Onyx Equities Debuts Head-Turning Renovation at Gateway Center’s Grand Opening in Downtown Newark

On Thursday, May 19th, Onyx Equities was joined by Newark Mayor Ras Baraka and other Newark elected and civic leaders to unveil the new two-story “Jewel Box” entryway into Gateway Center, downtown Newark’s cornerstone redevelopment project that links three newly reimagined Class A office towers through a massive 100,000 square... The post Onyx Equities Debuts Head-Turning Renovation at Gateway Center’s Grand Opening in Downtown Newark appeared first on Real Estate Weekly. Newark Mayor Ras Baraka joined John Saraceno and Jon Schultz, Co-Founders and Managing Partners for Onyx Equities to reveal the Jewel Box entrance to Gateway Center.  The new two-story, glass enclosed entrance is part of a $60 million renovation that will change the way that commuters, visitors and residents interact with the building and the surrounding neighborhood.From Left to Right: John Saraceno, Mayor Ras Baraka, Jon Schultz. On Thursday, May 19th, Onyx Equities was joined by Newark Mayor Ras Baraka and other Newark elected and civic leaders to unveil the new two-story “Jewel Box” entryway into Gateway Center, downtown Newark’s cornerstone redevelopment project that links three newly reimagined Class A office towers through a massive 100,000 square foot retail/dining concourse known as The Junction, opening later this year. The event celebrates a pinnacle moment in Gateway’s transformation – one of the largest in New Jersey’s history, and Newark’s revitalization as an international center for commerce, culture and cuisine. “The new Jewel Box entryway and the larger Gateway redevelopment project are a testament to what New Jerseyans have always known: there is no better place in the world to live, work, and play,” said Governor Phil Murphy. “Visitors, employees, and families will all benefit from this game-changing development, which showcases some of the best dining options and recreational activities the Garden State has to offer. Now more than ever, Newark remains an internationally renowned commercial and cultural hub.” Located along Raymond Plaza West across from Newark Penn Station, the “Jewel Box” was designed as a welcoming beacon for all Newark visitors, employees, and residents, and will soon serve as the main entrance into The Junction, which will deliver an exciting combination of food options from Newark’s local culinary talent and well-known restauranteurs from across the Hudson River in late 2022. Recently announced restaurant tenants include Serafina, Mökbar, Brooklyn Dumpling Shop, Fresh & Co, Greek from Greece Bakery & Café, Farinella, 375˚ Chicken & Fries, Chip City Cookies, The Brookdale, among other notables – many of which were highlighted as part of the Grand Opening celebration. Additional fitness, educational, and wellness retailers will round out a total lifestyle program. “The Jewel Box is a state-of-the-art entrance to the Gateway Center, one of our city’s signature complexes,” Newark Mayor Ras J. Baraka said. “Adjoined with The Junction that opens later this year, it will showcase our excellence, hospitality, and diverse array of food to Newark residents, workforce, and visitors. “We are thankful to Onyx Equities for transforming such an important center in the heart of our downtown.” “We are opening The Jewel Box at a really exciting time when people are coming back to the office,” said Jonathan Schultz, Co-Founder and Principal at Onyx Equities. “This was not just about improving the pedestrian and employee experience within the complex; it is part of a larger overall reinterpretation of what Newark can be for businesses and residents looking for a thriving urban community.” “Our design intent was to activate the streetscape and create a welcoming connection to the community. Designed in the 1970s, Gateway was deliberately inward-facing with little connection to the life of the city, but Onyx’s new vision re-engages the community,” said Roger Smith, Design Director. “With street level local retailers, a landscaped public plaza and the two-story entrance hall across from Newark Penn Station, Gateway will become Newark’s new front door.” Comprised of some of the tallest buildings in the city, the transformation of the 2.3 million square foot, four-building Gateway Center complex is nothing short of spectacular. Inside and out, over $50 Million in capital improvements bring the vision of world-renowned architect Gensler to life, introducing a new exterior façade, modernized lobbies and common areas, tech-forward collaborative spaces, generous and flexible office build-out configurations, state-of-the-art post-COVID sanitation systems, a newly renovated parking garage, and a best-in-class retail experience that anticipates over 75,000 daily visitors once complete thanks to direct skybridge connectivity to Newark Penn Station, a Doubletree by Hilton, One Riverfront Center, Panasonic’s Corporate Headquarters, and several new residential developments under construction. “Gateway is on course to be New Jersey’s premier office and dining destination – the first of its kind in our state,” said Matthew P. Flath, vice president of asset management at Onyx Equities. “We know we’re hitting the right note because we’re attracting world-renowned restaurants like Serafina and celebrity chefs like Esther Choi of Mökbar, as well our top-tier regional and local culinary talent.” Appealing to a wide audience, the development also plays a major day-to-day role in the immediate area where there is a growing population of 300,000, a daytime workforce population of 200,000 and 58,000 riders who board at Newark Penn Station daily. In addition, more than 60,000 vehicles pass The Junction at Gateway Center along McCarter Highway each day. Prudential Center, home of the New Jersey Devils and Seton Hall Pirates Basketball, is directly across the street and four major universities with over 50,000 students are nearby. To learn more about Gateway Center, visit For retail leasing inquiries at The Junction, contact Jason Pierson and Ryan Starkman of Pierson Commercial Real Estate at (927) 823-4800. For information about Class A office opportunities within 1, 2 & 4 Gateway Center, contact Tim Greiner and Blake Goodman of JLL at (732) 707-6900 x5. The post Onyx Equities Debuts Head-Turning Renovation at Gateway Center’s Grand Opening in Downtown Newark appeared first on Real Estate Weekly......»»

Category: realestateSource: realestateweeklyMay 21st, 2022

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,, 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

Asheville boasts one of the longest foliage seasons in the US - these 10 central hotels offer striking views

These are the best hotels in Asheville, NC including Grand Bohemian, the Biltmore, Cambria, the Renaissance, Kimpton, and Omni Grove Park Inn. When you buy through our links, Insider may earn an affiliate commission. Learn more. Omni Hotels Asheville is a big city with a small-town feel in North Carolina. Asheville is near national parks and is known for vibrant dining, breweries, art, and music. Asheville's best hotels are also varied, from boutique inns to B&Bs and brand name luxury. Table of Contents: Masthead StickyWith unbelievable mountain views, a thriving food and drink scene, an emphasis on nature, and a penchant for the arts, Asheville is a must-visit destination. Sitting on "America's Prettiest Drive," the Blue Ridge Parkway, it has mild seasons year-round and one of the longest, most vibrant fall foliage seaons in the US.I've been visiting Asheville for the past decade, and throughout the pandemic, it made it my go-to road trip for its accessible location, outdoor activities, and how safely it's handled COVID-19. Follow my lead and plan a trip to Asheville with a stay at one of the following standout hotels that range from cozy bed and breakfast in a historic neighborhood to trendy downtown high rise, and the lap of luxury at a five-star spa hotel. Browse the best Asheville hotels below, or jump directly to a specific area here:The best hotels in AshevilleFAQ: Asheville, NC hotelsHow we selected the best hotels in AshevilleMore of the best hotels on the East CoastThese are the best hotels in Asheville, sorted by price from low to high. Cambria Downtown Ashville Floor-to-ceiling windows offer direct views of Pisgah Mountain. Book Cambria Downtown AshevilleCategory: BudgetNeighborhood: DowntownTypical starting/peak prices: $128/$515Best for: Couples, friends, families, solo travelers, business travelers On-site amenities: Restaurant, bar, fitness room, convenience store, meeting roomsPros: Every room is thoughtfully designed with wide foyers, Bluetooth mirrors in the bathroom, and desks and beds facing floor-to-ceiling windows with mountain views.Cons: TVs only have a few channels and don't connect to streaming services, so don't count on a lot of in-room entertainment.Located next to historic Grove Arcade, the Cambria Downtown Asheville places you in an ideal location to explore Downtown's revered restaurants, bars, breweries, and galleries on foot.The rooms are loft-style, with floor-to-ceiling windows offering direct views of Pisgah Mountain and more space to spread out than most standard hotel rooms. As you walk in, a foyer gradually widens, opening up to a space marked by crisp white beds, a desk, plenty of electrical outlets and USB ports, wood floors, and exposed red brick walls with eye-catching splashes of blue. The bathroom is spacious with a large vanity, walk-in showers, bathtubs in some rooms, and the coolest part, Bluetooth mirrors that can play your music while you get ready.A sundry in the lobby is packed with healthy meals to prepare in your in-room microwave, or head to Hemingway's, a Cuban restaurant and bar on the fourth-floor with a terrace and fire pits. Locals pack this rooftop on weekend nights, so make a reservation to grab a seat. COVID-19 procedures are available here. Renaissance Asheville Hotel Rooms are comfortable, clean, and have mountain views. Marriott Book Renaissance Asheville HotelCategory: Mid-rangeNeighborhood: DowntownTypical starting/peak prices: $131/$512Best for: Couples, solo travelers, business travelers, Marriott loyalistsOn-site amenities: Restaurant, fitness room, pool, meeting rooms, marketPros: This Renaissance has the largest Junior Olympic saltwater swimming pool in Asheville.Cons: The restaurant is only open for breakfast, and the only other food served at the hotel are the snacks and packaged meals available at the on-site market. When you need a nice, but moderate Downtown Asheville hotel with a full list of modern amenities from a trusted brand, choose the Renaissance.I stayed here on a whim as I was passing through Asheville in the height of COVID-19 in 2020, and wanted a hotel brand I knew I could trust to handle the pandemic safely. The Renaissance, a Marriott Bonvoy property, did this exceptionally well and impressed me with their levels of safety and cleanliness.The Renaissance is on the edge of Downtown Asheville and every room has floor-to-ceiling windows that allow you to wake up to see the sunrise over the Blue Ridge Mountains. Rooms are spacious and comfortable with plush beds, textured black headboards, a desk, and a sitting area.Asheville was nicknamed "Bee City USA" in 2012 for its honey bee population and commitment to educating the public about how important bees are for the environment. Staying true to this oath, this hotel houses "bee boxes" from the Bee Institute on its roof to promote sustainability.COVID-19 procedures are available here. 1900 Inn on Montford The lavish, spa-like Cloisters Suite is a top pick for romance and relaxation. Book 1900 Inn On MontfordCategory: BoutiqueNeighborhood: Montford Historic DistrictTypical starting/peak prices: $145/$605Best for: Couples, luxury travelers, solo travelers, foodiesOn-site amenities: Dining room, daily breakfast and social hour, live music, games, all-day snacksPros: Book the luxurious 1,300-square-foot Cloisters suite, which has a private garden and a large spa room with a two-person Whirlpool, shiatsu massage, air bath, and walk-in shower.Cons: This hotel is not great for families as children under the age of 12 are not permitted.Perched on a hill in a historic residential neighborhood, just eight blocks from the edge of Downtown Asheville, the Inn on Montford is charming, cozy, and well-placed.This Arts and Crafts style bed and breakfast has eight rooms, each with King beds, gas fireplaces, bathrooms with fiber-optic starry floors, Roman baths, and color-changing, LED-lit vanities.Don't miss the daily cookie selection; one of the innkeepers, Shawnie, makes them herself and prepares a mix of mouthwatering flavors like salted chocolate chip, oatmeal raisin, or chocolate-orange.If you're on vacation with your special someone, make it extra romantic and book the Cloisters suite, in the Carriage House, which has 1,300 square feet of space, a private garden, a huge living room, a kitchenette, a bar, a fireplace, and a luxurious 68-square-foot spa room with a two-person Whirlpool tub, shiatsu massage, air bath, and a huge walk-in shower. COVID-19 procedures are available here. Grand Bohemian Hotel Asheville, Autograph Collection Art and design feature prominently, with statement decor in guest rooms. Marriott Book Grand Bohemian Hotel Asheville, Autograph CollectionCategory: LuxuryNeighborhood: Biltmore VillageTypical starting/peak prices: $158 /$600Best for: Couples, families, solo travelers, business travelers, Marriott loyalistsOn-site amenities: Restaurant, bar, art gallery, spa, fitness room, meeting roomsPros: Grand Bohemian Asheville is located directly across the street from the entrance to the famed Biltmore Estate, and the on-site art gallery has local and regional art and jewelry for sale.Cons: In some room categories, the bathroom is separated from the bedroom by a thin curtain rather than an actual door, which isn't ideal for privacy or modesty. Request one with a door if you're traveling with mixed company.This art-driven hotel is the best hotel in Biltmore Village, directly across the street from the entrance to famous Biltmore Estate, known as "America's Largest Home," which was built by George Vanderbilt in 1889 and has a world-class winery, historic gardens, popular restaurants, a farm and over 20 miles of nature trails.Like all Kessler boutique properties, this hotel is innately luxurious, but with a vibe that's creative, relaxing, and comfortable enough to make you feel at home. Art also features prominently, with an on-site art gallery filled with paintings, sculptures, glass art, and jewelry by local artists that are also available for sale.As such, the atmosphere is rich and enticing, with an entrance flanked by a Tudor-style driveway, dramatic candelabras, and heavy burgundy drapes.Inside, stylish, but quirky rooms and common areas juxtapose oil and contemporary paintings and historic busts with surprising sculptures, like a wild hog wearing a tacky tourist hat, and bright purple low lighting that matches velvet chairs alongside fixtures that look like antlers. The rooms are big and enticing, with tufted teal headboards, lamps with tree branch bases, brown and teal-patterned carpeting, and sleek bathrooms with views of the Blue Ridge Mountains from the soaking tub.COVID-19 procedures are available here.Read our full hotel review of Grand Bohemian Hotel Asheville Village Hotel Village Hotel is one of three accommodation options housed within the 8,000-acre Biltmore Estate. Book Village HotelCategory: Mid-RangeNeighborhood: Biltmore VillageTypical starting/peak prices: $170 /$705Best for: Families, couples, solo travelersOn-site amenities: Restaurants, bars, pool, spa, fitness room, meeting roomsPros: Village Hotel is located in Antler Hill Village, on Biltmore Estate, right next to a slew of family-friendly restaurants, activities, a petting zoo, a winery, and over 20 miles of nature trails. Cons: Transportation around the estate is currently unavailable due to COVID-19, so guests will need to factor a rental car into the cost of their trip.Village Hotel is one of three accommodation options housed within the 8,000-acre Biltmore Estate, and it's the best pick for families. Located in Antler Hill Village, just steps from the winery, the famed Cedric's Tavern (named after the Vanderbilt family dog), a petting zoo, the outdoor adventure center, and over 20 miles of nature trails, the hotel offers tons to do.The entry-level Village Double Rooms are simple, without fancy bells and whistles, but are modern and spacious with a minimalist black, white and gray color scheme, comfortable double beds, a walk-in shower, and a charming window seat for a vantage point over the beautiful grounds.In addition to all of the aforementioned perks of staying at Biltmore Estate, guests can also dine at Village Social for kid-friendly breakfast, lunch, and dinner menus, or go to The Creamery for "Winky Bar sundaes," which is a waffle cone filled with black cherry ice cream, whipped cream, and a cherry.COVID-19 procedures are available here. Kimpton Hotel Arras Kimpton Hotel Arras has a prime downtown location and impressive perks, especially for pets. Book Kimpton Hotel Arras Category: Boutique Neighborhood: DowntownTypical starting/peak prices: $171/$760Best for: Couples, solo travelers, business travelers, travelers with pets, IHG loyalistsOn-site amenities: Restaurant, bar, meeting rooms, fitness center, seasonal book program, free essential toiletriesPros: This hotel boasts a super central location in downtown Asheville, right on Pack Square. Animals may stay at no extra charge and receive special pet amenities.Cons: With its prime downtown location and resident and local foot traffic, this hotel can be loud and crowded.When in Downtown Asheville, look up and you'll spot the Kimpton Hotel Arras; it's the tallest building in all of Asheville.The 128 rooms, suites, one-bedroom, and two-bedroom luxury condos are bright, airy, and filled with natural woods, white and neutral fabrics, textured walls, art by local Asheville artist Catherine Murphy, a desk, and floor-to-ceiling windows facing Downtown Asheville and the Blue Ridge Mountains.In even the most basic Queen Room, the vanity and bathroom area feels luxurious with a huge walk-in glass shower, marble accents, warm lighting, a dark wood vanity, a large mirror, and a separate toilet.Indulge in drinks and a Mediterranean meal at District 42, and when the sun goes down on a pretty evening, grab a seat by the glass fire pits on the terrace and watch life in Downtown Asheville buzz by. All Kimpton hotels are pet-friendly, too, so bring your dog, cat, bird, iguana or any other animal for no charge. All pet companions are also pampered with perks like stylish feeding bowls, pet beds, treat bags, a ball, and more for free.COVID-19 procedures are available here. The Foundry Hotel Asheville Exposed brick and contemporary furnishings give off an industrial-chic vibe. Hilton Book The Foundry Hotel AshevilleCategory: BoutiqueNeighborhood: DowntownTypical starting/peak prices: $182/$684Best for: Couples, luxury travelers, solo travelers, families, Hilton loyalistsOn-site amenities: Restaurant, bar, fitness room, meeting rooms, courtyard with fire pitsPros: It's just two blocks walking distance from the heart of downtown Asheville, and offers Tesla car service and a Southern soul food restaurant by a six-time James Beard Award nominee.Cons: The internet connection was unreliable when I visited, which is hard for business travelers or those who like to be overly connected.Once the foundry and warehouse that forged steel for Asheville's famous Biltmore Estate, The Foundry Hotel Asheville is now a luxury boutique Hilton property next to Pack Square Park.An ode to the city's Black history, it's located in a historical enclave called "The Block," that was once a hub of African American community and business in the late 19th and 20th centuries.After sipping a glass of Champagne at check-in, make your way up to your room, which feels industrially luxe with exposed brick walls, all-white beds with cream tufted leather headboards, floor-to-ceiling mountain views, and eclectic wall art featuring period paintings and newspaper clippings in mixed oval and rectangular frames.Paying homage to its Black heritage, the on-site Benne on Eagle is a Southern soul food restaurant led by six-time James Beard Award nominee John Fleer. The hotel is just a five-minute walk from Downtown Asheville, but if you'd rather drive, The Foundry's Tesla car service can drop you off. COVID-19 procedures are available here. Abbington Green This charming B&B feels plucked from the English countryside. Book Abbington GreenCategory: BoutiqueNeighborhood: Montford Historic DistrictTypical starting/peak prices: $229/$469Best for: Couples, luxury travelers, solo travelers, foodiesOn-site amenities: Dining room, spa, English gardens, daily breakfast and social hour, games, all-day snacksPros: Every room has a King bed (which is unique for most historic bed and breakfasts in Asheville) and TVs you can watch from the bathtub.Cons: Children under the age of 12 are not permitted, which isn't ideal for young families.The English-inspired Abbington Green is an award-winning bed and breakfast, sitting atop a hill with whimsical landscaping and prize-winning manicured gardens.The property has both a main and carriage house, seven rooms, one two-bedroom suite, a spa room, a dining room, and a living room with games, a piano, and a guitar.Every guest room has a King bed, which is unique for historic homes like these, as well as towel warmers, a fireplace, and luxury bathtubs with a view of the TV — perfect for a bubble bath with a glass of wine and your favorite movie.There's an on-site charging station for electric cars, daily breakfast, a social hour, and a beautiful veranda where you can watch the sunset over the Blue Ridge mountains. The warmth of innkeepers Dean and Cherie brings it all together, as they love to talk to their guests, swap travel stories, and make everyone feel right at home.For COVID-19 procedures, call (828) 251-2454. Sourwood Inn The owners spent more than 25 years in the wine industry, and their knowledge filters down to the overall experience of staying here. Book Sourwood InnCategory: BoutiqueNeighborhood: Greater AshevilleTypical starting/peak prices: $235/$390Best for: Couples, luxury travelers, solo travelers, nature lovers, foodies, oenophilesOn-site amenities: Dining room, library, loop trails, wine and flower packages, gamesPros: The owners spent more than 25 years in the wine industry and brought that culinary experience to the hotel, giving guests farm-to-table dining, curated wine lists, in-room wine programs, and pairing dinners.Cons: The inn is a 20-minute drive from downtown Asheville on remote mountain roads, so you'll have to factor a rental car into your trip.This romantic bed and breakfast is a true hidden gem that sits largely under the radar in Asheville. Located right off the famous Blue Ridge Parkway, it's just 20 minutes from downtown, positioned on 100 acres of hilly landscapes that make it feel as if you're staying in a national park.There are 12 guest rooms in the cedar and stone-trimmed main house, with a separate Sassafras Cabin, all of which underwent a recent head-to-toe renovation. Rooms are airy and bright, welcoming sunlight through tall windows, plus light-colored walls, wood-burning fireplaces, balconies overlooking Reems Creek Valley, and soaking tubs with scenic Bullhead Mountain views.The owners spent a combined 25+ years in the wine industry, and brought that culinary knowledge to the inn through well-executed farm-to-table cuisine, curated wine lists, food pairings, as well as wine of the month and wine and dine packages that add value for serious oenophiles. COVID-19 procedures are available here. The Omni Grove Park Inn Sprawling grounds feel regal and are exceedingly beautiful. Tripadvisor Book The Omni Grove Park InnCategory: LuxuryNeighborhood: Grove ParkTypical starting/peak prices: $239/$1,049Best for: Couples, luxury travelers, business travelers, families On-site amenities: Restaurants, bars, fitness room, pools, spa, meeting rooms, sports complex, outdoor center, golf course, tennis courts, food foraging experiencesPros: Perfect for a honeymoon or couples getaway, this romantic hotel guarantees five-star service, a renowned subterranean spa, and an iconic view of the Blue Ridge Mountains at sunset from its restaurant, Sunset Terrace.Cons: As this is a luxury property, expect to pay premium prices for everything.Few resorts can say they've hosted 10 US presidents and every celebrity you can think of, from Gene Hackman and Helen Carter to Nick Carter and Barack Obama, but The Omni Grove Park Inn is one of them. Additionally, this historic resort, which opened in 1913 is famous for being a World War II internment camp for German diplomats, and served as the hotel and inspiration of choice for author F. Scott Fitzgerald over the course of two summers. Five-star service is unparalleled, with an exterior resembling a majestic stone palace that appears as if it's built right into the mountains. Overlooking 300 acres of hills, woodlands, and the Blue Ridge Mountains, the hotel also sits on a Donald Ross-designed championship golf course.From its famous terrace viewpoint, wander down the stone steps to the subterranean spa (it's so popular that you have to book six or eight weeks in advance to get an appointment) and discover hidden waterfalls along the way. Be sure to drink a glass of wine by one of two huge lobby fireplaces, and look up to see original light fixtures from the first day it opened.You'll likely pinch yourself watching the sunset over the mountains from dinner at Sunset Terrace. It's such an iconic view that, whether you stay at the Omni or not, everyone will ask if you saw it.COVID-19 procedures are available here. FAQ: Asheville, NC hotels What is the best area to stay in Asheville?Asheville is a revered food and drink destination and staying in downtown Asheville puts you within walking distance from many award-winning restaurants and breweries.If you're only in town to visit Biltmore Estate, you could stay in Biltmore Village, which is right across the street from the estate entrance, or at the Biltmore itself. Biltmore Village and Downtown Asheville are the two main attraction areas in Asheville and, luckily for visitors, they are only a 10-minute drive apart.Don't worry about not having a car; Uber and Lyft are everywhere in Asheville's popular areas, and it's easy to catch one to get to and from each. When is the best time of year to visit Asheville?Ask the locals, and they'll tell you there's no such thing as a "low season" in Asheville anymore. As such, the best time of year to visit Asheville is anytime. The award-winning restaurant and brewery scene is always available and the famous Biltmore Estate is a top attraction.If you're planning a fall visit, Asheville's 100+ deciduous trees give it one of the nation's longest fall foliage seaons, making it truly spectacular to visit in September and October. At this time of year, the leaves start to change along the iconic Blue Ridge Parkway, apple-picking season is in full swing, and temperatures drop to the 40s and 50s.Prices get slightly cheaper in January and February when snow and ice make driving in the mountains less appealing, and in March when it's cold and rainy. What are COVID-19 protocols in Asheville?Asheville has been very proactive about COVID-19 risk since the beginning of the pandemic, and stores, restaurants, and businesses strictly enforce local mandates. Currently, there are no restrictions on capacity and social distancing in restaurants, bars, and meeting spaces. Masks are required in all indoor locations in Buncombe County based on advice from medical experts and scientists. What is the best hotel in Asheville?I believe that The Omni Grove Park Inn is by far the best hotel in Asheville. It feels like staying in a palace built into the mountain, right on a championship golf course, with five-star service, a subterranean spa, and unbelievable views of 300+ acres of rolling green hills and the Blue Ridge Mountains in the distance. Staying here is the ultimate getaway, whether you're on your honeymoon, planning a girls spa weekend, or looking for a memorable place to spend the holidays. But with rooms hitting peak prices at $1,049 a night, it might not be an option for everyone. However, Asheville is filled with a range of wonderful boutique properties and larger hotels. For the best boutique hotel in Asheville, stay at the Abbington Green, an England-inspired bed and breakfast in the Montford Historic District with large and modern King rooms, daily breakfast, social hours, and beautiful English gardens.For the best hotels in downtown Asheville, the Kimpton Hotel Arras is a dog-friendly hotel right on Pack Square with beautiful and spacious rooms. And across from Grove Arcade, the Cambria Hotel Downtown Asheville offers stylish loft-style rooms with panoramic mountain views, Bluetooth bathroom mirrors, and a terrific terrace restaurant serving authentic Cuban food. What is better in Asheville—a boutique inn or bed and breakfast, or a larger hotel or resort?Both options are wonderful, and the one you choose depends on what your group needs or prefers. Boutique inns or bed and breakfasts are usually in historic residential neighborhoods and offer a cozy and comfortable feel of staying in someone's house. They typically have between six and 16 rooms, so if you're traveling with a small or mid-sized group, you could even rent the entire property.A larger hotel comes with more amenities and usually a more central location within walking distance of great restaurants, bars, breweries, shopping, and entertainment. There are also no age restrictions at larger hotels in Asheville, while most bed and breakfasts don't allow children under the age of 12 so as not to disturb other guests. What is the most romantic hotel in Asheville?With its beautiful stone building, iconic views, luxury service, and intimate feel, there is nowhere more romantic in Asheville than The Omni Grove Park Inn. Make your honeymoon extra special by booking a couples massage at the spa, ordering a tasty steak dinner and a bottle of wine at Sunset Terrace, book a Premium Club Floor Room on the adults-only Club Floor, and end each night with a drink by the lobby fireplace. What is the best hotel for families in Asheville?Village Hotel in Biltmore Estate's Antler Hill Village is great for families. Its basic Village Room starts at $170 and comes with two double beds. If you need more room, upgrade to the Village Double with Living Room, which starts at $320 per night and comes with a bedroom with two double beds, a separate living room with a couch, two twin sleeper sofas, and two full bathrooms.The location is also a huge benefit for families as it is steps away from family-friendly restaurants, the Farmyard petting zoo, 20+ miles of easy nature trails, falconry, and the Biltmore Gardens Railway, which has model trains that kids will love.How cheap or expensive is it to plan a trip to Asheville?Asheville is definitely a top tourist destination in the United States, so prices are constantly rising. That said, there is so much to do and see in Asheville, from hiking, biking, and kayaking to award-winning restaurants, breweries, and the Biltmore. These activities run from free or cheap to quite expensive. Hotels and resorts also run the gamut from $128 to $1,049 per night, and there are also tons of Airbnbs at a variety of price points. If you'd prefer one, we rounded up the best vacation rentals in Asheville as well. How we selected the best hotels in Asheville I chose the properties on this list based on my own deep knowledge of Asheville, supplemented by the research points listed below. I extensively researched and visited each hotel and selected properties with excellent recent reviews and ratings of 4 or higher on trusted traveler sites like Tripadvisor or properties offer a variety of accommodation types, from boutique bed and breakfasts to brand-name hotels and luxury resorts.They range in starting price from $128 to $1,049 per night to suit a range of budgets. Hotels are located in Asheville's top neighborhoods and historic districts, and are near popular restaurants, breweries, shops, and attractions.All hotels offer COVID-19 safety policies, which we've linked for each property, or provided contact information where you can find out more. More of the best hotels on the East Coast Tripadvisor The best hotels in BostonThe best hotels in New York CityThe best hotels in PhiladelphiaThe best hotels in Washington, DCThe best hotels in Ocean City, MarylandThe best hotels on Hilton Head IslandThe best hotels in Myrtle BeachThe best hotels in CharlestonThe best hotels in SavannahThe best hotels on Tybee IslandThe best hotels in Florida Read the original article on Business Insider.....»»

