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T&T Legacy Metals in Tonawanda company lands massive federal contract

This Tonawanda metals supplier formed a company-changing partnership by connecting with someone on LinkedIn......»»

Category: topSource: bizjournalsNov 25th, 2021

Lumen (LUMN) Gears Up for Q3 Earnings: What"s in Store?

Lumen (LUMN) is likely to have reported lower year-over-year consolidated revenues in the third quarter of 2021 due to economic uncertainties stemming from the COVID-19 pandemic. Lumen Technologies, Inc. LUMN is scheduled to report third-quarter 2021 results on Nov 3, after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 11.6%, surpassing the Zacks Consensus Estimate by 5 cents.In the third quarter, the Monroe, LA-based telecommunications company is expected to have recorded lower revenues on a year-over-year basis owing to a challenging macroeconomic environment in the face of the pandemic.However, Lumen is focused on bolstering its fiber investments across Business and Mass Markets segments, which should position it well for future growth. With improved platform capabilities, the company is making efforts to optimize the Lumen asset portfolio while catering to the dynamic requirements of its wide enterprise customer base on the back of various strategic initiatives.Factors at PlayDuring the quarter under review, Lumen partnered with Microsoft Corporation MSFT to incorporate Microsoft Azure capabilities in the Lumen platform. The partnership will enable businesses and developers to run their Microsoft-based solutions with the Edge Computing services of Lumen, thereby transforming the enterprise application delivery with in-depth insights and customized use cases.Telco giant, T-Mobile US, Inc. TMUS, joined forces with Lumen to extend their support to government agencies by rapidly deploying fixed wireless access service at field locations throughout the United States for improved data access and storage, and continuity of operations. As part of the General Services Administration's 15-year, $50 billion Enterprise Infrastructure Solutions program, the wireless access service from these entities is now available to the federal government and public sector agencies. The federal agencies capitalized on T-Mobile’s 5G network and Lumen’s edge computing platform for the deployment initiative.Lumen secured a contract worth $52 million from the U.S. Army Recruiting Command during the third quarter. It will provide high-speed connectivity to the U.S. Army Recruiting sites as part of this 12-year task order. The company also augmented its fiber network infrastructure in Europe, reinforcing its broadband speed and service capabilities in Switzerland, France, and Spain.In order to address the growing requirement for more data flow between the United States and Europe, Lumen augmented network capacity across the Trans-Atlantic route from Richmond, VA to Paris, France. The new on-net subsea fiber route leveraged the Google Dunant subsea cable system. Moreover, it unveiled Lumen Edge Private Cloud to increase the capacity required for interaction-intensive applications while connecting them to a global fiber network. The solution is fully managed by Lumen and built on VMware Cloud Foundation and Software-Defined Data Center technology with VMware Cloud Director.In the third quarter, Lumen announced that it will aid sustainable datacenter developer, Wyoming Hyperscale White Box, with adaptive and reliable networking and security technology solutions. Wyoming Hyperscale intends to launch its first development site in Aspen, WY, in early 2022. Further, the network services provider also teamed up with the U.S. Postal Service (“USPS”) to revamp the latter’s network services on the back of highly resilient broadband, wireless access, and software-defined networking solutions. Lumen will enhance USPS’ network performance and cost-efficiency with real-time network monitoring and analytics. This task order was awarded under a new USPS multi-vendor, indefinite-quantity, indefinite-delivery contract vehicle.However, a decline in legacy voice services, coupled with economic difficulties as a result of the virus outbreak, is likely to have had an adverse impact on Lumen’s third-quarter revenues. Substitution of its traditional wireline telephone services by wireless and other competitive low-priced offerings together with a massive debt burden might have further dampened its top line in the to-be-reported quarter.The Zacks Consensus Estimate for total revenues for the third quarter is pegged at $4,920 million, suggesting a fall from the year-earlier reported figure of $5,167 million. The consensus mark for earnings is currently pegged at 38 cents per share, indicating a 5% decline from 40 cents reported in the year-earlier quarter.Key Q3 DevelopmentsLumen inked a deal to sell its Latin American business to Stonepeak for $2.7 billion. The transaction is expected to unlock value for Lumen’s shareholders, accelerate investments in key growth areas, and provide flexibility on capital allocation strategy for debt reduction. The deal, subject to regulatory approvals, is expected to be closed in the first half of 2022.Further, Lumen inked a definitive agreement to sell its ILEC (incumbent local exchange carrier) business in 20 states to Apollo Funds for $7.5 billion. The valuation includes nearly $1.4 billion debt and is subjected to working capital and various other purchase price adjustments. Per the deal, Lumen will hold its ILEC assets in 16 states, as well as its national fiber routes and competitive local exchange carrier networks. The transaction is expected to not only boost Lumen’s diverse asset portfolio but also drive Apollo Funds’ customer base backed by high demand for high-bandwidth connectivity and fiber technology. The deal, which is subjected to regulatory approvals, is estimated to close in the second half of 2022.Earnings WhispersOur proven model does not predict an earnings beat for Lumen this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here.You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.Earnings ESP: Lumen’s Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -7.90% as the former is pegged at 35 cents and the latter at 38 cents.Lumen Technologies, Inc. Price and EPS Surprise Lumen Technologies, Inc. price-eps-surprise | Lumen Technologies, Inc. QuoteZacks Rank: Lumen currently has a Zacks Rank #3.Stock to ConsiderHere is a company that you may want to consider as our model shows that this has the right combination of elements to post an earnings beat this quarter:Golden Entertainment, Inc. GDEN is slated to release third-quarter 2021 results on Nov 3. It has an Earnings ESP of +37.45% and currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here. Tech IPOs With Massive Profit Potential: Last years top IPOs surged as much as 299% within the first two months. With record amounts of cash flooding into IPOs and a record-setting stock market, this year could be even more lucrative. See Zacks’ Hottest Tech IPOs Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Microsoft Corporation (MSFT): Free Stock Analysis Report TMobile US, Inc. (TMUS): Free Stock Analysis Report Golden Entertainment, Inc. (GDEN): Free Stock Analysis Report Lumen Technologies, Inc. (LUMN): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksOct 29th, 2021

Green Energy: A Bubble In Unrealistic Expectations

Green Energy: A Bubble In Unrealistic Expectations Authored by David Hay via Everegreen Gavekal blog, “You see what is happening in Europe. There is hysteria and some confusion in the markets. Why?…Some people are speculating on climate change issues, some people are underestimating some things, some are starting to cut back on investments in the extractive industries. There needs to be a smooth transition.” - Vladimir Putin (someone with whom this author rarely agrees) “By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of its citizens.” – John Maynard Keynes (an interesting observation for all the modern day Keynesians to consider given their support of current inflationary US policies, including energy-related) Introduction This week’s EVA provides another sneak preview into David Hay’s book-in-process, “Bubble 3.0” discussing what he thinks is the crucial topic of “greenflation.”  This is a term he coined referring to the rising price for metals and minerals that are essential for solar and wind power, electric cars, and other renewable technologies. It also centers on the reality that as global policymakers have turned against the fossil fuel industry, energy producers are for the first time in history not responding to dramatically higher prices by increasing production.  Consequently, there is a difficult tradeoff that arises as the world pushes harder to combat climate change, driving up energy costs to painful levels, especially for lower income individuals.  What we are currently seeing in Europe is a vivid example of this dilemma.  While it may be the case that governments welcome higher oil and natural gas prices to discourage their use, energy consumers are likely to have a much different reaction. Summary BlackRock’s CEO recently admitted that, despite what many are opining, the green energy transition is nearly certain to be inflationary. Even though it’s early in the year, energy prices are already experiencing unprecedented spikes in Europe and Asia, but most Americans are unaware of the severity. To that point, many British residents being faced with the fact that they may need to ration heat and could be faced with the chilling reality that lives could be lost if this winter is as cold as forecasters are predicting. Because of the huge increase in energy prices, inflation in the eurozone recently hit a 13-year high, heavily driven by natural gas prices on the Continent that are the equivalent of $200 oil. It used to be that the cure for extreme prices was extreme prices, but these days I’m not so sure.  Oil and gas producers are very wary of making long-term investments to develop new resources given the hostility to their industry and shareholder pressure to minimize outlays. I expect global supply to peak sometime next year and a major supply deficit looks inevitable as global demand returns to normal. In Norway, almost 2/3 of all new vehicle sales are of the electric variety (EVs) – a huge increase in just over a decade. Meanwhile, in the US, it’s only about 2%. Still, given Norway’s penchant for the plug-in auto, the demand for oil has not declined. China, despite being the largest market by far for electric vehicles, is still projected to consume an enormous and rising amount of oil in the future. About 70% of China’s electricity is generated by coal, which has major environmental ramifications in regards to electric vehicles. Because of enormous energy demand in China this year, coal prices have experienced a massive boom. Its usage was up 15% in the first half of this year, and the Chinese government has instructed power providers to obtain all baseload energy sources, regardless of cost.  The massive migration to electric vehicles – and the fact that they use six times the amount of critical minerals as their gasoline-powered counterparts –means demand for these precious resources is expected to skyrocket. This extreme need for rare minerals, combined with rapid demand growth, is a recipe for a major spike in prices. Massively expanding the US electrical grid has several daunting challenges– chief among them the fact that the American public is extremely reluctant to have new transmission lines installed in their area. The state of California continues to blaze the trail for green energy in terms of both scope and speed. How the rest of the country responds to their aggressive take on renewables remains to be seen. It appears we are entering a very odd reality: governments are expending resources they do not have on weakly concentrated energy. And the result may be very detrimental for today’s modern economy. If the trend in energy continues, what looks nearly certain to be the Third Energy crisis of the last half-century may linger for years.  Green energy: A bubble in unrealistic expectations? As I have written in past EVAs, it amazes me how little of the intense inflation debate in 2021 centered on the inflationary implications of the Green Energy transition.  Perhaps it is because there is a built-in assumption that using more renewables should lower energy costs since the sun and the wind provide “free power”.  However, we will soon see that’s not the case, at least not anytime soon; in fact, it’s my contention that it will likely be the opposite for years to come and I’ve got some powerful company.  