sliding as low as 125.09 on Monday, the weakest in almost seven years, an analysis by Bloomberg shows Russian President Vladimir Putin said that European buyers could continue making gas payments in euros, according to a German readout of a call he had with Chancellor Olaf Scholz Russian government bondholders would be left with no viable path to recover their money if the country defaults, according to one of the top global lawyers in sovereign debt litigation Hungary kept its key interest rate unchanged after the forint staged the second-biggest emerging-market currency rally this week, relieving pressure on policy makers to deliver more monetary tightening China’s cabinet vowed to stabilize the economy and called on officials to avoid measures that harm market expectations as the government struggles to control Covid outbreaks across the country including in the financial center of Shanghai For the first time in more than a decade, China’s yield advantage over Treasuries may be erased. The yield spread between the benchmark bonds of the world’s two biggest debt markets has narrowed to around 40 basis points from 150 a year ago, well below the People’s Bank of China’s “comfortable” range Australia will invest more to find new buyers for its exports in an effort to ease trade dependence on China, its treasurer said, in the face of “economic coercion” from Beijing that shows little sign of abating A more detailed look at global markets courtesy of Newsquawk Asia=Pac stocks traded cautiously at month-end following the weak lead from the US due to increased Russia-Ukraine scepticism and as the region digested disappointing Chinese PMI data. ASX 200 was kept afloat by outperformance in the mining and materials industries although upside was capped as the tech sector suffered from profit-taking and with energy hit by a drop in oil prices. Nikkei 225 traded indecisively amid a choppy currency and after Industrial Production data missed forecasts. Hang Seng and were subdued following the weak Chinese PMI data and with the mood inShanghai Comp. stocks not helped by the US SEC chief casting doubt regarding an imminent deal to avert a delisting of Chinese stocks. Top Asian News Thirteen-Hour Power Cuts Get Sri Lanka to Shorten Stock Trading Effissimo Would Tender Toshiba Shares in Event of Bain Bid BOJ Looks Ready for a Victory Lap With Yields on the Retreat BOJ Boosts Bond Buying in April-to-June Quarter European equities (Eurostoxx 50 -0.3%) kicked the final trading session of the month off on the front foot before drifting towards the unchanged mark. Sectors in Europe exhibit a mostly positive tilt with airline names cheering the declines in the energy space as the Energy sector suffers. The biggest laggard in the region is the retail section following a disappointing Q1 update from H&M (-8%). Futures in the US are modestly firmer as the NQ (+0.5%) marginally outpaces the ES (+0.1%) with inflation set to continue to remain in focus today, with the release of US PCE metrics for March; core PCE is seen rising to 5.5% Y/Y Top European News Iron Ore Futures Advance as Outlook for Demand Brightens Sorrell’s S4 Capital Audit Delay No Longer Down to Covid EU Commission Confirms Raids in Germany’s Natural Gas Sector Pearson Shares Rebound; Barclays Sees a ‘Resilient Business’ In FX, Dollar finds its feet as month, quarter and fiscal year end approach, albeit with a helping hand from others - DXY back on the 98.000 handle, narrowly. Commodity currencies reverse course alongside underlying prices, with crude crushed on reports of US SPR and IEA opening reserve taps - Usd-Cad rebounds through 1.2500 after sliding to new y-t-d low sub-1.2450 only yesterday. Yen choppy amidst residual repatriation flows and more BoJ action to cap JGB yields - Usd/Jpy circa 122.00 within a 122.45-121.35 range. Euro fades into 1.1200 vs Buck again as option expiries and tech resistance impinge, but Aussie  may derive traction from expiry interest at 0.7500 - EURUSD now eyeing support at 1.1100 after tripping stops. In commodities, WTI and Brent remain firmly on the backfoot in the wake of reports suggesting that the Biden administration is considering a 'massive' SPR release. The news has sent May’22 WTI and Jun’22 Brent to respective lows of USD 100.53/bbl and USD 107.39/bbl to leave them a few dollars above their weekly lows of USD 98.44/bbl and USD 102.19/bbl respectively. US President Biden's administration is considering a 'massive' release of oil to combat inflation and may release up to 1mln bpd for months from the strategic reserve in which the total release could be 180mln , according to Bloomberg.bbls Goldman Sachs says a potentially large SPR release would ease the situation but wouldn't resolve the structural deficit in the oil market. Says adjustments for SPR release, Iran supply delays would lower H2 22 Brent forecast by USD 15, to USD 120/bbl - still above market forwards. US President Biden will deliver remarks today at 13:30EDT/18:30BST regarding the administration's actions to reduce gas prices in the US, according to the White House. It was also reported that the US mulls permitting, according to Reuters sources.summertime sales of higher ethanol blends of gasoline to ease pump prices IEA called an emergency ministerial meeting for Friday, according to the Australian Energy Minister's office. It was later reported that , according to New Zealand'sIEA countries are to decide on a collective oil release Energy Minister's office OPEC+ JTC replaced IEA reports with Wood Mackenzie and Rystad Energy as secondary sources to assess crude oil output and conformity, according to sources cited by Reuters. In fixed income, bonds on track to see out extremely bearish month, quarter and end to FY on a firmer note. Curves more even after wild swings between flattening, inversion and steepening.BoJ ramps efforts to maintain YCC via a mostly larger JGB buying remit for Q2. US Event Calendar 08:30: March Initial Jobless Claims, est. 196,000, prior 187,000 08:30: Feb. Personal Income, est. 0.5%, prior 0% 08:30: Feb. Personal Spending, est. 0.5%, prior 2.1%; Real Personal Spending, est. -0.2%, prior 1.5% 08:30: Feb. PCE Deflator MoM, est. 0.6%, prior 0.6%; PCE Deflator YoY, est. 6.4%, prior 6.1% 08:30: Feb. PCE Core Deflator MoM, est. 0.4%, prior 0.5%; YoY, est. 5.5%, prior 5.2% 09:45: March MNI Chicago PMI, est. 57.0, prior 56.3 DB's Jim Reid concludes the overnight wrap After a great deal of optimism in markets on Tuesday following the Russia-Ukraine negotiations in Turkey, the last 24 hours have proven to be much more negative as investor hopes for a de-escalation in Ukraine were dampened by more gloomy comments on the war from both sides. From Russia, the Kremlin spokesman Dmitry Peskov said that they hadn’t seen a breakthrough in the talks, whilst Ukrainian President Zelensky said that “Russia is deploying new forces on our terrain to try to continue destroying us”, and NATO leaders continued to strike a sceptical tone. Indeed, it was reported by Dow Jones that the European Commission was considering new sanctions against additional Russian banks, and UK Prime Minister Johnson said that the UK was “looking at going up a gear” in its support to Ukraine. President Biden expressed similar sentiments, pledging $500 million of additional aid to Ukraine in a call with President Zelensky. Against this backdrop, oil prices rose again for the first time this week, with Brent Crude up +2.92% to $113.45/bbl, but there’s been a sharp turnaround overnight on the back of news that the US are planning a major release from their reserves, with Bloomberg reporting it would be a million barrels a day over several months. Biden is due to speak about efforts to lower prices at 1:30pm Eastern, so all eyes will be on that, and overnight we’ve seen Brent Crude prices come down by -4.54% to $108.30/bbl, more than reversing their gains from the previous session. However, European natural gas (+9.77%) rose for a third consecutive session to €118.97/MWh, which is its highest closing level in nearly 3 weeks. That occurred amidst a continued dispute about Russian gas payments, which President Putin wants paid for in rubles, but which multiple European countries have rejected as a breach of contract. In response, Germany’s economy minister Robert Habeck activated the “early warning phase” of an emergency law, which could eventually lead to gas rationing if supplies fall short. With Russia’s invasion having lasted for over 5 weeks now, we’re increasingly seeing the impact reflected in the official inflation numbers, and yesterday’s releases out of Europe gave fresh life to the bond selloff. In terms of the numbers, German inflation rose to +7.6% in March on the EU-harmonised measure, which was up from +5.5% back in February and some way above the +6.8% reading expected by the consensus. It was the same story in Spain, where inflation rose to +9.8% (up from +7.6% in February), which will heighten interest in tomorrow’s flash release for the entire Euro Area. In turn, that’s led to growing expectations of ECB rate hikes this year, with a total of 63bps being priced in by the December meeting, which is the most we’ve seen to date. On top of that, more than 30bps are even being priced in by the September meeting, which surpasses their pre-invasion peak. Given the strong inflation numbers and the prospect of a more aggressive ECB, European bonds sold off across most of the continent, with yields on 10yr bunds (+1.3bps), OATs (+2.3bps) and BTPs (+1.3bps) all hitting fresh multi-year highs. Furthermore, the 2yr German yield (+5.6bps) closed in positive territory for the first time since 2014, having briefly got there on an intraday basis during the previous session. Unsurprisingly, the latest rise in yields was driven by higher inflation breakevens rather than real rates, and the 10yr German breakeven surged another +6.0bps to 2.71%, its highest level in data available back to 2009, whilst the Italian breakeven rose +4.0bps to 2.53%, its highest level since 2008. Even as European bonds were selling off once again, it was the reverse story in the United States, where Treasuries recovered somewhat yesterday as we come to the end of one of their worst quarterly performances in decades. Yields on 10yr Treasuries fell -4.6bps to 2.35%, whilst yield curves remained incredibly flat; the 2s10s curve steepened marginally by +1.3bps to 3.6bps, avoiding another inversion, and this morning