Category: smallbizSource: nytSep 24th, 2021

Futures Slide Amid Renewed Recession Fears After China Doubles Down On "Covid Zero"

Futures Slide Amid Renewed Recession Fears After China Doubles Down On "Covid Zero" One day after futures ramped overnight (if only to crater during the regular session) on hopes China was easing its highly politicized  Zero Covid policy after it cut the time of quarantine lockdowns, this morning futures slumped early on after China's President Xi Jinping made clear that Covid Zero isn't going anywhere and remains the most “economic and effective” policy for China during a symbolic visit to the virus ground zero in Wuhan, in which he cast the strategy as proof of the superiority of the country’s political system. That coupled with renewed recession worries (market is again pricing in a rate cut in Q1 2023) even as monetary policy tightens in much of the world to fight supply-side inflation, sent US futures and global markets lower. S&P futures dropped 0.2% and Nasdaq 100 futures were down 0.4% after the underlying index slumped on 3.1% on Tuesday. The dollar was steady after rising the most in over a week while WTI crude climbed above $112 a barrel, set for a fourth session of gains. In cryptocurrencies, Bitcoin dipped below the closely watched $20,000 level on news crypto hedge fund 3 Arrows Capital was ordered to liquidate. The Nasdaq's Tuesday’s slump added to what was already one of the worst years in terms of big daily selloffs in US stocks. The S&P 500 Index has fallen 2% or more on 14 occasions, putting 2022 in the top 10 list, according to Bloomberg data. Not helping the tech sector, on Wednesday morning JPMorgan cut its earnings estimates across the sector, especially for companies exposed to online advertising, citing macroeconomic pressures, forex and company-specific dynamics. One of the chief drivers for overnight weakness, China's Xi said during a trip Tuesday to Wuhan where the virus first emerged in late 2019 that relaxing Covid controls would risk too many lives in the world’s most populous country. China would rather endure some temporary impact on economic development than let the virus hurt people’s safety and health, he said, in remarks reported Wednesday by state media. As a result, China’s CSI 300 Index extended loss to 1.4% after the headline, while the yuan drops as much as 0.2% to trade 6.7132 against the dollar in the offshore market. Among key premarket movers, Tesla slipped in US premarket trading. The electric-vehicle maker laid off hundreds of workers on its Autopilot team as it shuttered a California facility, according to people familiar with the matter. Carnival slumped as Morgan Stanley analysts warned that the London and New York-listed cruise vacation company’s shares could lose all their value in the event of another demand shock. Pinterest gained 3.7% as the company’s co- founder and CEO Ben Silbermann quit and handed the reins to Google and PayPal veteran Bill Ready in a sign the social-media company will focus more on e-commerce. Also, despite the pervasive weakness, the Energy Select Sector SPDR Fund ETF (XLE) rebounded off key support (50% Fibonacci) relative to the SPDR S&P 500 ETF (SPY). That said, energy was alone and most other notable movers were down in the premarket: Carnival (CCL US) shares fall 8% premarket as Morgan Stanley analysts warned that the cruise vacation firm’s shares could lose all their value in the event of another demand shock. Nio (NIO US) shares drop 8.2% after short-seller Grizzly Research published a report on Tuesday alleging that the electric carmaker used battery sales to a related party to inflate revenue and boost net income margins. The company rejected the claims. Upstart Holdings (UPST US) shares slump about 9% after Morgan Stanley downgraded the consumer finance company to underweight from equal-weight amid rising cyclical headwinds. Ormat Technologies (ORA US) rallies as much as 5% after the renewable energy company is set to be included in the S&P Midcap 400 Index. 2U (TWOU US) shares rise 16% premarket. Indian online-education provider Byju’s has offered to buy the company in a cash deal that values the US-listed edtech firm at more than $1 billion, a person familiar with the matter said. Watch Amazon (AMZN US) shares as Redburn initiated coverage of the stock with a buy recommendation and set a Street-high price target, saying “there is a clear path toward a $3 trillion value for AWS alone.” Shares in data center REITs could be active later in the trading session after short-seller Jim Chanos said in an FT interview that he’s betting against “legacy” data centers. Watch Digital Realty (DLR US) and Equinix (EQIX US), as well as data center operators Cyxtera Technologies (CYXT US) and Iron Mountain (IRM US) Investors are growing increasingly skeptical that the Fed can avoid a bruising economic downturn amid sharp interest-rate hikes. Evaporating consumer confidence is feeding into concerns that the US might tip into a recession. Naturally, Fed officials sought to play down recession risk. New York Fed President John Williams and San Francisco’s Mary Daly both acknowledged they had to cool inflation, but insisted that a soft landing was still possible. “It seems the market is in this tug of war between on the one hand the hope that we are close to the peak in inflation and rates, and on the other hand the challenge of a slowing economy and potential recession,” Emmanuel Cau, head of European equity strategy at Barclays Bank Plc, said in an interview with Bloomberg TV. “Central banks are walking a very tight line and to a certain extent dictate the mood in the markets.” European equities snapped three days of gains, trading poorly but off worst levels with sentiment also hurt by China remaining committed to its zero-Covid approach. Spanish inflation unexpectedly surged to a record, dashing hopes that inflation in the euro zone’s fourth-biggest economy had peaked, and emboldening European Central Bank policy makers pushing for big increases in interest rates. The ECB should consider raising interest rates by twice the planned amount next month if the inflation outlook deteriorates, according to Governing Council member Gediminas Simkus, as calls not to exclude an outsized initial move grow. German benchmark bonds rose, while 10-year Treasury yields slipped to 3.16%. DAX lags, dropping as much as 1.8%. Real estate, autos and miners are the worst performing sectors. In notable moves in European stocks, Hennes & Mauritz (H&M) gained after the Swedish low-cost retailer’s earnings beat analyst estimates. Just Eat NV tumbled to a record low after Berenberg analysts rated the stock sell, saying the food delivery firm’s UK business will remain under pressure. Here are some of the biggest European movers today: Just Eat Takeaway shares plunge as much as 21% after Berenberg initiated coverage with a sell rating, saying the firm’s UK business will remain under pressure and a sale of its Grubhub unit is unlikely to satisfy the bulls. Carnival stocks slumped over 12% in London as Morgan Stanley analysts warned that the cruise vacation firm’s shares could lose all their value in the event of another demand shock. Pearson drops as much as 6.1% after the education company was cut to sell at UBS, which reduced forecasts to reflect a weak outlook for 2022 college enrollments. Grifols shares plunge as much as 13% on a media report the Spanish plasma firm is weighing a capital raise of as much as EU2b to cut its debt. Diageo shares fall after downgrades for the spirits group from Deutsche Bank and Kepler Cheuvreux, while Pernod Ricard also dips on a rating cut from the latter. Diageo declines as much as 4.2%, Pernod Ricard -3.7% Fluidra shares fall as much as 8.4% after Santander cut its rating on the Spanish swimming pools company. The bank’s analyst Alejandro Conde cut the recommendation to neutral from outperform. H&M shares rise as much as 6.8% after the Swedish apparel retailer reported 2Q earnings that beat estimates. Jefferies said the margin beat in particular was reassuring, while Morgan Stanley said it was a “positive surprise” overall. Ipsen shares rise as much as 3.1% after UBS analyst Michael Leuchten said that accepting palovarotene refiling priority review should be a net present value and confidence boost. Asian stocks fell, halting a four-day gain, as renewed angst over the outlook for global economic growth and inflation help drive a selloff across most of the region’s equity markets. The MSCI Asia Pacific Index dropped as much as 1.5%, led by consumer discretionary and information sectors. Chinese equities in particular took a hit, as the CSI 300 Index fell 1.5% Wednesday after Xi Jinping reiterated his firm stance on Covid zero. Tech-heavy indexes in markets such as South Korea and Taiwan took the brunt of Wednesday’s drop amid lingering concerns that monetary tightening in much of the world to fight inflation will cause an economic slowdown. While Federal Reserve members have played down the risk of a US recession, gloomy data such as US consumer confidence have damped investor sentiment. “Volatility is going to be the enduring feature of the market, I suspect, for the next couple of quarters at least until we get a firm sense that peak inflation has passed,” John Woods, Credit Suisse Group AG’s Asia-Pacific chief investment officer, said in an interview with Bloomberg TV. “Markets, I think, have aggressively priced in quite a serious or steep recession.”  China’s four-day winning streak came to a halt, putting its advance toward a bull market on hold.  “We will continue to see a risk of targeted lockdowns, and that spoils the initial euphoria seen in the markets from the announcement on relaxation of quarantine requirements,” said Charu Chanana, market strategist at Saxo Capital Markets. “Still, economic growth will likely be prioritized as this is a politically important year for China.”  Japanese equities decline as investors digested data that showed a drop in US consumer confidence over inflation worries and increased concerns of an economic downturn.  The Topix Index fell 0.7% to 1,893.57 in Tokyo on Wednesday, while the Nikkei declined 0.9% to 26,804.60. Toyota Motor Corp. contributed the most to the Topix’s decline, decreasing 1.8%. Out of 2,170 shares in the index, 1,114 fell, 984 rose and 72 were unchanged. “There are concerns about stagflation,” said Hideyuki Suzuki a general manager at SBI Securities. “The consumer sentiment from the University of Michigan, which provides one of the fastest data points, has already shown poor figures.” Stocks in India tracked their Asian peers lower as brent rose to the highest level in two weeks, while high inflation and slowing global growth continued to dampen risk-appetite for global equities. The S&P BSE Sensex fell 0.3% to 53,026.97 in Mumbai, while the NSE Nifty 50 Index declined by an equal measure. Both gauges have lost more than 4% in June and are set for their third consecutive month of declines. The main indexes have dropped for all but one month this year. Twelve of the 19 sub-sector gauges compiled by BSE Ltd. eased, led by banking companies while power producers were the top performers.   Investors will also be watching the expiry of monthly derivative contracts on Thursday, which may lead to some volatility in the markets.  Hindustan Unilever was the biggest contributor to the Sensex’s decline, decreasing 3.5%. Out of 30 shares in the Sensex, 10 rose and 20 fell. The Bloomberg Dollar Spot Index inched up modestly as the greenback traded mixed against its Group-of-10 peers; the Swiss franc led gains while Antipodean currencies were the worst performers and the euro traded in a narrow range around $1.05. The relative cost to own optionality in the euro heading into the July meetings of the ECB and the Federal Reserve was too low for investors to ignore and has become less and less underpriced. The yen strengthened and US and Japanese bond yields fell. In rates, fixed income has a choppy start. Bund futures initially surged just shy of 200 ticks on a soft regional German CPI print before fading the entire move over the course of the morning as Spanish data hit the tape, delivering a surprise record 10% reading for June and more hawkish ECB comments crossed the wires. Treasuries and gilts followed with curves eventually fading a bull-steepening move. Long-end gilts underperform, cheapening ~4bps near 2.75%. Peripheral spreads are tighter to core.  Treasuries are slightly higher as US trading day begins, off the session lows reached as bund futures jumped after the first monthly drop since November in a German regional CPI gauge. Yields are lower across the curve, by 1bp-2bp for tenors out to the 10-year with long-end yields little changed; 10-year declined as much as 5.3bp vs as much as 8.2bp for German 10- year, which remains lower by ~3bp. Focal points for the US session include a final revision of 1Q GDP, comments by Fed Chair Powell, and anticipation of quarter-end flows favoring bonds. Quarter-end is anticipated to cause rebalancing flows into bonds; Wells Fargo estimated that $5b will be added to bonds, with most of the flows occurring Wednesday and Thursday. In commodities, crude futures advance. WTI drifts 0.3% higher to trade near $112.13. Base metals are mixed; LME tin falls 5.6% while LME zinc gains 0.4%. Spot gold falls roughly $5 to trade near $1,815/oz Looking ahead, the highlight will be the panel at the ECB Forum that includes Fed Chair Powell, ECB President Lagarde and BoE Governor Bailey. We’ll also be hearing from ECB Vice President de Guindos, the ECB’s Schnabel, the Fed’s Mester and Bullard, and the BoE’s Dhingra. On the data side, releases include German CPI for June, Euro Area money supply for May, and the final Euro Area consumer confidence reading for June. From the US, we’ll also get the third reading of Q1 GDP. Market Snapshot S&P 500 futures little changed at 3,829.00 STOXX Europe 600 down 0.8% to 412.69 MXAP down 1.3% to 159.96 MXAPJ down 1.6% to 531.04 Nikkei down 0.9% to 26,804.60 Topix down 0.7% to 1,893.57 Hang Seng Index down 1.9% to 21,996.89 Shanghai Composite down 1.4% to 3,361.52 Sensex little changed at 53,204.17 Australia S&P/ASX 200 down 0.9% to 6,700.23 Kospi down 1.8% to 2,377.99 German 10Y yield little changed at 1.59% Euro little changed at $1.0510 Brent Futures down 0.4% to $117.46/bbl Gold spot down 0.2% to $1,816.09 U.S. Dollar Index little changed at 104.55 Top Overnight News from Bloomberg The Fed’s Loretta Mester said she wants to see the benchmark lending rate reach 3% to 3.5% this year and “a little bit above 4% next year” to rein in price pressures even if that tips the economy into a recession The ECB should consider raising interest rates by twice the planned amount next month if the inflation outlook deteriorates, according to Governing Council member Gediminas Simkus, as calls not to exclude an outsized initial move grow ECB has “ample room” to hike in 25bps-50bps steps to “whatever rate we think, we consider reasonable,” Governing Council member Robert Holzmann said in interview with CNBC Swedish consumers are gloomier than they have been since the mid-1990s, as prices surge on everything from fuel to food and furniture China’s President Xi Jinping declared Covid Zero the most “economic and effective” policy for the nation, during a symbolic visit to Wuhan in which he cast the strategy as proof of the superiority of the country’s political system NATO moved one step closer to bolstering its eastern front with Russia after Turkey dropped its opposition to Swedish and Finnish bids to join the military alliance A more detailed look at markets courtesy of Newsquawk Asia-Pac stocks were pressured amid headwinds from the US where disappointing Consumer Confidence data added to the growth concerns. ASX 200 failed to benefit from better than expected Retail Sales and was dragged lower by weakness in miners and tech. Nikkei 225 fell beneath the 27,000 level as industries remained pressured by the ongoing power crunch. Hang Seng and Shanghai Comp. conformed to the negative picture in the region although losses in the mainland were initially stemmed after China cut its quarantine requirements which the National Health Commission caveated was not a relaxation but an optimization to make it more scientific and precise. Top Asian News Chinese President Xi said China's COVID prevention control and strategy is correct and effective and must stick with it, via state media. Shanghai will gradually reopen museums and scenic sports from July 1st, state media reports. US Deputy Commerce Secretary Graves said the US will take a balanced approach on Chinese tariffs and that a clear response on China tariffs is coming soon, according to Bloomberg. China State Council's Taiwan Affairs Office said it firmly opposes the US signing any agreement that has sovereign connotations with Taiwan, according to Global Times. BoJ Governor Kuroda said Japanese Core CPI reached 2.1% in April and May which is almost fully due to international energy prices and Japan's economy has not been affected much by the global inflationary trend so monetary policy will stay accommodative, according to Reuters. Japanese govt to issue power supply shortage warning for a fourth consecutive day on Thursday, according to a statement. European bourses are on the backfoot as the region plays catch-up to the losses on Wall Street yesterday. Sectors are mostly lower (ex-Energy) with a defensive tilt as Healthcare, Consumer Products, Food & Beverages, and Utilities are more cushioned than their cyclical peers. Stateside, US equity futures trade on either side of the unchanged mark with no stand-out performers thus far, with the contracts awaiting the next catalyst. Top European News UK expects defence spending to reach 2.3% of GDP and said PM Johnson will announce new military commitments to NATO, according to Reuters. UK Weighs Capping Maximum Stake in Online Casinos at £5 Europe Is the Only Region Where Earnings Estimates Are Rising European Gas Prices Rise as Supply Risks Add to Storage Concerns Gold Steady as Traders Weigh Fed Comments on US Recession Risks Choppy Start for Euro-Area Bonds on Mixed Inflation FX Dollar mostly bid otherwise as rebalancing demand underpins - DXY pivots 104.500 within 104.700-350 confines. Franc outperforms on rate and risk considerations - Usd/Chf breaches 0.9550 and Eur/Chf approaches parity. Euro erratic in line with conflicting inflation data - Eur/Usd rotates around 1.0500. Aussie and Kiwi undermined by downturn in sentiment - Aud/Usd loses 0.6900+ status, Nzd/Usd wanes from just over 0.6250. Yen rangy following firmer than forecast Japanese retail sales and BoJ Governor Kuroda reaffirming intent to remain accommodative - Usd/Jpy straddles 136.00. Nokkie welcomes oil worker wage agreement with unions to avert strike action, but Sekkie hampered by softer Swedish macro releases pre-Riksbank policy call tomorrow - Eur/Nok probes 10.3000, Eur/Sek hovers around 10.6800. Rand rattled by decline in Gold and ongoing SA power supply problems, but Rouble rallies irrespective of CBR and Russian Economy Ministry divergence over deflation. Central Banks ECB's Lane said there are two-way inflation risks: "on the one side, there could be forces that keep inflation higher than expected for longer. On the other side, we do have the risk of a slowdown in the economy, which would reduce inflationary pressure", via ECB. ECB's Holzmann said "We will have to make an assessment where the economic development is going and where inflation stands and afterwards there’s ample room to hike in 0.25 and 0.5 levels to whatever rate we think, we consider reasonable" via CNBC. ECB's Simkus said if data worsens, then he wants a 50bps July hike as an option, 50bps hike is very likely in September; ECB's fragmentation tool should serve as a deterrent, via Bloomberg. ECB's Herodotou said EZ inflation will peak this year, via CNBC. ECB's Wunsch said government aid may spell more rate hikes, via Bloomberg; 150bps of hikes by March 2023 is reasonable ECB is said to be weighting whether or not they should announce the size and duration of their upcoming bond-buying scheme, according to Reuters sources. Fed's Mester (2022, 2024 voter) said on a path towards restrictive interest rates; July debate between 50bps and 75bps hike, via CNBC. Mester said if inflation expectations become unanchored, monetary policy would have to act more forcefully; current inflation situation is a very challenging one, via Reuters. SARB Governor said a 50bps hike is "not off the table", Via Bloomberg CBR Governor said she does not see risks of deflation; sees room to cut rates; sticking to policy of floating RUB exchange rate. PBoC will step up implementation of prudent monetary policy, will keep liquidity reasonably ample. Fixed Income Bunds unwind all and a bit more of their hefty post-NRW CPI gains as other German states show smaller inflation slowdowns and Spanish HICP soars. Gilts suffer more pronounced fall from grace in relative terms and US Treasuries slip from overnight peaks in sympathy. UK debt and STIRs also await testimony from MPC member elect to see if newbie leans dovish, hawkish or middle of the road 10 year benchmarks settle off worst levels within 147.37-145.14, 112.66-11.85 and 117-12+/116-27 respective ranges awaiting comments from ECB, Fed and BoE heads at Sintra Forum. Commodities WTI and Brent front-month futures traded with no firm direction in early European hours before picking up modestly in recent trade. US Private Inventory (bbls): Crude -3.8mln (exp. -0.6mln), Cushing -0.7mln, Distillate +2.6mln (exp. -0.2mln) and Gasoline +2.9mln (exp. -0.1mln). Norway's Industri Energi and SAFE labour unions agreed a wage deal for oil drilling workers and will not go on strike, according to Reuters. OPEC to start today at 12:00BST/07:00EDT; JMMC on Thursday at 12:00BST/07:00EDT followed by OPEC+ at 12:30BST/07:30EDT, via EnergyIntel. Libya's NOC suspends oil exports from Es Sider port. Spot gold is under some mild pressure as the Buck and Bond yields picked up, with the yellow metal back to near-two-week lows Base metals are mixed but off best levels after President Xi reaffirmed China's COVID stance – LME copper fell back under USD 8,500/t US Event Calendar 07:00: June MBA Mortgage Applications, prior 4.2% 08:30: 1Q PCE Core QoQ, est. 5.1%, prior 5.1% 08:30: 1Q GDP Price Index, est. 8.1%, prior 8.1% 08:30: 1Q Personal Consumption, est. 3.1%, prior 3.1% 08:30: 1Q GDP Annualized QoQ, est. -1.5%, prior -1.5% Central Banks 09:00: Powell Takes Part in Panel Discussion at ECB Forum in Sintra 09:00: Lagarde, Powell, Bailey, Carstens Speak in Sintra 11:30: Fed’s Mester Speaks on Panel at ECB Forum in Sintra 13:05: Fed’s Bullard Makes Introductory Remarks DB's Jim Reid concludes the overnight wrap I'm finishing this off in a taxi on the way to the Eurostar this morning and I made the mistake of telling the driver I was slightly pressed for time. He seems to be taking the racing line everywhere and my motion sickness is kicking in. A little like this car journey, it's been another volatile 24 hours in markets, with a succession of weak data releases raising further questions about how close the US and Europe might be to a recession. That saw equities give up their initial gains to post a decent decline on the day, whilst there was little respite from central bankers either, with sovereign bonds selling off further as multiple speakers doubled down on their hawkish rhetoric. That comes ahead of another eventful day ahead on the calendar, with investors primarily focused on a panel featuring Fed Chair Powell, ECB President Lagarde and BoE Governor Bailey, as well as the flash German CPI print for June, who are the first G7 economy to release their inflation print for the month, which will provide some further clues on how fast central banks will need to move on rate hikes. Just as we go to print the NRW region of Germany has seen CPI print at 7.5% YoY, way below last month's 8.1%. This region is around a quarter of GDP so it could imply the national numbers will be notably softer when we get them later. The energy tax cuts were always going to come through in June so some respite was always possible but at first glance this seems materially below what might have been expected. This comes after a significant sovereign bond selloff in Europe once again yesterday as President Lagarde reiterated the central bank’s determination to bring down inflation, and described inflation pressures that were “broadening and intensifying”. And although Lagarde stuck to the existing script about the ECB raising rates by 25bps at the next meeting, we also heard from Latvia’s Kazaks who said that “front-loading the increase would be a reasonable choice” in the event that the situation with inflation or inflation expectations deteriorates. Lagarde did nod to this in part, saying that if the ECB was “to see higher inflation threatening to de-anchor inflation expectations, or signs of a more permanent loss of economic potential that limits resources availability, we would need to withdraw accommodation more promptly to stamp out the risk of a self-fulfilling spiral.” Separately on fragmentation, Lagarde said that they could “use flexibility in reinvesting redemptions” from PEPP starting July 1 in order to deal with the issue. For now, overnight index swaps are only pricing in a +31.3bps move in July from the ECB, so still closer to 25 than 50 for the time being. Meanwhile the rate priced in by year-end rose also by +7.9bps as investors interpreted the comments in a hawkish light. That supported a further rise in yields, with those on 10yr bunds up another +8.1bps yesterday, following on from their +10.7bps move in the previous session. That’s now almost reversed the -21.9ps move over the previous week, which itself was the third-largest weekly decline in bund yields for a decade, and brought the 10yr yield back up to 1.63%, so not far off its multi-year high of 1.77% seen last week. A similar pattern was seen elsewhere, with 10yr yields on 10yr OATs (+9.6bps), BTPs (+4.2bps) and gilts (+7.2bps) all moving higher too. Things turned near the European close with some poor US data releases piling on to some lacklustre confidence figures in Europe. Earlier in the day the GfK consumer confidence reading from Germany fell to -27.4 (vs. -27.3 expected), taking it to another record low. Separately in France, consumer confidence fell to 82 on the INSEE’s measure (vs. 84 expected), which we haven’t seen since 2013. Then in the US, the Conference Board’s measure fell to 98.7 (vs. 100.0 expected), which is the lowest since February 2021. The Conference Board’s one-year ahead inflation expectations hit a record high of 8.0%, surpassing the June 2008 record of 7.7%, adding to the pessimism. Along with waning confidence, the Richmond Fed’s Manufacturing Index registered a -19, its lowest since the peak onset of the pandemic, versus expectations of -7 and a prior of -9, showing that production data has weakened as well. This put a serious damper on risk sentiment which drove Treasury yields and equities lower intraday during the New York session. 10yr Treasury yields ended down -2.8bps after trading as much as +5.5bps higher during the European session. They are down another -4bps this morning. Concerningly as well, there was a fresh flattening in the Fed’s preferred yield curve indicator (which is 18m3m – 3m), which came down another -9.1bps to 165bps, which is the flattest its been since early March. With that succession of bad news helping to dampen risk appetite, US equities gave up their opening gains to leave the S&P 500 down -2.01% on the day. Tech stocks saw the worst losses, with the NASDAQ (-2.98%) and the FANG+ (-3.74%) seeing even larger declines. And whilst there was a stronger performance in Europe, the STOXX 600 ended the day up just +0.27%, having been as high as +0.95% in the couple of hours before the close. We didn’t hear so much from the Fed ahead of Chair Powell’s appearance today, although New York Fed President Williams said that at the upcoming July meeting “I think 50 to 75 is clearly going to be the debate”. Markets are continuing to price something in between the two, although since the last Fed meeting futures have been consistently closer to 75 than 50, with 69.0 bps right now. Those sharp losses in US equities are echoing across Asia this morning. The Hang Seng (-1.86%) is leading the losses followed by the Kospi (-1.82%), the Nikkei (-1.07%) and the ASX 200 (-1.06%). Over in mainland China, the Shanghai Composite (-0.77%) and the CSI (-0.80%) are slightly out-performing after yesterday’s surprise move by China to slash the quarantine period for inbound travellers (more on this below). Looking ahead, US stock index futures point to a positive opening with contracts on the S&P 500 (+0.18%) and NASDAQ 100 (+0.19%) mildly higher. Earlier today, data released showed that Japan’s retail sales advanced for the third consecutive month in May (+3.6% y/y) but lower than the consensus of +4.0%, but with the previous month's data revised up to +3.1% (vs +2.9% preliminary). Meanwhile, South Korea’s consumer sentiment index (CSI) fell sharply to 96.4 in June (vs 102.6 in May), sliding below the long-term average of 100 for the first time since Feb 2021. Separately, Australia’s retail sales put in another strong performance as it climbed +0.9% m/m in May, surpassing analyst estimates of a +0.4% increase. Oil has fallen back slightly overnight after three sessions of gains with Brent futures down -0.84% at $116.99 and WTI futures (-0.64%) at $111.04/bbl as I type. Just after we went to press yesterday, it was also announced that China would be shortening the required quarantine period for inbound travellers to one week from two. So although China is still very-much committed to a Covid-zero strategy for the time being, this step towards loosening rather than tightening restrictions is an interesting development that helped support Chinese equities in yesterday’s session towards the close which filtered through into early northern hemisphere risk performance. In terms of other data yesterday, there were signs that US house price growth might finally be slowing somewhat, with the S&P CoreLogic Case-Shiller index up by +20.4% in April, which is down slightly from the +20.6% gain in March. So still a long way from an absolute decline, but that marks a reversal in the trend after the previous 4 months of rises in the year-on-year measure. To the day ahead now, and the highlight will likely be the panel at the ECB Forum that includes Fed Chair Powell, ECB President Lagarde and BoE Governor Bailey. We’ll also be hearing from ECB Vice President de Guindos, the ECB’s Schnabel, the Fed’s Mester and Bullard, and the BoE’s Dhingra. On the data side, releases include German CPI for June, Euro Area money supply for May, and the final Euro Area consumer confidence reading for June. From the US, we’ll also get the third reading of Q1 GDP. Tyler Durden Wed, 06/29/2022 - 08:00.....»»

Category: smallbizSource: nytJun 29th, 2022

Saint Joseph’s Medical Center Joins with City, County and State Officials to Celebrate Grand Opening of Landy Court Apartment Building

Saint Joseph’s Medical Center President Michael Spicer and Saint Joseph’s Medical Center Chairman James Landy joined today with Yonkers, Westchester County and New York State officials on June 9 for a ribbon-cutting ceremony to celebrate the grand opening of Landy Court, an affordable apartment building located at 10 School Street... The post Saint Joseph’s Medical Center Joins with City, County and State Officials to Celebrate Grand Opening of Landy Court Apartment Building appeared first on Real Estate Weekly. From left, Councilwoman Corazon Pineda Isaac; Westchester County Executive George Latimer; Yonkers Deputy Mayor Anthony Landi; Assemblyman Nader Sayegh; Ralph Fasano, CEO Concern Housing; Saint Joseph’s Medical Center President & CEO Michael Spicer; Saint Joseph’s Medical Center Chairman James Landy; Mr. Landy’s wife, Nancy Landy; City Council President Lakisha Collins-Bellamy; Dr. Ann Sullivan, Commissioner of New York State Office of Mental Health; Ruthanne Visnauskas, Commissioner of the NYS Division of Housing and Community Renewal, and Brenda McAteer, Assistant Director, New York State Office of Temporary and Disability Assistance. Saint Joseph’s Medical Center President Michael Spicer and Saint Joseph’s Medical Center Chairman James Landy joined today with Yonkers, Westchester County and New York State officials on June 9 for a ribbon-cutting ceremony to celebrate the grand opening of Landy Court, an affordable apartment building located at 10 School Street in downtown Yonkers. The 7-story building features 32 efficiency one- and two-bedroom affordable housing units for individuals and families who meet the affordable housing guidelines. The building also has 48 efficiency units of supportive housing. Referrals for the supportive housing units will come from the Westchester County Single Point of Access program which is coordinated through Westchester County’s Department of Community Mental Health. Amenities at Landy Court include roof-top garden; fitness center; large community rooms; library/computer and laundry facilities. The $49 million Landy Court was co-developed in partnership with Concern Housing, Inc and CSD Housing LLC. Participation by the following funders and government agencies made this project a reality: NYS Office of Mental Health; NYS Housing Finance Agency; NYS Housing and Community Renewal; NYS Homeless Housing and Assistance Corporation; Dormitory Authority State of New York; The Richman Group; and Bank of America. “Saint Joseph’s affordable and supportive housing meets a significant need in our community. The affordable housing provides an attractive, new permanent place to live for local individuals and families who meet the qualifications. The 48 supportive apartments will meet the needs of those individuals who have demonstrated the ability to live independently in the community with on-site support services. This program is designed to offer support and assistance to help individuals maintain skills of daily living and foster successful integration in the community,” said Saint Joseph’s Medical Center President and CEO Michael Spicer. “Congratulations to Saint Joseph’s Medical Center on the vision and completion of this wonderful addition to our city’s housing stock,” said Yonkers Mayor Mike Spano. “Saint Joseph’s has long been a cornerstone of our community and this project demonstrates their continued commitment to the needs of our residents, providing new, quality affordable housing.” OMH Commissioner Dr. Ann Sullivan said, “Landy Court will provide people living with mental illness with the on-site services and the safe and stable homes they need to live full and productive lives in their own communities. This is a great addition to downtown Yonkers and another example of Governor Hochul’s commitment to helping vulnerable New Yorkers, and we at OMH are proud to have played a role in its construction.” The building is named after James J. Landy who has served as Chairman of the Board of Saint Joseph’s Medical Center since 1991 and has long been an advocate for affordable and supportive housing. The post Saint Joseph’s Medical Center Joins with City, County and State Officials to Celebrate Grand Opening of Landy Court Apartment Building appeared first on Real Estate Weekly......»»