Larry Fink, CEO of BlackRock, a very pro-ESG* organization, is one of the few members of Wall Street’s elite who admitted this in the summer of 2021.  The story, however, received minimal press coverage and was quickly forgotten (though, obviously, not be me!).  This EVA will outline myriad reasons why I think Mr. Fink was telling it like it is…despite the political heat that could bring down upon him.  First, though, I will avoid any discussion of whether humanity is the leading cause of global warming.  For purposes of this analysis, let’s make the high-odds assumption that for now a high-speed green energy transition will continue to occur.  (For those who would like a well-researched and clearly articulated overview of the climate debate, I highly recommend the book “Unsettled”; it’s by a former top energy expert and scientist from the Obama administration, Dr. Steven Koonin.) The reason I italicized “for now” is that in my view it’s extremely probable that voters in many Western countries are going to become highly retaliatory toward energy policies that are already creating extreme hardship.  Even though it’s only early autumn as I write these words, energy prices are experiencing unprecedented increases in Europe.  Because it’s “over there”, most Americans are only vaguely aware of the severity of the situation.  But the facts are shocking…  Presently, natural gas is going for $29 per million British Thermal Units (BTUs) in Europe, a quadruple compared to the same time in 2020, versus “just” $5 in the US, which is a mere doubling.  As a consequence, wholesale energy cost in Great Britain rose an unheard of 60% even before summer ended.  Reportedly, nine UK energy companies are on the brink of failure at this time due to their inability to fully pass on the enormous cost increases.  As a result, the British government is reportedly on the verge of nationalizing some of these entities—supposedly, temporarily—to prevent them from collapsing.  (CNBC reported on Wednesday that UK natural gas prices are now up 800% this year; in the US, nat gas rose 20% on Tuesday alone, before giving back a bit more than half of that the next day.) Serious food shortages are expected after exorbitant natural gas costs forced most of England’s commercial production of CO2 to shut down.  (CO2 is used both for stunning animals prior to slaughter and also in food packaging.)  Additionally, ballistic natural gas prices have forced the closure of two big US fertilizer plants due to a potential shortfall of ammonium nitrate of which “nat gas” is a key feedstock.  *ESG stands for Environmental, Social, Governance; in 2021, Blackrock’s assets under management approximated $9 ½ trillion, about one-third of the total US federal debt. With the winter of 2021 approaching, British households are being told they may need to ration heat.  There are even growing concerns about the widespread loss of life if this winter turns out to be a cold one, as 2020 was in Europe.  Weather forecasters are indicating that’s a distinct possibility.   In Spain, consumers are paying 40% more for electricity compared to the prior year.  The Spanish government has begun resorting to price controls to soften the impact of these rapidly escalating costs. (The history of price controls is that they often exacerbate shortages.) Naturally, spiking power prices hit the poorest hardest, which is typical of inflation whether it is of the energy variety or of generalized price increases.  Due to these massive energy price increases, eurozone inflation recently hit a 13-year high, heavily driven by natural gas prices that are the equivalent of $200 per barrel oil.  This is consistent with what I warned about in several EVAs earlier this year and I think there is much more of this looming in the years to come. In Asia, which also had a brutally cold winter in 2020 – 2021, there are severe energy shortages being disclosed, as well.  China has instructed its power providers to secure all the coal they can in preparation for a repeat of frigid conditions and acute deficits even before winter arrives.  The government has also instructed its energy distributors to acquire all the liquified natural gas (LNG) they can, regardless of cost.  LNG recently hit $35 per million British Thermal Units in Asia, up sevenfold in the past year.  China is also rationing power to its heavy industries, further exacerbating the worldwide shortages of almost everything, with notable inflationary implications. In India, where burning coal provides about 70% of electricity generation (as it does in China), utilities are being urged to import coal even though that country has the world’s fourth largest coal reserves.  Several Indian power plants are close to exhausting their coal supplies as power usage rips higher. Normally, I’d say that the cure for such extreme prices, was extreme prices—to slightly paraphrase the old axiom.  But these days, I’m not so sure; in fact, I’m downright dubious.  After all, the enormously influential International Energy Agency has recommended no new fossil fuel development after 2021—“no new”, as in zero.  It’s because of pressure such as this that, even though US natural gas prices have done a Virgin Galactic to $5 this year, the natural gas drilling rig count has stayed flat.  The last time prices were this high there were three times as many working rigs.  It is the same story with oil production.  Most Americans don’t seem to realize it but the US has provided 90% of the planet’s petroleum output growth over the past decade.  In other words, without America’s extraordinary shale oil production boom—which raised total oil output from around 5 million barrels per day in 2008 to 13 million barrels per day in 2019—the world long ago would have had an acute shortage.  (Excluding the Covid-wracked year of 2020, oil demand grows every year—strictly as a function of the developing world, including China, by the way.) Unquestionably, US oil companies could substantially increase output, particularly in the Permian Basin, arguably (but not much) the most prolific oil-producing region in the world.  However, with the Fed being pressured by Congress to punish banks that lend to any fossil fuel operator, and the overall extreme hostility toward domestic energy producers, why would they?  There is also tremendous pressure from Wall Street on these companies to be ESG compliant.  This means reducing their carbon footprint.  