is up another +0.3bps to 3.9bps. In terms of other developments this morning, Asian equity markets have followed Wall Street’s lead overnight with the Nikkei (-0.18%), Hang Seng (-0.59%), Shanghai Composite (-0.14%), CSI (-0.26%) all losing ground, though the Kospi (+0.54%) is the exception to this pattern. The weakness in Asian gauges has come amidst declines in the PMI data, with China’s manufacturing PMI down to 49.5, and the non-manufacturing PMI down to 48.4. For reference, that’s the first time that both readings have been below the 50-mark that separates expansion from contraction since February 2020, and comes as multiple cities are undergoing further lockdowns in response to the current Covid outbreak. Additionally, a slide in Chinese tech stocks is weighing on sentiment after the US Securities and Exchange Commission added Hong Kong listed Baidu Inc. to its long list of companies potentially facing delisting from US exchanges. Outside of Asia, stock futures in the US and Europe are pointing to a more positive start, with contracts on the S&P 500 (+0.28%), Nasdaq (+0.56%) and DAX (+0.59%) all trading higher. Those equity declines overnight in Asia follow a broader decline in risk appetite yesterday given the more negative geopolitical developments, and both the S&P 500 (-0.63%) and Europe’s STOXX 600 (-0.41%) unwound some of their gains from the previous day. More cyclical industries underperformed in general, whilst the German DAX (-1.45%) also put in a weaker performance relative to the other main European indices. The VIX Index of volatility (+0.43pts) also ticked up to 19.33pts, after closing at to its lowest level since Russia’s invasion of Ukraine on Tuesday. In France, we’re now just 10 days away from the first round of the presidential election, and there are continued signs of a narrowing in the polls, albeit with President Macron still in the lead. In terms of yesterday’s polls (from Opinionway, Harris, Ipsos, Ifop and Elabe), all of them pointed to a repeat of the second-round contest from 2017, with the first-round polling putting President Macron in first place followed by Marine Le Pen in second. That said, they’re also implying a noticeably tighter result in the second round than Macron’s 66%-34% victory against Le Pen in 2017. Looking through the numbers, the second round estimates ranged from a 55%-45% Macron victory (from Opinionway and Ipsos), to a 52.5%-47.5% Macron victory (from Elabe). Finally on yesterday’s other data, the ADP’s report of private payrolls from the US showed growth of +455k in March (vs. +450k expected). That comes ahead of tomorrow’s jobs report, where our US economists are expecting nonfarm payrolls to have grown by +400k, with the unemployment rate ticking down to a post-pandemic low of 3.7%. To the day ahead now, and data releases include German retail sales for February and unemployment for March, French and Italian CPI for March, and the Euro Area unemployment rate for February. From the US, there’s also February’s personal income and personal spending, the weekly initial jobless claims, and the MNI Chicago PMI for March. Otherwise, central bank speakers include ECB Vice President de Guindos, Chief Economist Lane, and New York Fed President Williams. Tyler Durden Thu, 03/31/2022 - 07:56.....»»

Category: blogSource: zerohedgeMar 31st, 2022

Futures Slide, Oil Rises As Ukraine War De-escalation Optimism Fizzles

Futures Slide, Oil Rises As Ukraine War De-escalation Optimism Fizzles S&P 500 futures edged lower along with European shares, as the "peace in our time" optimism that pushed stocks on a history bear market short and gamma squeeze rally in the past two weeks fizzled and was instead replaced with the far less pleasant reality that de-escalation of the war in Ukraine is exaggerated as the Kremlin said that talks with Ukraine in Istanbul Tuesday yielded no breakthroughs and refused to discuss the status of Crimea as part of a peace deal, as the Russian constitution prohibits anyone discussing the fate of Russian regions. The S&P futures were 0.3% lower while Nasdaq futures declined 0.4%. Commodities climbed, fueling renewed concerns about inflation’s impact on profits and economic growth while the inversion of the 2s10s yield curve that started the clock on the next recession did not help investor mood. Europe’s Stoxx 600 snapped a three-day winning streak after surging to the highest level in five weeks and oil futures gained over 2%. The dollar slipped, the euro climbed and the yen bounced from a six-year low after the Bank of Japan pledged to buy more securities than planned and include longer-dated debt. “The yield curve inversion needs to be sustained before it’s a predictor of anything,” Mariann Montagne, senior portfolio manager at Gradient Investments , said on Bloomberg Television. “We’ll have volatility both in the stock and the bond markets but we think that progression” on the cease-fire talks will lead to upward earnings revisions. Apple shares were slightly lower in premarket trading, set to end their longest winning streak since 2003 after the iPhone maker surged nearly 20% over the past 11 days. Chinese live-streaming platforms fell in U.S. premarket trading after Chinese government agencies vowed to crack down on any tax-related crimes in the sector. Bilibili (BILI US) falls 3.8%, HUYA (HUYA US) -4.4%. Other notable premarket movers: BioNTech (BNTX US) rises 3% premarket as the Covid-19 vaccine- maker says it’s planning a share buyback of as much as $1.5 billion and will propose a special dividend. Chewy (CHWY US) slumps 14% in premarket trading after the online pet products retailer’s results missed estimates and it forecast slower-than- anticipated sales growth. Microvast (MVST US) slumps 14% in premarket after the battery solutions provider reported 2021 results, with the company’s CEO flagging “many headwinds” in the release. RH (RH US) falls 14% premarket after the furniture retailer’s fourth-quarter results missed expectations amid “softening” demand in the current quarter. Romeo Power (RMO US) shares jump 7.1% in premarket after the battery-products maker said it has started shipping its first production pedigree packs to a key customer. On Tuesday, the S&P 500 rallied to the highest level since mid-January. Skeptical NATO allies are evaluating whether Russia’s promise to scale back military operations in Ukraine marks a turning point in the conflict or simply a tactical shift as attacks were still reported near Kiev. Here are some of the latest developments involving the Ukraine war courtesy of Newsquawk: Ukrainian President Zelenskiy said they are not reducing defensive efforts as the Russian army still has significant potential to carry out attacks, according to Reuters. Ukraine Deputy PM says three humanitarian corridors have been agreed for evacuations on Wednesday; said Ukraine had requested 97 corridors to be opened in the worst-hit areas. Ukraine Forces warn of danger of Russian ammunition exploding at Chernobyl. Ukraine Presidential Adviser says on negotiations, Ukraine has improved its position in all respects. Russian Kremlin says Ukraine has begun to put demands down on paper and be more specific which is a positive thing. Not seen anything really promising that looks like a breakthrough, there is a lot of work ahead Governor of Donestsk region says situation is difficult, shelling is continuing in nearly all cities around the demarcation line. Germany triggered an emergency plan to brace for a potential Russian gas cut-off, as President Vladimir Putin steps up demands that the fuel should be paid for in rubles. Russia may expand the list of commodities for which it demands payment in rubles to include grain, oil, metals and others. Meanwhile, as reported last night, BofA analysts echoed Goldman and warned that the 11% surge in U.S. stocks in the past two weeks has the hallmarks of a bear-market rally that might give way to deeper losses. Philadelphia Fed Bank President Patrick Harker said Tuesday he expects a series of “deliberate, methodical” rate increases this year, but said he is open to a half-point move in May if near-term data shows more inflation. Economic data releases Wednesday include U.S. GDP.  “While the Fed faces considerable challenges in pulling off an economic soft landing, the central bank did manage to do so in 1965, 1984, and 1994; thus, we think it is too soon to write off their chances of doing so again, said Mark Haefele, chief investment officer at UBS Global Wealth Management. “We believe investors should brace for higher rates, without overreacting by neglecting areas of value in equity markets.” Europe's Stoxx 600 was down 0.6%, but traded off worst levels; sentiment was dented after Kremlin comments that there has been no breakthrough in Ukraine talks. Travel, retail and media names lag; energy and miners outperform. European stocks exposed to Russia and Ukraine slipped in early trading as optimism about a de-escalation of the war in Ukraine faded. The skepticism over Russia’s promise to scale back military operations in Ukraine has dented global stocks and boosted oil prices. Nokian Renkaat, which has a large factory near St. Petersburg, is down more than 7%, among top decliners on Stoxx 600. Here are some of the most notable premarket movers: Equinor, Shell, BP and other energy peers lead gains on the Stoxx 600, with the energy subindex its best performer, with basic resources gaining too: Glencore +2.5%, Boliden +4.7% Bachem rises as much as 4.1%, the best performer on the Stoxx 600 Health Care index, after Credit Suisse upgraded the company to outperform on its strength in peptides manufacturing Bloomsbury Publishing climbs as much as 8.8% after the company best known for the Harry Potter series said the new fantasy novel series ‘Crescent City’ had driven “exceptional” sales in February Encavis shares gain as much as 9.3% as Warburg sees an “upbeat outlook” that should “trigger earnings revisions,” after the company reported earnings late Tuesday Pearson shares fall as much as 11% after Apollo said it does not intend to make an offer for the firm after being unable to reach agreement over the terms with Pearson’s board Nokian Renkaat slides as much as 7.5% after JPMorgan and SEB cut their ratings for the Finnish tire maker due to its exposure to Russia, bringing its YTD loss to over 50% Other Russia-exposed peers also fall as optimism about a de-escalation of the war in Ukraine fades: Wizz Air drops as much as 5.5%, Faurecia as much as 7.5% Atlas Copco, SKF and Sandvik all fall after after reports emerged in Swedish media that its equipment and service contracts in Russia may have been been used by the military Earlier in the session, Asian equities advanced for a second day as traders remained cautiously optimistic over Russia’s offer to scale back military operations in Ukraine. The MSCI Asia Pacific Index climbed as much as 0.9%, with Taiwan Semiconductor Manufacturing the biggest contributor following Micron’s strong forecast. Equities in mainland China outperformed, led by gains in brokerages and developers. Japanese stocks retreated as the yen strengthened. Inflation Trade Is Key to Everything in Global Markets Right Now Investors are hoping for a de-escalation in the war in Ukraine, though progress in cease fire talks has been met with some skepticism. Also on traders’ radar are Chinese firms’ earnings results and the risk of trading halts, and the impact from the yield-curve inversion in U.S. treasuries that are typically seen as a sign of future recession. “With talk of de-escalation in Ukraine, volatility is easing off and that’s a positive for global equities – the benefits of which ought to flow through to an Asian region that’s very sensitive to the economic cycle and commodity prices,” said Kyle Rodda, analyst at IG Markets Ltd.  