Category: realestateSource: realestateweeklyJun 12th, 2022

Tony Estanguet, President of Paris 2024, Wants to Redefine the Legacy of the Olympic Games

Estanguet is tasked with ensuring the 2024 Olympics are free of scandal, economic woes, and bitter regrets Editor’s note: TIME is now accepting submissions for its annual Best Inventions list, which recognizes products, software and services that are solving compelling problems in creative ways. Submit your invention for consideration here. (To receive weekly emails of conversations with the world’s top CEOs and business decisionmakers, click here.) When Paris won the bid to host the 2024 Olympics five years ago, the International Olympic Committee (IOC) rejoiced at least as much as Parisians. The list of cities vying to host the Olympic Games had shrunk to near zero, after previous hosts like Athens and Rio were left heavily in debt and the event had been marred by decades of sexual abuse and corruption scandals. [time-brightcove not-tgx=”true”] Now, with the Paris Games just two years away, there finally seems a chance to halt the decline, and reclaim some of the glory of the “Olympic movement,” as the IOC calls it. The task lies in the hands of Tony Estanguet, president of the Paris Olympics 2024. Despite having to navigate a global pandemic, an economic downtown and a war in Europe while planning the Games, the 44-year-old French canoeist and three-time gold medalist, seems to have an optimistic smile permanently planted on his face. Some changes from previous Olympics already seem clear. The vast operation—akin to launching a multinational corporation, and then disbanding it a few years later—is not headquartered in Paris’s glittering center, but in the immigrant-heavy suburb of Seine-Saint-Denis, the poorest district in all of France. Its budget is a modest four billion euros (about $4.2 billion)—a tiny fraction of the $30 billion Tokyo spent hosting the Olympics last year. That is because about 95% of the sporting venues Paris needs to host the Games already exist. The Olympics have come to define Estanguet’s life: he won gold in Sydney in 2000, Athens in 2004 and London in 2012, something that seemed wildly improbable when he was growing up in the provincial Pyrenées town of Pau, that seemed wildly improbable. His three young sons, he says, are now ardent athletes. The weight of expectation is heavy on Estanguet’s shoulders. It will be important for the Lausanne, Switzerland-based IOC that the 2024 Olympics are free of scandal, economic woes, and bitter regrets. TIME sat down with Estanguet in the Paris Olympics headquarters, to discuss what is needed to pull that off. (For coverage of the future of work, visit and sign up for the free Charter newsletter.) (This interview has been edited and condensed for clarity.) Is the IOC going to get the image makeover it needs with Paris 2024? My role is to keep the best of the Games. We need also to improve the rest, to adapt to what we are living at the moment. I’m not an expert in finance, I’m not an expert in construction, I’m not an expert in politics. But I know sport, and more than ever, I believe sport can play a big role in our society. We have economic crises, health crises, big, big, big issues. Sport is a fantastic way to bring people together, to inspire, and to allow people to live their life in a positive manner. So what’s different here? This will be completely different from the past Games. I think it is a turning point for the IOC, for the Olympic movement, to change their minds about the philosophy and the legacy that the Games should leave. It’s no longer in the number of buildings that you will build. It’s more about how you use this unique moment to inspire, to gather people, to send a message to the world that we still need some moment of unity, of peace, of sport. You’re planning to have the opening ceremony [on July 26, 2024] on boats along the Seine, going all through the center of Paris. That’s really unusual. It’s the first time that the opening ceremony will be outside a stadium. That’s important because we want to demonstrate that the Games will be unique and different. Paris 2024 has to be spectacular. We need to use its monuments, its culture, its history. Of course, it’s difficult to deliver this kind of ceremony. We have 878 competitions to deliver. And every competition is big. There’s also the athletes’ village with 200 countries living together. (For coverage of the future of work, visit and sign up for the free Charter newsletter.) Has Paris ever hosted such an event? Never, never, never. It’s hugely complex. It’s 208 countries, 15,000 athletes, 20,000 journalists, 13 million spectators. It will be the biggest event that France has ever organized. The Paris 2024 logo is a woman’s face around the flame. It’s been really controversial. Many people thought it was sexist. I’m proud that it’s a human face, and it’s a woman’s face, because for the first time, we will have the same number of athletes—women and men. We will have parity. And I’m so proud of the fact that for the first time we are able to have the same logo for the Olympics and Paralympics. You’ve had a big sporting career, and now you’re having to negotiate with governments and CEOs. How strange has that switch been for you? I became an athlete in canoeing, doing canoeing twice a day, every day, and after 20 years of training, I decided to stop. It’s always a challenge to find a new career, and when I’ve been proposed to be involved in this, it was a fantastic challenge. In the morning I’m involved with the international federation or with athletes. Then I have to meet with a business company to try to bring them on board. We are a private organization, financed 98% from private money. You are still fundraising? How much have you raised so far? €4 billion is the total budget of Paris 2024. We’ve already secured two-thirds of it, independent of COVID. When we created the organizing committee, we set some objectives: By the end of 2021, we were supposed to be at 60%, and we had the objective to be at 80% by the end of 2022. It is going well, because I believe this project has succeeded in maintaining a high level of ambition. Paris lost five previous bids to host the Olympics. What went wrong? On every attempt, we improved the proposal. The major change was between the bid for 2012 [which was won by London] and now. We increased the number of sportspeople involved, including me. The director general is also an Olympian,as are the director of sport, and the director of technology. We have a strong DNA coming from sportspeople. I can choose my team, and I decided who I wanted to work with. Of course, I have businesspeople, people from finance, because I need them to maintain the budget. But I guaranteed that I would also have sports people in the organization. It’s not a political organization. It’s a sports competition organization. Yes, but you have been thrown into politics. You supported the idea of banning the participation of Russia’s and Belarus’ athletes in 2024. It’s not yet decided, right? It’s not my role to make these decisions, it’s the IOC’s decision. But of course, in recent months I supported the position of the international sports movement, to try to apply pressure. There is this international dynamic, trying to fight against the war. And that’s something strong that we’re able to deliver, in a way. It’s not our role to be involved in these political matters. But I’m proud that we’re also able to contribute to the international dynamic. Russian athletes were allowed to compete in Tokyo, but not under Russia’s national flag, because of the doping scandal. It has been so ambiguous and confusing. At what point do you need to make a decision about Russia’s participation in Paris in 2024? The qualification system for the different countries to be able to participate will start this summer and end one month before the Olympic ceremony in July 2024. We have time, we are not under pressure. I think the priority at the moment is not to know if Russia will participate or not in Paris 2024. It’s more about when this conflict will end, and how we can contribute to a positive end with this war. That’s the major priority. I assume you’ve had some pretty anxious times since you got the job in 2017. The pandemic completely disrupted the Tokyo Olympics. And now we have a war in Europe. What kind of contingency plans have you made, if the war spreads, or there’s another global pandemic? We have to remain flexible and meditative. I’ve been impressed by our Japanese colleagues who were able to postpone the project for a year. It’s so complex to fix everything. There are solutions., You have to keep in mind as an athlete that, until the end, you will face challenges, you have to remain open and to adapt yourself to the context. I think we have to be prepared for that mentally. You’ve also situated yourself in the heart of Seine Saint-Denis, the poorest part of all of France. Why? When we decided to bid for the Games, we had this mindset, a vision: We want the legacy to be different. Not a legacy of having fantastic venues, but how this project can help a population. We have education programs, we have an approach in terms of employment and the tenders, we will involve the local businesses. Here in Seine Saint-Denis two-thirds of the employees are local people. The volunteer program will offer different opportunities for the population here. You have about one-tenth of the budget that the Tokyo Olympics had. When you go out and speak to big business now—when things aren’t going well economically—do you have to make a hard sell to get them on board? We already have 95% of existing venues. We’ll build 10 times less than the past edition of the Games. For business, they know it’s a unique opportunity: In terms of exposure, in terms of motivation for people working in the company, it’s just unique to be involved in the Olympic torch relay, to be volunteering, to be involved in organizing the Games. Many of them use it internally, as a strong vehicle to recruit people. For business it’s really a challenge to keep the best talent, and these kinds of projects are very important. They also benefit from the billions that will be invested. So for instance, [French energy giant] EDF is our partner. They will benefit because we will use their electricity, And after they will be able to demonstrate they are able to provide 100% from sustainable energy. 100% sustainable? Yes, green electricity will be used for the Games. We’ve promised to cut the carbon footprint in half from the London Olympics in 2012: That was the reference, the greenest Olympics until now. We’re building 10 times fewer venues, we will use public transportation, with all competition venues in public transportation-accessible areas. We are adding more local food. We’re already working with different companies to develop a new approach. Less meat, more vegetarian—a really new approach. Are you a vegetarian yourself? It’s very un-French not to eat meat. Ha! Not completely, but I reduced meat a lot. My team has educated me. I’m flexitarian. Parisians complain a lot. But so far they support the Olympics. Yet you do hear complaints, most strongly about the whole redesign of the city. Blocking the Trocadero and the Champs-Elysées [key areas around the Arc de Triomphe and the Eiffel Tower] to traffic. People link that to the Olympics, even though the plan came in before Paris won the 2024 Games. We have not imposed any long-term project for the use of the Games. We will use those areas, just temporarily, and the same conditions we will take it will not impact on the Games, except the two months of use. It is the vision of the Mayor of Paris [Anne Hidalgo], who has been elected with a clear vision of reducing cars and adding more places for bicycles. We just have to respect it. Many of those projects were decided in 2010, and were supposed to be delivered by 2020, then 2022, then 2023. People have become pretty cynical about the Olympics. It’s seen as wasteful. The number of cities wanting to host the Games is very small. Do you hope or believe Paris will have an impact on how people think about the Olympics? Of course I wish for it. I believe it’s needed in our society. It’s important to have this moment of gathering the world, an inspiring, positive moment. It’s had a big impact on my life, and I’m sure it can have a big positive impact on many lives. This will be the third edition of the Paris Games: There was 1900, 1924, now 2024. A hundred years ago there were 14 countries competing. So we have Paris 2024, Los Angeles 2028, Brisbane 2032. That’s a very different set of cities that we have had the last 20 years or so, with Beijing, Rio, Sochi. What needs to change in the Olympics? The Olympics is a relay race. You build from the success or the previous ones. The Olympic movement’s strength is its universality. We need to bring sport across the planet, everywhere. That’s also a message of our concept in Paris 2024: Sport has to be spectacular. Sport has to be everywhere, not just in the stadium. We will be in the Chateau Versailles. We will be in museums. We will be in the streets. We will be everywhere. That’s really a vision of how sport can have an impact on society, by being everywhere. It’s good that we have a new chapter, in France, then the U.S. and Australia. I’m sure that those three countries will add something different—some new creativity and some new technology, probably. Subscribe to The Leadership Brief by clicking here......»»

Category: topSource: timeJun 5th, 2022

Futures Rise For The First Time This Week As Oil Slumps

Futures Rise For The First Time This Week As Oil Slumps US futures advanced for the first time this week, as investors tentatively bought the dip and were cheered by a drop in oil prices. S&P 500 futures were 0.6% higher by 7:30 am in New York, while Nasdaq 100 futs gained 0.7%. Already light trading volumes are even lower, with UK markets shut for a long weekend holiday to mark Queen Elizabeth II’s Platinum Jubilee. Stocks slumped Wednesday after JPMorgan CEO Jamie Dimon’s warning to investors to prepare for an economic “hurricane”, reversing his cheerful comments from just one week earlier, and disagreeing with JPMorgan’s permabullish strategist, Marko Kolanovic, who expects stocks to rebound by the end of the year and the US to avoid recession. Treasuries held losses, with 10-year yields above 2.90%. The dollar slipped while the yen held near 130 per dollar after its recent decline on the prospect of widening interest rate differentials with the US. Oil dropped on a rehashed report - this time from the FT which echoed an almost verbatim report from the WSJ one day earlier - that Saudi Arabia could pump more crude should Russian output drop substantially due to increasing sanctions over its invasion of Ukraine. It could, of course, but it won't for various reasons we will discuss in a post shortly. In any case, OPEC+ meeting members are set to meet Thursday for their monthly gathering where no break up of OPEC+ is going to happen. It seems that #OPEC+ will continue its current policy of monthly increases until September, after which, depending on the market conditions, production limits will be lifted. In any case, we expect to see another lackluster meeting, as in previous months./3 #OOTT — Reza Zandi (@R_Zandi) June 2, 2022 Oil’s decline helped to steady sentiment after US manufacturing activity and job openings data Wednesday fueled concern the Federal Reserve will need to get more restrictive to slow runaway price gains. “There’s been a large correction in some stocks; those corrections led to valuations that are way more attractive that can benefit medium-to long-term investors, especially in Europe and the emerging-markets space,” Vanguard Asset Services Ltd. Investment Strategist Giulio Renzi Ricci said on Bloomberg TV, summarizing prevailing sentiment among the BTFD crowd. In premarket trading, bank stocks are higher as the US 10-year Treasury yield rises for a third straight day to about 2.91%. Elsewhere, Repare Therapeutics will be in focus as shares soared 20% in postmarket after it announced a worldwide license and collaboration agreement with Roche for Camonsertib, while GameStop reported mixed results in the first quarter as it shifts to cryptocurrencies and non-fungible tokens. In corporate news, tech-bloated hedge fund Tiger Global Management’s losses for the year reached 51.8% amid turbulent markets. Here are some other notable premarket movers: Hewlett Packard Enterprise (HPE US) drops as much as 8.1% in US premarket trading on Thursday after the computer hardware and storage company lowered its adjusted earnings per share forecast for the full year. Chewy (CHWY US) shares are up 16% in pre- market trading after the online pet products retailer reported quarterly adjusted Ebitda and net sales that topped analysts’ expectations. Jefferies called the results “impressive.” NetApp Inc. (NTAP US) shares gained in extended trading Wednesday. Analysts remain cautious about the outlook for the cloud business after the storage hardware and software company reported adjusted fourth-quarter earnings that were higher than analysts’ expectations. Inc. (AI US) tumbled 22% postmarket after the AI software company forecast revenue for fiscal 2023 that fell short of estimates. Piper Sandler’s analyst Arvind Ramnani cut his recommendation to neutral from overweight. Veeva (VEEV US)shares advanced 4.2% in postmarket trading Wednesday as it lifted its revenue forecast for the full year. Investors have been on edge over when (not whether) the US central bank’s tighter policies will induce a recession. A chorus of Fed officials has fallen behind calls to keep hiking to counter price pressures. Mary Daly of the San Francisco Fed and her more hawkish colleague James Bullard of St. Louis both backed a plan to raise rates by 50 basis points this month, while Richmond’s Thomas Barkin said it made “perfect sense” to tighten policy. “We do see the rise in probability of a recession in the second half of this year, potentially persisting into 2023 as the Fed continues to battle inflation,” Tracie McMillion, Wells Fargo Investment Institute head of global asset allocation strategy, said on Bloomberg Television. In Europe, the Stoxx 600 Index advanced amid low session volumes with the London market closed in commemoration of the Queen’s Jubilee festivities. Here are some of the biggest European movers today: Remy Cointreau shares advance as much as 5.6% after the spirits company reported FY earnings that Morgan Stanley called “reassuring.” Peer Pernod Ricard also climb, as much as 3.1%. Calliditas Therapeutics rise as much as 16% after Pareto Securities initiated with a buy recommendation, calling the Swedish biotechnology firm “highly undervalued” and a potential acquisition target. European energy stocks underperformed as oil slipped following a report that Saudi Arabia is ready to pump more should Russian output decline substantially. Earlier in the session, Asian markets were dragged lower by the technology sector, as strong US economic data bolstered the case for aggressive interest-rate hikes by the Federal Reserve. The MSCI Asia Pacific Index dropped as much as 1.2% as most sectors fell, with tech shares including TSMC and Alibaba among the biggest drags. South Korea led declines in the region as traders returned from a holiday, while China stocks eked out gains after authorities urged banks to set up a 800 billion yuan ($120 billion) line of credit for infrastructure projects.  An unexpected advance in US manufacturing activity and still-high job openings added to investor concerns about monetary tightening in the country and its impact on global growth. James Bullard of the St. Louis Fed urged policy makers to raise interest rates to 3.5% this year to try and curb inflation. The US policy outlook adds to pressure on Asian firms, whose earnings prospects have dimmed on higher costs and China’s economic slowdown. The MSCI regional benchmark is down 13% this year, largely tracking the S&P 500’s 14% loss. “We do think near term it’s likely to be bumpy,” Sunil Koul, Apac equity strategist at Goldman Sachs, told Bloomberg Television. “This combination of quantitative tightening, raising rates, combined with some growth risks we are seeing and a stronger dollar is what is causing pain in the markets.” Japanese stocks fell as the persistent risk of global inflation and the prospects of tighter monetary policy in the US damped sentiment.  The Topix closed 0.6% lower at 1,926.39 at the 3pm close in Tokyo, while the Nikkei 225 declined 0.2% to 27,413.88. Sony Group contributed the most to the Topix’s decline, decreasing 3.2%. Out of 2,171 shares in the index, 675 rose and 1,402 fell, while 94 were unchanged. “There are still worries over inflation in the US and rate hikes, so it will be quite hard for stocks to enter an upward trend,” said Hitoshi Asaoka, a senior strategist at Asset Management One.  Stocks in India overcame concerns over hawkish central bank moves to snap two days of declines as a drop in oil prices and attractive valuations buoyed investors. The S&P BSE Sensex rose 0.8% to 55,818.11 in Mumbai, while the NSE Nifty 50 Index advanced 0.6%. Reliance Industries provided the biggest boost to the key gauges, surging 3.5%, followed by software majors Infosys and Tata Consultancy Services.  Of the 30 member stocks on the Sensex, 20 rose, while 10 declined. All but four of the 19 sectoral indexes compiled by BSE Ltd., rose, led by a measure of energy companies. Stocks in Asia were mostly lower after strong US economic data bolstered the case for aggressive interest-rate hikes by the Federal Reserve. However, the trend soon changed as investors assessed attractive valuations, while crude oil slid to $113 a barrel before the monthly OPEC+ meeting later today. “Nifty valuations are now at a sweet spot where they offer good potential returns,” DSP Mutual Fund said in note. About half of the NSE Nifty 500 Index’s members have corrected more than 30%, which creates selective opportunities, the asset manager said. In Australia, the S&P/ASX 200 index fell 0.8% to close at 7,175.90, following US shares lower after Fed officials reinforced a hawkish stance and JPMorgan’s Jamie Dimon cautioned on the economy. Megaport led a drop in technology shares. Woodside was the top performer after a block trade. In New Zealand, the S&P/NZX 50 index fell 0.2% to 11,349.54. In FX, the Bloomberg Dollar spot Index fell as the greenback traded weaker against all of its Group-of-10 peers. The euro snapped two days of losses and approached $1.07. One-week options in euro-dollar now capture the next ECB meeting, and implied volatility in the euro heads for its strongest close since mid-May. The pound retraced about half of Wednesday’s loss, with UK markets shut for a holiday. Australia’s bonds dropped amid speculation that the Reserve Bank of Australia will follow its Canadian counterpart and keep raising rates aggressively. The yen fell to a three-week low before reversing losses. US Treasuries were flat in early US trading as equity futures rose for the first time this week. The 10Y Yield is trading unch at 2.91%, outperforming most euro-zone counterparts, with 2- to 5-year yields cheaper by 1bp-2bp with 10- to 30-year yields little changed, flattening 5s30s by ~2bp. IG dollar issuance slate empty so far; nine borrowers priced $14.6b Wednesday, largest daily total since May 17. European bonds posted modest losses after a steady start. As noted above, crude oil slid on a report that Saudi Arabia is ready to pump more oil if Russian output declines. OPEC+ is scheduled to meet to discuss supply policy, where it is not expected to surprise anyone. At last check, Brent was trading just above $113, and although the benchmark lifted around $1/bbl off of its overnight troughs, this has marginally pulled back. Looking at the day ahead, the economic data slate includes May Challenger job cuts (7:30am), ADP employment change (8:15am), 1Q final nonfarm productivity and initial jobless claims (8:30am) and April factory orders (10am). Fed speakers slated include Logan (12pm) and Mester (1pm). Market Snapshot S&P 500 futures up 0.5% STOXX Europe 600 up 0.5% MXAP down 0.7% to 167.84 MXAPJ down 0.8% to 552.13 Nikkei down 0.2% to 27,413.88 Topix down 0.6% to 1,926.39 Hang Seng Index down 1.0% to 21,082.13 Shanghai Composite up 0.4% to 3,195.46 Sensex up 0.8% to 55,825.08 Australia S&P/ASX 200 down 0.8% to 7,175.94 Kospi down 1.0% to 2,658.99 German 10Y yield up 2bps to 1.21% Euro up 0.4% to $1.0689 Brent futures down 2.3% to $113.65/bbl Gold spot up 0.3% to $1,851.88 U.S. Dollar Index down 0.3% to 102.23 Top Overnight News President Joe Biden is likely to visit Saudi Arabia later this month as part of an international trip for NATO and Group of Seven meetings, according to people familiar with the matter, with record high US gas prices weighing on his party’s political prospects The ECB must pare back stimulus as inflation is too strong and too broad, Governing Council member Francois Villeroy de Galhau said EU efforts to approve a partial ban on Russian oil imports hit an obstacle after Hungary raised new or already rejected demands, further slowing a push to clinch a deal, according to people familiar with the negotiations The pound is coming off the first positive month of 2022, but the mood in the market is as bleak as ever. Scorching inflation, an economy teetering on the edge of recession and a scandal-prone government are feeding into a view that the UK currency is vulnerable After years of pushing exports to China and building up energy links to Russia, Germany’s economy faces a poisonous cocktail of risks. Its heavy reliance on manufacturing makes it more vulnerable than European peers to war-related disruptions in Russian energy supplies and bottlenecks in trade. The upshot is risk of contraction and even higher prices squeezing unsettled consumers Beijing is turning to state-owned policy banks once again to help rescue an economy under strain, ordering them to provide 800 billion yuan ($120 billion) in funding for infrastructure projects Chinese officials have vowed to carry out a slew of government policies to stimulate growth following Premier Li Keqiang’s recent call to avoid a Covid- fueled economic contraction this quarter A more detailed look at global markets courtesy of Newsquawk Asia-Pac stocks followed suit to the subdued performance seen in global peers after the recent upside in yields and hawkish central bank rhetoric. ASX 200 was dragged lower by underperformance in tech and weakness in financials, with sentiment also not helped by frictions with China. Nikkei 225 lacked firm direction with automakers indecisive following sharp declines in their US sales last month. Hang Seng and Shanghai Comp traded mixed ahead of the Dragon Boast Festival tomorrow and with Hong Kong suffering from notable losses in property names and tech, while losses in the mainland were pared amid COVID-related optimism and after the latest support efforts in which Beijing announced CNY 800bln of increased credit quotas for state-owned policy banks to fund the construction of infrastructure projects. Top Asian News China's Ambassador to Australia said that Beijing is prepared to talk with Australia without preconditions but added that trade sanctions on Australia will not be removed until there is an improvement in the political relationship, according to AFR. China's Global Times tweeted that Chinese Coast Guard vessels patrolled the territorial waters off the Diaoyu Islands (Senkaku Islands) on Thursday, which is a disputed territory with Japan. Japan's Chief Cabinet Secretary Matsuno confirmed that the government wants to increase the average minimum wage to JPY 1000, according to Reuters. China's Commerce Ministry, on the US considering adding additional firms to the blacklist, says they will adopt measures to protect Chinese firms. A group of nations are to make a request for an international labour organisation mission to China to probe alleged violation in Xinjiang at a meeting today, according to Reuters sources. Chinese Officials Vow to Carry Out Plans for Economic Stimulus Toshiba Reveals Buyout Bids as Privatization Chances Rise Hong Kong Quarantine Backtrack Stokes Fears of Covid Zero Return European bourses are posting modest gains, Euro Stoxx 50 +0.6%, though volumes are lighter given UK Spring Bank Holiday. Stateside, futures are firmer across the board, ES +0.5%, with action similarly contained ahead of a busy PM docket featuring ADP and Fed's Mester. Top European News Deutsche Bank CEO’s Fixer Hoops Takes Another Leap as DWS Chief Ukraine Latest: Russia Ready to Settle Eurobond Payment Claims Euro Options Into ECB Meeting Are Now Most Overpriced in a Month Swiss Exchange Investigates Swissquote for Disclosure Delay FX Pound pounces on Dollar downturn to reclaim 1.2500 handle as UK prepares for Platinum Jubilee celebrations. DXY sub-102.500 amidst broad bounce in index components led by Franc initially; USD/CHF reverses around 0.9600 axis in wake of Swiss inflation data showing bigger overshoot vs SNB targets. Euro eyes 1.0700, but capped by hefty option expiry interest from round number up to 1.0740. Kiwi and Aussie boosted by recovery in risk sentiment, but Loonie lags as WTI sags on reports of Saudi Arabia standing ready to cover any shortfall in Russian oil output; NZD/USD probes 0.6500, AUD/USD approaches 0.7200 and Usd/Cad 1.2650+ Yen retrieves some losses as Greenback retreats and US Treasury yields slip from peaks ahead of busy pm agenda, USD/JPY circa 129.70 compared to 130.24 overnight peak. Fixed Income Bunds and Eurozone peers extend recent losing streak to set deeper cycle lows in futures/high yields, without Liffe support and despite steady US Treasuries. 10 year German benchmark down to 150.29 and 1.21%+ in cash terms. Multi-tranche Spanish and French issuance draw mixed covers irrespective of concession. T-note holds around par within 118-30+/18+ range awaiting slew of US data and more Fed speakers. Commodities WTI and Brent remain pressured after overnight FT reports re. Saudi being prepared to pump more oil if Russian output declines. Though, the benchmarks have lifted around USD 1/bbl off of their respective overnight troughs at best; however, this has marginally pulled back. Reminder, the JMMC commences from 13:00BST/08:00ET with the OPEC+ event following ~30-minutes later. US Private Energy Inventory Data (bbls): Crude -1.2mln (exp. -1.4mln), Gasoline -0.3mln (exp. +0.5mln), Distillate +0.9mln (exp. +1.0mln), Cushing +0.2mln. Norway's Hammerfest liquefied natural gas plant has restarted LNG production following a fire 20 months ago, according to Equinor (EQNR NO). Spot gold is bid but has failed to gain much additional traction after breaching USD 1850/oz and the 10-DMA at USD 1851.3/oz; base metals are bid ahead of the long Chinese weekend for Dragon Boat Festival. US Event Calendar 8:15am: U.S. ADP Employment Change, May, est. 300k, prior 247k 8:30am: U.S. Initial Jobless Claims, May 28, est. 210k, prior 210k; Continuing Claims, May 21, est. 1340k, prior 1346k 8:30am: U.S. Nonfarm Productivity, 1Q F, est. -7.5%, prior -7.5% 10am: U.S. Durable Goods Orders, April F, est. 0.4%, prior 0.4% 10am: U.S. Factory Orders, April, est. 0.6%, prior 2.2%, revised prior 1.8%; -Less Transportation, April F, est. 0.3%, prior 0.3% 10am: U.S. Cap Goods Orders Nondef Ex Air, April F, est. 0.4%, prior 0.3% 10am: U.S. Cap Goods Ship Nondef Ex Air, April F, no est., prior 0.8% DB's Tim Wessel concludes the overnight wrap Filling in while the UK is on holiday, I hope my use of “Z’s” and neglect of “U’s” does not prove jarring to regular readers. The start of the month was jarring to many asset holders, as bond and equities both sold off with more evidence that labor markets are historically tight while inflation remains well above target. Meanwhile, the Fed’s beige book provided anecdotes of slowing growth in some districts, while a majority of districts had respondents expecting growth to slow in the near future. St. Louis Fed President and Hawk Emeritus James Bullard joined San Francisco Fed President to echo previous Fed communications that policy would expeditiously get to neutral, while the CEO of J.P. Morgan gave the gloomy growth narrative his imprimatur. The mix drove policy pricing higher and all but one sector in the S&P lower. North of the border, the Bank of Canada hiked rates another +50bps, layering hawkish guidance into the statement such as “the risk of elevated inflation becoming entrenched has risen.” While in Europe, ECB Governing Council member Holzmann sang the virtues of a +50bp hike (in line with our Europe team’s updated ECB call, found here). Stepping through the developments. The rate selloff began in earnest following the mid-morning data dump in the US, which included May ISM manufacturing and April JOLTS data. The ISM print surprised to the upside at 56.1 versus expectations of 54.5, while prices paid printed at 82.2 versus expectations of 81.0. Meanwhile, the JOLTS data across quits, hiring, and opening painted an historically tight labor market picture, with the vacancy yield (hires-per-job opening) hitting a record low. The March revisions also leaned tighter. The data re-emphasized that policy would need to get much tighter to do the work of actually bringing inflation down despite bubbling fears that the growth outlook was on shaky footing. The Treasury curve sold off and flattened, with 2yr yields gaining +8.5bps and the 10yr yield increasing +6.2bps, with real yields gaining +6.1bps in line with the tighter expected policy path. Two of the more germane policy path questions – how to size the September hike and what is terminal – moved tighter, in turn. The odds of a +50bp September move reached a month-high 65%, while terminal pricing moved back north of 3.1%. Presidents Bullard and Daly, typically taking opposing corners in the ideological ring, both re-emphasized the need to tighten policy expeditiously to neutral in light of runaway inflation. While policymakers debate where neutral is and what to do once there, support to get there fast is robust; it is best to heed their harmonious message the next time growth fears or falling risk assets drive policy pricing lower. Balance sheet policy will augment tightening as June marks the start of the Fed’s balance sheet normalization process, or QT. For more details on what that entails, I published a playbook on QT in conjunction with US rates and economics colleagues, found here. Steeper policy paths gripped north of the border and across the Atlantic as well. On the latter, Austrian central bank governor Holzmann said that “a 50 basis-point rise would send the necessary clear signal that the ECB is serious about fighting inflation”, leading OIS rates to price in +38bps by the July meeting. Longer-dated sovereign yields sold off in concert, with 10yr bunds (+6.4bps), OATs (+6.6bps) and BTPs (+8.5bps) hitting fresh multi-year highs. The spread of 10yr Italian yields over bunds also moved back above 200bps. The Bank of Canada hiked rates +50bps as expected, though weaved in restrictive guidance that gave the meeting a hawkish hue. Namely, the central bank warned they could be “more forceful” if needed, updating their statement to note that the economy was “clearly operating in excess demand”, which risked elevated inflation becoming yet more entrenched, as mentioned. The daily stew got a dose of anecdotal growth fears with the release of the beige book and comments from the CEO of J.P. Morgan warning that an economic “hurricane” was on the horizon. The beige book had a majority of Fed districts with contacts reporting growth or recession fears. The impact was to bring 10yr yields around 5bps below their intraday highs. Those yields are less than a basis point higher from those levels as we go to press this morning. The mixture drove equities lower on both sides of the Atlantic. The S&P 500 retreated -0.75% to start the month, with all but one sector in the red. The NASDAQ was in line, falling -0.72%, though mega cap growth FANG+ felt the impact of higher discount rates, falling -0.92%. In Europe, stocks underperformed as the continent countenances yet tighter monetary policy, with the STOXX 600 falling -1.04%. Energy was the sole gainer in the S&P, though that outperformance may be short lived as the FT reported overnight that Saudi Arabia was primed to pump more oil onto the market should Russian exports be crimped by sanctions. Brent crude futures are -1.67% lower ahead of the OPEC+ meeting today. Asian equity markets are trading lower following yesterday’s selloff. Across the region, the Hang Seng (-1.72%) is the largest underperformer after the local government decided to revive its toughest Covid-Zero measures as Covid variants flare. US stock futures are swinging between gains and losses with contracts on the S&P 500 (+0.04%), NASDAQ 100 (+0.07%) virtually unchanged. Elsewhere, early morning data showed that Australia’s April trade surplus swelled to A$10.5 bn (v/s A$9.0 bn) from the A$9.7 bn. In terms of yesterday’s other data, German retail sales fell by a larger-than-expected -5.4% (vs. -0.5% expected). Otherwise, the final manufacturing PMIs for May only diverged slightly from the flash readings. The Euro Area manufacturing PMI was revised up to 54.6 (vs. flash 54.4), but the US manufacturing PMI was revised down to 57.0 (vs. flash 57.5). To the day ahead now, and data releases include the Euro Area’s PPI for April, as well as the US weekly initial jobless claims, April’s factory orders, and the ADP’s report of private payrolls for May. Central bank speakers include the ECB’s Villeroy and Hernandez de Cos, along with the Fed’s Mester. Tyler Durden Thu, 06/02/2022 - 08:03.....»»