That’s tough to do while expanding their volume of oil and gas.  Further, investors, whether on Wall Street or on London’s equivalent, Lombard Street, or in pretty much any Western financial center, are against US energy companies increasing production.  They would much rather see them buy back stock and pay out lush dividends.  The companies are embracing that message.  One leading oil and gas company CEO publicly mused to the effect that buying back his own shares at the prevailing extremely depressed valuations was a much better use of capital than drilling for oil—even at $75 a barrel. As reported by Morgan Stanley, in the summer of 2021, an US institutional broker conceded that of his 400 clients, only one would consider investing in an energy company!  Consequently, the fact that the industry is so detested means that its shares are stunningly undervalued.  How stunningly?  A myriad of US oil and gas producers are trading at free cash flow* yields of 10% to 15% and, in some cases, as high as 25%. In Europe, where the same pressures apply, one of its biggest energy companies is generating a 16% free cash flow yield.  Moreover, that is based up an estimate of $60 per barrel oil, not the prevailing price of $80 on the Continent. *Free cash flow is the excess of gross cash flow over and above the capital spending needed to sustain a business.  Many market professionals consider it more meaningful than earnings.  Therefore, due to the intense antipathy toward Western energy producers they aren’t very inclined to explore for new resources.  Another much overlooked fact about the ultra-critical US shale industry that, as noted, has been nearly the only source of worldwide output growth for the past 13 years, is its rapid decline nature.  Most oil wells see their production taper off at just 4% or 5% per year.  But with shale, that decline rate is 80% after only two years.  (Because of the collapse in exploration activities in 2020 due to Covid, there are far fewer new wells coming on-line; thus, the production base is made up of older wells with slower decline rates but it is still a much steeper cliff than with traditional wells.)  As a result, the US, the world’s most important swing producer, has to come up with about 1.5 million barrels per day (bpd) of new output just to stay even.  (This was formerly about a 3 million bpd number due to both the factor mentioned above and the 2 million bpd drop in total US oil production, from 13 million bpd to around 11 million bpd since 2019).  Please recall that total US oil production in 2008 was only around 5 million bpd.  Thus, 1.5 million barrels per day is a lot of oil and requires considerable drilling and exploration activities.  Again, this is merely to stay steady-state, much less grow.  The foregoing is why I wrote on multiple occasions in EVAs during 2020, when the futures price for oil went below zero*, that crude would have a spectacular price recovery later that year and, especially, in 2021.  In my view, to go out on my familiar creaky limb, you ain’t seen nothin’ yet!  With supply extremely challenged for the above reasons and demand marching back, I believe 2022 could see $100 crude, possibly even higher.  *Physical oil, or real vs paper traded, bottomed in the upper teens when the futures contract for delivery in April, 2020, went deeply negative.  Mike Rothman of Cornerstone Analytics has one of the best oil price forecasting records on Wall Street.  Like me, he was vehemently bullish on oil after the Covid crash in the spring of 2020 (admittedly, his well-reasoned optimism was a key factor in my up-beat outlook).  Here’s what he wrote late this summer:  “Our forecast for ’22 looks to see global oil production capacity exhausted late in the year and our balance suggests OPEC (and OPEC + participants) will face pressures to completely remove any quotas.”  My expectation is that global supply will likely max out sometime next year, barring a powerful negative growth shock (like a Covid variant even more vaccine resistant than Delta).  A significant supply deficit looks inevitable as global demand recovers and exceeds its pre-Covid level.  This is a view also shared by Goldman Sachs and Raymond James, among others; hence, my forecast of triple-digit prices next year.  Raymond James pointed out that in June the oil market was undersupplied by 2.5 mill bpd.  Meanwhile, global petroleum demand was rapidly rising with expectations of nearly pre-Covid consumption by year-end.  Mike Rothman ran this chart in a webcast on 9/10/2021 revealing how far below the seven-year average oil inventories had fallen.  This supply deficit is very likely to become more acute as the calendar flips to 2022. In fact, despite oil prices pushing toward $80, total US crude output now projected to actually decline this year.  This is an unprecedented development.  However, as the very pro-renewables Financial Times (the UK’s equivalent of the Wall Street Journal) explained in an August 11th, 2021, article:  “Energy companies are in a bind.  The old solution would be to invest more in raising gas production.  But with most developed countries adopting plans to be ‘net zero’ on carbon emissions by 2050 or earlier, the appetite for throwing billions at long-term gas projects is diminished.” The author, David Sheppard, went on to opine: “In the oil industry there are those who think a period of plus $100-a-barrel oil is on the horizon, as companies scale back investments in future supplies, while demand is expected to keep rising for most of this decade at a minimum.”  (Emphasis mine)  To which I say, precisely!  Thus, if he’s right about rising demand, as I believe he is, there is quite a collision looming between that reality and the high probability of long-term constrained supplies.  One of the most relevant and fascinating Wall Street research reports I read as I was researching the topic of what I have been referring to as “Greenflation” is from Morgan Stanley.  Its title asked the provocative question:  “With 64% of New Cars Now Electric, Why is Norway Still Using so Much Oil?”  While almost two-thirds of Norway’s new vehicle sales are EVs, a remarkable market share gain in just over a decade, the number in the US is an ultra-modest 2%.   Yet, per the Morgan Stanley piece, despite this extraordinary push into EVs, oil consumption in Norway has been stubbornly stable.  