While the yield curve’s inversion is another factor to consider, a recession typically comes anywhere between 12 and 24 months following an inversion implying “there’s no major reason why sentiment can’t remain well supported,” he added. Elsewhere in Asia, stocks in Australia rose for a seven-day winning streak following a stimulatory federal budget package. China tech stocks traded in Hong Kong trimmed earlier advance amid fresh regulatory crackdown worries.   Japanese equities fell as the yen strengthened amid concerns it had weakened too much. More than 1,500 Topix stocks traded without rights to the next dividend, shaving 22.4 points off the benchmark. Banks and automakers were the biggest drags the Topix, which fell 1.2%. KDDI and Tokyo Electron were the largest contributors to a 0.3% loss in the Nikkei 225. The yen strengthened 0.7% against the dollar, extending its 0.8% rally on Tuesday. The yen is still down more than 6% against the greenback since March 4 amid the Bank of Japan’s determination to continue easing. Perceived benefits of the weaker currency have helped boost the Nikkei 5.7% this month, its best since November 2020. “There’s much talk about the yen weakening further but it seems like it has gone too far,” said Tetsuo Seshimo, a portfolio manager at Saison Asset Management. The level of products exported from Japan is actually low, so “the image is a little different from reality.” Australia's stocks climbed, with the S&P/ASX 200 index rising 0.7% to close at 7,514.50, gaining for a seventh day, its longest win streak since December 2020.  The rally followed a stimulatory federal budget package unveiled late Tuesday. Hopes for talks between Russia and Ukraine also helped investor sentiment.  Life360 gained the most, rising for a second day, while Telix Pharmaceuticals led decliners. In New Zealand, the S&P/NZX 50 index rose 1.5% to 12,098.80. In FX, the Bloomberg dollar spot index fell 0.4% as the greenback was steady to weaker against all its Group-of-10 peers; short-dated Treasury yields fell by around 4bps while longer dated ones were steady. European bonds slid, led by shorter maturities, as traders bet hotter-than-expected inflation readings will force the ECB to end its era of negative rates sooner than previously anticipated. Traders are wagering the ECB will raise its key interest rate to zero two months earlier than expected after Spain’s statistics service said EU-harmonized CPI jumped 9.8% from a year ago in March, topping all 15 estimates in a Bloomberg survey of economists. The yen outperformed all its G-10 peers as the options market signaled that a short-term top has been established in spot dollar-yen. The Bank of Japan ramped up efforts to rein in rising yields by offering to buy more debt across maturities. Bank of Japan Governor Haruhiko Kuroda gave another strong indication that the central bank will continue capping long-term bond yields after holding his first meeting with Prime Minister Fumio Kishida since the yen touched its lowest level since 2015 In rates, Treasuries were mixed with the curve steepening, pivoting around a little changed 7-year sector as 2s10s spread continues to widen away from the brief inversion that took place Tuesday. 2-year TSY yields are richer by ~3bp on the day while long-end of the curve cheapens almost 3bp -- 2s10s spread steeper by 5bp; wides of the day more than 8bp. U.S. 10-year yields around 2.41%, with bunds and gilts trading 4bp and 1bp cheaper in the sector. Long-end Treasuries underperformed, cheaper on the day and following wider losses across bunds and gilts. Early gains in Asia spurred by Bank of Japan bond-buying operations, especially at long end of the curve which pushed Japanese government bond yields lower. IG dollar issuance slate includes three SOFR deals and a Misc Bhd 3Y/5Y; four issuers priced $5.1b Tuesday, takes weekly total to around $9b vs. $20b to $25b projected European bonds slid, led by shorter maturities as traders bet higher inflation will force the European Central Bank to end its era of negative rates sooner than previously anticipated. German two-year yields, among the most sensitive to changes in the key policy rate, are on course for their first close above zero since 2014. The German curve bear-flattens, cheapening ~7bps across the short end. ECB-dated OIS rates point to a zero percent depo rate by the October meeting, red pack Euribor drops up to 9.5 ticks. USTs bull steepen, with 2y yields up 5bps. Gilts are comparatively quiet. Peripheral spreads tighten to core. In commodities, crude futures advanced with WTI adding ~2% near $106.25. Base metals trade in the green; LME aluminum rises over 3%. Spot gold is little changed at $1,919/oz. European natural gas surges as much as 15% after Germany triggered an emergency plan to brace for a potential Russian gas cut-off. Looking at the day ahead now, and data releases include German CPI for March and Italian PPI for February, whilst in the US there’s the ADP’s report of private payrolls for March and the third estimate of Q4 GDP. Otherwise, central bank speakers include ECB President Lagarde, and the ECB’s Holzmann, Wunsch, Makhlouf and Panetta, along with the Fed’s Barkin and George, and BoE Deputy Governor Broadbent. Market Snapshot S&P 500 futures down 0.3% to 4,609.50 STOXX Europe 600 down 0.7% to 458.63 German 10Y yield little changed at 0.64% Euro up 0.4% to $1.1131 Brent Futures up 1.8% to $112.22/bbl Gold spot up 0.2% to $1,922.70   U.S. Dollar Index down 0.41% to 98.00 MXAP up 0.7% to 181.73 MXAPJ up 1.3% to 595.64 Nikkei down 0.8% to 28,027.25 Topix down 1.2% to 1,967.60 Hang Seng Index up 1.4% to 22,232.03 Shanghai Composite up 2.0% to 3,266.60 Sensex up 0.9% to 58,467.18 Australia S&P/ASX 200 up 0.7% to 7,514.52 Kospi up 0.2% to 2,746.74 Top Overnight News from Bloomberg Skeptical NATO allies are evaluating whether Russia’s promise to scale back military operations in Ukraine marks a turning point in the conflict or simply a tactical shift as attacks were still reported near Kyiv ECB President Christine Lagarde said Russia’s invasion poses “significant risks to growth” and has introduced “considerable uncertainty” into the economic outlook. At the same time, sticky energy costs, increasing food prices and persistent bottlenecks “are likely to take inflation higher,” she said The initial reaction to the prospect of a peace deal in Ukraine shows how the most important trades in markets are now all about inflation. Equities, Treasuries and the yen all rallied, underscoring how investing is being filtered through an inflation-driven prism rather than by a peace dividend, according to strategists In the third week of March, redemptions from China equity funds were the highest since early 2021, while outflows from Chinese bond funds exceeded $1 billion for the first time ever, according to data provider EPFR Global. That’s after regulators made promises this month to ensure policies are more transparent and predictable U.S. trade chief Katherine Tai said it’s time to forget about changing China’s behavior and instead take a more defensive posture toward the world’s second- biggest economy Germany triggered an emergency plan to brace for a potential Russian gas cut-off, as President Vladimir Putin steps up demands that the crucial fuel should be paid for in rubles Germany faces a “considerable risk” of lower output and possibly even a recession because of its high dependency on Russian energy, according to a panel of advisers to Chancellor Olaf Scholz. Even without a gas-supply shutoff, the Council of Economic Experts prediction is that gross domestic product will rise just 1.8% this year, down from a November projection of 4.6% BOE’s Broadbent sees an unprecedented external hit to the U.K.’s national income as Russia’s invasion of Ukraine “has led to substantial rises in the cost of energy and other commodities” India’s government is considering a proposal from Russia to use a system developed by the Russian central bank for bilateral payments, according to people with knowledge of the matter, as the Asian nation seeks to buy oil and weapons from the sanctions-hit country A more detailed look at global markets courtesy of Newsquawk Asia-Pac stocks traded mostly positive amid optimism from Russia-Ukraine talks in which negotiators discussed a ceasefire and with Russia to scale down military activity in Kyiv and Chernihiv, although the US was unconvinced. ASX 200 gained on continued tech strength and with consumer stocks helped on Budget support measures. Nikkei 225 fell beneath the 28,000 level after weaker than expected Retail Sales and as the Yen nursed losses. Hang Seng and were underpinned after continued PBoC liquidity efforts and amid a deluge ofShanghai Comp. earnings including from large banks in which Bank of China and China Construction Bank both topped estimates Top Asian News China’s Growth Outlook Worsens as Lockdown Fears Escalate U.S., India Officials Set to Hold Security Meetings in April Logan Unit Warns About Ability to Meet Bond-Repayment Demands China Tech Stocks