Category: smallbizSource: nytJun 2nd, 2022

Academy Securities: Crypto Has Become A Leading Indicator... And For Those Of Us Who Missed This Rally, Do We Pile On, Or Do We Fight It?

Academy Securities: Crypto Has Become A Leading Indicator... And For Those Of Us Who Missed This Rally, Do We Pile On, Or Do We Fight It? By Peter Tchir of Academy Securities On Memorial Day I want to offer special thanks to all those who serve and have served their country. I also want to highlight this month’s Around the World which highlights: Finland and Sweden’s Application to NATO China’s Investments in Pakistan and Sri Lanka North Korean Preparations for another Nuclear Test. U.S. Special Operations Troops in Somalia Sunshine in My Pocket, or even A Pocketful of Sunshine After last week’s almost 7% gain across every major U.S. stock index, I’ve got nothing but positive songs running through my head. It seems appropriate for this holiday weekend and is a refreshing change from some of the darker songs and themes that have been the focus on many recent T-Report. Can’t stop the feeling seems like the most appropriate as stock futures are rallying again this morning, along with crypto, though bonds are selling off. Last week, I had the good sense to at least turn neutral in We Laughed, We Cried, but I let the ongoing malaise (at the time) in the crypto market, amongst other things leave me defensive. The big question, is whether this rally, which took us from up 10% on S&P futures (from a low of 3,807 to as high as 4,202 overnight) staying with us? Heck, one more week like that and we will have erased the 20% drop to bear market territory in presumably record time. Do those of us who missed this rally, pile on, or do we fight it? There are so many factors at work, with such major possible implications, that it is not an easy call, at least not for me. This Week’s Drivers Once again, there are several near-term drivers at work. Not the stories that will play out over months and will have the biggest impact in the direction of the economy, but those factors that will drive markets this week. While thinking weekly seems too short, in a market where 3% intraday swings have become the norm, it is also important. Factors that will “resolve” themselves this week: Month-end buying. There were supposed to be large “re-balancing” flows as bonds had done much better than stocks, though with the S&P posting a small gain on the month, and bonds down slightly, that flow has already played out. So we need to see how Tuesday and Wednesday play out. I suspect that the month-end buying has already played out and may be so heavily front-run that it acts as a drag on markets this week. Balancing against that is the holiday shortened week, which may just let the trend in place (higher) continue! The Fed. Without a doubt the Fed minutes helped markets, immensely! Whether it was the realization that the Fed will not crater the economy to save us from inflation, or that people now see many inflationary pressures receding, I don’t know. I’ve always been in the camp that the markets are pricing in far too many rate hikes, not because they will be inflation sooner, but because the economy will turn out to be more fragile than expected. Given some of the earnings warnings, chatter about being overstaffed, inventory builds, etc., I think the Fed will be cautious on hikes (which is bullish). But, and this is the big but, will the Fed support that dovish view this week as they speak? WE get Waller today, Williams and Bullard Wednesday, with Mester and Brainard speaking later this week. Will they confirm this more dovish view or will they try and dampen the recent enthusiasm? I’m concerned they could try and undo some of the recent moves in risk assets by hammering home on rate hikes. Also, not wanting to sound like Debbie Downer, but we haven’t really begun to see balance sheet reduction occur and that will be starting in earnest now. Crypto is rallying nicely. Angst over stable coins, the Ethereum conversion and new regulatory scrutiny are being overcome right now. I continue to watch crypto closely as I believe that it has become a leading indicator as price movement in crypto is forcing people to trade equities for liquidity and/or risk management. I remain bearish crypto for now, as I think more importantly than anything else, more people are vocal about crypto not accomplishing a lot of what has been promised (from payment system, to inflation hedge, etc.) but that is for a T-Report later in the week. The Bond Grab! Municipal bond closed end funds beat stocks last week!  Let that sink in for a moment. This “weird” part of the market saw funds rise anywhere from 6% to 10% (based on a semi-random sampling). Not only did the underlying muni market do well, but discounts to NAV declined, signaling strong retail interest. The muni market seemed to do exceptionally poorly throughout the year, but may finally have turned the corner. There is a lot of upside left in this market, if we have turned the corner. ETF flows. Not only did muni’s (MUB) seem more inflows, but IG (LQD), high yield (HYG, JNK), crossover (ANGL) and even leveraged loans (BKLN, SRLN) all had significant inflows last week. This could be a real turning point as the “chase for yield” comes back.  If the fear of higher yields is over or receding, then there could be a rush to lock in these current yields. LQD, for example (longer dated IG) yielded 2.75% for much of last year, and even after the recent rally in IG bonds, still yields almost 4.5%. Credit and bonds should continue to do well, which should be supportive of risk assets, though I think bonds with credit risk will outperform treasuries. Jobs, Economic Data. Is Good News Good or Bad? Will the data be good? I’m most concerned about the job situation. When some major companies discuss being overstaffed, it sends a shiver down my spine. We have still not “normalized” from COIVD. Yes, we don’t have the same number of jobs we had pre-COVID (which could be good longer term), but we saw hiring in response to the COVID economy and that economy is changing as re-opening has occurred. Mixed signals on consumer spending. The data seems somewhat mixed, but I’m getting concerned here, as any of the positive signs seem to be driven by increases in credit purchases, which may not be sustainable. My estimate is that the data will be weak, but not horribly weak (problems take time to show up in the data) and market skepticism on the economy seems high (I’ve come across the Citi Economic Surprise Index an inordinate number of times this week). Is Good News Good? Or vice versa. The bond market seems to be reacting to news “appropriately”. Good news pushes yields higher. Bad news pusher bond yields lower. Stocks seem to be trading with a “normal” correlation to bonds, which lets stocks go up even as bond yields go higher. That is the “normal” relationship and is what is going on again today. That is much healthier for markets than when stocks rally on bond yields going lower because of bad data. That tends not to be sustainable. So, the good news is that stocks rising as bond yields rise, means we can sustain this rally through good data. The bad news is, that data may still be getting worse, faster, than expectations are coming down. Inflation. A reprieve of food and energy? Maybe, but that may be very temporary. I remain in the camp that we will have higher inflation (3% to 4%) for longer (2 to 5 year), but that doesn’t mean we won’t see peaks and valleys within that. So maybe we get some easing on the inflation front, certainly from recent highs, but will we worry about consistently high prices? For now, we probably focus on rate of change (lower inflation than we had), but in the coming weeks, persistently high prices and the outlook for that to continue could weigh on the economy and markets. Insane price moves. I have absolutely no idea what MSPR does or is supposed to do. None. But, I don’t think anything is meant to De-SPAC (if that is the word) at $10 and trade down to $1.74 in a week. I’m confused on the market cap of this company and exactly what happened, but it seems sure to attract some attention and seems “odd” if not insane. We continue to see ginormous swings in market cap of some extremely large companies, that again, defy any sort of ‘efficient market’ hypothesis and point to the gambling, option trading, algo driven gyrations that have now become the norm. Bottom Line I’m neutral to slightly bullish on treasuries. The 10-year traded in a range of 2.74% to 2.85% last week. I could see us testing the upper end of that range, or approaching 3% on strong economic data, but think there is plenty of support and it can get to 2.5% in a hurry on bad economic news. I like credit products. The chase for yield seems to have legs and can go on, even if equities falter. I’d rather own credit (IG, High Yield, and muni’s, structured products, etc) than treasuries. I’d still be easing out of floating rate product into fixed income as I want to lock in duration here, especially on the credit side. While not for the faint of heart, CCC might be the best bang for the buck, as the chase for yield continues, but that is more like next week’s trade, as there is still plenty of opportunity in the other markets. Crypto, bearish, though am not going to fight this current pop. Which leaves us with stocks. Am I being stubborn because it sucks to miss a 7% rally? Is that what is holding me back from getting on board with this rally? It shouldn’t be. It especially shouldn’t be, because knowing that it is affecting my judgement should reduce how much it is affecting my judgement, but it is in the back of my mind. For stocks, and this is all crazy when 3% days are the norm, I’m looking for a pullback as we head into next month. While there is a good balance between risk and reward here, I think the preponderance of influences will weigh on stocks, but I am finally, for the first time in months, looking for buying opportunities rather than selling opportunities. Sectors that I like including anything travel related, homebuilders, emerging markets (especially Mexico) and even financials, while I’m leaning bearish on energy for the first time in almost 2 years!   Have a great Memorial Day and if you want to start the work week off right, tune into Bloomberg TV on Tuesday at 8am for Academy Securities! Tyler Durden Mon, 05/30/2022 - 12:15.....»»

Category: personnelSource: nytMay 30th, 2022

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

Futures Slide Before Fed Minutes, Dollar Jumps As China Lockdown Fears Return

Futures Slide Before Fed Minutes, Dollar Jumps As China Lockdown Fears Return Another day, another failure by markets to hold on to even the smallest overnight gains: US futures erased earlier profits and dipped as traders prepared for potential volatility surrounding the release of the Federal Reserve’s minutes which may provide insight into the central bank’s tightening path, while fears over Chinese lockdowns returned as Beijing recorded more Covid cases and the nearby port city of Tianjin locked down a city-center district. Contracts on the Nasdaq 100 and the S&P 500 were each down 0.5% at 7:30 a.m. in New York after gaining as much as 1% earlier, signaling an extension to Tuesday’s slide that followed a profit warning from Snap. In premarket trading, Nordstrom jumped 10% after raising its forecast for earnings and revenue for the coming year suggesting that the luxury consumer is doing quite fine even as most of the middle class has tapped out; analysts highlighted the department store’s exposure to higher-end customers.Meanwhile, Wendy’s surged 12% after shareholder Trian Fund Management, billionaire Nelson Peltz' investment vehicle, said it will explore a transaction that could give it control of the fast-food chain. Here are the most notable premarket movers in the US: Urban Outfitters (URBN US) shares rose as much as 5.7% in premarket trading after Nordstrom’s annual forecasts provided some relief for the beaten down retail sector. Shares rallied even as Urban Outfitters reported lower-than-expected profit and sales for the 1Q. Best Buy (BBY US) shares could be in focus as Citi cuts its price target on electronics retailer to a new Street-low of $65 from $80, saying that there continues to be “significant risk” to 2H estimates. Dick’s Sporting Goods (DKS US) sinks as much as 20% premarket after the retailer cut its year adjusted earnings per share and comparable sales guidance for the full year. Peers including Big 5 Sporting Goods, Hibbett and Foot Locker also fell after the DKS earnings release 2U Inc. (TWOU US) shares drop as much as 4.3% in US premarket trading after Piper Sandler downgraded the online educational services provider to underweight from neutral, with broker flagging growing regulatory risk. Verrica Pharma (VRCA US) shares slump as much as 61% in US premarket trading after the drug developer received an FDA Complete Response Letter for its VP-102 molluscum treatment. Shopify’s (SHOP US) U.S.-listed shares fell 0.7% in premarket trading after a second prominent shareholder advisory firm ISS joined its peer Glass Lewis to oppose the Canadian company’s plan to give CEO Tobi Lutke a special “founder share” that will preserve his voting power. Cazoo (CZOO US) shares declined 3.3% in premarket trading as Goldman Sachs initiated coverage of the stock with a neutral recommendation, saying the company is well positioned to capture the significant growth in online used car sales. CME Group (CME US Equity) may be in focus as its stock was upgraded to outperform from market perform at Oppenheimer on attractive valuation and an “appealing” dividend policy. US stocks have slumped this year, with the S&P 500 flirting with a bear market on Friday, as investors fear that the Fed’s active monetary tightening will plunge the economy into a recession: as Bloomberg notes, amid surging inflation, lackluster earnings and bleak company guidance have added to market concerns. The tech sector has been particularly in focus amid higher rates, which mean a bigger discount for the present value of future profits. The Nasdaq 100 index has tumbled to the lowest since November 2020 and its 12-month forward price-to-earnings ratio of 19.7 is the lowest since the start of the pandemic and below its 10-year average. “The consumer in the US is still showing really good signs of strength,” said Michael Metcalfe, global head of macro strategy at State Street Global Markets. “Even if there is a slowdown it’s going to be quite mild,” he said in an interview with Bloomberg Television. Meanwhile, Barclays Plc strategists including Emmanuel Cau see scope for stocks to fall further if outflows from mutual funds pick up, unless recession fears are alleviated. Retail investors have also not yet fully capitulated and “still look to be buying dips in old favorites in tech/growth,” the strategists said. "Our central scenario remains that a recession can be avoided and that geopolitical risks will moderate over the course of the year, allowing equities to move higher,” said Mark Haefele,  chief investment officer at UBS Global Wealth Management. “But recent market falls have underlined the importance of being selective and considering strategies that mitigate volatility." The Fed raised interest rates by 50 basis points earlier this month -- to a target range of 0.75% to 1% -- and Chair Jerome Powell has signaled it was on track to make similar-sized moves at its meetings in June and July. Investors are now awaiting the release of the May 3-4 meeting minutes later on Wednesday to evaluate the future path of rate hikes. However, in recent days, traders have dialed back the expected pace of Fed interest-rate increases over worse-than-expected economic data and the selloff in equities. Sales of new US homes fell more in April than economists forecast, and the Richmond Fed’s measure of business activity dropped to a two-year low. The yield on the 10-year Treasury slipped for a second day to 2.73%. “Given the risks to growth and our view that positive real rates will be unmanageable for any significant length of time, we expect the Fed to deliver less tightening in 2022 overall than it and markets currently expect,” Salman Ahmed, global head of macro and strategic asset allocation at Fidelity International, wrote in a note. In Europe, stocks pared an earlier advance but hold in the green while the dollar rallies. The Stoxx 600 gave back most of the morning’s gains with autos, financial services and travel weighing while miners and utilities outperformed. The euro slid as comments by European Central Bank officials indicated policy normalization will be gradual. The ECB is in the midst of a debate over how aggressive it should act to rein in inflation. Here are some of the most notable European movers today: SSE shares rise as much as 6.3% after strong guidance and amid reports that electricity generators are likely to escape windfall taxes being considered by the U.K. government. Air France-KLM jumps as much as 13% in Paris after falling 21% on Tuesday as the airline kicked off a EU2.26 billion rights offering. Mining and energy stocks outperform the broader market in Europe as iron ore rebounded, while oil rose after a report that showed a decline in US gasoline stockpiles. Rio Tinto gains as much as 2.3%, Anglo American +2.6%, TotalEnergies +2.8%, Equinor +3.7% Elekta rises as much as 9.3% after releasing a 4Q earnings report that beat analysts’ expectations. Torm climbs as much as 12% after Pareto initiates coverage at buy and says the company may pay out dividends equal to 40% of its market value over the next 3 years. Mercell rises as much as 104% to NOK6.13/share after recommending a NOK6.3/share offer from Spring Cayman Bidco. Luxury stocks traded lower amid rekindled Covid-19 worries in China as Beijing continued to report new infections while nearby Tianjin locked down its city center. LVMH declines as much as 1.4%, Burberry -2.6% and Hermes -1.7% Sodexo falls as much as 5.7% after the French caterer decided not to open up the capital of its benefits & rewards unit to a partner following a review of the business. Ocado slumps as much as 8% after its grocery joint venture with Marks & Spencer slashed its forecast for FY22 sales growth to low single digits, rather than around 10% guided previously. Earlier in the session, Asian stocks were steady as traders continued to gauge growth concerns and fears of a US recession. The MSCI Asia Pacific Index rose 0.1%, paring an earlier increase of as much as 0.5%, as gains in the financial sector were offset by losses in consumer names. New Zealand equities dipped on Wednesday after the central bank delivered an expected half-point interest rate hike to combat inflation. Chinese shares stabilized after the central bank and banking regulator urged lenders to boost loans as the nation grapples with ongoing Covid outbreaks. The benchmark CSI 300 Index snapped a two-day losing streak to close 0.6% higher. Asian equities have been trading sideways as the prospect of slower growth amid tighter monetary conditions, as well as China’s strict Covid policy and supply-chain disruptions, remain key overhangs for the market. In China, the country’s strict Covid policy is outweighing broad measures to support growth and keeping investors wary. Its commitment to Covid Zero means it’s all but certain to miss its economic growth target by a large margin for the first time ever. The nation’s central bank and banking regulator urged lenders to boost loans in the latest effort to shore up the battered economy. “The valuation is still nowhere near attractive and you have a number of leading indicators, whether its credit, liquidity or growth, which are not yet indicating that we want to take more risks on the market,” Frank Benzimra, head of Asia equity strategy at Societe Generale, said in a Bloomberg TV interview. He added that the preferred strategy in equities will focus on defensive plays like resources and income. Investors will get further clues on the Federal Reserve’s interest-rate policies with the release in Washington of minutes from the latest meeting on Wednesday. Concerns that the Fed’s tightening will plunge the nation into recession had spurred a sharp selloff in US shares recently. Japanese stocks ended a bumpy day lower as investors awaited minutes from the latest Federal Reserve meeting and continued to gauge the impact of China’s rising Covid cases. The Topix fell 0.1% to close at 1,876.58, while the Nikkei declined 0.3% to 26,677.80. Nintendo Co. contributed the most to the Topix Index decline, decreasing 4.3%. Out of 2,171 shares in the index, 793 rose and 1,257 fell, while 121 were unchanged. Meanwhile, Australian stocks bounced with the S&P/ASX 200 index rising 0.4% to close at 7,155.20, with banks and miners contributing the most to its move. Costa Group was the top performer after reaffirming its operating capex guidance. Chalice Mining dropped after an equity raising. In New Zealand, the S&P/NZX 50 index fell 0.7% to 11,173.37 after the RBNZ’s policy decision. The central bank raised interest rates by half a percentage point for a second straight meeting and forecast further aggressive hikes to come to tame inflation. India’s key equity indexes fell for the third consecutive session, dragged by losses in software makers as worries grow over companies’ spending on technology amid a clouded growth outlook. The S&P BSE Sensex slipped 0.6% to 53,749.26 in Mumbai, while the NSE Nifty 50 Index dropped 0.6%. The benchmark has retreated for all but four sessions this month, slipping 5.8%, dragged by Infosys, Tata Consultancy and Reliance Industries. All but two of the 19 sector sub-indexes compiled by BSE Ltd. fell on Wednesday, led by information technology stocks. Out of 30 shares in the Sensex index, 12 rose and 18 fell. The S&P BSE IT Index has lost nearly 26% this year and is trading at its lowest level since June.  In FX, the Bloomberg dollar spot index resumed rising, up 0.3% with all G-10 FX in the red against the dollar. The euro slipped and Italian bonds extended gains after comments from ECB officials. Executive board member Fabio Panetta said the ECB shouldn’t seek to raise its interest rates too far as long as the euro-area economy displays continuing signs of fragility. Board Member Olli Rehn said the ECB should raise rates to zero in autumn. The pound was steady against the dollar and gained versus the euro, paring some of its losses from Tuesday. Focus is on the long-awaited report into lockdown parties at No. 10. The BOE needs to tighten policy further to fight rising inflation, but it’s also wary of acting too quickly and risking pushing the UK into recession, according to Chief Economist Huw Pill. Sweden’s krona slumped on the back of a stronger dollar and amid data showing that consumer confidence fell to the lowest level since the global financial crisis. Yen eased as Treasury yields steadied in Asia from an overnight plunge.  China’s offshore yuan weakened for the first time in five days as Beijing recorded more Covid cases and the nearby port city of Tianjin locked down a city-center district. New Zealand dollar and sovereign yields rose after the RBNZ hiked rates by 50 basis points for a second straight meeting and forecast more aggressive tightening, with the cash rate seen peaking at 3.95% in 2023. Most emerging-market currencies also weakened against a stronger dollar as investors await minutes from the Federal Reserve’s last meeting for clues on the pace of US rate hikes.  The ruble extended its recent rally in Moscow even as Russia’s central bank moved up the date of its next interest-rate meeting by more than two weeks to stem gains in the currency with more monetary easing. Russia has been pushed closer to a potential default. US banks and individuals are barred from accepting bond payments from Russia’s government since 12:01 a.m. New York time on Wednesday, when a license that had allowed the cash to flow ended. The lira lagged most of its peers, weakening for a fourth day amid expectations that Turkey’s central bank will keep rates unchanged on Thursday even after consumer prices rose an annual 70% in April. In rates, Treasuries were steady with yields slightly richer across long-end of the curve as S&P 500 futures edge lower, holding small losses. US 10-year yields around 2.745% are slightly richer vs Tuesday’s close; long-end outperformance tightens 5s30s spread by 1.4bp on the day with 30-year yields lower by ~1bp. Bunds outperform by 2bp in 10-year sector while gilts lag slightly with no major catalyst. Focal points of US session include durable goods orders data, 5-year note auction and minutes of May 3-4 FOMC meeting. The US auction cycle resumes at 1pm ET with $48b 5-year note sale, concludes Thursday with $42b 7-year notes; Tuesday’s 2-year auction stopped through despite strong rally into bidding deadline. The WI 5-year yield at ~2.740% is ~4.5bp richer than April auction, which tailed by 0.9bp. In commodities, WTI pushed higher, heading back toward best levels of the week near $111.60. Most base metals trade in the red; LME aluminum falls 2.3%, underperforming peers. Spot gold falls roughly $10 to trade around $1,856/oz. Spot silver loses 1.1% to around. Bitcoin trades on either side of USD 30k with no real direction. Looking to the day ahead now, and central bank publications include the FOMC minutes from their May meeting and the ECB’s Financial Stability Review. Separately, we’ll hear from ECB President Lagarde, the ECB’s Rehn, Panetta, Holzmann, de Cos and Lane, BoJ Governor Kuroda, Fed Vice Chair Brainard and the BoE’s Tenreyro. Otherwise, data releases from the US include preliminary April data on durable goods orders and core capital goods orders. Market Snapshot S&P 500 futures little changed at 3,942.75 STOXX Europe 600 up 0.4% to 433.41 MXAP little changed at 163.41 MXAPJ up 0.3% to 531.42 Nikkei down 0.3% to 26,677.80 Topix little changed at 1,876.58 Hang Seng Index up 0.3% to 20,171.27 Shanghai Composite up 1.2% to 3,107.46 Sensex down 0.5% to 53,763.20 Australia S&P/ASX 200 up 0.4% to 7,155.24 Kospi up 0.4% to 2,617.22 German 10Y yield little changed at 0.94% Euro down 0.5% to $1.0677 Brent Futures up 1.0% to $114.69/bbl Gold spot down 0.5% to $1,856.22 U.S. Dollar Index up 0.30% to 102.16 Top Overnight News from Bloomberg New Zealand dollar and sovereign yields rose after the RBNZ hiked rates by 50 basis points and forecast more aggressive tightening, with the cash rate seen peaking at 3.95% in 2023 The euro slipped and Italian bonds extended gains after comments from ECB officials. Executive board member Fabio Panetta said the ECB shouldn’t seek to raise its interest rates too far as long as the euro-area economy displays continuing signs of fragility. Board Member Olli Rehn said the ECB should raise rates to zero in autumn The pound was steady against the dollar and gained versus the euro, paring some of its losses from Tuesday. Focus is on the long-awaited report into lockdown parties at No. 10 The BOE needs to tighten policy further to fight rising inflation, but it’s also wary of acting too quickly and risking pushing the UK into recession, according to Chief Economist Huw Pill Sweden’s krona slumped on the back of a stronger dollar and amid data showing that consumer confidence fell to the lowest level since the global financial crisis Yen eased as Treasury yields steadied in Asia from an overnight plunge A more detailed look at global markets courtesy of Newsquawk Asia-Pac stocks were mostly positive but with gains capped and price action choppy after a lacklustre lead from global counterparts as poor data from the US and Europe stoked growth concerns, while the region also reflected on the latest provocations by North Korea and the RBNZ’s rate increase. ASX 200 was led higher by commodity-related stocks despite the surprise contraction in Construction Work. Nikkei 225 remained subdued after recent currency inflows and with sentiment clouded by geopolitical tensions. Hang Seng and Shanghai Comp were marginally higher following further support efforts by the PBoC and CBIRC which have explored increasing loans with major institutions and with the central bank to boost credit support, although the upside is contained amid the ongoing COVID concerns and with Beijing said to tighten restrictions among essential workers. Top Asian News US SEC official said significant issues remain in reaching a deal with China over audit inspections and even if US and China reach a deal on proceeding with inspections, they would still have a long way to go, according to Bloomberg. China will be seeing a Pacific Island Agreement when Senior Diplomat Wang Yi visits the region next week, according to documents cited by Reuters. North Korea Fires Suspected ICBM as Biden Wraps Up Asia Tour Luxury Stocks Slip Again as China Covid-19 Worries Persist Asia Firms Keep SPAC Dream Alive Despite Poor Returns: ECM Watch Powerlong 2022 Dollar Bonds Fall Further, Poised for Worst Week In Europe the early optimism across the equity complex faded in early trading. Major European indices post mild broad-based gains with no real standouts. Sectors initially opened with an anti-defensive bias but have since reconfigured to a more pro-defensive one. Stateside, US equity futures have trimmed earlier gains, with relatively broad-based gains seen across the contracts; ES (+0.1%). Top European News Aiming ECB Rate at Neutral Risks Hurting Economy, Panetta Says M&S Says Russia Exit, Inflation to Prevent Profit Growth Prudential Names Citi Veteran Wadhwani as Insurer’s Next CEO EU’s Gentiloni Eyes Deal on Russian Oil Embargo: Davos Update UK’s Poorest to See Inflation Hit Near Double Pace of the Rich FX Buck builds a base before Fed speak, FOMC minutes and US data - DXY tops 102.250 compared to low of 101.640 on Tuesday. Kiwi holds up well after RBNZ hike, higher OCR outlook and Governor Orr outlining the need to tighten well beyond neutral - Nzd/Usd hovers above 0.6450 and Aud/Nzd around 1.0950. Euro pulls back sharply as ECB’s Panetta counters aggressive rate guidance with gradualism to avoid a normalisation tantrum - Eur/Usd sub-1.0700 and Eur/Gbp under 0.8550. Aussie undermined by flagging risk sentiment and contraction in Q1 construction work completed - Aud/Usd retreats through 0.7100. Loonie and Nokkie glean some underlying traction from oil returning to boiling point - Usd/Cad capped into 1.2850, Eur/Nok pivots 10.2500. Franc, Yen and Sterling all make way for Greenback revival - Usd/Chf bounces through 0.9600, Usd/Jpy over 127.00 and Cable close to 1.2500. Fixed Income Choppy trade in bonds amidst fluid risk backdrop and ongoing flood of global Central Bank rhetoric, Bunds and Gilts fade just above 154.00 and 119.00. Eurozone periphery outperforming as ECB's Panetta urges gradualism to avoid a normalisation tantrum and Knot backs President Lagarde on ZIRP by end Q3 rather than going 50 bp in one hit. US Treasuries flat-line before US data, Fed's Brainard, FOMC minutes and 5-year supply - 10 year T-note midway between 120-21/09+ parameters. Commodities WTI and Brent July futures are firmer intraday with little newsflow throughout the European morning. US Energy Inventory Data (bbls): Crude +0.6mln (exp. -0.7mln), Gasoline -4.2mln (exp. -0.6mln), Distillates -0.9mln (exp. +0.9mln), Cushing -0.7mln. Spot gold is pressured by the recovery in the Dollar but found some support at its 21 DMA. Base metals are pressured by the turn in the risk tone this morning. US Event Calendar 07:00: May MBA Mortgage Applications -1.2%, prior -11.0% 08:30: April Durable Goods Orders, est. 0.6%, prior 1.1% -Less Transportation, est. 0.5%, prior 1.4% 08:30: April Cap Goods Ship Nondef Ex Air, est. 0.5%, prior 0.4% 08:30: April Cap Goods Orders Nondef Ex Air, est. 0.5%, prior 1.3% Central Banks 12:15: Fed’s Brainard Delivers Commencement Address 14:00: May FOMC Meeting Minutes DB's Jim Reid concludes the overnight wrap This morning we’ve launched our latest monthly survey. In it we try to ask questions that aren’t easy to derive from market pricing. For example we ask whether you think a recession is a price worth paying to tame inflation back to target. We also ask whether you think the Fed will think the same. We ask whether you think bubbles are still in markets and whether the bottom is in for equities. We also ask you the best hedge against inflation from a small list of mainstream assets. Hopefully it will be of use and the more people that fill it in the more useful it might be so all help welcome. The link is here. Talking of inflation I had a huge shock yesterday. The first quote of three came back from builders for what I hope will be our last ever renovation project as we upgrade a dilapidated old outbuilding. Given the job I do I'd like to think I'm fully aware of commodity price effects and labour shortages pushing up costs but nothing could have prepared me for a quote 250% higher than what I expected. We have two quotes to come but if they don't come in nearer to my expectations then we're either going to shelve/postpone the project after a couple of years of planning or my work output might reduce as I learn how to lay bricks, plumb, tile, make and install windows and plaster amongst other things. Maybe I could sell the rights of my journey from banker to builder to Netflix to make up for lost earnings. Rather like my building quote expectations, markets came back down to earth yesterday, only avoiding a fresh closing one-year low in the S&P 500 via a late-day rally that sent the market from intra-day lows of -2.48% earlier in the session to -0.81% at the close and giving back just under half the gains from the best Monday since January. Having said that S&P futures are up +0.6% this morning so we've had a big swing from the lows yesterday afternoon. The blame for the weak market yesterday was put on weak economic data alongside negative corporate news. US tech stocks saw the biggest losses as the NASDAQ (-2.35%) hit its lowest level in over 18 months following Snap’s move to cut its profit forecasts that we mentioned in yesterday’s edition. The stock itself fell -43.08%. Indeed, the NASDAQ just barely avoided closing more than -30% (-29.85%) from its all-time high reached back in November. The S&P 500's closing loss leaves it +1.03% week to date as it tries to avoid an 8th consecutive weekly decline for just the third time since our data starts in 1928. Typical defensive sectors Utilities (+2.01%), staples (+1.66%), and real estate (+1.21%) drove the intraday recovery, so even with the broad index off the day’s lows, the decomposition points to continued growth fears. Investors had already been braced for a more difficult day following the Monday night news from Snap, but further fuel was then added to the fire after US data releases significantly underwhelmed shortly after the open. First, the flash composite PMI for May fell to 53.8 (vs. 55.7 expected), marking a second consecutive decline in that measure. And then the new home sales data for April massively underperformed with the number falling to an annualised 591k (vs. 749k expected), whilst the March reading was also revised down to an annualised 709k (vs. 763k previously). That 591k reading left new home sales at their lowest since April 2020 during the Covid shutdowns, and comes against the backdrop of a sharp rise in mortgage rates as the Fed have tightened policy, with the 30-year fixed rate reported by Freddie Mac rising from 3.11% at the end of 2021 to 5.25% in the latest reading last week. The strong defensive rotation in the S&P 500 and continued fears of a recession saw investors pour into Treasuries, which have been supported by speculation that the Fed might not be able to get far above neutral if those growth risks do materialise. Yields on 10yr Treasuries ended the day down -10.1bps at 2.75%, and the latest decline in the 10yr inflation breakeven to 2.58% leaves it at its lowest closing level since late-February, just after Russia began its invasion of Ukraine that led to a spike in global commodity prices. And with investors growing more worried about growth and less worried about inflation, Fed funds futures took out -11.5bps of expected tightening by the December meeting, and saw terminal fed funds futures pricing next year close below 3.00% for the first time in two weeks. 10 year US yields are back up a basis point this morning. Over in Europe there was much the same pattern of equity losses and advances for sovereign bonds. However, the decline in yields was more muted after there was further chatter about a potential 50bp hike from the ECB. Austrian central bank governor Holzmann said that “A bigger step at the start of our rate-hike cycle would make sense”, and Latvian central bank governor Kazaks also said that a 50bp hike was “certainly one thing that we could discuss”. Along with Dutch central bank governor Knot, that’s now 3 members of the Governing Council who’ve openly discussed the potential they could move by 50bps as the Fed has done, and markets seem to be increasingly pricing in a chance of that, with the amount of hikes priced in by the July meeting closing at a fresh high of 32.5bps yesterday. In spite of the growing talk about a 50bp move at a single meeting, the broader risk-off tone yesterday led to a decline in sovereign bond yields across the continent, with those on 10yr bunds (-4.9bps), OATs (-4.3bps) and BTPs (-5.9bps) all falling back. Equities struggled alongside their US counterparts, and the STOXX 600 (-1.14%) ended the day lower, as did the DAX (-1.80%) and the CAC 40 (-1.66%). The flash PMIs were also somewhat underwhelming at the margins, with the Euro Area composite PMI falling a bit more than expected to 54.9 (vs. 55.1 expected). Over in the UK there were even larger moves after the country’s flash PMIs significantly underperformed expectations. The composite PMI fell to 51.8 (vs. 56.5 expected), which is the lowest reading since February 2021 when the country was still in lockdown. In turn, that saw sterling weaken against the other major currencies as investors dialled back the amount of expected tightening from the Bank of England, with a fall of -0.44% against the US dollar. That also led to a relative outperformance in gilts, with 10yr yields down -8.3bps. And on top of that, there were signs of further issues on the cost of living down the tracks, with the CEO of the UK’s energy regulator Ofgem saying that the energy price cap was set to increase to a record £2,800 in October, an increase of more than 40% from its current level. Asian equity markets are mostly trading higher this morning with the Hang Seng (+0.64%), Shanghai Composite (+0.58%), CSI (+0.17%) and Kospi (+0.80%) trading in positive territory with the Nikkei (-0.03%) trading fractionally lower. Earlier today, the Reserve Bank of New Zealand (RBNZ), in a widely anticipated move, hiked the official cash rate (OCR) by 50bps to 2.0%, its fifth-rate hike in a row in a bid to get on top of inflation which is currently running at a 31-year high. The central bank has significantly increased its forecast of how high the OCR might rise in the coming years with the cash rate jumping to about 3.4% by the end of this year and peaking at 3.95% in the third quarter of 2023. Additionally, it forecasts the OCR to start falling towards the end of 2024. Following the release of the statement, the New Zealand dollar hit a three-week high of 0.65 against the US dollar. Elsewhere, as we mentioned last week, today marks the expiration of the US Treasury Department’s temporary waiver that allowed Russia to make sovereign debt payments to US creditors. US investors will no longer be able to receive such payments, pushing Russia closer to default on its outstanding sovereign debt. To the day ahead now, and central bank publications include the FOMC minutes from their May meeting and the ECB’s Financial Stability Review. Separately, we’ll hear from ECB President Lagarde, the ECB’s Rehn, Panetta, Holzmann, de Cos and Lane, BoJ Governor Kuroda, Fed Vice Chair Brainard and the BoE’s Tenreyro. Otherwise, data releases from the US include preliminary April data on durable goods orders and core capital goods orders. Tyler Durden Wed, 05/25/2022 - 08:00.....»»