Coincidentally, that’s been the experience of the overall developed world over the past 10 years, as well; petroleum consumption has largely flatlined.  Where demand hasn’t gone horizontal is in the developing world which includes China.  As you can see from the following Cornerstone Analytics chart, China’s oil demand has vaulted by about 6 million barrels per day (bpd) since 2010 while its domestic crude output has, if anything, slightly contracted. Another coincidence is that this 6 million bpd surge in China’s appetite for oil, almost exactly matched the increase in US oil production.  Once again, think where oil prices would be today without America’s shale oil boom. This is unlikely to change over the next decade.  By 2031, there are an estimated one billion Asian consumers moving up into the middle class.  History is clear that more income means more energy consumption.  Unquestionably, renewables will provide much of that power but oil and natural gas are just as unquestionably going to play a critical role.  Underscoring that point, despite the exponential growth of renewables over the last 10 years, every fossil fuel category has seen increased usage.  Thus, even if China gets up to Norway’s 64% EV market share of new car sales over the next decade, its oil usage is likely to continue to swell.  Please be aware that China has become the world’s largest market for EVs—by far.  Despite that, the above chart vividly displays an immense increase in oil demand.  Here’s a similar factoid that I ran in our December 4th EVA, “Totally Toxic”, in which I made a strong bullish case for energy stocks (the main energy ETF is up 35% from then, by the way):  “(There was) a study by the UN and the US government based on the Model for the Assessment of Greenhouse Gasses Induced Climate Change (MAGICC).  The model predicted that ‘the complete elimination of all fossil fuels in the US immediately would only restrict any increase in world temperature by less than one tenth of one degree Celsius by 2050, and by less than one fifth of one degree Celsius by 2100.’  Say again?  If the world’s biggest carbon emitter on a per capita basis causes minimal improvement by going cold turkey on fossil fuels, are we making the right moves by allocating tens of trillions of dollars that we don’t have toward the currently in-vogue green energy solutions?” China's voracious power appetite increase has been true with all of its energy sources.  On the environmentally-friendly front, that includes renewables; on the environmentally-unfriendly side, it also includes coal.  In 2020, China added three times more coal-based power generation than all other countries combined.  This was the equivalent of an additional coal planet each week.  Globally, there was a reduction last year of 17 gigawatts in coal-fired power output; in China, the increase was 29.8 gigawatts, far more than offsetting the rest of the world’s progress in reducing the dirtiest energy source.  (A gigawatt can power a city with a population of roughly 700,000.) Overall, 70% of China’s electricity is coal-generated. This has significant environmental implications as far as electric vehicles (EVs) are concerned.  Because EVs are charged off a grid that is primarily coal- powered, carbon emissions actually rise as the number of such vehicles proliferate. As you can see in the following charts from Reuters’ energy expert John Kemp, Asia’s coal-fired generation has risen drastically in the last 20 years, even as it has receded in the rest of the world.  (The flattening recently is almost certainly due to Covid, with a sharp upward resumption nearly a given.) The worst part is that burning coal not only emits CO2—which is not a pollutant and is essential for life—it also releases vast quantities of nitrous oxide (N20), especially on the scale of coal usage seen in Asia today. N20 is unquestionably a pollutant and a greenhouse gas that is hundreds of times more potent than CO2.  (An interesting footnote is that over the last 550 million years, there have been very few times when the CO2 level has been as low, or lower, than it is today.)  Some scientists believe that one reason for the shrinkage of Arctic sea ice in recent decades is due to the prevailing winds blowing black carbon soot over from Asia.  This is a separate issue from N20 which is a colorless gas.  As the black soot covers the snow and ice fields in Northern Canada, they become more absorbent of the sun’s radiation, thus causing increased melting.  (Source:  “Weathering Climate Change” by Hugh Ross) Due to exploding energy needs in China this year, coal prices have experienced an unprecedented surge.  Despite this stunning rise, Chinese authorities have instructed its power providers to obtain coal, and other baseload energy sources, such as liquified natural gas (LNG), regardless of cost.  Notwithstanding how pricey coal has become, its usage in China was up 15% in the first half of this year vs the first half of 2019 (which was obviously not Covid impacted). Despite the polluting impact of heavy coal utilization, China is unlikely to turn away from it due to its high energy density (unlike renewables), its low cost (usually) and its abundance within its own borders (though its demand is so great that it still needs to import vast amounts).  Regarding oil, as we saw in last week’s final image, it is currently importing roughly 11 million barrels per day (bpd) to satisfy its 15 million bpd consumption (about 15% of total global demand).  In other words, crude imports amount to almost three-quarter of its needs.  At $80 oil, this totals $880 million per day or approximately $320 billion per year.  Imagine what China’s trade surplus would look like without its oil import bill! Ironically, given the current hostility between the world’s superpowers, China has an affinity for US oil because of its light and easy-to-refine nature.  China’s refineries tend to be low-grade and unable to efficiently process heavier grades of crude, unlike the US refining complex which is highly sophisticated and prefers heavy oil such as from Canada and Venezuela—back when the latter actually produced oil. Thus, China favors EVs because they can be de facto coal-powered, lessening its dangerous reliance on imported oil.  It also likes them due to the fact it controls 80% of the lithium ion battery supply and 60% of the planet’s rare earth minerals, both of which are essential to power EVs.     