Pare Gains After Reports on Online Video Curbs European equities (Eurostoxx 50 -0.8%) are mostly lower as optimism from Ukraine/Russia updates yesterday fades and inflation concerns were further bolstered by regional German CPIs. FTSE 100 (+0.1%) remains afloat following gains in Energy and Basic Resources names Top European News BOE’s Broadbent Sees Unprecented External Hit to National Income ECB’s Lagarde Says Costs of War Increase the Longer It Lasts Spanish Inflation Unexpectedly Soars to Almost 10% on War Citi Workers Stay Home as London Power Cut Disrupts Canary Wharf In FX, Yen repatriation offsets BoJ yield intervention to keep recovery intact - Usd/Jpy extends sharp retreat to circa 121.31 from 125.10 on Monday. Euro inflated by significantly stronger than expected preliminary CPI prints and further EGB/UST yield convergence - Eur Usd takes out recent peak and probes Fib retracement in decent option expiry zone before fading around 1.1160. Kiwi rebounds on strong building approvals and improvements in NBNZ survey readings - NzdUsd firmly above 0.6950 and AudNzd back under 1.0800. Dollar drifts ahead of ADP and more Fed commentary, with under 98.000. In commodities, WTI and Brent have continued to pare back some of the aggressive selling pressure seen during yesterday’s session. From a technical standpoint, May’22 WTI has made it back up to USD 107.30 vs. yesterday’s peak of USD 107.84, whilst June’22 Brent sits at 113.05 vs. yesterday’s peak of USD 114.83. US Energy Inventory Data (bbls): Crude -3.0mln (exp. -1.0mln), Gasoline -1.4mln (exp. -1.7mln), Distillate -0.2 (exp. -1.6mln), Cushing -1.1mln. US House Energy and Commerce Committee is to hold a hearing next week with six oil company executives regarding rising gas prices, according to Reuters. Germany declares "Early Warning" stage of gas supply emergency to prepare for possible escalation by Russia; says no current gas supply shortages. India is to increase natural gas prices for April-Sept to USD 6.10/mmbtu from USD 2.90mmbtu currently, according to Reuters sources. Spot gold traded sideways and only marginally benefitted from the weaker greenback. US Event Calendar 07:00: March MBA Mortgage Applications, prior -8.1% 08:15: March ADP Employment Change, est. 450,000, prior 475,000 08:30: 4Q PCE Core QoQ, est. 5.0%, prior 5.0% 08:30: 4Q GDP Price Index, est. 7.1%, prior 7.1% 08:30: 4Q Personal Consumption, est. 3.1%, prior 3.1% 08:30: 4Q GDP Annualized QoQ, est. 7.0%, prior 7.0% DB's Jim Reid concludes the overnight wrap The last two times that the 2s10s first inverted during the cycle occurred when I was on holiday (August 22nd 2019 and way back on December 27th 2005). Proving that the yield curve is no respecter of my two-week holiday starting tomorrow, 2s10s teasingly dipped its toes into negative territory after Europe closed yesterday before discretely re-steepening into the US close (at 2.4bps). Nevertheless, the headline damage was done. The momentum has been toward flatter curves for a while, so this moment has felt inevitable even if it happened quicker than we expected. It is surely only a matter of time before we close inverted. I'll likely be on holiday when it does so see you in a couple of weeks. First stop a diagnostic and steroid injection today in my back. Henry and Tim will be taking care of the EMR in my absence. First stop LEGOLAND and the Natural History Museum at the end of this week. The latter to see some dinosaurs that aren't Daddy. See you on the other side. Back to the curve and 2s10s has now flattened -75.0bps YTD, -17.4bps of which have come over the last two days amidst heightened bond market volatility, which showed no signs of calming yesterday with 2yr and 10yr Treasuries again trading in a wide range. 2yr yields were +12.3bps higher as New York walked in before finishing the day up +3.7bps, while 10yr yields went from +7.4bps higher early in the day to as low as -8.2bps, before closing down -6.4bps. US yields are another -5 to -6bps lower in Asia as I type so 15 to 20bps off the highs 18 hours ago. Yields hit their intraday peaks at this point alongside the peak in optimism around potential peace talks covered in more detail below. Having said that there were other important bond milestones yesterday. 2yr German debt moved into positive territory in trading for the first time since 2014, although by the close it was “only” up +6.2bps at -0.07%. Note German inflation is coming out later today and the NRW region has just come out at a very high 7.6% which likely means the 6.2% national average expected is going to be beaten. So maybe more grounds for bond volatility today. Also Italian PPI is out. Remember last month this hit an astonishing 41.8% YoY. This all comes as the Ukraine developments yesterday led to growing conviction that the ECB would commence liftoff in its policy rates this calendar year, and the amount of ECB tightening priced for 2022 went all the way up to +62.1bps by the close, surpassing their previous peak prior to the invasion. At the same time, yields on 10yr bunds (+5.3bps), OATs (+4.9bps) and BTPs (+0.9bps) all hit multi-year highs of their own even if 10yr bunds closed at 0.63, -10bps below its intraday highs of 0.73%. As discussed near the top, the last leg of the global yield spike higher came as peace hopes exploded in the middle of the European session. However the spike in nominal yields was very short lived as commodities fell back following the positive news, dragging breakevens down with them. This followed some of the most optimistic headlines we’ve seen since the conflict began. In particular, Russia said it would “dramatically reduce” its military operations around Kyiv, and their chief negotiator Vladimir Medinsky said that Ukraine’s proposals would be passed onto President Putin for a response. Meanwhile Ukraine’s negotiator Mykhailo Podolyak said that the agreement offered would see both sides “resolve issues linked to Crimea and the city of Sevastopol though bilateral negotiations”, which Russia has occupied since 2014. So although it’s worth pointing out that we don’t even have a ceasefire yet, the fact that both sides might be edging closer towards one another has seen markets reduce the perceived likelihood of further escalation scenarios. The alternative view is that the Russians are simply diverting resources to other areas and this is purely tactical. So it's still a long way from being over but the tail risks seem to be reducing. This growing optimism was evident across multiple asset classes, with European equities moving back up to levels not seen since the conflict began. Indeed, the STOXX 600 (+1.74%) closed at its highest level since February 17, having now recovered by +13.85% since its closing low just 3 weeks earlier. The S&P 500 (+1.23%) also advanced, which reduced its YTD losses to just -2.82%, whilst the NASDAQ was up +1.84%. While fixed income volatility has taken off, equity volatility continues to fall as indices rally and risk sentiment improves. The VIX fell another -0.73ppts yesterday to 18.9ppts, having fallen 13 of the last 16 days after reaching its highest level in over a year earlier in the month. Oil prices had a significant reaction as well, with Brent Crude falling by about $10/bbl between its intraday high and low just a couple of hours apart, before settling -0.94% lower at $111.42/bbl. And the euro itself strengthened by +0.92% to move just shy of $1.11. When it comes to the Fed, the added optimism did not do much to alter pricing this year, as it seems markets have already internalised that the Fed is now less inclined to let war get in the way of the hiking cycle. Expectations for a 50bp hike at the May meeting remain high, having oscillated between 65% and 80% since last Monday, finishing yesterday near the upper end of that range at 75%. The only speaker of note was Philadelphia Fed President Harker, who said that he wouldn’t take 50bps off the table for May, but expected “a series of deliberate, methodical hikes as the year continues”. The jobs report on Friday as well as the CPI report on April 12 will be very important ahead of the Fed’s decision in early May. Asian stock markets are mostly trading in positive territory. The Hang Seng (+1.15%) is up after shares of Chinese tech giant Tencent rose more than +2%. Meanwhile, shares of China Evergrande Group will “remain suspended until further notice” as per yesterday’s announcement by the firm. Chinese stocks opened higher with the Shanghai Composite (+1.28%) and CSI (+1.40%) leading gains across the region. Elsewhere, the Kospi (+0.25%) is trading up, building on gains in the previous session. Bucking the trend is the Nikkei (-1.27%) after giving up its earlier session gains as the Japanese Yen strengthened (~1.0%) against the US Dollar. Data showed that Japan’s retail sales (-0.8% m/m) fell for the third straight month in February, exceeding market expectations for a -0.3% loss and after falling -0.9% last month. Moving on, the S&P 500 (-0.12%), Nasdaq (-0.11%) and DAX (-0.15%) futures are all slightly down. On the data side yesterday, there were a number of interesting releases from the US, which collectively pointed to inflationary pressures still in the pipeline. In particular, the total number of job openings in February came in at 11.266m (vs. 11m expected), which means that the number of job openings per unemployed moved back up to its second highest ever level, at 1.80 openings per unemployed person. Furthermore, the quits rate also ticked back up to 2.9%, just shy of its record 3.0% back in November and December. Otherwise, the FHFA house price index was up +1.6% in January (vs. +1.2% expected), and that was the fastest monthly gain in 7 months. Meanwhile, the Conference Board’s consumer confidence measure ticked up slightly to 107.2 (vs. 107.0 expected), but there was a growing divergence between the present situation reading, which rose to 153.0, unlike the expectations measure at 76.6, which hit its lowest level since February 2014. To the day ahead now, and data releases include German CPI for March and Italian PPI for February, whilst in the US there’s the ADP’s report of private payrolls for March and the third estimate of Q4 GDP. Otherwise, central bank speakers include ECB President Lagarde, and the ECB’s Holzmann, Wunsch, Makhlouf and Panetta, along with the Fed’s Barkin and George, and BoE Deputy Governor Broadbent. Tyler Durden Wed, 03/30/2022 - 07:51.....»»