Category: blogSource: zerohedgeMay 25th, 2022

Onyx Equities Debuts Head-Turning Renovation at Gateway Center’s Grand Opening in Downtown Newark

On Thursday, May 19th, Onyx Equities was joined by Newark Mayor Ras Baraka and other Newark elected and civic leaders to unveil the new two-story “Jewel Box” entryway into Gateway Center, downtown Newark’s cornerstone redevelopment project that links three newly reimagined Class A office towers through a massive 100,000 square... The post Onyx Equities Debuts Head-Turning Renovation at Gateway Center’s Grand Opening in Downtown Newark appeared first on Real Estate Weekly. Newark Mayor Ras Baraka joined John Saraceno and Jon Schultz, Co-Founders and Managing Partners for Onyx Equities to reveal the Jewel Box entrance to Gateway Center.  The new two-story, glass enclosed entrance is part of a $60 million renovation that will change the way that commuters, visitors and residents interact with the building and the surrounding neighborhood.From Left to Right: John Saraceno, Mayor Ras Baraka, Jon Schultz. On Thursday, May 19th, Onyx Equities was joined by Newark Mayor Ras Baraka and other Newark elected and civic leaders to unveil the new two-story “Jewel Box” entryway into Gateway Center, downtown Newark’s cornerstone redevelopment project that links three newly reimagined Class A office towers through a massive 100,000 square foot retail/dining concourse known as The Junction, opening later this year. The event celebrates a pinnacle moment in Gateway’s transformation – one of the largest in New Jersey’s history, and Newark’s revitalization as an international center for commerce, culture and cuisine. “The new Jewel Box entryway and the larger Gateway redevelopment project are a testament to what New Jerseyans have always known: there is no better place in the world to live, work, and play,” said Governor Phil Murphy. “Visitors, employees, and families will all benefit from this game-changing development, which showcases some of the best dining options and recreational activities the Garden State has to offer. Now more than ever, Newark remains an internationally renowned commercial and cultural hub.” Located along Raymond Plaza West across from Newark Penn Station, the “Jewel Box” was designed as a welcoming beacon for all Newark visitors, employees, and residents, and will soon serve as the main entrance into The Junction, which will deliver an exciting combination of food options from Newark’s local culinary talent and well-known restauranteurs from across the Hudson River in late 2022. Recently announced restaurant tenants include Serafina, Mökbar, Brooklyn Dumpling Shop, Fresh & Co, Greek from Greece Bakery & Café, Farinella, 375˚ Chicken & Fries, Chip City Cookies, The Brookdale, among other notables – many of which were highlighted as part of the Grand Opening celebration. Additional fitness, educational, and wellness retailers will round out a total lifestyle program. “The Jewel Box is a state-of-the-art entrance to the Gateway Center, one of our city’s signature complexes,” Newark Mayor Ras J. Baraka said. “Adjoined with The Junction that opens later this year, it will showcase our excellence, hospitality, and diverse array of food to Newark residents, workforce, and visitors. “We are thankful to Onyx Equities for transforming such an important center in the heart of our downtown.” “We are opening The Jewel Box at a really exciting time when people are coming back to the office,” said Jonathan Schultz, Co-Founder and Principal at Onyx Equities. “This was not just about improving the pedestrian and employee experience within the complex; it is part of a larger overall reinterpretation of what Newark can be for businesses and residents looking for a thriving urban community.” “Our design intent was to activate the streetscape and create a welcoming connection to the community. Designed in the 1970s, Gateway was deliberately inward-facing with little connection to the life of the city, but Onyx’s new vision re-engages the community,” said Roger Smith, Design Director. “With street level local retailers, a landscaped public plaza and the two-story entrance hall across from Newark Penn Station, Gateway will become Newark’s new front door.” Comprised of some of the tallest buildings in the city, the transformation of the 2.3 million square foot, four-building Gateway Center complex is nothing short of spectacular. Inside and out, over $50 Million in capital improvements bring the vision of world-renowned architect Gensler to life, introducing a new exterior façade, modernized lobbies and common areas, tech-forward collaborative spaces, generous and flexible office build-out configurations, state-of-the-art post-COVID sanitation systems, a newly renovated parking garage, and a best-in-class retail experience that anticipates over 75,000 daily visitors once complete thanks to direct skybridge connectivity to Newark Penn Station, a Doubletree by Hilton, One Riverfront Center, Panasonic’s Corporate Headquarters, and several new residential developments under construction. “Gateway is on course to be New Jersey’s premier office and dining destination – the first of its kind in our state,” said Matthew P. Flath, vice president of asset management at Onyx Equities. “We know we’re hitting the right note because we’re attracting world-renowned restaurants like Serafina and celebrity chefs like Esther Choi of Mökbar, as well our top-tier regional and local culinary talent.” Appealing to a wide audience, the development also plays a major day-to-day role in the immediate area where there is a growing population of 300,000, a daytime workforce population of 200,000 and 58,000 riders who board at Newark Penn Station daily. In addition, more than 60,000 vehicles pass The Junction at Gateway Center along McCarter Highway each day. Prudential Center, home of the New Jersey Devils and Seton Hall Pirates Basketball, is directly across the street and four major universities with over 50,000 students are nearby. To learn more about Gateway Center, visit For retail leasing inquiries at The Junction, contact Jason Pierson and Ryan Starkman of Pierson Commercial Real Estate at (927) 823-4800. For information about Class A office opportunities within 1, 2 & 4 Gateway Center, contact Tim Greiner and Blake Goodman of JLL at (732) 707-6900 x5. The post Onyx Equities Debuts Head-Turning Renovation at Gateway Center’s Grand Opening in Downtown Newark appeared first on Real Estate Weekly......»»

Category: realestateSource: realestateweeklyMay 21st, 2022

This Is How We Quit Big Oil

At the end of the first quarter of 2021, as the CEOs of the three biggest U.S. oil and gas companies presented their firms’ earnings, investors fired off a range of questions about how they were addressing climate change. The market had already come to view fossil fuels as old, dirty energy, and after oil… At the end of the first quarter of 2021, as the CEOs of the three biggest U.S. oil and gas companies presented their firms’ earnings, investors fired off a range of questions about how they were addressing climate change. The market had already come to view fossil fuels as old, dirty energy, and after oil prices cratered in 2020, owing largely to the pandemic, investors wanted to know how these companies would adapt. They asked about whether carbon capture could be an engine to grow revenue and how the companies viewed the climate-policy landscape. “We are committed to providing products to help customers reduce their emissions,” said Darren Woods, the CEO of ExxonMobil. “Across the globe we’re helping economies decarbonize.” [time-brightcove not-tgx=”true”] This year, the conversation was much different. Oil and gas are now hot commodities following the Russian invasion of Ukraine, and on first-quarter investor calls in 2022, those same CEOs announced massive profits. As investors dialed in to pepper the CEOs with questions, the topic of climate change hardly came up. Instead, investors focused on dividends and share buybacks: ways the companies can pass along their profits to shareholders. For years, activists and politicians have condemned the industry for its efforts to deny the science of climate change and delay any action to address it. But what really moves the industry—like any big industry—is financial performance. In the years leading up to the COVID-19 pandemic, energy was the worst-performing sector in the S&P 500 stock index—a reality that slowly but surely forced leaders to question their business model. Now, the financial rejuvenation of the oil and gas industry has created a complicated dynamic for those pushing the sector to align with the realities of climate change. Money talks, and right now there’s a lot of money to be made digging up and selling oil and gas. In a complete reversal from two years prior, energy is now the best performing sector of 2022 and the only industry on the S&P 500 stock index that has seen valuations rise this year. This renewed profitability has already raised alarms for many concerned about the science of climate change. In a 2021 report, the International Energy Agency laid out a pathway for the world to meet the targets set in the Paris Agreement, which calls for limiting global temperature rise to less than 2°C relative to pre-industrial levels. To do that, public- and private-sector- leaders need to pour trillions of dollars into clean energy, while also reducing financing for fossil fuels. Oil production needs to fall 75% by 2050; to get there, the world should already be ending investment in new fossil fuel production sites. “The scientists tell us that if we want to have a planet that is still livable, emissions need to come to net zero by 2050,” says Fatih Birol, the head of the IEA. “If these things happen, oil demand will go down.” These dual exigencies—an industry turning a healthy profit on its core products and the urgent need to decarbonize the global economy—have led activists around the world to ask a variation on the same question: How will the reign of oil and gas end? Another way to put it: In a free-market system where profit rules, how do you phase down a product that’s making a profit? Produced by TIME Studios and Darren Aronofsky’s Protozoa Pictures, Black Gold tells the story of the coverup of the century—a gripping documentary exposing a global conspiracy that changed the world forever. BlackGold debuts in theaters nationwide on May 11, followed by its Paramount+ docuseries debut on May 17. Click here to purchase tickets. Decades ago, before climate change entered the vernacular, oil companies studied the science of how burning fossil fuels would warm the planet and realized as early as the 1970s that addressing climate change would threaten their core business. To protect their profits, they hid the evidence and launched public relations campaigns to sow doubt with the public and obstruct appropriate regulation. In Black Gold, TIME’s new docuseries on the history of ExxonMobil’s denial of the science of climate change, viewers witness the oil and gas industry’s decades-long effort unfold as the planet warms. Scientists are silenced and shadowy dark-money groups are brought on to help shape the public conversation. The bottom line was profit. “It’s hard to imagine putting the fate of humanity at such risk in return for more money,” former Vice President Al Gore, who won the Nobel Peace Prize for his climate activism, says in the series. The efforts paid dividends. Presidential administrations committed to enacting climate policy, namely those of Bill Clinton and Barack Obama, struggled to get efforts off the ground as industry lobbying dissuaded would-be supporters. Under Republican administrations, the industry enjoyed unparalleled access, with former executives serving in key positions of authority and making government policy. Even President Biden, who campaigned on a promise to be the most climate-forward President yet, took office with climate plans largely centered on incentivizing clean energy rather than penalizing fossil fuels. Denying climate-change science and delaying action are often portrayed by activists as a moral crime. “From a human perspective, it is the gravest sin I can imagine,” says Christine Arena, a former PR executive at Edelman who quit in protest of the company’s work with oil and gas trade groups, in Black Gold. Unsurprisingly, industry leaders don’t view it that way. In a 2019 interview, I asked Shell CEO Ben van Beurden about a campaign accusing his company of knowing about climate change for decades and failing to act. Van Beurden acknowledged that “yeah, we knew” and added, “everybody knew.” He went on to argue that Shell had since publicly acknowledged the science of climate change, but society had failed to act. In other words, the blame shouldn’t fall on Shell; in a free-market economy, the role of a corporation is to make a profit, and, in that context, the company was delivering just as it was supposed to do. Indeed, when the price of oil declined and profits waned in the mid-2010s—thanks to widespread deployment of fracking and horizontal drilling—the industry all of a sudden became vulnerable to pushes for change. Protesters staged die-ins at oil company headquarters. Climate activists used reports about the industry’s decades of climate denial to make a moral case. Meanwhile, college students pushed their universities to divest from fossil fuels, winning some victories while pushing public perception to grow more antagonistic toward oil and gas. These efforts made it harder to recruit talent into the industry and left companies increasingly vulnerable to regulation. Still, nothing challenged the industry’s attitude toward climate as much as the change in tone from investors. By 2020, according to the Forum for Sustainable and Responsible Investment, some $17 trillion dollars in investment had flowed into so-called ESG -investments—short for environmental, social and governance—and executives felt the pressure to offer a positive narrative about how their companies were approaching climate. “In the world of money, everyone lives on bended knee,” Brian Thomas, a managing director at Prudential Private Capital, said at an industry conference in March. “The industry is beginning to kind of morph its behavior to reflect the concerns of its investor base, right or wrong.” Regardless of climate concerns, investors across the board fretted about the dismal financial performance of oil and gas—the industry was failing to make money and needed to be disrupted. “The basic model is in pieces, it’s fallen apart,” Tom Sanzillo, director of finance at the Institute for Energy Economics and Financial Analysis, told me at the time. “This is an industry in last place.” Fossil-fuel companies embarked on efforts to change; the approach varied by company and region, but by and large they were piecemeal and insufficient. In an October 2021 hearing, members of the House Oversight Committee asked executives from some of the world’s largest oil and gas firms about their plans to address climate change. ExxonMobil CEO Woods cited the company’s investment in natural gas as an emissions-reducing tool. The CEO of Chevron said his company would try to emit less carbon in its operations. In short, the scale of the industry’s changes doesn’t match the science. Mike Sommers, the head of the American Petroleum Institute summed it up in a January 2022 address. While offering an unequivocal declaration that his industry needs to address climate change, he made clear that the industry would not shrink voluntarily. “We reject efforts to scale back domestic production,” he said. “This is about addition, not subtraction.” Spencer LowellIn the U.S., refineries like this Chevron facility in El Segundo, Calif., process about 10.5 million barrels of oil per day. For a brief moment, the Russian invasion of Ukraine seemed to offer an opportunity for the energy industry to change course. Following the initial attacks, proponents of clean energy suggested that the moment created a unique chance for policymakers to nudge the economy off fossil fuels. After all, oil and gas paid for Vladimir Putin’s war efforts and left people around the world vulnerable to the economic consequences of higher fuel prices. The European Commission, the E.U.’s executive body, quickly produced a plan to wean the bloc off Russian gas with a dramatic proposal to ramp up the development of clean energy infrastructure. But, on the other side of the Atlantic, the policy picture has been less promising. Republicans opposed to climate legislation have used the spike in oil prices to blame the Biden Administration’s climate initiatives for hurting consumers. And the Administration has softened its climate messaging, tempering it with calls for greater oil and gas production in the short term. Still, even without government policy to serve as a nudge, the oil and gas industry could have used the moment to embrace a different course. As prices rose, companies found themselves flush with no-strings-attached cash that could have been used to finance a true pivot toward green initiatives. But so far, companies have mostly used the money to pay enormous dividends to shareholders and buy back stock, thereby inflating the stock price. ExxonMobil made $5.5 billion in the first quarter of 2022; it plans to spend $30 billion buying back stock by 2023. Chevron made more than $6 billion; it said it would buy back $10 billion by the end of the year. Shell made $9.1 billion; it plans to repurchase $8.5 billion in shares in the first half of the year alone. The dynamic has led advocates, activists, and politicians to rethink their messaging. As consumers pay more for energy, criticizing the industry for its climate failures may not have the same resonance as it once did. Recent polls have shown that while the majority of Americans remain concerned about climate change, the issue has fallen on the list of priorities. Gas prices, on the other hand, seem destined for center stage as the U.S. approaches congressional midterm elections. And so the advocates have turned their attention to the enormous profit companies are making. The companies, these advocates say, should cut the price of their product—or else face a windfall profit tax that would take that money and return it to American taxpayers. “We need an offensive narrative: we’re just saying ‘Blame Putin,’ and they’re saying ‘Blame Biden,’” says Ro Khanna, a Democratic representative from California who is chair of the House Oversight Subcommittee on the Environment. “That’s not enough. We need to be saying ‘Blame Big Oil.’” On the surface, the pivot to talking about the industry’s profit margin may seem like an unfortunate turn away from the urgent reality of pushing these companies to slow fossil-fuel production. But it cuts to the core of the challenge the oil and gas industry poses to addressing climate change. Profits drove the industry’s climate denial from the beginning; profits are driving investment decisions today. When oil is truly no longer a good investment, its reign will come to an end.—With reporting by Mariah Espada.....»»

Category: topSource: timeMay 11th, 2022

Bell Works Celebrates the Opening of FitLab in Hoffman Estates

Bell Works Chicagoland, the former AT&T corporate campus and Chicagoland’s first ‘metroburb’ – a self-contained metropolis in suburbia — today celebrated the opening of FitLab. Operated by Kinema Fitness, the new health and wellness facility offers a holistic wellness experience for tenants, guests and the greater community, including personal training,... The post Bell Works Celebrates the Opening of FitLab in Hoffman Estates appeared first on Real Estate Weekly. Bell Works Chicagoland, the former AT&T corporate campus and Chicagoland’s first ‘metroburb’ – a self-contained metropolis in suburbia — today celebrated the opening of FitLab. Operated by Kinema Fitness, the new health and wellness facility offers a holistic wellness experience for tenants, guests and the greater community, including personal training, health coaching, nutrition consultation, state-of-the-art equipment and a broad range of group fitness classes. “The opening of FitLab marks yet another important milestone in the transformation of Bell Works Chicagoland. As employees’ expectations from the workplace continue to shift, we’re placing an even greater  emphasis on health and wellbeing,” said Ralph Zucker, the developer behind the transformation of the metroburb. “As the metroburb continues to take shape, we’re providing an environment – emblematic of a vibrant downtown – that enhances work life balance. This expansive, thoughtfully designed space provides the ability to bring people together and inspire more activity, which are the greatest assets to our growing Bell Works community.” The new FitLab offers comprehensive wellness programming and fitness courses that are available both within the facility and externally at tenant spaces. Spread across 31,680 square feet, FitLab features a variety of fitness classes, workshops and assessments; nutrition consultations and health coaching sessions; and recovery-focused offerings such as private meditation and reiki sessions. In addition to group classes and programming, the facility offers: State-of-the-art Precor Fitness EquipmentCardio touch screens with streaming applicationsQueenax Functional Rig SystemIndoor Running TrackFull-service locker rooms with complimentary towel serviceMulti-purpose studio room with cycling classesMeditation roomTRX Bay units and circuit trainingJacobs Ladder cardio machines Designed by Bell Works Creative Director Paola Zamudio and her team at NPZ Style+Decor, FitLab features an intimate urban boutique fitness facility atmosphere, with a human-centric design fabric woven throughout the elevated space. The bold color palette is complemented by biophilic elements interspersed throughout the facility, creating an inspiring and carefully curated environment that increases members’ feeling of well-being. “Wellness has always been a core value of the Bell Works brand. As Creative Director and Lead Designer of Bell Works, I find importance in emphasizing health through my design process, especially in today’s world. In collaboration with the FitLab team, we created a state-of-the-art fitness studio with bold graphics, energizing colors, high-quality equipment, and an overall modern experience for our community. FitLab is the perfect addition to the metroburb, and we look forward to welcoming them and their members very soon!” FitLab is operated by Kinema Fitness, a full-service fitness center management and design company. Founded in 2009, Kinema manages some of the most premier tenant fitness centers in the country with sites in Los Angeles, San Francisco, Nashville, Chicago, Washington D.C., Boston, Miami, Orlando, Philadelphia, and more. Kinema Fitness has additionally created a robust virtual wellness platform for its members that offers live streaming fitness classes, workshops, nutritional coaching, challenges and fun family activities. “Kinema’s has built a reputation rooted in our passion for providing incredible holistic wellness experiences and unparalleled customer service,” said Kinema Fitness President Joshua Love. “Our brand ethos aligns perfectly with the culture of inspiration permeating throughout the metroburb, and we’re honored to be part of the expanding community here at Bell Works Chicagoland.”  Somerset is transforming the vacant former AT&T corporate campus into Chicagoland’s first ‘metroburb’ – a self-contained metropolis in suburbia. The company continues to build on the resounding success of the first Bell Works concept in Holmdel, N.J., where it has transformed a two-million-square-foot former Bell Labs headquarters into a first-of-its-kind ecosystem of offices, shops, dining, event space, hospitality, and community resources. Recently, Somerset celebrated the grand opening of coLab at Bell Works Chicagoland,  the official coworking membership experience at the property. Spread across 15,000 square feet, the new coworking facility offers flexible lease terms and workspaces, including access to dedicated conference and meeting rooms, lounges, and state-of-the-art amenities. All members of coLab qualify for the tenant membership rate at FitLab. Bell Works also welcomed Platinum Home Mortgage Corporation — the metroburb’s first long-term lease — which joins a growing list of office tenants including CPA Advisors Group, a boutique full-service accounting firm; Mosquito Hunters, residential and commercial mosquito control services; and The Next Unicorn, an equity crowdfunding firm. The metroburb additionally features 60,000 square feet of ground-floor retail and restaurant space, which will provide both members and visitors alike with an eclectic mix of dining and entertainment options. FitLab joins an outpost of local Chicago favorite Fairgrounds Craft Coffee and Tea, which opened earlier this year.  For office leasing inquiries at Bell Works Chicagoland please contact Steve Kling at or Tara Keating at To learn more about Bell Works Chicagoland, visit The post Bell Works Celebrates the Opening of FitLab in Hoffman Estates appeared first on Real Estate Weekly......»»