However, even for China, mining enough lithium, cobalt, nickel, copper, aluminum and the other essential minerals/metals to meet the ambitious goals of largely electrifying new vehicle volumes is going to be extremely daunting.  This is in addition to mass construction of wind farms and enormously expanded solar panel manufacturing. As one of the planet’s leading energy authorities Daniel Yergin writes: “With the move to electric cars, demand for critical minerals will skyrocket (lithium up 4300%, cobalt and nickel up 2500%), with an electric vehicle using 6 times more minerals than a conventional car and a wind turbine using 9 times more minerals than a gas-fueled power plant.  The resources needed for the ‘mineral-intensive energy system’ of the future are also highly concentrated in relatively few countries. Whereas the top 3 oil producers in the world are responsible for about 30 percent of total liquids production, the top 3 lithium producers control more than 80% of supply. China controls 60% of rare earths output needed for wind towers; the Democratic Republic of the Congo, 70% of the cobalt required for EV batteries.” As many have noted, the environmental impact of immensely ramping up the mining of these materials is undoubtedly going to be severe.  Michael Shellenberger, a life-long environmental activist, has been particularly vociferous in his condemnation of the dominant view that only renewables can solve the global energy needs.  He’s especially critical of how his fellow environmentalists resorted to repetitive deception, in his view, to undercut nuclear power in past decades.  By leaving nuke energy out of the solution set, he foresees a disastrous impact on the planet due to the massive scale (he’d opine, impossibly massive) of resource mining that needs to occur.  (His book, “Apocalypse Never”, is also one I highly recommend; like Dr. Koonin, he hails from the left end of the political spectrum.) Putting aside the environmental ravages of developing rare earth minerals, when you have such high and rapidly rising demand colliding with limited supply, prices are likely to go vertical.  This will be another inflationary “forcing”, a favorite term of climate scientists, caused by the Great Green Energy Transition. Moreover, EVs are very semiconductor intensive.  With semis already in seriously short supply, this is going to make a gnarly situation even gnarlier.  It’s logical to expect that there will be recurring shortages of chips over the next decade for this reason alone (not to mention the acute need for semis as the “internet of things” moves into primetime).  In several of the newsletters I’ve written in recent years, I’ve pointed out the present vulnerability of the US electric grid.  Yet, it will be essential not just to keep it from breaking down under its current load; it must be drastically enhanced, a Herculean task. For one thing, it is excruciatingly hard to install new power lines. As J.P. Morgan’s Michael Cembalest has written: “Grid expansion can be a hornet’s nest of cost, complexity and NIMBYism*, particularly in the US.”  The grid’s frailty, even under today’s demands (i.e., much less than what lies ahead as millions of EVs plug into it) is particularly obvious in California.  However, severe winter weather in 2021 exposed the grid weakness even in energy-rich Texas, which also has a generally welcoming attitude toward infrastructure upgrading and expansion. Yet it’s the Golden State, home to 40 million Americans and the fifth largest economy in the world, if it was its own country (which it occasionally acts like it wants to be), that is leading the charge to EVs and seeking to eliminate internal combustion engines (ICEs) as quickly as possible.  Even now, blackouts and brownouts are becoming increasingly common.  Seemingly convinced it must be a role model for the planet, it’s trying desperately to reduce its emissions, which are less than 1%, of the global total, at the expense of rendering its energy system more similar to a developing country.  In addition to very high electricity costs per kilowatt hour (its mild climate helps offset those), it also has gasoline prices that are 77% above the national average.  *NIMBY stands for Not In My Back Yard. While California has been a magnet for millions seeking a better life for 150 years, the cost of living is turning the tide the other way.  Unreliable and increasingly expensive energy is likely to intensify that trend.  Combined with home prices that are more than double the US median–$800,000!–California is no longer the land of milk and honey, unless, to slightly paraphrase Woody Guthrie about LA, even back in the 1940s, you’ve got a whole lot of scratch.  More and more people, seem to be scratching California off their list of livable venues.  Voters in the reliably blue state of California may become extremely restive, particularly as they look to Asia and see new coal plants being built at a fever pitch.  The data will become clear that as America keeps decarbonizing–as it has done for 30 years mostly due to the displacement of coal by gas in the US electrical system—Asia will continue to go the other way.  (By the way, electricity represents the largest share of CO2 emission at roughly 25%.)  California has always seemed to lead social trends in this country, as it is doing again with its green energy transition.  The objective is noble though, extremely ambitious, especially the timeline.  As it brings its power paradigm to the rest of America, especially its frail grid, it will be interesting to see how voters react in other states as the cost of power leaps higher and its dependability heads lower.  It’s reasonable to speculate we may be on the verge of witnessing the Californication of the US energy system.  Lest you think I’m being hyperbolic, please be aware the IEA (International Energy Agency) has estimated it will cost the planet $5 trillion per year to achieve Net Zero emissions.  This is compared to global GDP of roughly $85 trillion. According to BloombergNEF, the price tag over 30 years, could be as high as $173 trillion.  Frankly, based on the history of gigantic cost overruns on most government-sponsored major infrastructure projects, I’m inclined to take the over—way over—on these estimates. Moreover, energy consulting firm T2 and Associates, has guesstimated electrifying just the US to the extent necessary to eliminate the direct consumption of fuel (i.e., gasoline, natural gas, coal, etc.) would cost between $18 trillion and $29 trillion.  