Category: smallbizSource: nytMar 30th, 2022

California authorities say they"ve busted a ring of professional shoplifters who stole $135,000 worth of merchandise from retailers like Macy"s, Abercrombie, and Lululemon

The spate of retail thefts took place across California in Los Angeles, Orange County, Sacramento, and San Bernardino, according to authorities. The alleged gang of shoplifters targeted at least five retailers in California, including Lululemon.Jeremy Moeller/Getty Image An alleged ring of shoplifters has been busted in California. Authorities have accused the operation of stealing from multiple retailers across the state. The group allegedly targeted stores like Macy's, Abercrombie & Fitch, and Lululemon. Authorities announced on Monday that nine people were charged over allegations that they were members of an "organized retail theft ring operating throughout California" that targeted brands like Macy's, Columbia Sportswear, Abercrombie & Fitch, J.C. Penney, and Lululemon.The bust is just the latest move in ongoing efforts by authorities and retailers to combat organized retail crime.Organized theft rings often function as shadow businesses, and can be linked to organized crimes. High-level individuals within a ring have been known to hand down shopping lists to low-level, often impoverished, unhoused, or drug-dependent persons. Those professional shoplifters are then tasked with stealing those specific items in order to receive payment.The latest California ring's alleged modus operandi matches the organized retail crime playbook. In its statement, Bonta's office said "the suspects allegedly stole and transported hundreds of thousands of dollars' worth of goods, held the items, and shipped them internationally."In a statement, California Attorney General Rob Bonta said that "nine defendants" were hit with felony charges at the Los Angeles County Superior Court, and five were arrested. The statement said that California Highway Patrol investigated the case since 2021, and retrieved "$62,000 in cash and $135,000 of stolen merchandise from major retailers." The group allegedly operated across California, from Los Angeles to Sacramento. Three members of the group were also charged last week on Tuesday over $17,000 of "stolen merchandise."Industry experts say the problem is growing in scope. In 2011, the FBI estimated that "organized retail crime" was a $30 billion industry. A 2020 survey from the National Retail Federation found that organized retail theft has seen a nearly 60% increase from 2015, now averaging $719,548 for every $1 billion in sales. Businesses have taken measures like engineering high-ticket products to fail to work unless they're properly checked out at the cash register or equipping shopping carts with lockable wheels or even adopting controversial facial-recognition tools that critics say could violate shoppers' rights. Retailers have also pushed for stricter legislation around organized retail crime, and have pressed lawmakers to do more about the issue.Insider reached out to the Attorney General's office and the various retailers and did not immediately receive any further comment. Previously, Bonta's office sentenced a Bay Area organized retail theft ring and met with retail representatives and law enforcement officials to address the issue."Organized retail theft hurts businesses, employees, and the public — and this criminal activity will not be tolerated in California," Attorney General Rob Bonta said in the statement. "Today we take another step toward tackling this issue by announcing the arrests and felony charges against individuals alleged to be participants in an organized criminal scheme targeting retailers throughout our state."Read the original article on Business Insider.....»»

Category: topSource: businessinsiderMar 29th, 2022

Futures, Yields Rise On Ceasefire Hopes As Ukraine-Russia Talks Resume

Futures, Yields Rise On Ceasefire Hopes As Ukraine-Russia Talks Resume Following yesterday's surge in stocks following an FT report that Russia has eased on its Ukraine demands and the Russian ceasefire document no longer contains any discussion of three of Russia’s initial core demands - “denazification”, “demilitarisation”, and legal protection for the Russian language in Ukraine - overnight futures have extended their "feel good" rise as peace negotiations which resumed on Tuesday in Turkey between Russia and Ukraine stoked a rally in global equities, and hit session highs after Ukrainian negotiator Podoliak noted that a ceasefire is being discussed with Russia adding a press conference is to be expected later. Ukraine is striving for a cease-fire agreement in talks with Russian negotiators that started Tuesday in Turkey, setting a “minimum” goal of an improvement in the humanitarian situation. Nasdaq 100 futures were up 0.6% while S&P 500 futures gained 0.5% and Dow futures 0.4%. Europe’s Stoxx 600 Index also advanced, with auto and consumer stocks outperforming. Oil fluctuated as investors weighed the impact of China’s mobility curbs against a Covid resurgence on demand; the dollar dropped. Treasuries bear flattened, outperforming bunds and gilts as haven demand continues to be unwound; the 10Y TSY yield rose to 2.50%. Apple headed higher in premarket trading and was set for its longest winning streak since 2003, in which the iPhone maker has added about $407 billion in market capitalization. A revival in the so-called meme stock rally also set GameStop on course for its 11th straight day of gains as retail traders bid up OTM calls sparking yet another gamma squeeze and proving that the market remains hopelessly broken. Here are some other notable premarket mvoers: Dave & Buster’s (PLAY) shares drop 7.2% after the dining and entertainment venue operator reported earnings per share for the fourth quarter that missed the average analyst estimate. While analysts pointed to the impact of the Omicron variant of the Covid-19 virus on the company’s fourth-quarter, they saw reassuring signs in the firm’s margins and recent improvements. Progenity (PROG US) falls 20% in U.S. premarket trading after the firm late on Monday reported a wider annual loss for 2021 than expected. Small biotech and pharma companies rally in U.S. premarket trading, rebounding from this year’s declines, as investor appetite for riskier assets and so-called meme stocks grows. Brooklyn Immunotherapeutics (BTX US) +8.7%, Alaunos Therapeutics (TCRT US) +6.5%. CVS Health (CVS US) shares drop 1.7% in U.S. premarket trading after Deutsche Bank downgrades the pharmacy health care provider to hold from buy amid rising risks. U.S. stocks have rebounded in March as the Federal Reserve issued an upbeat outlook on economic growth, with investors also looking past surging inflation and a historic rout in Treasuries. Paradoxically, technology-heavy stocks, which tend to sell off when interest rates are rising, have in fact outperformed the benchmark S&P 500 as traders focused instead on differentiating between profitable and unprofitable firms.  Even more paradoxically as a new cold war rages, the Nasdaq 100 is on track for its biggest monthly gain since October 2021. "The resilience of global stocks given the cocktail of risks facing the global economy is truly impressive, but this stoicism is likely to face continuing tests as the impact of mounting prices and the actions of central banks continue to feed through, not to mention the ongoing geopolitical concerns,” Russ Mould, investment director at AJ Bell Ltd., said in emailed comments. Meanwhile, government bond yields rose, with bets on aggressive U.S. monetary tightening hurting shorter maturity Treasuries. Inversions along the curve, where some short-term rates exceed longer tenor yields, point to concerns about a looming economic downturn as the Federal Reserve hikes interest rates to quell high inflation. Hopes of a cease-fire in Ukraine-Russia talks also bolstered European equities. The Stoxx 600 jumped 1.3%, with automakers, consumer products and services and technology shares leading gains. Here are some of the biggest European movers today: Carlsberg shares advance as much as 4.5% as analysts welcomed the brewer’s decision to exit Russia, with Credit Suisse seeing potential for a re-rating for a stock battered by Russia’s invasion of Ukraine. Adyen shares gain as much as 6% after JPMorgan said the company could boost its outlook for long-term margin to more than 70% from 65%, placing the firm on “positive catalyst watch.” Currys Plc shares rise as much as 12% following a so-called uncooked mention in a Betaville blog post regarding potential takeover interest in the electrical goods retailer. Euromoney shares climb as much as 4.9% after Investec raises its recommendation to buy from hold, citing a disconnect between the share price and the media firm’s operational performance. Schibsted shares rise as much as 6.6%, the most since March 16, after its largest shareholder, Blommenholm Industrier, buys 1 million Class A shares at NOK222.5 each. Nordex shares rise as much as 8.3% after the wind-turbine maker’s new FY22 guidance is ahead of expectations, Jefferies says; wind power peers Vestas and Orsted gain, too. Barclays falls as much as 5.7% in London following news that an unnamed investor sold about 575m shares at a discount. Stock is also downgraded to neutral from overweight at JPMorgan. Maersk, Kuehne + Nagel and Hapag-Lloyd all drop after Deutsche Bank downgrades several logistics and container stocks due to the indirect consequences of the war in Ukraine. Sanofi shares fall as much as 2.5% after the firm provided a new sales forecast for its drug Dupixent, with both Morgan Stanley and Citi noting guidance is slightly behind expectations. Earlier in the session, Asian stocks advanced after a three-day loss, as a decline in oil prices eased concerns over corporate earnings and Chinese tech stocks extended gains into a second day. The MSCI Asia Pacific Index rose 0.7% with Tencent, Toyota Motor, and Alibaba among the biggest contributors to the advance. Apart from Hong Kong, where gains in tech and health names drove gauges higher, equities in Japan and Australia outperformed, with the former benefiting from a weaker yen and the latter rising ahead of a budget release after markets closed. Investors are waiting to see how the cease-fire talks between Russia and Ukraine proceed, while assessing the repercussions to businesses from the lockdown in Shanghai. The risk of Chinese firms, especially those in the property sector, facing trading halts is weighing on sentiment as a key earnings deadline looms.  Oil Extends Losses on China Demand Concerns Ahead of OPEC+ Meet “A V-shaped recovery in stock markets looks difficult,” said Kim Kyung Hwan, a strategist at Hana Financial Investment in Seoul.  “The worst is behind in terms of investor sentiment, but issues like Covid lockdowns and the war in Ukraine aren’t resolved, traders are just getting used to them.” Despite Tuesday’s gain, the benchmark Asian measure is poised for a third straight monthly loss. It’s also lagging behind the S&P 500 index in recent performance Japanese equities rose, powered by exporters after the yen plunged by the most since March 2020 against the U.S. dollar on the Bank of Japan’s easing measures. Electronics and auto makers were the biggest boosts to the Topix, which rose 0.9%. Fast Retailing and SoftBank Group were the largest contributors to a 1.1% gain in the Nikkei 225. The yen was slightly higher after weakening 1.5% against the greenback on Monday. “Makers of export-related products like automobiles should rise with the BOJ’s continuous bond-purchase operations expected to continue weakening the yen,” said Hideyuki Ishiguro, a strategist at Nomura Asset Management. The drop in oil prices is a “relief” for Japan as an importer, and growth stocks should benefit from the slowing rise in long-term U.S. interest rates, he added Indian stocks rose as a drop in crude prices along with prospects of more cease-fire talks between Russia and Ukraine supported buying sentiment. The S&P BSE Sensex climbed 0.6% to 57,943.65, in Mumbai, a second day of gains, while the NSE Nifty 50 Index also advanced by a similar magnitude. Housing Development Finance Corp. advanced 3.1% and was the biggest boost to the Sensex, which had 20 of the 30 shares trading higher.   Fifteen of 19 sectoral indexes compiled by BSE Ltd. rose, led by a gauge of healthcare stocks. Price of Brent crude, a major import for India, hovered around $113 a barrel, down about 6% this week.  Lower oil is supporting gains across economies as a lockdown in parts of China after a resurgence in Covid cases raised possibilities of lower demand, Mitul Shah, head of research at Reliance Securities, wrote in a note. “The Russia-Ukraine conflict and inflationary pressures continue to keep the market wavered,” he said.    In rates, Treasuries extended bear-flattening move with yields cheaper by ~5bp across front-end of the curve, following wider losses for bunds and gilts in early European session. U.S. 10-year yields around 2.49%, higher by ~3bp on the day with bunds and gilts trading cheaper by 6bp and 4bp in the sector; Treasury curve-flattening persists with 2s10s spread tighter by 4.5bp as front-end continues to underperform. The week's auction cycle concludes with $47b 7-year note sale at 1pm ET, following Monday double supply of 2- and 5-year notes; WI 7-year around 2.60% is above auction stops since 2019 and ~69.5bp cheaper than February’s stop-out. IG dollar issuance slate includes two 3Y SOFR deals; two deals priced $4b Monday, and early calls for April are for around $100b of issuance. In Europe, fixed income trades heavy in the risk-on environment. Bund and Treasury curves bear-flatten with U.S. 5s30s remaining inverted and 2s10s flattening a further ~5bps near 7bps. Germany’s 2y yield trades ~3bps shy of a 0% yield. Gilts bear-steepen, cheapening 7-8bps across the back end. Peripheral spreads tighten modestly. In FX, Bloomberg dollar spot drops 0.3%, CHF is the weakest in G-10 sending EUR/CHF 0.6% higher on to a 1.03-handle. The Bloomberg Dollar Spot Index hovered as the greenback traded mixed versus its Group-of-10 peers; Scandinavian currencies were the best performers while the Swiss franc and the pound were the worst. The yen inched up after posting is biggest drop in over a year Monday; the currency may be heading for its worst monthly performance versus the dollar since November 2016, yet trading in the options space is much more balanced. Super-long Japanese government bonds dropped while benchmark 10-year notes were supported by the central bank’s purchase operations; The Bank of Japan offered to buy an unlimited amount of 5- to 10-year government notes for a second time on Tuesday Cable gave up an early advance to fall to an almost two-week low; gilts fell. London’s Metropolitan Police are set to issue at least 20 fines to government officials close to the prime minister who broke U.K. lockdown rules, although this tranche of fines is unlikely to touch Prime Minister Boris Johnson Australia’s three-year bonds dropped after retail sales beat economists’ estimates, with the gap over 10-year notes narrowing to the least since March 2020 In commodities, crude futures hold in the green, recouping Asia’s weakness. WTI regains a $106-handle, Brent trades near $113. Spot gold extends losses, dropping ~$13 before stalling near $1,910/oz. Base metals trade poorly with LME nickel underperforming Looking at the day ahead now, and data releases from the US include the FHFA house price index for January, the Case-Shiller home price index for January, the Conference Board’s consumer confidence indicator for March, and the JOLTS job openings for February. Over in Europe there’s also French consumer confidence for March, Germany’s GfK consumer confidence reading for April and UK mortgage approvals for February. Lastly, central bank speakers include the Fed’s Harker. Market Snapshot S&P 500 futures up 0.5% to 4,590.75 STOXX Europe 600 up 1.1% to 459.14 MXAP up 0.7% to 179.73 MXAPJ up 0.6% to 586.67 Nikkei up 1.1% to 28,252.42 Topix up 0.9% to 1,991.66 Hang Seng Index up 1.1% to 21,927.63 Shanghai Composite down 0.3% to 3,203.94 Sensex up 0.2% to 57,724.92 Australia S&P/ASX 200 up 0.7% to 7,464.26 Kospi up 0.4% to 2,741.07 German 10Y yield little changed at 0.63% Euro little changed at $1.0995 Brent Futures up 1.3% to $113.95/bbl Gold spot down 0.4% to $1,916.02 U.S. Dollar Index little changed at 99.04 Top Overnight News from Bloomberg Deputy Treasury Secretary Wally Adeyemo said the U.S. and its allies will tighten the sanction screws on Russia over its invasion of Ukraine, singling out industries integral to Moscow’s war effort As NATO allies discuss the terms of any potential peace deal to be struck between Russia and Ukraine, signs of strategic splits are emerging from within their ranks Policymakers in Japan on Tuesday sought to balance a commitment to ultra-loose monetary policy in a world of rising interest rates without letting the yen tumble further toward a 20-year low Japan’s Finance Minister Shunichi Suzuki highlighted the need to check if a weaker yen is harming the economy, as he indicated heightened government concern over the currency’s recent slide The additional increase in energy prices resulting from the war in Ukraine pushed inflation significantly higher in March, European Central Bank Governing Council member Pablo Hernandez De Cos says Key OPEC members said oil prices would be even more volatile if not for the group’s strategy and that the U.S. must trust what it’s doing, as calls from major importers for higher production grow Russia has made a $102 million interest payment as the world’s biggest energy exporter continues to service its foreign bonds despite financial isolation after the invasion of Ukraine North Korea looks set to detonate its first nuclear bomb in more than four years, as the U.S.’s sanctions disputes with Russia and China make further United Nations penalties against the country unlikely More detailed look at global markets courtesy of Newsquawk Asia Pac stocks traded mostly higher following the gains in the US where growth stocks spearheaded a recovery and with a decline in oil prices conducive for risk. ASX 200 was led by strength in tech and consumer stocks heading into the Budget announcement. Nikkei 225 gained with Japan to compile economic measures by the end of next month. Hang Seng and traded mixed with the mainland index faltering amid the ongoing lockdown inShanghai Comp. Shanghai and despite the announcement of supportive measures by the local government. Top Asian News Australia’s Budget Pitches Cash to Key Voters Ahead of Election Samsung to Offer More Credit in India to Boost Smartphone Sales Modern Land Joins List of Earnings Delays: Evergrande Update Iron Ore Edges Lower in China as Virus Controls Dent Demand European bourses, Euro Stoxx 50 +2.2%, are firmer across the board in a continuation of the APAC/US handover as Russian-Ukraine talks begin. Upside that has been exacerbated by remarks from both Ukraine and Russian officials. US futures are firmer across the board, ES +0.4%, though magnitudes more contained with Fed speak and supply ahead Top European News U.K. Consumer Credit Surges at Strongest Pace in Five Years U.K. Faces Crypto Exodus as Firms Sound Off Before FCA Deadline European Banks Could Earn $6.6 Billion a Year Greening Economy Inflation Rose Sharply in March on Energy Shock: ECB’s de Cos Commodities: Crude benchmarks have experienced an erosion of earlier upside amid multiple, but generally constructive, updates from Ukraine and Russia. Specifically, Ukrainian negotiator Podoliak noted that a ceasefire is being discussed with Russia adding a press conference is to be expected later. Albeit, the morning's action has not been sufficient to spark a test of the overnight parameters for WTI and Brent. Spot are pressured once more, generally speaking in-fitting with other havens, exacerbated by thegold/silver aforementioned risk-on move. In FX, Euro elevated as EGB yields ramp up again and hopes rise regarding a Russia-Ukraine peace resolution, EUR /USD above 1.1000 and a series of decent option expiries stretching between 1.0950 and the round number. Buck caught amidst buoyant risk sentiment and hawkish Fed vibe, DXY sub-99.000 after narrowly missing test of 2022 peak on Monday. Yen maintains recovery momentum amidst more MoF verbal intervention and demand for month/fy end, USD /JPY under 124.00 vs 125.00+ peak yesterday. Franc flounders as SNB ponders direct repo indexing to main policy rate, USD/CHF around 0.9360 and EUR /CHF over 1.0300. US Event Calendar 09:00: Jan. S&P/CS 20 City MoM SA, est. 1.50%, prior 1.46% 09:00: Jan. FHFA House Price Index MoM, est. 1.2%, prior 1.2% 10:00: March Conf. Board Present Situation, prior 145.1 10:00: March Conf. Board Expectations, prior 87.5 10:00: Feb. JOLTs Job Openings, est. 11m, prior 11.3m 10:00: March Conf. Board Consumer Confidenc, est. 107.0, prior 110.5 Central Bank Speakers 09:00: Fed’s Williams Makes Opening Remarks at Bank Culture... 