Category: realestateSource: realestateweeklyMay 2nd, 2022

From Resort to Residential: Disney Expands on Community Living

Disney has always been well-known for its hospitality. Songs like, “Be Our Guest,” invite audiences to make a home for themselves—whether they’re visitors being delighted at the theme parks or families cozied up on the couch. Now, Disney hopes to repurpose its company commitment towards placemaking with a real estate venture sequel it hopes will… The post From Resort to Residential: Disney Expands on Community Living appeared first on RISMedia. Disney has always been well-known for its hospitality. Songs like, “Be Our Guest,” invite audiences to make a home for themselves—whether they’re visitors being delighted at the theme parks or families cozied up on the couch. Now, Disney hopes to repurpose its company commitment towards placemaking with a real estate venture sequel it hopes will have a better ending than its last. In the first quarter of 2022 alone, the entertainment and media conglomerate has announced the development of two major residential community properties. On April 6, the Walt Disney Company announced in a press release that it will be using  80 acres of land in Orange County, California to bring affordable housing opportunities to qualifying public applicants and its cast members (as Disney calls its employees). This development will expand on the initiatives it’s taken to address the nation’s affordable housing crisis—which also include several housing developments built around the Disneyland Resort. Credit: @Disney In February, Disney also announced the launch of its new Storyliving by Disney communities, which will offer housing, entertainment and unique amenities encompassing a plot of land in Rancho Mirage, California—dubbed Cotino. Aerial View of Palm Springs In collaboration with Scottsdale-based DMB Development specializing in planned communities, Cotino will allow homebuyers to purchase single-family homes, villa estates and condominiums, with some neighborhoods designated as 55+. Cast members will also manage day-to-day associations. While Orange County remains in a concept phase, Storyliving in Rancho Mirage has been approved and will include a mixed-use district featuring shopping, dining and entertainment, a beachfront hotel and beach park with recreational water activities that can be accessed by the public through the purchase of a day pass. Rancho REALTORS® have voiced their support for this endeavor, highlighting the power of influence communities like Cotino can have on a new era of homebuyers. “There is an increasing market for lifestyle communities with conveniences—hotel, shops, restaurants—and easy access through walkability,” says Geoff McIntosh, broker associate for Coldwell Banker and former president of the California Association of REALTORS®. “Leave the car at home! We have a clientele—especially baby boomers and millennials—looking for exactly that.” He adds that this development aims to deliver on its decades-plus mission of enchantment and enterprise. “Leveraging the Disney brand is brilliant—with Disneyland opening in 1955 that brand is uniquely positioned to have broad appeal. Recognized as a “quality-trusted” brand with incredible Imagineering looks like a winning combination to me.” The tagline on the Storyliving by Disney website reads, “Imagine. Create. Live your story.,” displaying illustrated, concept renderings of a diverse community backlit by a picturesque, desert-spring landscape. “A Living Painting,” another tagline suggests. The notion of a suburban utopia conceived by Disney isn’t new. Many are familiar with Disney’s past residential endeavors—the most recent being the multi-million-dollar luxury properties in Golden Oak, Florida, located within Walt Disney World Resort, and its first and former residential model in Celebration, Florida. The concept draws upon decades of achievements in innovation, brand loyalty…and quite a few learning-curves. Something to Celebrate In 1966, when Walt Disney outlined his vision for the Experimental Prototype Community of Tomorrow (EPCOT), it was less a suggestion for a compact representation of world heritage, but moreover an Arcadian Americana. Disney died a year later, and his grand vision metamorphosed into EPCOT park in 1982. In 1991, the company turned back the pages of his book and began planning an actualized version of Walt’s perfect town—climate-controlled bio-dome excluded. Epcot in Disney World at Sunset Disney secured nearly 5,000 acres of land in Osceola County, Florida, a stone’s throw away from the parks, and in 1996, his vision was fully realized. “Celebration” was a community styled off of the holistic design movement, New Urbanism, which aims to shift away from low-density zoning and single-use buildings and homes that became popular after the end of World War II. New Urbanism promotes walkable, mixed-family neighborhoods, a centralized main street, accessible public spaces and a community model where function influences social well-being. Disney hired celebrity architects around the world to design its residential and commercial infrastructure. Celebration’s Town Center contained commerce, a town hall, a movie theater, schools and other civic establishments incorporated into the town. Homes were designed in different architectural styles like Classical, Victorian and Colonial Revival, with a front porch and garage in the back. Everything from street signs to storefronts, even manhole covers, were designed to tie the whole town together. Postcard Perspective When Kim Hawk first heard of Celebration, she was one of the first (of 5,000) people who showed up for the lottery Disney held for the sale of the first 350 homes. “My mother, who was a broker at the time, said to me, ” Now’s the time to activate your life,” because it’s always smart when you can see a project from the ground up. I’ve been here for over 25 years since.” Hawk, a REALTOR® for Florida in Motion Realty and reputed locally as the “Fairygodmother of Real Estate Near Disney,” shared what it was like at the start in terms of buyer expectations. “There were people that put every bit of their energy into getting a house here,” she says. “Back in those days, it was required that you had to sell whatever property that you lived in prior because they wanted to have founding residents. All of a sudden, you really started to see the definition of supply and demand. The power of Disney behind the community really amped up the sales quickly.” Hawk reveals that the community’s walkable streets, fiber optics and locale under a no-fly zone are still attractable assets. “Because people are concerned about the pandemic returning, people have adopted this mindset of ‘who has the right resources where I can live the best lifestyle possible’,” she says. “I would say Celebration is skyrocketing because of that. Now, we’re getting calls from people who say, “I just want to live in Celebration, you don’t even have to show me the house.” Great Reflections of the Celebration, Florida Downtown and Lakefront Social analyst and author Andrew Ross, who wrote about his year-long stint living in Celebration in his book, The Celebration Chronicles: Life, Liberty, and the Pursuit of Property Value in Disney’s New Town, resounded in favor of Celebration’s design scheme. “The first people who came to Celebration were just dying to live on Disney land. You can compare Celebration with typical suburban subdivisions in Central Florida, but I think the quality of offering was far superior,” he details. “A master plan residential development wasn’t all that experimental at the time. However, when you think about the identity of the developer and that they were able to build a town center before people even moved in—that has never happened before in real estate history.” Ross also has been vocal about the issue of affordable housing in American suburbs and rural areas, and cites Disney’s own shortcomings on the issue. His 2021 follow up to Celebration Chronicles titled Sunbelt Blues: The Failure of American Housing, provides even further insight into Disney’s response (or lack thereof) to the need for affordable housing within Celebration itself. “At the time Celebration was built, the alternative was for the developer to put a bunch of money into a fund and have affordable housing built off-site, which is what they did,” he explains. “It was only $300,000—that doesn’t give you much affordable housing. As a result, there was nothing built-in in the way of permanent affordable housing in Celebration.” The town remains to be a mixed-income community, but Ross articulates how once these kinds of properties become commercially successful, they no longer become affordable—which is what happened in Celebration and other New Urbanist-showpiece towns like it. Hawk retrospectively addresses the issue of affordability in Celebration, saying, “It probably was a little bit of a stretch 25 years ago, but I think a lot of those people are now very happy with it because when they went to sell, they made a good amount of money from the properties.” Because of its Disney name, critics couldn’t help but perceive Celebration as an extension of the theme parks—which complicated matters of public interest, according to Ross. “The problem is, visitors and consumers of the theme parks are accustomed to a high level of customer satisfaction” he explains. “I think there were some people who expected that Disney would be on call if something went wrong and that they’d deliver customer satisfaction, but that doesn’t happen in real estate. You can’t control the speech of the residents in the same way you control animatronic figures in the theme park.” Walt Versus Wall Street Disney’s conflation of imagination and perception resulted in a fairytale-like dilemma. In truth, it was a real town, like any, with real problems. Even though Celebration proved to be a commercial success for Disney in terms of home sales, the company sold Town Center in 2004 to Lexin Capital, a private-equity New York City firm. Disney claimed that it wanted to focus on selling other commercial lands, but insisted it’d keep a watchful eye on the town for several more years. While Lexin assured that the effects on the town were going to be nothing short of a change in guard, the next decade plus proved otherwise. The years following ignited a media frenzy. Crime, educational tussles and a litany of lawsuits from disgruntled residents plagued the town. Hawk recounts how many residents wanted power to transfer over to its own residents who knew the town best. “I was a member of a group of people that said we wanted to buy downtown versus Disney going out and selling it to a group that wasn’t familiar. I think if that had been the case, it might have been a better situation.” She does maintain, however, that the issue involved both personal and public deception, since resolved. “As far as expectations of what should be delivered, the town’s doing pretty well right now,” she holds. “My heart does go out to a couple people who had to fight in order to get the results that they wanted, but I wouldn’t say it was the town in its totality that was an issue.” Celebration’s distinctive origins and design elements cement it as an entirely unique community, however, Ross addresses its drawbacks in a much broader context. “There are communities all across America with a similar story to tell when they get taken over by private equity. They usually don’t go after fairly affluent places like Celebration, and they don’t usually get pushback (i.e. residents who fight back), but that’s what happened in Celebration.” A New Chapter of Real Estate Though Disney’s past real estate ventures do not necessarily dictate the future of Cotino, it certainly informs how they move forward. The narrative for Storyliving characterizes this project as an entirely new venture for Disney, and in many ways it is. Since it is not the developer, it’s safe to assume that it would want to distance their brand more so than it has in the past. Bringing his expertise in planned communities and Disney into the fold is DMB’s president and CEO, Brett Harrington, who formerly served as Celebration’s town manager in its formative years. Though Rancho Mirage Mayor, Ted Weill, believes that Cotino will be a “fabulous fit” for the community and serve as a much-needed economic boost—he took the time to dispel some public concerns on the government website. Its location has raised eyebrows. The state of California is experiencing a two-decade drought, and with plans to feature a 24-acre, “grand oasis,” lagoon on the property, many are wary of the environmental impact a structure like that will do. Disney safeguards the potential water shortage issues by stating they will be employing the use of Crystal Lagoons, which promotes sustainable, eco-friendly, low-consumption technologies. Others question its location in relation to its nearest park. In contrast, Celebration is at arm’s length with Walt Disney World, and Golden Oak is located within the resort itself. Cotino does not have the luxury of such proximity (nearby Disneyland is two hours away). Disney squares this by tying the land to the magic man himself, Walt Disney. The Coachella Valley was a beloved destination for Walt Disney and his wife Lillian, as well as other golden-age celebrities and U.S. presidents alike. It was a reprieve from the hustle and bustle of Hollywood, with Cotino offering a similar level of escapism. Disney has yet to announce how much homes will cost, but it has stated that they will not be developing, building or selling the homes themselves. What is certain, however, is that REALTORS® up to the challenge of selling these homes will be marketing towards a very niche demographic who might welcome the idea of morning tee times, solitude in the Santa Ana’s and a community of like-minds with a penchant for theatrics. David Cantwell, managing broker for Berkshire Hathaway HomeServices Bennion Deville Homes, offered a generally optimistic approach to this development, and revealed that the Disney connection was unbeknownst to city officials until the day before the official announcement came through. “The response has been mostly positive,” he says. “It’s amazing was able to keep it quiet.” Cantwell, whose corporate offices reside in Rancho Mirage, is encouraged that the city has put in place conservation efforts so that the water being taken from aquifers underneath the land and through its Colorado River reserves is mitigated through the use of the advanced tech being used to fill the lagoon. “We have no thoughts on it going dry,” he maintains. He also gave insight into the potential rate of these Cotino homes in lieu of an already steep market. He noted that forces that have driven detached home prices higher, (i.e. low inventory and rising sales) continue to dominate the Coachella Valley housing market—currently averaging $630,000 for detached homes. “Considering that the median price for homes have gone up over 40% in the Coachella Valley, we expect that the rate for these new properties will go for $500,000 or more, which is actually below the median in the area.” As for who might be eying these homes, Cantwell categorized this target demographic as 55+ residents (the median age in Rancho Mirage is 65), Midwest and Pacific Northwest buyers who look for secondary homes in warmer climates and higher income families interested in the amenities being developed on the property. In regard to its future community impact, Cantwell assures that this project can only bring out good things for the housing market. “We need the inventory. A project of this size helps our market currently being affected by a low-cycle housing market. This property also offers plenty of room for growth in the commercial sector.” Geoff McIntosh of Coldwell Banker additionally gave insight into the eventual process of selling these homes—and is hopeful that these properties would foster new leads and growth opportunities for area real estate agents. “I would anticipate that there will be an onsite sales team that handles the initial sell out. Given the size and scope of the project it will likely take years,” McIntosh estimates. “Generally, new developments are very welcoming of the local real estate community as we are influential in introducing prospective buyers to all the options they have in the area. Usually the onsite sales office represents both the developer and the new home buyers received through referrals by local REALTORS®.” Though many are wary of this property’s large footprint negatively impacting the landscape, McIntosh trusts the experts and the bottom-line overview as compared to similar properties in the area. “I believe adequate studies have been completed to address these concerns and the location of the project is 618 acres of undeveloped desert land on the north side of most of the improved property in Rancho Mirage. In comparison, Del Webb Rancho Mirage is on a site about half the size with roughly 1,050 planned homes at completion. There are only 1932 residences and a 400-room boutique hotel on site at Cotino, so it will be relatively low density.” In a continued market that favors the seller, Judy Ziegler of Bennion Deville Homes contends that agents have the leg up. Compared to years past when the area really catered to secondary homes, work-from-home opportunities and an emphasis on life-work balance has made the greater Palm Springs area and alfresco living desirable year-round. “COVID changed our entire market. People are staying here,” she says. A project of this scale naturally invites some curiosity and criticism. It’s safe to say onlookers will be tuning into every phase of this venture—from the very first nail to the cutting of the ribbon. Storyliving seeks to expand on the concept of storytelling set out by Walt himself nearly a century ago wherein everyday is the story, and you hold the pen. There is hope, however, that these communities foster a new chapter of real estate beyond just its whimsicalities and brand name. These undertakings illuminate the desire and necessity for a larger scope of natural and accessible living spaces throughout the country. Whether Disney will be the one to change the status quo of real estate, only time will tell. Joey Macari is RISMedia’s associate editor. Email her your real estate news ideas at The post From Resort to Residential: Disney Expands on Community Living appeared first on RISMedia......»»

Category: realestateSource: rismediaApr 18th, 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

European Markets Freak Out As Odds Of Le Pen Victory In French Presidential Elections Jump

European Markets Freak Out As Odds Of Le Pen Victory In French Presidential Elections Jump Ahead of last weekend's Hungarian parliamentary election, the pollsters were predicting a landslide loss for the loathed by the western/EU establishment current prime minister, the pro-Putin Viktor Orban. Well, there was a landslide, just not in the direction the so-called experts predicted (which begs the question: why do people still listen to polls after 2016, but we digress), and in the latest humiliation for Brussels, Orban was re-reelected in a huge victory, steamrolling the opposition alliance. So with all eyes on this weekend's French elections which pit Davos crowd pet and former Rotschild banker Emanuel Macron against outspoken nationalist Marine Le Pen. Here too, fears are growing that what until recently was seen by the always wrong pollsters as a "done deal" and blowout victory for Macron, suddenly is looking very shaky. With French voters taking to the polls on Sunday, the race is suddenly wide open because while Macron's lead over Le Pen had been narrowing in recent weeks, a shock poll released yesterday by Atlas Politico showed that Le Pen (50.5%) now has a slight advantage over Macron (49.5%). A little background: the first round of the French presidential election will take place on Sunday (April 10). The two candidates gathering the most votes will qualify for the second round of the election, which will take place on Sunday, April 24. Incumbent President Macron still enjoys a comfortable lead in the polls at over 25% of voting intentions, although this is down marginally from the early-March highs. Voting intentions for far-right candidate Marine Le Pen have increased to about 20% (from about 15% a few weeks ago), placing her as the most likely candidate facing Macron in the second round. Macron, who had sought to put himself at the center of European and US efforts to end the crisis in Ukraine since late last year with dismal results so far, only began campaigning in earnest about a week ago. The calculation was that he’d benefit from the image of peacemaker and seasoned statesman, and that his handling of the pandemic and a strong economic rebound would be enough to keep him in the Elysee. Until recently, polls suggested that was true... but suddenly the unthinkable appears possible, and a big reason for that is the exploding inflation across France. More on that in a second. The problem, as Bloomberg notes, is that foreign policy rarely wins elections in France, and an appearance of complacency fueled the perception that Macron is arrogant and out of touch - which of course is true on both counts - is opening the way for Marine Le Pen. Unlike the caviar-slurping Davos jet-setter, Le Pen realized long ago on that voters already struggling with high energy and food prices were more likely to care about purchasing power or lack thereof. And so, what was a 12 point gap between her and Macron has narrowed dramatically as she toured towns and villages, casting herself as the defender of the “little ones” against Macron’s reputation as the “president of the rich.” She pledged to slash gasoline prices and tax big energy companies. Of course, this won't be Le Pen's first attempt to dethrone Macron. Or second. On her third attempt to clinch France’s top job, Le Pen has become a familiar face. Her efforts to appear more mainstream got an unexpected boost from the candidacy of Eric Zemmour, a far-right former media pundit sanctioned three times for hate speech also known as the French Trump. People close to Macron have been warning that his victory isn’t assured. “Of course Ms. Le Pen can win,” Edouard Philippe, a former prime minister in Macron’s government, said last week according to Bloomberg. But for that to happen, Le Pen would have to build an anyone-but-Macron coalition in the second round on April 24 and left-wing voters would have to abstain, or vote for her. To be sure, a Le Pen victory over Macron, the self-styled successor of Angela Merkel, and defender of the European project, would be a shock for the European Union on a par with Donald Trump’s U.S. election victory and the Brexit vote in 2016. Armed with a veto on most EU initiatives, she could bring the bloc to an abrupt halt and could effectively spell the end of the EU, one of the core Western alliances in a thunderous win for Putin. There’s one more wildcard in this race: Far-left leader Jean-Luc Melenchon. On his third shot at the presidency, he’s polling six percentage points after Le Pen, and could convince left-wing voters to rally behind him on Sunday. As Bloomberg puts it, "voter support for her means that immigration would remain central to her agenda. A win would cap the far-right in France, pointing the country on a nationalist, nativist path." In any case, even if Le Pen doesn’t pull it off, Macron would win by a far smaller margin than last time the two went head-to-head in 2017. The nationalist would emerge empowered in either outcome while Macron will be left with a weak mandate that could make it difficult to implement his economic and social reforms, depending on the outcome of legislative elections scheduled for June. That said, a victory would be a stunning accomplishment for 53-year-old: it took Le Pen a year to recover from her defeat to Macron in 2017, but she held tight and looked to Viktor Orban, who just won a fourth-straight term as prime minister in Hungary, and Matteo Salvini in Italy for inspiration. She changed her party’s name to appear less aggressive and also intensified a strategy to soften her image, sharing personal stories about her life as a single mother with three children and her Bengal cats. She dropped a plan to ban dual citizenship - a calling card of the far right - and disavowed Russian President Vladimir Putin after his invasion of Ukraine. “She’s made progress — she’s opened up to other people and listens to criticism,” said Robert Menard, the mayor of Beziers, who backs her and talks to her once a week. “Before, we didn’t speak, we just argued.” Le Pen has been focusing on social welfare since taking over her father’s party in 2011, essentially inching the movement that was economically liberal in the 1980s closer to the left, increasingly attracting less well-off people and the young working class. On March 10, Le Pen cast herself as the candidate of the “little ones” against the “big ones” in the poorer Northern France region, slamming Macron for “giving everything to big companies.” She also pledged that gasoline prices would go down if she’s elected — a key issue for voters in rural areas who rely on their cars — with tax cuts on fuel, and new taxes on oil majors. By contrast, Zemmour’s program veers more to the right. He wants the French to retire later, reduce welfare and cut taxes on companies and real estate owners. But at the end of the day, his supporters will likely back Le Pen in a runoff against Macron, according to an analysis by Gilles Ivaldi, a Sciences Po researcher. “By pushing a social-populist agenda long before the war and increasing her rhetoric after the invasion, Le Pen is gambling,” Ivaldi wrote in a recent opinion piece. “So far, polls appear to be proving her right."  Indeed they are, and the market is starting to freak out: holders of French debt have been dumping it ahead of what could be a shock outcome this weekend, pushing benchmark yields up to as high as 1.25%, a level last seen in 2015. That took the spread over their German equivalents -- a measure of investors’ perception of risk -- to the widest since March 2020, the onset of the pandemic. Consistent with the evolution of polls, further election risk premium has been priced across assets during the course of this week. In our view, the French presidential election has more European rather than domestic implications. In a note previewing the French election, Goldman strategist Peter Oppenheimer (note available to pro subscribers), writes that consistent with the evolution of polls, further election risk premium has been priced across assets during the course of this week as "the French presidential election has more European rather than domestic implications." As Oppenheimer details, "since the invasion of Ukraine by Russian forces, equities and peripheral sovereign spreads have been resilient despite the deterioration of the growth/rate mix and the repricing of tighter monetary policies. Part of this resilience likely lies in the swift and homogeneous response of European leaders in terms of diplomatic and fiscal policies, with President Macron being a key player in proposals for further EU integration." But a change in the French presidency or rising odds of a Le Pen victory is likely to trigger market stress, pushing some sovereign risk back to the forefront and raising the equity risk premium. If Le Pen were to be elected, Goldman expects 10y OAT-Bunds to land at 60-75bp, 10y BTP-Bunds at 180-210bp and EUR/USD to trade 2% lower. In the equity space, the risk premium could rise by 30bp, which implies a 7% price drop for the SXXP. This is consistent with what the equity derivatives market is currently pricing. In any case, with 2 days to go, President Macron still enjoys a modest lead in most polls, with a handful of exceptions, at over 25% of voting intentions, although this has declined marginally from the early-March highs (Chart 1, left). The recent polls also confirm that the next two leading contenders are far-right candidate Marine Le Pen (Rassemblement National) and far-left candidate Jean-Luc Mélenchon (La France Insoumise). In France, polls this close to the election have tended to be relatively accurate, with mean polling errors shrinking by close to 1pp a fortnight before the first round, and a rematch of the 2017 contest between Macron and Le Pen therefore looks highly likely (Chart 1, right). Where things get shaky is that second-round polls have recently shown President Macron’s lead over Ms. Le Pen narrowing to historical lows. Although prediction markets still foresee a victory for President Macron, they have repriced Ms. Le Pen’s odds to 20% up from 5%. In that respect, Goldman argues that the key risk stems from the participation rate of moderate voters. In a simple exercise, assuming that Zemmour voters largely vote for Le Pen and that Pécresse voters equally split on supporting Le Pen, Macron and abstaining in the second round. Varying the participation rate amongst left-wing voters in the second round (i.e., who voted for Mr. Mélenchon, Hidalgo or Jadot in the first round), Goldman finds that 60% of 1st round left-wing voters would need to abstain for Le Pen to be elected president if the far-left was to split itself equally between Macron and Le Pen (Exhibit 2, left). As such, the bank will carefully monitor (i) unsuccessful candidates’ voting guidelines, if any, and (ii) sub-polls showing 2nd round voting intentions conditional on the 1st round vote. We will also look for major public figures—including former presidents and prime ministers—to persuade 1st round abstainers and voters whose candidates did not advance to regroup behind the mainstream candidate (likely Mr. Macron) so as to form the so-called Front Républicain. Tyler Durden Fri, 04/08/2022 - 10:50.....»»

Category: personnelSource: nytApr 8th, 2022

Transcript: Bill Gross

     The transcript from this week’s, MiB: Bill Gross is Still Standing, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ RITHOLTZ: This week on the… Read More The post Transcript: Bill Gross appeared first on The Big Picture.      The transcript from this week’s, MiB: Bill Gross is Still Standing, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ RITHOLTZ: This week on the podcast we have an extra special guest. I’m trying to — to maintain low tones and I’m trying to keep my insane enthusiasm down. But holy cow, Bill Gross, the Bond King, spent three hours talking with us literally about everything. This is a pretty amazing conversation. He does not hold anything back. He names names. He calls people out. He — I don’t even want to say he has scores to settle because he did that in his book. He explains what made PIMCO such a — a unique place, how they accumulated trillion dollars, essentially creating the concept of institutional bond trading before PIMCO bond trading was by appointment only. This didn’t exist before then. We cover everything from card counting to inflation, to the Fed, to his book. It’s a Mary Childs book, “The Bond King,” about him. Really, there were no comments left unturned. And we also revealed what his thoughts were about when his bonus was revealed by a certain podcast host about eight years ago, and — and how that came about. His and Mohamed El-Erian’s multibillion bonus pool, how that thing could even exist, Allianz allowed them to do it, and — and how after almost being a parlor game of speculation, how those billions of dollars in who got what bonus pool was finally revealed. This was an absolutely fascinating conversation and an extra special guest. So, with no further ado, my conversation with PIMCO Co-founder Bill Gross. ANNOUNCER: This is Masters in Business with Barry Ritholtz on Bloomberg Radio. RITHOLTZ: My extra special guest this week is the Bond King, Bill Gross, the Co-founder of PIMCO. At one time, Bill’s total return fund was nearly $300 billion. It was the world’s largest mutual fund. Gross controlled more bond money than anybody else in the world. He advised the U.S. Treasury on the role of subprime mortgage bonds in the ’08-’09 crisis. He was named Morningstar’s Fund Manager of the Decade in 2010. They observed no other fund manager made more money for more people than Bill Gross. He is the author of several books, including “Bill Gross on Investing” and most recently, his book “I’m Still Standing: Bill Gross and the PIMCO Express.” Bill Gross, welcome back to Masters in Business. GROSS: Thank you, Barry. Actually, I’m — I’m sitting talking to you, but I’m standing in life, so that’s what the — the title applies, I think, but it’s good to be here. RITHOLTZ: It’s good to have you back. And, in fact, I owe you a debt of gratitude because when you came on the show, you know, it’s got to be six, seven years ago. You were really the first big name that said that I – let’s try this podcast thing out, and you opened the floodgates. So, if I’m lacking in any objectivity, let me disclose that right up front. But — but let’s talk about your career starting with Pacific Life. You’re — you’re a junior guy there, literally, going into the vaults, taking bond certificates and clipping coupons off of that. How — how do you get from that sort of junior intern menial labor to launching a standalone active bond shop? GROSS: We’ll, let me add to that quickly. I — I could only clip coupons for half of the day, I guess. The other half I was off making private placements of loans to fledgling companies such as Berkshire Hathaway and Wal-Mart. I — I visited Sam Walton with his two kids with a dog I struck. They had two Wal-Marts in Bentonville, Arkansas. And same thing with Buffett and Charlie Munger. So, I — I was doing some of that. But to — to — to make the transition, I guess, to managing money, I — I — I did a master’s thesis at UCLA, I just graduated, and it was about convertible bonds, but also about warrants and — and option-related vehicle. So, I was interested in the bond market even though I wanted to get in the stocks. And Pacific Mutual in downtown LA had a $1 billion worth of bonds. And a broker from Weeden & Company, Howard Raykoff, decided to visit and tell me that somebody else in town was trading some bonds from boxes. And — and that was as — as you know, there weren’t any computers or IBM 360s, but we only had one. You couldn’t really buy and sell on the wire, and so it was very difficult to trade. But I convinced him to, you know, let me use $5 million of their bonds and set-up an active trading account. That was the beginning of PIMCO. RITHOLTZ: And before PIMCO, I’ve heard bond trading described as by appointment only. Is it fair to say you and your team invented fixed income trading? Am I — am I overstating that? GROSS: Probably just a little. There was this gentleman, I forget his name in Occidental Life Insurance in L.A. that was doing some of that. There was Jim guy from Lehman who later died that was doing some of that. But I was certainly one of the first, and I was certainly one that pursued it and convinced at least the executives of Pacific Mutual that this could be turned into a business. RITHOLTZ: So maybe I should say PIMCO helped to bring about institutional trading on a level that just didn’t exist before. You guys helped to systematize it. Is that — is that more accurate? GROSS: Yeah, I think that’s true because back then, you know, stocks were the vehicle to trade, and even then, they weren’t traded that actively. Bonds were basically bought and ultimately matured, I guess that — the big banks in the East, the New York, and Boston, and Chicago. And so, yeah, bond trading was — was an afterthought. No one thought that you could sell one bond, buy another, and make some money. And so, it was innovative, and I was glad to be part of it. RITHOLTZ: So, in the book, you describe how PIMCO grew in the 1980’s and 1990’s, but we’ll talk about the latter years later. But that period, following everything that Chairman Paul Volcker had done with the bond market, that really was a — a perfect storm to — to plow into the fixed income space. Tell us about the growth of PIMCO in the 1980’s and 1990’s. GROSS: OK. And — and so you’re right, we started at a great time not in the 70’s because the bear market didn’t really end until ’81, ’82, ’83 depending upon, you know, the maturities of bond. But you — you know, it’s — it’s set-up the premise for total return in bonds where you could not only get a coupon, get an interest payment, but get a capital gain. And when you’re starting at close to 15 percent for a 30-year treasury, you know, it was — it was fairly easy ultimately to get a capital gain, and so that — that helped us. We were also helped by a legislation from the Congress a bill that legislated ERISA, which basically mandated that pension managers had to diversify and not just diversify between, you know, the obvious, but also diversify between East Coast and West Coast. And so, this little company called AT&T, the biggest in the world team according late in the 70’s and liked what they saw, and they hired PIMCO. And that really was the beginning of it all. I mean, who — who wouldn’t open the door to a person or to a company that had just been hired by AT&T. RITHOLTZ: But this is more than just lucky timing for a couple of reasons that I want to go into. We’ll talk a little later about some of the technical aspects that PIMCO really figured out to generate fixed income alpha. We’ll — we’ll circle back to that. I want to talk a little bit about your investment outlooks. These were — were highly regarded. People thought they were both insightful and well-written. And this is at a time when, you know, we kind of take it for granted today that so many people write about financial investing and strategies. When you started doing the investment outlooks each month, that was somewhat unusual, wasn’t it? Tell us about that. GROSS: Yeah, it was very unusual, and I thought about it from a business context. And I said, you know, if I want to be successful at PIMCO, if we want to grow as a company, you’ve got to say hello. And the best way to say hello is to write these investment outlooks. I mean, there were a few. There was a famous guy you know, Barton Biggs from … RITHOLTZ: Sure. GROSS: … Morgan Stanley that was a real good writer. And — and I don’t think Jim Grant had started yet, but he was a excellent writer in the time. So, I wasn’t the only one. But I — I thought that if I’m going to inject some personal vignettes into my forecast for the bond market, the people would read it because they didn’t really read these things that came out of First Boston, and Solomon Brothers, and so on. And so, I — I decided to take a little risk. You know, one of the things that I wrote at the beginning of my book, a quote, it said that, “Talent is helpful in writing, but guts are absolutely necessary.” And so, I — I decided to have a few guts and opened myself up to people. And some like that and some didn’t but, you know, the — the reputation grew. RITHOLTZ: Well, I want to point out first, you were the — the O.G., the original gangster when it came to financial writing because, of course, there were lots of professional writers and journalists running about it. But as far as I recall you might be one of the earliest people who were managing money to describe what you were doing. I — I want to say it was Howard Marks and you. Pretty much, you were the guys that were putting out regular commentary before, you know, anybody could — could go online and find letters from Warren Buffett or — or things that Ray Dalio wrote or anyone of thousands of other professional money managers. When you began, I don’t think there were many other money managers putting out written commentary the way you guys were. You, Buffett, and Marks are kind of the three that — that blazed this trail. GROSS: I — I think so. And, you know, one of my positive attributes is that I — I wasn’t afraid to take risk and to — to take chances. And so, you know, there were those that, you know, PIMCO and marketing and so on that would suggest that you can’t do that because people would just jump on your ideas and front-run. But, you know, I’m — I’m paranoid in a lot of things, but I wasn’t paranoid in that in terms of thinking that no one really cared. And so, — so why not? Why not tell people what I thought? And I — I think it worked. RITHOLTZ: So, no doubt I remember worked because the firm did well in the 80’s and 90’s. At what point did you come to the realization, “Hey, this is kind of a one of a kind company and it’s going to be special.” Did you ever imagine you would have a trillion dollars in assets under management? GROSS: Well, of course not, but at some point, I did when we were $990 billion. RITHOLTZ: Right. GROSS: But — no, my — my objective was to — was to grow the company to, you know, have a fiduciary responsibility to clients in terms of products and not — not charging them too much or inventing products that ripped them off. But I also want to or wanted to be famous. I mean, that’s — that’s in my book and — and the — the Childs book as well. And, you know, growing into $1 trillion and ultimately ended $2 trillion was — was very productive in terms of being famous and I guess, ultimately, infamous. RITHOLTZ: So now that you look back, which is more important in hindsight, money, power or fame? Greg Dardis: Well, I — I never enjoyed power and I’ve enjoyed some of the money, but after a certain point, it’s not that productive unless you give it away. And so, I — I think ultimately, if those are the three choices and I did offer those to potential recruits who, by the way, would never answer the question because they were afraid that any of the answers would be — be negatively. But I — I — I — I’m certain, you know, I would choose fame again. And I — I was — I was cognizant at the time that fame can turn into infamy that you could fly too close to the sun, et cetera , et cetera from an objective standpoint. But I must say I didn’t think it could happen to me because I was always on the up and up, always honest, always open, and — and why would anybody. And I — I think ultimately, that was eye-opening to me, but I — I do it again. RITHOLTZ: Really interesting. (COMMERCIAL BREAK) RITHOLTZ: Let’s talk a little bit about the way he PIMCO grew and generated profits for clients. You — you describe a lot of very technical aspects to bond management and trading, which all contributed to fixed income alpha, which I think a lot of people reading your latest book might not have realized all the ways that — that you guys generated outperformance. The — the question I — I ask is how is it possible with all this money laying around nobody thought of this before. Why didn’t anybody else try and systematize total return of fixed income portfolios? GROSS: Well, I think, I mean, a lot of bond managers were and probably still are very conservative. That’s their job to protect principal. And therefore, on the sales side, on the Wall Street side, they were facing the clientele that didn’t really want to accept any of their suggestions, whatever they were, you know, well, just the other way for me and for PIMCO. And, you know, we were very innovative from the standpoint of new products. We were one of the first to — to buy financial futures. We were one of the first to — to fund mortgages — Fannie Mae mortgage. I mean, most — most bond managers didn’t want to go through the problem of segregating principal and interest, and determining performance. It took a long time and a separate staff, and so we did that. And then, of course, in the — later in the global and tips. And — and so — and so the innovation was key, I think, to help with generation. The biggest key was the thrust of what we called secular forecasting, secular outlooks. And I — I — I read a book early on just after I joined PIMCO called “Investing for the Long-Term.” I forget who wrote it. But, you know, you’re focused maybe on the dangers of trading for the short-term because fear and greed on the others that get involved and you tend to make bad decisions. And so, we approached it from the standpoint of three to five years. In terms of the — an outlook, we brought in speakers that spoke to that, many of them, you know, Fed officials or ex-Fed officials, et cetera. And so, I think that really helped us to avoid, you know, the bad — the bad months and the bad quarter by looking at three to five years. So those were several of the case. RITHOLTZ: And when you say investing for the long run, you’re not talking about Jeremy Siegel’s stocks for the long run, you’re talking about something more specific. GROSS: Yeah, and basically it involved forecasting interest rates. And — and to be fair, you know, throughout the period of time that the secular outlook for interest rates was down, down, down. And, you know, during our annual secular forums that we had where we brought in outside speakers and basically set the tone for the next 12 months, you know, for the most part, it was a bullish forecast, which turned out to be true. If we had a forecast, it went the other way for the long-term for the next three to five years and obviously, the company would have disappeared. But — but focusing on that, forgetting about the day or the week or the month, I think it became very successful in terms of position in a portfolio duration-wise, and volatility-wise, and credit-wide. RITHOLTZ: Really intriguing. So — so let’s talk a little bit about, you know, you as a investor and trader. I’m — I’m kind of entranced by the way I’ve heard the PIMCO trading floor describe your desk was a horseshoe, and the traders and the analysts were arranged in a really specific manner. Tell us a little bit about — about the thinking there. GROSS: Well, I — I thought it was pretty simple, and I don’t really remember the horseshoe. But, you know, I was positioned in the middle certainly, and the traders of which they eventually grew to 20, 30, 40, 50 were, you know, basically positioned in pods: the mortgage people, the high-yield people, the global people, et cetera. And, you know, they would work together and almost independently day-to-day, but I would check and — and others would check in terms of what they were doing, make suggestions, and so on as — as we walked around the floor. So, it — it made a lot of sense. It was a big trading room with — I don’t know how many square feet, but I think functionally it really worked for us. RITHOLTZ: So — so who got to sit close to you and who sat further away? Was that a function of how accurate — how active those markets were or was it, you know, just seniority basis? GROSS: You know, well, it was both. You know, I remember that Scott Simon sat to the left to me, and — and Bill Powers, and I don’t think Chris Dialynas ever sat next to me. He was — he was content to be on the wing, so to speak, and do his own thing. But — but usually, I would be determined as well by who would — who would be quiet as opposed to loud. You know, I — I liked quiet to be able to think myself, and somebody with a loud voice talking to brokers are calling up their spouse, you know, just wasn’t working for me in terms of a trading day. So, you know, the quiet, and function, and seniority all sort of fit in. And I — I didn’t think somebody else picked and I just went along with it until the noise got too loud, and then they were out and somebody else is in. RITHOLTZ: So — so you mentioned the number of your colleagues. In the book, which we’ll talk about in a little bit, you’re very generous in giving lots of credit to your colleagues for being major drivers of — of the firm’s success. Tell us about some of these colleagues and — and how they contributed to PIMCO’s growth. GROSS: Well, they were, you know, we hired some really smart people and really aggressive people, obsessive people that really love to do what they’re doing. Chris Dialynas was one of the first who was my co-portfolio manager so to speak from the early 80’s. He wanted to be a baseball player for the Angels, but decided to take our $20,000 offer. And he came and he — he had gone to the University of Chicago and, you know, studied there about options and so on, and ultimately became instrumental in terms of bringing financial futures to — to the portfolios and suggesting some very creative ideas in terms of Ginnie Mae futures which, you know, some say we — we broke the market, but he was one. And then there was another gentleman Changhong Zhu that came to us from Wells Fargo in San Francisco. He ultimately left after 10 years to go back to China with his family and head up, you know, a key position in the Chinese Central Bank, I think. But he — he would make lots of suggestions and Investment Committee in terms of the convexity and yield curve strategies, euro dollar futures, et cetera. He was perhaps the smartest guy in the floor, including me. And, you know, so I think a lot of the strategies are due to his suggestions. You know, there was a high-yield gentleman, Ben Trosky, who was really a master that all of our mortgage people Bill Powers and John Hague, and Scott Simon that I mentioned were really smart. And their performance and mortgages through the years in terms of their own portfolios, you know, just flowed over into the total return fund. So, all of these people and there are a lot of other ones. You know, we were a team and, you know, the — the term “Bond King” was, I guess, more of a P.R. acceptance than anything else. I — I — I don’t think there was a king, I was a leader and certainly a leader of the Investment Committee. And — and in terms of accepting a standard portfolio for those to manage, but not the smart people. And I think it bared acknowledgement in my book. RITHOLTZ: So, lots of these colleagues eventually became successful, they became very wealthy, and they, you know, hit the eject button and retired. You stuck around for 43 years. That’s a long time. What led to that longevity? That’s pretty unusual these days. GROSS: I — I think it — it was because I loved it. And, you know, the — the standard — the standard idea that you should do what you love is fine. It — it can’t really apply to — to billions of people, you know, throughout the world that they all can’t find jobs that they love. They can’t all paint. They can’t all write music, but this was an area that I loved in terms of buying, and selling, and competing, and making money, and becoming famous, of course. And so, I — I think I stuck around for that long until I was 72 at PIMCO or 71 simply because I love coming in. It — it just — it made my week. And, you know, at PIMCO we would have an Investment Committee until — from 12 to three every day, but after three and certainly in the summertime, I — I could just go across the street and hit some balls and play golf, too. So, I — I wasn’t a — a one-way horse rider, I — I guess, I — I could do a lot of things, but managing money and investing and — and talking about it, writing about it was something I truly enjoyed. RITHOLTZ: So, let’s talk a little bit about the two thousands. You guys really, because the way you were positioned, got a very early warning look at what was going on in the bond market and the housing market. You were pretty well-positioned before, during, and after the financial crisis of ’08-’09. How did you manage to — to accomplish that? GROSS: Well, I — I — I give most of the credit, in this case, to Paul McCauley, and Paul is still around. He’s on TV. He’s got that long hair and that southern (inaudible). But — but … RITHOLTZ: At least he got rid of the beard finally. GROSS: Yes. But he was a — an economist at — at heart, and he was a prominent member of Investment Committee. And he — he would speak about Hyman Minsky and his theory about stability turning into instability. And — and as the housing market roared and dipped, we became sensitive to the potential for instability. I — I had a brother-in-law who was a mortgage banker on kind of small scale, and we would have dinner sometimes. He would tell me about no dots and liar loans, and so on before anyone at the Fed knew anything about that. And so, I — I decided to take 10 of our credit analysts and send them out to — throughout the country and pretend that they were buying houses and to see what was going on. They came back and said hey, that this stuff is dangerous, these subprime mortgages, et cetera, et cetera. And so, we (inaudible) to this early on. We voided portfolios of subprime mortgages and high-yield bonds in general anticipating a crisis at some point. So, I — I — I think our Investment Committee, and again Paul McCauley was the leader in this regard. Grant (ph) really helped in terms of anticipating what might happen at some point, that did happen. RITHOLTZ: To say the least. Full disclosure, I know McCauley really well. We’ve gone fishing together in Maine. I’ve had him on the show before, and full credit to him for giving Minsky’s work a wider modern audience. So, given that you were positioned so well during the financial crisis, how did the relationship with the U.S. Treasury develop? Tell us a little bit about that. GROSS: Well, I guess this sounds delicate, but it shouldn’t be. You know, almost all of us were in touch with the Treasury. I mean, I — I talked to Timothy Geithner once over the phone on a Sunday evening when he called me up after it had a few beers and wanted to know what was happening in the economy. But that — that’s the only time I can ever remember talking to the Treasury. We weren’t — unlike BlackRock and Larry Fink, nothing wrong with that, but we were a company on the West Coast that basically did our own research and weren’t in touch with Treasury officials unless they were Fed officials that had retired like, you know, Bernanke and Paul Volcker, and — and others. And so, I don’t really know how to go up. It certainly wasn’t a phone call. They called us and — and said can we help manage a portfolio of mortgages for them, and we said sure. And so, that was basically it. And, you know, there was a rumor that we badgered them into guaranteeing Fannie and Freddie mortgages. Nothing could be further from the truth. Nobody made a phone call to — to badger or to — to influence in any way. What we did see is that of all the mortgages that Fannie and Freddie were the highest quality and that they were yielding astronomical yields relative to treasuries and — and much wider spreads and — had ever occurred. And so, that was the fascination with Fannie and Freddie. We did well with mortgages, and we did well during the crisis. And after the crisis, PIMCO went from $1 trillion to $2 trillion because we had protected their money. RITHOLTZ: So, we mentioned earlier the — the new book by Mary Childs, “The Bond King” is out. And I know you participated in — in responding to some questions about at least validating certain things are not factually. But it’s pretty easy to read that book and see that she is trying to make the case that PIMCO was the largest holder of Fannie and Freddie bonds, and that you guys bullied the government into guaranteeing them. Make your case. Rebut that premise. Was it simply, hey, we never sp.....»»