Again, taking into account how these ambitious efforts have played out in the past, I suspect $29 trillion is light.  Regardless, even $18 trillion is a stunner, despite the reality we have all gotten numb to numbers with trillions attached to them.  For perspective, the total, already terrifying, level of US federal debt is $28 trillion. Regardless, as noted last week, the probabilities of the Great Green Energy Transition happening are extremely high.  Relatedly, I believe the likelihood of the Great Greenflation is right up there with them.  As Gavekal’s Didier Darcet wrote in mid-August:  ““Nowadays, and this is a great first in history, governments will commit considerable financial resources they do not have in the extraction of very weakly concentrated energy.” ( i.e., less efficient)  “The bet is very risky, and if it fails, what next?  The modern economy would not withstand expensive energy, or worse, lack of energy.”  While I agree this an historical first, it’s definitely not great (with apologies for all the “greats”).  This is particularly not great for keeping inflation subdued, as well as for attempting to break out of the growth quagmire the Western world has been in for the last two decades.  What we are seeing in Europe right now is an extremely cautionary case study in just how disastrous the war on fossil fuels can be (shortly we will see who or what has been a behind-the-scenes participant in this conflict). Essentially, I believe, as I’ve written in past EVAs, we are entering the third energy crisis of the last 50 years.  If I’m right, it will be characterized by recurring bouts of triple-digit oil prices in the years to come.  Along with Richard Nixon taking the US off the gold standard in 1971, the high inflation of the 1970s was caused by the first two energy crises (the 1973 Arab Oil Embargo and the 1979 Iranian Revolution).  If I’m correct about this being the third, it’s coming at a most inopportune time with the US in hyper-MMT* mode. Frankly, I believe many in the corridors of power would like to see oil trade into the $100s, and natural gas into the teens, as it will help catalyze the shift to renewable energy.  But consumers are likely to have a much different reaction—potentially, a violently different reaction, as I noted last week.  The experience of the Yellow Vest protests in France (referring to the color of the vest protestors wore), are instructive in this regard.  France is a generally left-leaning country.  Despite that, a proposed fuel surtax in November 2018 to fund a renewable energy transition triggered such widespread civil unrest that French president Emmanuel Macron rescinded it the following month. *MMT stands for Modern Monetary Theory.  It holds that a government, like the US, which issues debt in its own currency can spend without concern about budgetary constraints.  If there are not enough buyers of its bonds at acceptable interest rates, that nation’s central bank (the Fed, in our case) simply acquires them with money it creates from its digital printing press.  This is what is happening today in the US.  Many economists consider this highly inflationary. The sharp and politically uncomfortable rise in US gas pump prices this summer caused the Biden administration to plead with OPEC to lift its volume quotas.  The ironic implication of that exhortation was glaringly obvious, as was the inefficiency and pollution consequences of shipping oil thousands of miles across the Atlantic.  (Oil tankers are a significant source of emissions.)  This is as opposed to utilizing domestic oil output, as well as crude from Canada (which is actually generally better suited to the US refining complex).  Beyond the pollution aspect, imported oil obviously worsens America’s massive trade deficit (which would be far more massive without the six million barrels per day of domestic oil volumes that the shale revolution has provided) and costs our nation high-paying jobs. Further, one of my other big fears is that the West is engaging in unilateral energy disarmament.  Russia and China are likely the major beneficiaries of this dangerous scenario.  Per my earlier comment about a stealth combatant in the war on fossil fuels, it may surprise you that a past NATO Secretary General* has accused Russian intelligence of avidly supporting the anti-fracking movements in Western Europe.  Russian TV has railed against fracking for years, even comparing it to pedophilia (certainly, a most bizarre analogy!).  The success of the anti-fracking movement on the Continent has essentially prevented a European version of America’s shale miracles (the UK has the potential to be a major shale gas producer).  Consequently, the European Union’s domestic natural gas production has been in a rapid decline phase for years.  Banning fracking has, of course, made Europe heavily reliant on Russian gas shipments with more than 40% of its supplies coming from Russia. This is in graphic contrast to the shale output boom in the US that has not only made us natural gas self-sufficient but also an export powerhouse of liquified natural gas (LNG).  In 2011, the Nord Stream system of pipelines running under the Baltic Sea from northern Russia began delivering gas west from northern Russia to the German coastal city of Greifswald.  For years, the Russians sought to build a parallel system with the inventive name of Nord Stream 2.  The US government opposed its approval on security grounds but the Biden administration has dropped its opposition.  It now appears Nord Stream 2 will happen, leaving Europe even more exposed to Russian coercion.  Is it possible the Russian government and the Chinese Communist Party have been secretly and aggressively supporting the anti-fossil fuel movements in America?  In my mind, it seems not only possible but probable.  In fact, I believe it is naïve not to come that conclusion.  After all, wouldn’t it be in both of their geopolitical interests to see the US once again caught in a cycle of debilitating inflation, ensnared by the twin traps of MMT and the third energy crisis? *Per former NATO Secretary General, Anders Fogh Rasumssen:  Russia has “engaged actively with so-called non-governmental organizations—environmental organizations working against shale gas—to maintain Europe’s dependence on imported Russian gas”. Along these lines, I was shocked to listen to a recent podcast by the New Yorker magazine on the topic of “intelligent sabotage”.  