10:45: Fed’s Harker Discusses Economic Outlook 21:30: Fed’s Bostic Discusses Economic Leadership DB's Jim Reid concludes the overnight wrap A mixed medical report from the Reid family today. I have a nerve root block injection and a diagnostic test on my back tomorrow to battle my sciatica. I managed to stretch for an hour before attempting to play golf on Saturday thinking there was no hope. Miraculously it must have helped me get round but I then suffered for the rest of the weekend as I seized up as soon as I stopped. I told my wife I should have just carried on playing. She despaired at me. On the more positive side my 6-yr old Maisie had her latest 3-4 month scan yesterday. Regular readers will remember she's been in a wheelchair since November after an operation to help her battle a rare hip disorder called Perthes. There are no guarantees as to the long-term outcome with Perthes but the latest scan was encouraging and suggested that while her hip ball is fragmenting (disintegrating), it's not collapsing and getting out of shape largely due to no weight bearing. That suggests a decent chance that when it regrows (assuming it does) it will regrow relatively normally. The nightmare is if the hip ball gets squashed as it disintegrates. She'll still need to keep the weight off for most of the rest of the year but there's hope that by the end of it she can come out of her wheelchair and start the rehab towards a manageable hip. There are some horror stories with this disease in terms of pain and constant discomfort through the entirety of childhood so fingers crossed it's going in the right direction due to her discipline in spite of missing out on all the running about that she's desperate to do. Also helping is that she continues to swim 3-4 times a week and is remarkably good now. This has been the one blessing that's come out of a year and a half where we tried to get her problem diagnosed and then treated. Fingers crossed that the next scan in July will continue to move her in the right direction. Bond markets continued to be as volatile as my back yesterday with big swings in yields but with the front end sell-off being durable. This helped push a number of yield curves ever closer to inversion, meaning we have multiple recessionary signals starting or continuing to flash. The one we always look most closely at is the 2s10s curve, which has inverted prior to every one of the last 10 US recessions. Yesterday this flattened by -7.3bps to 12.5bps and this morning it’s currently just above 6bps with more flattening plus a new on the run 2yr note to blame. Could we invert today? Regardless it's likely to happen soon. A key factor behind this curve flattening has been monetary policy expectations, and over the last 24 hours we’ve seen investors continue to ratchet up their bets on how much tightening we’re likely to see this year. By the close yesterday, Fed Funds futures were pricing in a further 211bps of tightening by the end of 2022, on top of the 25bps a couple of weeks back, which if realised would be the largest move tighter in a calendar year since 1994, back when the Fed raised the target range for the Federal Funds by 250bps. On top of that, it’s clear that investors are also reappraising what the terminal rate is likely to be, and at one point yesterday investors were pricing in a move above 3% by the second half of 2023. We’re not talking much about the terminal rate at the moment, but as we move deeper into the hiking cycle, that’s likely to grab increasing attention, since the destination will have big implications for a wide variety of financial assets. Whilst the all-important 2s10s curve is still (just about) in positive territory, increasing numbers of curves have been inverting across different maturities, with the 3s30s curve becoming the latest to do so around the time we went to press yesterday, eventually closing down -10.4bps at -2.9bps. Similarly, the 3s10s that had already inverted went even deeper into inversion territory to close at -11.5bps, which is the most inverted it's been since 2006. The 5s30s was another to invert yesterday, falling as low as -7.1bps at one point before it steepened to close at -0.9bps. Clearly they are all a bit flatter this morning. If you’re interested in reading more on the yield curve, DB’s US economics team put out a piece last Friday (link here) looking at the value of these various measures for predicting recessions. The Fed have played down the usefulness of the 2s10s curve, and have argued that the Fed forward spread (18-month forward, 3-month yield minus the spot 3-month yield) is more valuable when it comes to explaining recessions risks over the next 12 months. But our economists find that traditional curve slope metrics like the 2s10s provide useful information over a longer horizon, like the next 2 years, and they point out that the 2s10s slope is consistent with a probability greater than 60% of a recession at some point over the next 2 years. Even with the latest round of flattening though, the truth is that the trend has been nearly all one-way for basically a year now. In fact, it was a year ago tomorrow that the slope of the 2s10s curve saw its intraday peak for this cycle, when it hit 162bps. Yesterday’s flattening also coincided with a healthy dose of Treasury volatility. 2yr yields ultimately wound up +5.8bps higher at 2.33%, after trading as much as +13.8bps higher during London trading. 10yr yields fell -1.5bps to 2.46%, but were as much as +8.0bps higher during London trading, and -6.1bps lower during the New York morning. This pushed the MOVE index of Treasury volatility +4.0pts higher to 129.3, just below levels realised in early March. In spite of all the volatility, equities were mostly positive yesterday, with the S&P 500 (+0.71%) staging a steady second half rally to start another week off in the green. The decline in longer-dated yields from their early London peak helped spur tech outperformance, with the NASDAQ gaining +1.31%. Europe also started the week on the front foot, with the STOXX 600 (+0.14%) advancing, alongside the DAX (+0.78%) and the CAC 40 (+0.54%). There were pockets of relative weakness however, with the small-cap Russell 2000 in the US closing flat. Energy stocks were left behind in the otherwise broad rally on both sides of the Atlantic given the large decline in oil discussed below, with the S&P 500 energy sector down -2.56% and the STOXX 600 energy sector down -2.10%. Indeed, Oil prices did fall back yesterday, with Brent crude down -6.77% to $112.48/bbl, but that reflected the lockdown in Shanghai and the prospect of a further release from the US Strategic Petroleum Reserve rather than more positive developments out of Ukraine. It's down another -0.8% this morning. On the other hand European natural gas (+1.26%) rose to €102.55/MWh, which occurred as German Economy minister Habeck said that the G7 had rejected the proposal from President Putin that natural gas contracts be paid in Rubles, with Habeck saying it was a “one-sided and clear breach of contracts”. Back to sovereign bonds, and there were some major moves in European sovereign bonds as well as the US yesterday, with yields on 10yr bunds moving to a fresh high above 0.6% after the open before modestly retreating -0.6bps to 0.58%. That pattern was common across core European sovereigns, with yields on 10yr gilts (-7.9bps) and OATs (-1.2bps) eventually also moving lower following their increases that morning. Similarly to the US, this has come as investor conviction has grown about the chances of tighter ECB policy in the coming months, with 48bps of hikes priced by year-end. Nevertheless, there’s still a wide policy divergence between the Fed’s and the ECB’s trajectory, and we saw this in the widening spread between 2yr US and Germany yields, which closed at 246.1bps yesterday, the most since September 2019. Asian equity markets are trading higher outside of China this morning with the Nikkei (+0.60%), Hang Seng (+0.40%) and Kospi (+0.31%) up. Stocks in mainland China are wavering with the Shanghai Composite (-0.44%) and CSI (-0.11%) both trading in negative territory as I type. Meanwhile, contracts on the S&P 500 (+0.04%) are fractionally higher while Nasdaq futures are down -0.11%. Early morning data showed that Japan’s industrial output rebounded +0.5% m/m in February after January’s contraction of -0.8%. Separately, Japan’s jobless rate inched down to 2.7% in February from 2.8% in January while the jobs-to-applicants ratio improved to 1.21 in February from 1.20 in the prior month. Elsewhere, Australia reported retail sales for February, advancing +1.8% m/m and beating market expectations for a +0.9% gain. It followed a downwardly revised +1.6% m/m increase in January. The Japanese Yen weakened to its lowest level against the US Dollar since 2015, depreciating -1.48% to 123.86 per dollar, and at one point surpassing 125 per dollar. It's moved nearly 8% in four weeks - a substantial move historically. The latest move came as the Bank of Japan announced they would purchase 10yr JGBs in unlimited quantities over three sessions today, tomorrow and the day after, which followed their move above 0.25% at one point, which we haven’t seen since 2016. The Yen is trading at 123.31 as we go to press so a continued reversal from the close and the lows yesterday morning. Elsewhere today, there’s set to be another round of in-person talks taking place in Turkey between Russia and Ukraine as the war continues into its second month. Investors have grasped at positive headlines in recent weeks and more sensitive assets such as energy prices have reacted accordingly, but the reality has been few signs of concrete progress towards any ceasefire, even if there has been a moderation in some of the demands from either side as to any potential settlement. Finally on Europe, we’re now just 12 days away from the first round of the French presidential election, and there are signs the race is tightening up slightly as the official campaign period began yesterday. Politico’s polling average puts President Macron in the lead still, but his 1st round polling has dipped to 28%, having been at 30% a couple of weeks earlier following the bounce he saw after Russia’s invasion of Ukraine. Behind him is Marine Le Pen on 19%, who he also faced in the second round back in 2017, and her average is up from 18% a couple of weeks earlier. The far-left Jean-Luc Mélenchon is also gaining, now in 3rd place with 14% (up from 12% a couple of weeks ago), but he’s still 5 points behind Le Pen, and only the top 2 candidates go through to the run-off two weeks later. Behind them are also the far-right Eric Zemmour (11%), as well as the conservative Valérie Pécresse (11%). To the day ahead now, and data releases from the US include the FHFA house price index for January, the Case-Shiller home price index for January, the Conference Board’s consumer confidence indicator for March, and the JOLTS job openings for February. Over in Europe there’s also French consumer confidence for March, Germany’s GfK consumer confidence reading for April and UK mortgage approvals for February. Lastly, central bank speakers include the Fed’s Harker. Tyler Durden Tue, 03/29/2022 - 07:51.....»»