Category: blogSource: TheBigPictureApr 4th, 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 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

After Urging To Buy The Dip Every Week In 2022, Kolanovic Tells Clients To Buy The Dip... And He Means It This Time

After Urging To Buy The Dip Every Week In 2022, Kolanovic Tells Clients To Buy The Dip... And He Means It This Time If it sometimes feels like JPMorgan's global head of markets strategy Marko Kolanovic has turned into a broken record, and tells the bank's clients (and anyone else) to buy the dip every single week... well, that's because it's true. One almost wonders if JPM has an agenda in trying to get retail investors to buy all day, every day the stocks that the bank's whale clients are selling (and for those who laugh at this suggestion, do not read the far more bearish commentary from JPM's trading desk reserved for a smaller and much more "select" list of clients). So in a historic week when JPMorgan absolutely murdered what may have been the biggest short squeeze in recent history, when Hong Kong-traded Chinese tech stocks and ETFs exploded higher, in some cases as much as 50% on Wednesday just hours after JPMorgan downgraded the entire Chinese internet sector calling it "uninvestable", Marko Kolanovic is out not with one but two notes in which he tells clients to - you guessed it - buy the dip. To wit, just three days after the JPMorgan quant, who one year ago was promoted to global markets strategist, bet it all on green perhaps figuring that purely statistically his call to BTFD should finally pan out and in a note on Monday Kolanovic wrote that "Too much negativity priced in - add risk to equities" adding that "we stay with a pro risk stance as we do not believe that we will see a recession", the Croatian has literally doubled down and on Thursday pushed out a note titled "A time of big risks but even bigger market opportunities", in which he points to one of the few bearish calls he has made in the past year - "we warned about the commodity supercycle and energy crisis; we also warned about the bubble in innovation, renewables, etc, and on the front page of our year ahead outlook in December we warned about geopolitical risks as a key risk in 2022", and just to impress those clients who still haven't bought the dip because perhaps they didn't see Marko as bullish enough, he writes that "it is our assessment that these forecasts have now nearly fully materialized." Noting that "while the commodity supercycle will persist, in our view, the correction in bubble sectors is now likely finished, and geopolitical risk will likely start abating in a few weeks’ time (while a comprehensive resolution may take a few months)" and predicts that "markets may anticipate these turning points sooner, and we think it is time to start adding risk in many areas that overshot on the downside year to date." In other words, in case you missed all his previous weekly calls to buy the dip, this time he really means it even as he caveats that not all dips should be bought( "not all assets are cheap, and one can still find expensive segments in mega caps, defensives and low volatility stocks that are sensitive to rising rates, a slowing US economy and factor rotations" he writes). So for those JPM who still have some dry powder left after buying every single dip in 2022 - and there have been many - Marko's reco is that "there are great opportunities in high beta, beaten down segments that now include innovation, tech, biotech, emerging markets (e.g. China), as well as more broadly in smaller capitalization and more volatile stocks." Translation: buy the highest beta, shittest assets out there, because they should go up... or something. Oh, and buy China now after the biggest ripfest in history, just ignore the reco from another JPM strategist who on Monday said not to touch Chinese tech names with a 10 foot pole, right before the biggest short squeeze in Chinese history. So why should investors buy the dip in the worst-of-the-worst stocks out there? He explains" These segments are already pricing in a severe global recession, which will not materialize in our view (though it is not possible to rule out a recession in Europe and further slowdown in the US). From the time when we called the bubble, these segments are down 60-80%, which we think is the end of the correction and in some areas represents a liquidity-driven overshoot. In fact, many of these market segments trade at all-time valuation lows (including previous recessions and periods of much higher interest rates). Perhaps the loudest message from the above is that a recession in the US is now assured, a view which not just this website but other, more astute Wall Street strategists now share. And while Kolanovic's thesis could actually make sense if he anticipated a sharp slowdown in growth which would force the Fed to halt rate hikes, cut rates and unleash a new QE, sparking rotation out of value/cyclicals and into growth/deflation stocks (i.e., buy those names the go up when growth and inflation are slowing), bizarrely he actually goes full barbell and tells his readers that he als remains "bullish on commodities and commodity equities, as recent developments are just the bi-product and not the cause of the great supply/demand imbalances that developed over the past years due to underinvesting in ‘dirty’ industries and the COVID crisis." In other words, and we agree with this, Kolanovic sees all the same reflationary catalysts that pushed energy stocks higher persisting, at the same time he is also pushing the opposite trade, buying high-beta crap, a trade which makes zero sense in a world where inflation is set to continue to rise, and where the same bubble stocks which he did indeed would drop, are set to continue sliding ever lower as growth and high beta factors continue to get crushed. In any case, where we do agree with Marko, is his continued energy bullishness, and picking up on a point we made last week when we noted that when looked in the context of the broader S&P, energy is a tiny fraction and is only set to increase, bringing with it far greater capital inflows... the Energy sector in context — zerohedge (@zerohedge) March 10, 2022 ... Marko writes that "investors are asking how far our positive Energy view can go – for a perspective we show the historical weight of the energy sector in the market and some of the supercycle drivers over the past decade." His punchline which, again, we agree with, is that "the energy crisis will end when the energy sector attains the same relative weight as during the previous commodity  up cycle. This would realign economic incentives, reduce the impact of politically-driven capital allocation and reach a capital clearing point needed to alleviate the crisis." Does this then mean that the energy sector will "appreciate multiple times" Kolanovic asks rhetorically, and answers "Not  necessarily, as the convergence can take place with some combination of Energy appreciation and a decline of other sectors in case of a continued acute energy crisis" although it certainly assures far more upside for energy stocks, a view which Warren Buffett clearly shares with his continued investment in OXY. The Croat also correctly notes that "energy is also center and key to geopolitical developments. Historically it was not uncommon that energy was traded between geopolitical enemies during the conflict, however nearly always it was at exorbitant geopolitical cost for the party that was experiencing an energy shortage. This type of energy trade is currently an important factor in 2 geopolitical regions: in Eastern Europe and in the Middle East." If Marko would only extend further on this line of thought, he may reach the same striking conclusions published in recent weeks by Zoltan Pozsar, who in the past three years, has boldly taken the title of Wall Street's most insightful analyst, a title which once belonged to Kolanovic until one day, several years ago, something snapped and Marko decided to trade in his probing market observations for the (much better compensated) political talking points emanating from JPM's C-suite. Tyler Durden Thu, 03/17/2022 - 14:05.....»»

Category: blogSource: zerohedgeMar 17th, 2022

Live updates: Russian forces "frustrated," Zelensky refuses evacuation help, Germany sends weapons and missiles to "friends in Ukraine"

Zelensky called for allies to send help. In a major "turning point," Germany will send 1,000 anti-tank weapons and 500 Stinger missiles. Ukrainian servicemen walk by fragments of a downed aircraft in Kyiv on February 25, 2022.AP Photo/Oleksandr Ratushniak President Zelensky said during a briefing on Saturday morning that Ukraine "survived" the night. He said that government forces still control Kyiv and called for allies to send help. Germany is planning to send 1,000 anti-tank weapons and 500 Stinger missiles to Ukraine. Germany to send anti-tank weapons and missiles to Ukraine in a major policy reversalGermany is planning to send 1,000 anti-tank weapons and 500 Stinger missiles to Ukraine, according to a statement made by German Chancellor Olaf Scholz on Saturday. "The Russian attack marks a turning point," Scholz wrote in a statement shared on Twitter. "It is our duty to do our best to help Ukraine defend against the invading army of Putin. That's why we're supplying 1000 anti-tank weapons and 500 stinger missiles to our friends in Ukraine."The announcement marks a significant shift of Germany's restrictive arms export policy. The country has previously said it held "historical responsibilities" that prevented it from sending weapons and arms to conflict areas, often citing guilt for crimes committed against the Soviet Union during World War II. Read Full StoryRussian forces are 'frustrated' with lack of progress, US official saysAn unexploded Grad rocket is seen at a kindergarten playground in Kharkiv, Ukraine, February 26, 2022, in this still image obtained from a videoReuters TV via REUTERSAccording to a Reuters report, the US official, who was not named by the outlet, said Russian forces had not planned to bring enough fuel or for other basic logistics. "We know that they have not made the progress that they have wanted to make, particularly in the north. They have been frustrated by what they have seen is a very determined resistance," the official told Reuters, adding: "It has slowed them down." An unnamed US official told Fox News: "We continue to believe, based on what we've observed, that this resistance is greater than what the Russians expected." The British Defense Ministry on Saturday made similar claims, saying: "The speed of the Russian advance has temporarily slowed likely as a result of acute logistical difficulties and strong Ukrainian resistance," according to the Associated Press.Read Full StoryZelensky called on 'every friend of Ukraine' to 'please come over' and help defend against Russian invasionUkraine President Volodymyr ZelenskyUkraine President Volodymyr ZelenskyUkrainian President Volodymyr Zelensky on Saturday remained defiant in the face of Russia's invasion, confirming that government forces continued to control Kyiv and "key points around the city.""Please stop those who are lying, or trying to lie to you, or lying to us. We need to stop this war," he said during a morning briefing, The Guardian reported, lambasting disinformation about the state of the country. "We can live in peace together, globally, as humans."He continued: "Our military, our national guard, our national police, our territory defense, special service, nationals of Ukraine, please carry on. We will win. Glory to Ukraine."Read Full StoryBiden's administration is reportedly working to set up a hotline with Russia to avoid an unintended clash between their military forces in Eastern EuropeU.S. soldiers of the 82nd Airborne Division and military vehicles are seen at the temporary military base for U.S. troops established at the Arlamow Airport.Beata Zawrzel/NurPhoto via Getty ImagesSources told NBC News that the United States is working to set up backchannel communications with the Russian military to prevent a clash between the two forces near Ukraine's border.The hotline would help both parties to avoid clashing as US forces are operating near Eastern Europe, according to the report.The open line of communication would also help US and Russian aircraft and ships remain in different areas and communicate the risk of missile strikes. However, it is not yet clear if Russia will subscribe to the potential plan. Mayor of Kyiv sets curfew amid battle to hold capital, says anyone on the street after curfew will be considered an enemyKyiv Mayor Vitali Klitschko on Saturday announced a curfew from 5 p.m. to 8 a.m. to ensure a "more effective defense of the capital" and its residents, according to reports. "This curfew is introduced until the morning of February 28," Klitschko said in the translated announcement. "All civilians who will be on the street during the curfew will be considered members of the enemy's sabotage and reconnaissance groups." —Alex Ward (@alexbward) February 26, 2022The mayor added: "Please treat the situation with understanding and do not go outside."Read Full StoryUkrainian President Zelensky says Ukraine 'survived' the nightUkrainian President Volodymyr Zelenskyy addresses nation in Kyiv, Ukraine on February 25, 2022.Ukrainian Presidential Press Office via APUkraine has "survived" the night, Ukrainian President Volodymyr Zelensky said during a briefing on Saturday morning."And we are successfully fighting off the enemy attacks," he added, per The Kyiv Independent.He said that government forces still control Kyiv and "key points around the city," The Guardian reported.Ukrainian President Zelensky addressed false information that circulated online claiming he called on residents to lay down armsIn a video posted early Saturday, Ukraine's President Volodymyr Zelensky can be seen in front of the House with Chimaeras in Kyiv. —Володимир Зеленський (@ZelenskyyUa) February 26, 2022Zelensky addressed misinformation that was circulating online and reiterated that he was not standing down. "Ukrainians, it has now come to our attention that a lot of fake information has been circulating about me allegedly calling to our armed forces to lay down their arms, and talks of de-evacuation. Let's get things straight. We are here, we are not laying down any arms, we are going to defend our nation." Zelensky said. He added: "This is because our weapons are our truth, and our truth lies in the fact that this is our land, this is our country, our children, and we are going to defend all of this. So this is what I want to tell you. Glory to Ukraine!" Officials in Kyiv are telling residents to seek shelter as street fights break out against Russian forcesIn this handout photo taken from video released by Ukrainian Police Department Press Service released on Friday, Feb. 25, 2022, firefighters hose down burning burning debris in front of a damaged building following a rocket attack on the city of Kyiv, Ukraine.Ukrainian Police Department Press Service via APThe Associated Press reported that on Saturday morning, Russian troops headed toward Kyiv as explosions could be heard across the city. Officials in the Ukrainian capital warned residents to stay away from windows and take shelter indoors as fighting escalated on the streets. President Joe Biden authorized the release of $350 million for military aid to UkrainePresident Joe Biden delivers remarks during a joint news conference with German Chancellor Olaf Scholz in the East Room of the White House on February 07, 2022.Anna Moneymaker/Getty ImagesIn a memorandum to Secretary of State Anthony Blinken sent on Friday night, President Joe Biden asked the State Department to release $350 million through the Foreign Assistance Act to be sent to Ukraine as it defends itself against a Russian invasion.   'The fight is here; I need ammunition, not a ride,' Ukrainian President Zelensky said following an offer to evacuateUkrainian President Volodymyr Zelensky seen at Arlington National Cemetery on September 1, 2021.Anna Moneymaker/Getty ImagesUkrainian President Volodymyr Zelensky refused an offer from the US to evacuate the Ukrainian capital, a senior American intelligence official with direct knowledge of the conversation told the Associated Press. "The fight is here; I need ammunition, not a ride," Zelensky said in response to the offer, the official said, describing Zelensky as "upbeat," according to the AP. US Secretary of State Antony Blinken accuses Russia of "abusing its power" on the UN Security Council with its attacks on UkraineSecretary of State Antony Blinken takes part in a press conference at the end of the Quadrilateral Security Dialogue (Quad) foreign ministers meeting in Melbourne on February 11, 2022.Kevin Lamarque/Getty ImagesUS Secretary of State Antony Blinken tweeted his support for the people of Ukraine on Friday night, rebuking Russia — an "irresponsible Permanent Member of the UN Security Council" — for "abusing its power to attack its neighbor and subvert the UN and our international system.Blinken said the US will be addressing the matter in the UN General Assembly where "the nations of the world can, will, and should hold Russia accountable..."—Secretary Antony Blinken (@SecBlinken) February 26, 2022Earlier Friday, Russia vetoed a United Nations Security Council draft resolution that called on Moscow to withdraw its troops and halt the attack on Ukraine.The US Embassy in Kyiv issued a travel advisory warning US citizens remaining in the city to "know your closest shelter"US Embassy building stays empty as the diplomatic staff was ordered to leave Ukraine Kiev, Ukraine on February 23, 2022.Photo by Dominika Zarzycka/NurPhoto via Getty ImagesThe US Embassy in Kyiv issued a new travel advisory for US citizens remaining in Kyiv early Saturday morning. As Russian forces intensify their attacks against the capital city, the embassy warned US citizens to exercise increased caution due to the possibility of active combat, crime, and civil unrest."The security situation throughout Ukraine is highly volatile, and conditions may deteriorate without warning," the statement said. "US citizens should remain vigilant and take appropriate steps to increase their security awareness."The advisory urged US citizens to know the location of "your closest shelter or protected space," and seek shelter immediately in "the event of mortar and/or rocket fire." "If you feel your current location is no longer safe, you should carefully assess the potential risks involved in moving to a different location," the advisory said. US government prepared to evacuate President Zelensky, according to The Washington PostUkrainian President Volodymyr Zelensky delivers a statement during the 58th Munich Security Conference (MSC) on February 19, 2022 in Munich, Germany.Photo by Ronald Wittek - Pool/Getty ImagesThe US government is ready to help Ukrainian President Volodymyr Zelensky flee Kyiv, but the president is so far refusing to leave, according to The Washington Post.US and Ukrainian officials told the outlet that preparations have been made to help Zelensky avoid being captured or killed as Russian forces descended upon the capital city early Saturday morning.Amid increasing Russian attacks on Friday, Zelensky promised to remain at the head of Ukraine's government in Kyiv, despite the danger."According to the information we have, the enemy has marked me as target No. 1, my family as target No.2," he said in an address. "They want to destroy Ukraine politically by destroying the head of state."Insider has reached out to the White House and the State Department for comment. A senior US official told The Post that US officials in recent days have talked to Zelensky about multiple security issues, including the safest place for the president to remain to maintain the Ukrainian government. "We have been making him aware not only of the threat of Russian invasion, now a reality, but also the threat to him personally," Rep. Adam Schiff, the chairman of the House Intelligence Committee, told The Post. "We stand ready to assist him in any way."Satellite image shows 4-mile-long traffic jam along the Ukrainian-Romanian borderSatellite image of a miles-long traffic jam along the Ukraine-Romania border.Satellite image ©2022 Maxar Technologies.Satellite images from Maxar show a 4-mile (6.5 km)-long traffic jam of people, cars, and trucks attempting to leave Ukraine and cross into Romania near the Siret border crossing.Tens of thousands of Ukrainian refugees have already fled the country since Russian forces invaded early Thursday morning.New explosions heard in Kyiv as Russian forces attack the cityA view of empty streets following the curfew in the country after explosions and air raid sirens wailing again in Kyiv, Ukraine on February 26, 2022.Photo by Aytac Unal/Anadolu Agency via Getty ImagesMore than four dozen explosions were heard early Saturday morning in Kyiv as Russian troops intensified their attacks on the capital city, according to The Washington Post.Thirty minutes of ongoing shelling could be heard as the Ukrainian military fought off Russian assaults in northern Kyiv, the Kyiv Independent reported.The State Special Communications Service instructed people to seek shelter following more than 50 shots fired in a suburb near the city's center.CNN reported that heavy fighting is being reported south of Kyiv as well.—The Recount (@therecount) February 26, 2022 Ukraine's president warns that Russia will try to 'break our resistance' and topple the government before the night is overPresident of Ukraine Volodymyr Zelenskyy holds a press conference in regard of Russia's attack on Ukraine in Kiev, Ukraine on February 24, 2022.Ukrainian Presidency/Handout/Anadolu Agency via Getty ImagesUkrainian President Volodymyr Zelensky said on Friday night that the future of his country "is being decided right now," a warning that comes amid reports that Russian troops are approaching Kyiv from multiple directions."Tonight the enemy will use all the resources they have to break our resistance in a mean, cruel, and inhuman way," Zelensky said in a message to his nation, according to a translation of his remarks. "Tonight they will assault us."He added that many Ukrainian cities remain under attack."Burn down the enemy's military vehicles, using anything—anything—you can. If even the kindergartens are an admissible target for the invaders, you must not leave them any chance," he said.READ FULL STORYRussia vetoed a UN Security Council draft resolution calling on Moscow to stop Ukrainian assaultUnited Nations Security Council vote on a resolution during a meeting on Russian invasion of Ukraine, Friday Feb. 25, 2022 at U.N. headquarters.AP Photo/Seth WenigRussia vetoed on Friday a United Nations Security Council draft resolution that called on Moscow to withdraw its troops and halt the attack on Ukraine.Eleven countries on the council voted in favor, while three abstained. The countries that voted in favor of the resolution were:United StatesUnited KingdomFranceNorwayIrelandAlbaniaGabonMexicoBrazilGhanaKenyaRussia voted no.The countries that abstained from voting were: ChinaIndiaUnited Arab EmiratesThe Biden administration is seeking $6.4 billion for Ukraine aid from CongressA view of the US Capitol at sunset on January 5, 2022 in Washington, DC.Photo by Drew Angerer/Getty ImagesThe White House on Friday asked Congress for an estimated $6.4 billion in additional spending to aid Ukraine amid Russia's invasion, according to Bloomberg.The outlet reported that $2.9 billion of the requested funds would go to humanitarian and security needs in Ukraine, the Baltics, and Poland, including food aid, refugee assistance, and energy stabilization. The remaining $3.5 billion would help the US Department of Defense respond to the conflict, a Biden administration official told Bloomberg.The funds could be included in a broad government spending package Congress is aiming to pass by mid-March. The The requested money is on top of $650 million in security aid and $52 million in humanitarian aid that the US promised Ukraine last year. Spy chief humiliated by Putin on Russian TV for stammering releases new video echoing Putin's war rhetoricRussian Foreign Intelligence Service (SVR) Director Sergei Naryshkin is seen while opening of the exhibition on violations of human rights in Ukraine (2017-2020), on January 18, 2022 in Moscow, Russia.Mikhail Svetlov/Getty ImagesJust days after being humiliated in a broadcast meeting by Vladimir Putin, the head of Russia's foreign intelligence agency, Sergei Naryshkin, returned to the screen to reiterate war rhetoric."Russia cannot allow Ukraine to become a dagger raised above us in the hands of Washington," Naryshkin said in a video on state television, according to the New York Times. "The special military operation will restore peace in Ukraine within a short amount of time and prevent a potential larger conflict in Europe."Read Full StoryBiden is planning to announce new sanctions that personally target Putin, report saysRussian President Vladimir Putin ordered troops into eastern Ukraine on Monday.Alexei Nikolsky/Associated PressUS President Joe Biden is planning to announce as soon as Friday that the US will sanction Russian President Vladimir Putin, CNN reported, a provocative move of condemnation against one of the world's most powerful leaders.The move would come after the US, in coordination with its partners and allies, slapped two rounds of sanctions on Russia following its military assault on Ukraine earlier this week.Biden's reported decision to sanction Putin personally is a rare step and follows the European Union and the UK announcing sanctions against the Russian leader.Read Full StoryA California professor says he spotted Russia's invasion of Ukraine on Google Maps hours before Putin announced the attackRadar imagery showed a large Russian military unit south of Belgorod before it moved toward the border with Ukraine.Capella Space/Middlebury Institute of International StudiesA California professor and arms control expert says he noticed Russia's invasion of Ukraine on Google Maps in real time hours before Russian President Vladimir Putin announced the attack in a televised address.Jeffrey Lewis, a nonproliferation professor at the Middlebury Institute of International Studies in Monterey, California, had been monitoring Google Maps with a small team of research assistants and graduate students when they spotted a "traffic jam" on a road from Belgorod, Russia, to the Ukrainian border at around 3:15 a.m. local time in the Russian city on Thursday.Lewis told Insider on Friday that the "unusual" early morning backup started exactly where a radar image taken a day earlier showed a newly arrived "large Russian military unit with a lot of armor," such as tanks and armored personnel carriers."What was important about that image is that they were not set up in a camp — they were lined up in columns along roads, which is what you do when you're about to pounce," Lewis said.Read Full StoryThe daughter of Putin's spokesman publicly opposed Russia's invasion of Ukraine, undermining her dadElizaveta Pesokva attends a restaurant opening in January 2022Vyacheslav Prokofyev/TASS via Getty ImagesThe daughter of President Vladimir Putin's spokesman posted an anti-war slogan in her Instagram Live on Friday, according to multiple reports.Elizaveta Peskova, 24, posted "HET BOЙHE" — "no to war," against a black background on her Instagram story according to a screenshot tweeted by the Russian outlet TV Rain.This slogan is the main chant used by Russian protesters to oppose the invasions of Ukraine.Read Full StoryVideo reportedly shows Ukrainian men helping themselves to guns on a Kyiv street after all 18-60 years were urged to take up arms and fight the Russian invasionVolunteers, holding AK-47 rifles, protect a main road leading into Kyiv on February 25, 2022DANIEL LEAL/AFP via Getty ImagesThe video, which was shared on Twitter by Illia Ponomarenko, the defense correspondent at the Kyiv Independent, appears to shows civilians on a suburban street in a Kyiv suburb rummaging through boxes of firearms unloaded from trucks, as a voice off-camera says "Slava Ukraini!" (Glory to Ukraine!)."Firearms are delivered to anyone willing," Ponomarenko said in the tweet of the video.Read Full StoryUkraine's president posts defiant video with top government leaders saying 'we are all here' in the streets of besieged KyivUkraine's President Volodymyr Zelenskyy holds a press conference on Russia's military operation in Ukraine, on February 25, 2022 in Kyiv.Photo by Presidency of Ukraine/Handout/Anadolu Agency via Getty ImagesUkraine's President Volodymyr Zelensky posted a defiant video on Friday, purportedly from streets of besieged Kyiv, with top government leaders."We are all here," he said in a video posted to his Facebook page with the words: "We're in here. We are in Kiev. We defend Ukraine."Zelensky said he was with Ukraine's prime minister, presidential advisor, and head of the president's office."Our military are here, our citizens and society are here. We are all here defending our independence, our state, and this is how it's going to be," he said.Read Full StoryRussia says it will partially restrict access to Facebook, accusing it of censorship and human rights violationsRussian President Vladimir PutinAlexey Nikolsky/Getty ImagesRussia said Friday that it would partially limit access to Facebook within its borders over what it alleges is censorship of four state news outlets. In its announcement, the country's communications regulator said it asked Facebook earlier in the week to remove the restrictions and explain its reasoning for them but did not hear back.It also accused the company of various other undetailed human rights and freedoms abuses. Read Full StoryBan children of Russian oligarchs from elite British schools, UK MPs urge after invasion of UkraineHarrow School is one of the many prestigious private schools included in testimonies on Everyone's Invited.Stefan Rousseau/PA Images via Getty ImagesBoris Johnson should ban the children of Russian oligarchs from enjoying the benefits of elite British schools, Conservative MPs have said. The prime minister is coming under increasing pressure to punish Russia for its invasion of Ukraine by targeting its super-rich, many of whom have interests in the UK and mingle with its high society.Read Full StoryThe 5,000 helmets Germany offered Ukraine are finally on their way as it faces a Russian onslaught from 3 sidesGermany is sending 5,000 military helmets to Ukraine, which had requested 100,000 of them.Friso GentschThe 5,000 helmets Germany offered to Ukraine are finally on their way as the country faces Russian attacks from 3 sides. Over a month after Germany's secretary of defense promised the equipment, two trucks are bound for a handoff just outside Ukraine, according to German media company Der Spiegel.  Read Full StoryRussia's advance on Kyiv hit more resistance and is moving slower than expected, US defense official saysUkrainian servicemen ride on tanks towards the front line with Russian forces in the Lugansk region of Ukraine on February 25, 2022ANATOLII STEPANOV/AFP via Getty ImagesRussia appears to have "lost a bit of momentum" as they continue their invasion of Ukraine, a senior US defense official told reporters on Friday. The official said Russian forces are "not moving on Kyiv as fast as they anticipated they would be able to" and are "meeting more resistance than they expected," CNN reported.Read Full StoryEuropean Union freezes assets of Putin and Foreign Minister Lavrov, Latvia's foreign minister saysRussian Foreign Minister Sergei Lavrov looks on, next to Russian President Vladimir Putin, as they wait for the US-Russia summit at the Villa La Grange, in Geneva on June 16, 2021.Photo by BRENDAN SMIALOWSKI/AFP via Getty ImagesThe European Union on Friday approved freezing the assets of Russian President Vladimir Putin and Foreign Minister Sergei Lavrov, Latvia's foreign minister said."EU Foreign Affairs Council has adopted the 2nd sanctions package, asset freeze includes President of Russia and its Foreign Minister. We will prepare the 3d package," Foreign Minister Edgars Rinkēvičs said on Twitter.Read Full StoryA Russian tennis star protested the war in Ukraine in a twist of a traditional celebration in the sportTSN/TwitterRussian tennis star Andrey Rublev has a message for the world — and maybe one directed at his own country."No war please."On Friday, the 24-year-old Moscow native called for peace after besting Poland's Hubert Hurkacz for a spot in the Dubai Tennis Championships title match.As is a popular tennis tradition, Rublev wrote a note on the TV camera lens following his victory.Instead of signing his name or sketching a cheeky doodle — as is the norm in the sport — the world No. 7 penned a serious message for all to see: "No war please."Read Full StoryMonuments around the world are lighting up in blue and yellow in support of UkraineSt Georges Hall in Liverpool is lit up in yellow and blue in an expression of solidarity with Ukraine following Russia's invasion.Peter Byrne/PA Images via Getty ImagesMonuments around the world are lit up in Ukrainian flag colors following Russia's invasion.Berlin's Brandenburg Gate and Rome's Colosseum, among other landmarks, displayed blue and yellow lights.Read Full StoryUkraine praises marine for sacrificing his life to blow up bridge to try to choke off Russian tanksSkakun Vitaliy Volodymyrovich.General Staff of the Armed Forces of UkraineOfficials in Ukraine praised a marine for sacrificing his life to blow up a bridge to try to stop Russian tanks from advancing.Vitaliy Skakun Volodymyrovych was positioned at the Henichesk bridge in the Kherson region during a standoff with Russian forces, the General Staff of the Armed Forces of Ukraine said in a Friday statement.In an effort to fight off advancing Russian tanks, Ukrainian forces decided to blow up the bridge, the statement said."According to his brothers in arms, Vitaly got in touch [with them] and said he was going to blow up the bridge," the statement said. "Immediately after, an explosion rang out."Volodymyrovych died immediately, the statement said.Read Full StoryOrdinary Ukrainian citizens are taking up arms to fend off Russian forces as they close in on KyivResidents attend an open training organised for civilians by war veterans and volunteers who teach the basic weapons handling and first aid on one of Kyiv's city beachesGenya Savilov/AFP via Getty ImagesOrdinary citizens all over Kyiv are taking up arms in the fight against Russian forces as they close in on the capital city following two days of heavy attacks and hundreds of casualties.As Russian forces started making their way toward Kyiv, the Ukrainian government called on all citizens and "patriots" to take up arms in defense of the country, saying that only an ID was required and adding, "We give weapons to all patriots!""We will give weapons to anyone who wants to defend the country," Ukrainian President Volodymyr Zelensky said in a tweet. "Be ready to support Ukraine in the squares of our cities."Read Full StoryRussian state media denies its military attacked Kyiv and claims Ukraine shot down its own plane thereDamage to a building in Kyiv Ukraine, on the morning of February 25, 2022. Russia insisted it was not attacking the city.Pierre Crom/Getty ImagesOn Thursday and into Friday it was clear to most people around the world that Russia had invaded Ukraine, and moved quickly to attack its capital, Kyiv.But those receiving their news from Russia's vast array of state media outlets were given no sense of this, according to a review by Insider and other monitors.A selection of stories from the front pages of major Russian outlets in the early afternoon of Friday, the second day of hostilities around Kyiv, show the news the Russian state is promoting. They had a common theme: Russia is winning, Ukraine is planning atrocities, and there are no Russian attacks on Kyiv.Read Full StoryPeople in Kyiv describe bombardment on night 2 of invasion as Russia closes in on the capitalA building hit by a missile in Kyiv, Ukraine, seen on February 25, 2022.Wolfgang Schwan/Anadolu Agency via Getty ImagesKyiv was rocked by shelling for the second straight day on Friday morning, with Russian forces entering the outskirts of the capital by the afternoon.Speaking from Kyiv by phone on Friday, five residents told Insider of multiple explosions overnight, interspersed with air raid sirens directing people to find safety in bunkers. Alisa Obraztsova, 25, said she was rocked away by explosions at 4:20 a.m."I slept in the guest room in my apartment because I could hear the sirens from that room better," she said. Oleksii, a Kyiv resident who asked to be identified only by his first name, told Insider he was also startled awake by bombs."I woke up at around 4 a.m. because there was a massive explosion," he said. "I looked out the window, everything was a bright orange, everything was getting brighter."Read Full StoryPutin falsely describes Ukraine's government as a 'band of drug addicts and neo-Nazis' in latest propaganda blitz as Russian troops fight to take KyivRussia's President Vladimir Putin meets with members of the Delovaya Rossiya [Business Russia] All-Russian Public Organization at Moscow's Kremlin.Photo by Alexei NikolskybackslashTASS via Getty ImagesRussian President Vladimir Putin falsely described Ukraine's government as a "band of drug addicts and neo-Nazis" in a television appearance on Friday.In the speech, Putin also said Ukrainian President Volodymyr Zelensky's government "lodged itself in Kyiv and taken hostage the entire Ukrainian people," according to a translation from New York Times Moscow bureau chief Anton Troianovski and The Guardian.Read Full StoryZelensky told European leaders, "This might be the last time you see me alive," report saysPresident of Ukraine Volodymyr Zelenskyy holds a press conference in regard of Russia's attack on Ukraine in Kiev, Ukraine on February 24, 2022.Ukrainian Presidency/Handout/Anadolu Agency via Getty ImagesUkrainian President Volodymyr Zelensky on Friday told European leaders on a conference call that it "might be the last time you see me alive" as the Russian military pushes ahead with its offensive in his country. Zelensky on Thursday said in a video address he would remain in Kyiv and would keep his family in Ukraine.Zelensky added that "the enemy marked me as the number one target," with his family being number two.Read Full StoryZelensky asks Putin to 'sit down at the negotiating table' to 'stop the dying' as Russian forces strike KyivUkraine's President Volodymyr Zelenskyy holds a press conference on Russia's military operation in Ukraine, on February 25, 2022 in Kyiv.Photo by Presidency of Ukraine/Handout/Anadolu Agency via Getty ImagesUkrainian President Volodymyr Zelensky asked Russian President Vladimir Putin for negotiations to "stop the dying" as Russian forces strike the country's capital city of Kyiv."Let us sit down at the negotiating table in order to stop the dying," he said in a video address on Friday, according to a translation from The New York Times.Zelensky added: "I want to turn again to the president of the Russian Federation... Fighting is taking place across the entire territory of Ukraine."Read Full StoryMap shows Russian troop movement in Ukraine on Friday!function(){"use strict";window.addEventListener("message",(function(e){if(void 0!["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in["datawrapper-height"])for(var r=0;r.....»»