Category: blogSource: zerohedgeMar 29th, 2022

I tried curbside grocery pickup at Walmart and Aldi, and Walmart was the clear winner despite higher prices

Aldi's app is glitchy, and the whole process has some kinks that need working out, while everything goes much more smoothly at Walmart. Justin Sullivan/Getty Images Stephen Zenner/SOPA Images/LightRocket via Getty Images I tried curbside pickup at Aldi and Walmart to see how they really compare.  Aldi's app is glitchy, and the whole process has some kinks that need working out. Walmart has curbside down perfectly, from ordering to grocery pickup.  Curbside pickup got a major boost because of the pandemic as customers avoided going into stores.The logo of Walmart is seen outside of a new Walmart Store in San SalvadorReutersTwo years later, in 2022, curbside pickup remains popular with shoppers, showing no signs of going away.Aldi plans to open 150 new stores.Stephen Zenner/SOPA Images/LightRocket via Getty Images.I've been using curbside pickup at Walmart for over a year, so I decided to compare it to Aldi's version. Here's what Walmart's pickup is like.WalmartWhen you open the app, it prompts you to choose your nearest location for pickup, or add your address for delivery.WalmartThe time slots come in hour-long blocks. At the beginning of the pandemic it was hard to find a spot, but now I rarely need to book more than a day or two in advance to get my choice of time.WalmartOnce you've selected a time, create your list. The app is organized into sections that change seasonally, like spring produce, but you can also search for items or look through past orders.WalmartSee what's available, and get suggestions for similar items to picks that are out of stock. Just add enough items to hit the $35 minimum and pickup is free.WalmartI also really like how easy it is to re-add the items I order the most, all gathered in one place.WalmartOnce your order is created, you have until about midnight the night before to continue adding to your list. For me, this is one of the most useful features, because I almost always realize we need something else before it's actually time to pick up groceries.WalmartA few hours before pickup, Walmart will send a text notifying you about any substitutions or weight adjustments on produce.Mary Meisenzahl/InsiderI've always had good experiences with substitutions that are nearly identical to what I ordered, at the same cost.Mary Meisenzahl/InsiderOnce you accept or reject any substitutions, the shoppers start preparing your order.Mary Meisenzahl/InsiderYou'll also get a text letting you know your order is ready for pickup.Mary Meisenzahl/InsiderCheck-in on the app when you leave home so Walmart has an estimate of when you'll arrive.Mary Meisenzahl/InsiderA side area of the parking lot was marked for grocery pickup. When you pull into a spot the app knows you've arrived and prompts you to enter your spot number and color of your car.Mary Meisenzahl/InsiderMy Walmart has about 10 pickup spots. I've occasionally had to wait, but the process usually moves quickly.Mary Meisenzahl/InsiderWalmart shoppers use small carts to pull crates with grocery orders.Mary Meisenzahl/InsiderShoppers come up to the driver's window to double-check the name on the order with a handheld tablet that they carry.Mary Meisenzahl/InsiderThen, groceries get loaded into the trunk.Mary Meisenzahl/InsiderShoppers will usually bag groceries in your reusable bags if you bring them, but I usually just ask them to load groceries into my trunk to save time and bag them myself at home.Mary Meisenzahl/InsiderSometimes they are more organized in my trunk, but as long as eggs and anything else with the potential to get crushed is supported, I'm happy. I've never had any issues with this.Mary Meisenzahl/InsiderAt first, I was unsure about using a grocery pickup service, but now I'm never going back. I love the convenience, especially because I can add things to my order over several days and have them all ready and waiting for me.Courtesy of WalmartI also find I avoid overspending on impulse purchases because I'm browsing aisles where I don't need anything, and I avoid purchasing too much of staples because I can look at my pantry as I shop.Reuters/Cheryl RaveloNext, I visited my local Aldi in Rochester, New York to test out the chain's curbside pickup option.Mary Meisenzahl/InsiderIn a recent price comparison, I found Aldi has lower prices than competing stores on nearly every product, so I wanted to see how its curbside pickup stacked up.Mary Meisenzahl/InsiderSource: InsiderI downloaded the Aldi app, where one of the first options I saw was curbside pickup.AldiClicking the link took me out of the Aldi app and directed me to the company's website on a web browser.AldiThe website was fairly intuitive to use, although at first I was confused at being unable to change the pickup time.AldiGroceries were divided into the categories I expected, like vegetables, fruits, meat, and dairy.AldiIt even included a section with "Aldi Finds," featuring items beloved by customers that the chain switches out regularly.AldiSome categories didn't have very many options. I like to buy larger 18-count egg containers, but that wasn't an option at Aldi.Mary Meisenzahl/InsiderOnce I'd made my shopping list, Aldi alerted me that my pickup service would be free and I had the chance to change anything before the order was finalized.Mary Meisenzahl/InsiderI spent about $70 for plenty of produce, meat, and some pantry staples that I think will last my fiancé and me about two weeks, which felt like a good deal.Mary Meisenzahl/InsiderAfter finalizing everything else, I finally got to pick my grocery pickup time. There were so many slots available, as soon as within just two hours after I ordered.Mary Meisenzahl/InsiderAldi sent me 14 total texts between my order and pickup, which felt a bit excessive.Mary Meisenzahl/InsiderIt was somewhat difficult to communicate with my shopper in real-time. Even when I responded almost immediately to address a product substitution, it wasn't fast enough.Mary Meisenzahl/InsiderAt my pickup time, I went to Aldi and checked in online, which was quite slow and kept crashing.Mary Meisenzahl/InsiderThis location has four designated curbside spots near the side of the parking lot.Mary Meisenzahl/InsiderThe spots were marked with signs, so it was very clear where to go.Mary Meisenzahl/InsiderI checked in by indicating my parking spot and car color.Mary Meisenzahl/InsiderWhen you check in, the website provides a summary of the information you've entered and an estimate of the remaining wait time.Mary Meisenzahl/InsiderThe progress bar reminded me of Domino's tracker, which similarly gives updates on what the worker is doing with your order at the moment.Mary Meisenzahl/InsiderAldi definitely erred on the side of over-communicating, sending multiple messages about my pickup window closing, and alerting me when the worker was preparing my order.Mary Meisenzahl/InsiderThe Aldi employee came to my car about when the tracker predicted and placed bags in my trunk.Mary Meisenzahl/InsiderThe bags were all labeled with my name and number, which made it seem like a very organized process, and they didn't forget any of my items.Mary Meisenzahl/InsiderUltimately, I liked the idea of Aldi curbside pickup more than I did the execution.Mary Meisenzahl/InsiderAldi's stock changes regularly, and the website doesn't seem to update consistently to reflect current offerings.Mary Meisenzahl/InsiderI also wish the app itself worked better, with the capability to do the grocery order right there instead of in a separate browser. Walmart's app is definitely easier to use and functions better.The entrance of an Aldi supermarket seen in High Point,Thomson ReutersThe pickup process was also much smoother at Walmart, without sending me over a dozen texts.Walmart, SecaucusRachel Askinasi/Business InsiderWalmart pickup was definitely a better experience, from the app to the service. I still like Aldi, but I think I'll only shop there in person from now on.Sarah Halzack/The Washington Post via Getty ImagesDo you have a story to share about a retail or restaurant chain? Email this reporter at mmeisenzahl@businessinsider.com. Read the original article on Business Insider.....»»

Category: worldSource: nytMar 27th, 2022