Category: worldSource: nytFeb 26th, 2022

Futures Rebound Ahead Of Critical CPI Print

Futures Rebound Ahead Of Critical CPI Print US futures rebounded on Friday from Thursday's selloff as traders waited with bated breath for an inflation report that could strengthen the case for an aggressive policy tightening by the Federal Reserve, while Oracle Corp jumped on an upbeat third-quarter outlook. At 730 a.m. ET, Dow e-minis were up 109 points, or 0.30%, S&P 500 e-minis were up 16.25 points, or 0.35%, and Nasdaq 100 e-minis were up 53.50 points, or 0.4%. Europe’s Stoxx 600 Index pared an earlier decline, while a Bloomberg gauge of Asian airlines fell. In China, Evergrande chairman Hui Ka Yan sold just over a 2% stake in the company, in the same week the property developer was officially labeled a defaulter for the first time. The dollar, Treasury yields and oil advanced. Shares of Oracle gained 11.2% in premarket trading after posting forecast-beating results for the second quarter, helped by higher technology spending from businesses looking to support hybrid work.  Broadcom Inc rose 7.0% as the semiconductor firm sees first-quarter revenue above Wall Street expectations and announced a $10 billion share buyback plan. So far this week, the Nasdaq and the S&P advanced over 2.8% each and the Dow rallied 3.4%. The S&P is now down 1.6% from its all-time peak. The S&P 500 dropped 5.2% from a record high hit on Nov. 22 as investors digested Jerome Powell's renomination as the Fed's chair, his hawkish commentary to tackle. Meanwhile, the U.S. Senate on Thursday passed and sent to President Joe Biden the first of two bills needed to raise the federal government's $28.9 trillion debt limit and avert an unprecedented default. In other news, the U.S. government moved a step closer to prosecuting Julian Assange on espionage charges, after London judges accepted that the WikiLeaks chief can be safely sent to America. With headline CPI expected to print at 6.8% Y/Y this morning - in what would be its highest level since 1982 - with whisper numbers are high as the low 8% after Biden said that this month's number won't show the drop in gasoline prices (which is certainly transitory now that oil price are on track for the biggest weekly gain since August), it is very likely that the CPI number will miss and we will see a major relief rally. On the other hand, any upside surprise on the reading will likely bolster the case for a faster tapering of bond purchases and bring forward expectations for interest rate hikes ahead of the U.S. central bank's policy meeting next week. “Various FOMC participants, including Chair Powell, have signaled a hawkish shift in their policy stance, catalyzed by increasing discomfort with elevated inflation against a backdrop of robust growth and ongoing strengthening in labor markets conditions,” Morgan Stanley economists and strategists including Ellen Zentner, wrote in a note Thursday. “We revise our Fed call and now expect the FOMC to begin raising rates in Sept. 2022 -- two quarters earlier than our prior forecast.” Discussing today's key event, the CPI print, DB's Jim Reid writes that "our US economists are anticipating that headline CPI will rise to +6.9%, which would be the fastest annual pace since 1982. And they see core inflation heading up to +5.1%, which would be the highest since 1990. Bear in mind as well that this is the last big release ahead of next Wednesday’s Federal Reserve decision, where our economists are expecting they’ll double the pace of tapering. Chair Powell himself reinforced those expectations in recent testimony, stopping just shy of unilaterally announcing the faster taper. Crucially, he noted this CPI print and the evolution of the virus were potential roadblocks to a faster taper next week. That said, the bar is extremely high for today’s data print to alter their course, especially with the Covid outlook having not deteriorated markedly since his testimony. By the close last night, Fed funds futures were fully pricing in a rate hike by the June meeting, alongside more than 70% chance of one by the May meeting." A reminder that last month saw another bumper print, with the monthly price gain actually at its fastest pace since July 2008, which sent the annual gain up to its highest since 1990, at +6.2%. It also marked the 6th time in the last 8 months that the monthly headline print had been above the consensus estimate on Bloomberg, and in another blow for team transitory, the drivers of inflation were increasingly broad-based, rather than just in a few categories affected by the pandemic. It may have been the death knell for team transitory, with Chair Powell taking pains to retire the term in the aforementioned testimony before Congress. In Europe, stocks fell slightly as a rise in coronavirus infections, with the Stoxx 600 dropping 0.3%, weighed down the most by tech, health care and utilities. DAX -0.2%, and FTSE 100 little changed, both off worst levels. Meanwhile, an epidemiologist has said that the omicron strain may be spreading faster in England than in South Africa, with U.K. cases possibly exceeding 60,000 a day by Christmas. Banks in the U.K. have already started telling staff to work from home in response to the government’s guidance.  Daimler AG’s trucks division gained in its first trading day as the storied German manufacturer completed a historic spinoff to better face sweeping changes in the auto industry. Polish retailer LPP rose to a record. Asian stocks fell on worries over the global spread of the omicron virus strain and after China Evergrande and Kaisa Group officially defaulted on their dollar debt. The MSCI Asia Pacific Index lost as much as 0.9%, with healthcare, technology and consumer discretionary sectors being the worst performers. Benchmarks slid in China and Hong Kong after Fitch Ratings cut Evergrande and Kaisa to “restricted default,” with the Hang Seng Index being the region’s biggest loser. Investors remain concerned that the omicron virus strain may crimp the economic rebound. South Korea brought forward the timing for Covid-19 booster shots to just three months after the second dose, as one of Asia’s most-vaccinated countries grapples with its worst ever virus surge. The Kospi snapped a seven-day winning run. Meanwhile, the U.S. appears to be headed for a holiday crisis as virus cases and hospital admissions climb, while London firms started telling thousands of staff to work from home. “In Europe, restrictions are being put in place, not just in the U.K. but also in other countries, due to the spread of the omicron variant, spurring worry over the impact on the economy,” said Nobuhiko Kuramochi, a market strategist at Mizuho Securities. “If work-from-home practices are prolonged, consumption will become lackluster, delaying any recovery.” Still, the Asian benchmark is up 1.2% from Dec. 3, poised for its best weekly advance in about two months. That’s owing to gains earlier in the week after China’s move to boost liquidity helped restore investor confidence. Traders are now turning focus to U.S. inflation data due later in the day for clues on the pace of anticipated tapering. China’s central bank took further steps to limit the yuan’s strength -- setting the weakest reference rate relative to estimates compiled by Bloomberg since 2018 -- a day after policy makers raised the foreign currency reserve requirement ratio for banks a second time this year. In rates, the Treasury curve bear flattened with 5s30s printing sub-60bps ahead of today’s November CPI data. Bunds and gilts are quiet; Italy leads a broader tightening of peripheral spreads. In FX, the Bloomberg Dollar Spot Index rises 0.2%, building on modest strength during the Asian session. AUD leads G-10 peers; NZD and SEK are weakest, although ranges are narrow. Demand for euro downside exposure waned this week as investors now focus on the upcoming decisions by the Federal Reserve and the European Central Bank. China’s central bank took further steps to limit the yuan’s strength In commodities, brent crude is slightly higher on the day, hovering around the $74-level, while WTI climbs 0.6% to $71-a-barrel. Base metals are mixed. LME aluminum and copper rise, while zinc and lead declines. Spot gold drops $4 to $1,771/oz. Looking at the day ahead now, and the main data highlight will be the aforementioned US CPI reading for November. In addition, there’s the University of Michigan’s preliminary consumer sentiment index for December, UK GDP for October and Italian industrial production for October. Central bank speakers include ECB President Lagarde, along with the ECB’s Weidmann, Villeroy, Panetta and Elderson. Market Snapshot S&P 500 futures up 0.2% to 4,677.75 STOXX Europe 600 down 0.4% to 474.88 MXAP down 0.8% to 193.90 MXAPJ down 0.8% to 632.63 Nikkei down 1.0% to 28,437.77 Topix down 0.8% to 1,975.48 Hang Seng Index down 1.1% to 23,995.72 Shanghai Composite down 0.2% to 3,666.35 Sensex little changed at 58,799.05 Australia S&P/ASX 200 down 0.4% to 7,353.51 Kospi down 0.6% to 3,010.23 Brent Futures up 0.4% to $74.69/bbl Gold spot down 0.3% to $1,770.81 U.S. Dollar Index little changed at 96.32 German 10Y yield little changed at -0.34% Euro down 0.1% to $1.1281 Top Overnight News from Bloomberg Already fighting economic fires on a number of fronts, China is rushing to clamp down on speculation in its strengthening currency before it gets out of control The arrival of the omicron variant has triggered a global rush for booster shots, but questions remain over whether it is the right strategy against omicron The Biden administration aims to sign what could prove a “very powerful” economic framework agreement with Asian nations -- focusing on areas including coordination on supply chains, export controls and standards for artificial intelligence -- next year, Commerce Secretary Gina Raimondo said A mouse bite is at the center of an investigation into a possible new Covid-19 outbreak in Taiwan, after a worker at a high-security laboratory was confirmed as the island’s first local case in more than a month A more detailed look at global markets courtesy of Newsquawk Asia-Pac stocks were on the back foot as the region took its cue from the weak performance in the US, where the major indices reversed recent upside in the run-up to today’s US CPI metric. The ASX 200 (-0.4%) was led lower by the underperformance in energy and tech after a retreat in oil prices and similar weakness of their counterpart sectors in US. The Nikkei 225 (-1.0%) remained lacklustre as it succumbed to the recent inflows into the currency, although the downside was stemmed as participants digested a record increase in wholesale prices. The Hang Seng (-1.0%) and Shanghai Comp. (-0.2%) were hindered by several headwinds including lower-than-expected lending and aggregate financing data, as well as China’s latest internet crackdown in which it removed 106 apps from app stores. However, losses were contained by a softer currency after China’s efforts to curb RMB strength including the PBoC’s 200bps FX RRR hike yesterday and its overnight weakening of the reference rate by the widest margin against estimates on record. Finally, 10yr JGBs were quiet after the mixed performance in US fixed income markets and with the risk-averse mood counterbalanced by the lack of BoJ purchases in the market today, although later saw a bout of selling on a breakdown of support at the key 152.00 level. Top Asian News Evergrande’s Hui Forced to Sell Part of Stake in Defaulted Firm Hui Has 277.8m Evergrande Shares Sold Under Enforced Disposal Asia Stocks Fall on Renewed Concerns Over Evergrande and Omicron Gold Heads for Worst Weekly Run Since 2019 Before Inflation Data Cash bourses in Europe kicked off the session with modest losses across the board, but the region has been clambering off worst levels since (Euro Stoxx 50 -0.3%; Stoxx 600 -0.3%) as traders gear up for the US CPI release (full preview available on the Newsquawk headline feed). US equity futures meanwhile post modest broad-based gains across the ES (+0.3%), NQ (+0.3%), RTY (+0.4) and YM (+0.2%). Back to Europe, cash markets see broad but contained downside. Sectors are mixed with no overarching theme or bias. Tech resides at the foot of the bunch with heavyweight SAP (-0.2%) failing to garner impetus from Oracle’s (+11% pre-market) blockbuster earnings after beating expectations on the top and bottom lines and announcing a new USD 10bln stock-repurchase authorisation. The upside meanwhile sees some of the more inflation-related sectors, including Oil & Gas, auto, Goods, Foods, and Beverages. In terms of individual movers, Bayer (+1.8%) is firmer after the Co. won a second consecutive trial in California regarding its Roundup weed killer. Daimler (-15%) sits at the foot of the Stoxx 600 after spinning off its Daimler Trucks unit (+4%) - considered to be a market listing rather than a full initial public offering. Top European News Heathrow Offers Bleak Outlook as Omicron Halts Long-Haul Rebound HSBC, JPMorgan, Deutsche Bank Tell London Staff to Stay Home SocGen CEO Takes Over Compliance After $2.6 Billion Fines Santander AM Names Utrera as Head of Equities as Montero Exits In FX, not a lot of deviation from recent ranges, but the Greenback is grinding higher ahead of US inflation data and Treasuries are bear-steepening to suggest hedging or positioning for an upside surprise following pointers from President Biden and NEC Director Deese to that effect (both advising that recent declines in prices, including energy, will not be reflected in November’s metrics). The index is back above the 96.000 level that has been very pivotal so far this week and hovering near the upper end of a 96.429-157 range, while the benchmark 10 year T-note yield is holding above 1.50% after a so-so long bond auction to wrap up the latest refunding remit. NZD/JPY/GBP - It’s marginal, but the Kiwi, Yen and Pound are lagging behind in the G10 stakes, with Nzd/Usd back below 0.6800 and perhaps taking note of a marked slowdown in the manufacturing PMI to 50.6 in November from 54.3, while Usd/Jpy is straddling 113.50 and eyeing DMAs either side of the half round number and Cable remains choppy around 1.3200 in wake of UK GDP, ip and output all missing consensus. AUD/CAD/EUR/CHF - All a tad more narrowly divergent vs the Buck, and the Aussie managing to keep tabs on 0.7150 after outperformance post-RBA on mainly external and technical impulses. Elsewhere, the Loonie has limited losses through 1.2700 with some assistance from hawkish sounding commentary from BoC Deputy Governor Gravelle rather than choppy crude prices as WTI swings around Usd 71/brl. To recap, he said that concerns over inflation are heightened on the upside much more than usual and the BoC is likely to react a little bit more readily to the upside risk given that inflation is already above the control range. Elsewhere, the Euro continues to fade on advances beyond 1.1300 and hit resistance at or near the 21 DMA and the Franc is more attuned to yields than risk sentiment at present, like the Yen, though is outpacing the Euro, as Eur/Chf veers towards 1.0400 again and Usd/Chf sits closer to 0.9250 vs 0.9200. In commodities, WTI and Brent front-month futures have been edging higher in early European trade following a choppy APAC session and in the run-up today’s main event, the US inflation data. Currently, WTI Jan trades just under USD 71.50/bbl (vs low USD 70.32/bbl) while Brent Feb resides north of USD 74.50/bbl (vs low USD 73.80/bbl), with news flow also on the lighter side ahead of the tier 1 data. In terms of other macro events, sources suggested Iran is willing to work from the basis of texts created in June on nuclear discussions, which will now be put to the test in upcoming days, via a European diplomatic source. This would mark somewhat of a shift from reports last week which suggested that Iran took a tougher stance than it had back in June. Western diplomats last week suggested that Tehran ramped up their conditions, which resulted in talks stalling last Friday. Aside from that, relevant news flow has been light for the complex. Elsewhere, spot gold and silver are drifting lower in tandem gains in the Dollar – spot gold has dipped under USD 1,770/oz, with the current YTD low at 1,676/oz. LME copper holds its head above USD 9,500/t but within a tight range amid the overall indecisive mood across the markets. US Event Calendar 8:30am: Nov. CPI YoY, est. 6.8%, prior 6.2%; MoM, est. 0.7%, prior 0.9% 8:30am: Nov. CPI Ex Food and Energy YoY, est. 4.9%, prior 4.6%; MoM, est. 0.5%, prior 0.6% 8:30am: Nov. Real Avg Hourly Earning YoY, prior -1.2%, revised -1.3% Real Avg Weekly Earnings YoY, prior -1.6% 10am: Dec. U. of Mich. 1 Yr Inflation, est. 5.0%, prior 4.9%; 5-10 Yr Inflation, prior 3.0% Sentiment, est. 68.0, prior 67.4 Expectations, est. 62.5, prior 63.5 Current Conditions, est. 73.5, prior 73.6 DB's Jim Reid concludes the overnight wrap I’m sure if anyone had said to you at the start of 2021 that US CPI would end the year around 7% YoY then there may have been some sleepless nights about how to position your portfolio. The reality is that as inflation has risen, the market has managed to go through denial, transitory, elongated transitory, and now the retirement of transitory, all without much fuss. I’ve said this before but I doubt there is anyone in the world that predicted we’d end the year at near 7% whilst at the same time having 10yr UST yields still at around 1.5%. Today our US economists are anticipating that headline CPI will rise to +6.9%, which would be the fastest annual pace since 1982. And they see core inflation heading up to +5.1%, which would be the highest since 1990. Bear in mind as well that this is the last big release ahead of next Wednesday’s Federal Reserve decision, where our economists are expecting they’ll double the pace of tapering. Chair Powell himself reinforced those expectations in recent testimony, stopping just shy of unilaterally announcing the faster taper. Crucially, he noted this CPI print and the evolution of the virus were potential roadblocks to a faster taper next week. That said, the bar is extremely high for today’s data print to alter their course, especially with the Covid outlook having not deteriorated markedly since his testimony. By the close last night, Fed funds futures were fully pricing in a rate hike by the June meeting, alongside more than 70% chance of one by the May meeting. A reminder that last month saw another bumper print, with the monthly price gain actually at its fastest pace since July 2008, which sent the annual gain up to its highest since 1990, at +6.2%. It also marked the 6th time in the last 8 months that the monthly headline print had been above the consensus estimate on Bloomberg, and in another blow for team transitory, the drivers of inflation were increasingly broad-based, rather than just in a few categories affected by the pandemic. It may have been the death knell for team transitory, with Chair Powell taking pains to retire the term in the aforementioned testimony before Congress. Ahead of this, markets were in slightly subdued mood yesterday as the reality of the new Omicron restrictions in various places soured the mood. Even as the news on Omicron’s severity has remained positive, concern is still elevated that this good news on severity could be outweighed by a rise in transmissibility, which ultimately would lead to a higher absolute number of both infections and hospitalisations. Even if it doesn’t, it seems restrictions are mounting while we wait and see. In response, US equities and oil prices fell back for the first time this week, as did 10yr Treasury yields. The S&P 500 (-0.72%) and the STOXX 600 (-0.08%) fell, whilst the VIX index of volatility ticked back up +1.73pts to move above the 20 mark again. Tech stocks underperformed in a reversal of the previous session, with the NASDAQ down -1.71%, and the small-cap Russell 2000 seeing a hefty -2.27% decline, as it moved lower throughout the day. Other risk assets saw similar declines too, with Brent crude (-1.85%) and WTI (-1.96%) oil prices both paring back their gains of the week so far. The move out of risk benefited safe havens, with sovereign bond yields moving lower across the curve, with those on 10yr Treasuries down -2.2bps to 1.50%. Those moves were echoed in Europe, where yields on 10yr bunds (-4.3bps), OATs (-4.5bps) and BTPs (-2.9bps) fell back as well. That came against the backdrop of a Reuters report saying ECB governors would discuss a temporary increase in the Asset Purchase Programme at their meeting next week, albeit one that would still leave bond purchases significantly beneath their current levels once the Pandemic Emergency Purchase Programme ends in March. Bitcoin fell -5.21% to $47,997 and is now more than -29% below its all-time highs reached a month ago. Marion Laboure from my team published a piece analysing the interaction between Bitcoin and the environment given its huge energy consumption. You can find the piece here. Ahead of today’s US CPI, there was another round of robust labour market data, with the US weekly initial jobless claims down to 184k (vs. 220k expected) in the week through December 4, marking their lowest level since 1969. The 4-week moving average was also down to a fresh post-pandemic low of 218.75k, having fallen for 9 consecutive weeks now. So with the labour market becoming increasingly tight and price pressures continuing to remain strong, it’s no surprise that markets have moved over the last year from pricing no hikes at all in 2022 to almost 3. Overnight in Asia, equities are all trading in the red with the Shanghai Composite (-0.32%), Hang Seng (-0.50%), Nikkei (-0.58%), CSI (-0.62%) and KOSPI (-0.67%) tracking the weaker US close last night after a three day rally. This comes after Chinese real-estate firms Evergrande Group and Kaisa Group were downgraded to restricted default by Fitch Ratings. Elsewhere in Japan, November's PPI reading came in at the highest level since 1980 at +9.0% year-on-year against +8.5% consensus due largely to rising energy prices. Our Japan economist expects CPI rising above 1% next year to be one of the ten key events to watch in 2022. You can read more here. Staying on Japan, the ruling party today will unveil a set of tax policy measures aimed at incentivising businesses to raise wages as Prime Minister Fumio Kishida aims to deliver on campaigning promises. Futures are pointing to a slightly more positive start in the US with S&P 500 futures (+0.10%) trading higher but with DAX futures (-0.24%) catching down to the weaker US close. Out of DC, the Senate approved a one-time procedural measure that will allow them to raise the debt ceiling with a simple majority vote, ostensibly in the coming days, and hopefully for a longer period than the last six-week suspension. Yields on potentially at-risk Treasury bills are at similar levels to neighboring maturities. In terms of the latest on the pandemic, yesterday didn’t see any news of major significance, with the indicators mainly confirming what we already knew. In particular, the EU’s ECDC continued to say that among the 402 confirmed Omicron cases in the EU/EEA, all the cases with known severity were either asymptomatic or mild, with no deaths reported. So positive news for now, although it’ll be very important to keep an eye with what happens with hospitalisations in South Africa, which are continuing to rise, and the country also reported another 22,391 cases yesterday, which is once again the highest number since the Omicron variant was first reported. Separately, the US FDA moved yesterday to expand the eligibility of the Pfizer-BioNTech booster to 16 and 17 year olds. To the day ahead now, and the main data highlight will be the aforementioned US CPI reading for November. In addition, there’s the University of Michigan’s preliminary consumer sentiment index for December, UK GDP for October and Italian industrial production for October. Central bank speakers include ECB President Lagarde, along with the ECB’s Weidmann, Villeroy, Panetta and Elderson. Tyler Durden Fri, 12/10/2021 - 07:50.....»»

Category: blogSource: zerohedgeDec 10th, 2021