This segment was an interview between the magazine’s David Remnick and a Swedish professor, Adreas Malm.  Mr. Malm is the author of a new book with the literally explosive title “How To Blow Up A Pipeline”.   Just as it sounds, he advocates detonating pipelines to inhibit fossil fuel distribution.  Mr. Remnick was clearly sympathetic to his guest but he did ask him about the impact on the poor of driving energy prices up drastically which would be the obvious ramification if his sabotage recommendations were widely followed.  Mr. Malm’s reaction was a verbal shrug of the shoulders and words to the effect that this was the price to pay to save the planet. Frankly, I am appalled that the venerable New Yorker would provide a platform for such a radical and unlawful suggestion.  In an era when people are de-platformed for often innocuous comments, it’s incredible to me this was posted and has not been pulled down.  In my mind, this reflects just how tolerant the media is of attacks on the fossil fuel industry, regardless of the deleterious impact on consumers and the global economy. Surely, there is a far better way of coping with the harmful aspects of fossil fuel-based energy than this scorched earth (literally, in the case of Mr. Malm) approach, which includes efforts to block new pipelines, shut existing ones, and severely restrict US energy production.  In America’s case, the result will be forcing us to unnecessarily and increasingly rely on overseas imports.  (For example, per the Wall Street Journal, drilling permits on federal land have crashed to 171 in August from 671 in April.  Further, the contentious $3.5 trillion “infrastructure” plan would raise royalties and fees high enough on US energy producers that it would render them globally uncompetitive.) Such actions would only aggravate what is already a severe energy shock, one that may be worse than the 1970s twin energy crises.  America has it easy compared to Europe, though, given current US policy trends, we might be in their same heavily listing energy boat soon. Solutions include fast-tracking small modular nuclear plants; encouraging the further switch from burning coal to natural gas (a trend that is, unfortunately, going the other way now, as noted above); utilizing and enhancing carbon and methane capture at the point of emission (including improving tail pipe effluent-reduction technology); enhancing pipeline integrity to inhibit methane leaks; among many other mitigation techniques that recognize the reality the global economy will be reliant on fossil fuels for many years, if not decades, to come.  If the climate change movement fails to recognize the essential nature of fossil fuels, it will almost certainly trigger a backlash that will undermine the positive change it is trying to bring about.  This is similar to what it did via its relentless assault on nuclear power which produced a frenzy of coal plant construction in the 1980s and 1990s.  On this point, it’s interesting to see how quickly Europe is re-embracing coal power to alleviate the energy poverty and rationing occurring over there right now - even before winter sets in.  When the choice is between supporting climate change initiatives on one hand and being able to heat your home and provide for your family on the other, is there really any doubt about which option the majority of voters will select? Tyler Durden Tue, 10/26/2021 - 19:30.....»»

Category: worldSource: nytOct 26th, 2021

BTFD Arrives: Futures Rebound, Europe Surges While Asia Slumps On Evergrande Fears

BTFD Arrives: Futures Rebound, Europe Surges While Asia Slumps On Evergrande Fears Even though China was closed for a second day, and even though the Evergrande drama is nowhere closer to a resolution with a bond default imminent and with Beijing mute on how it will resolve the potential "Lehman moment" even as rating agency S&P chimed in saying a default is likely and it does not expect China’s government “to provide any direct support” to the privately owned developer, overnight the BTFD crew emerged in full force, and ramped futures amid growing speculation that Beijing will rescue the troubled developer... Algos about to go on a rampage — zerohedge (@zerohedge) September 21, 2021 ... pushing spoos almost 100 points higher from their Monday lows, and European stock were solidly in the green - despite Asian stocks hitting a one-month low - as investors tried to shake off fears of contagion from a potential collapse of China’s Evergrande, although gains were capped by concerns the Federal Reserve could set out a timeline to taper its stimulus at its meeting tomorrow. The dollar dropped from a one-month high, Treasury yields rose and cryptos rebounded from yesterday's rout. To be sure, the "this is not a Lehman moment" crowed was out in full force, as indicated by this note from Mizuho analysts who wrote that “while street wisdom is that Evergrande is not a ‘Lehman risk’, it is by no stretch of the imagination any meaningful comfort. It could end up being China’s proverbial house of cards ... with cross-sector headwinds already felt in materials/commodities.” At 7:00 a.m. ET, S&P 500 e-minis were up 34.00 points, or 0.79% and Nasdaq 100 e-minis 110.25 points, or 0.73%, while futures tracking the Dow  jumped 0.97%, a day after the index tumbled 1.8% in its worst day since late-July,  suggesting a rebound in sentiment after concerns about contagion from China Evergrande Group’s upcoming default woes roiled markets Monday. Dip-buyers in the last hour of trading Monday helped the S&P 500 pare some losses, though the index still posted the biggest drop since May. The bounce also came after the S&P 500 dropped substantially below its 50-day moving average - which had served as a resilient floor for the index this year - on Monday, its first major breach in more than six months. Freeport-McMoRan mining stocks higher with a 3% jump, following a 3.2% plunge in the S&P mining index a day earlier as copper prices hit a one-month low. Interest rate-sensitive banking stocks also bounced, tracking a rise in Treasury yields. Here are some of the biggest U.S. movers today: U.S.-listed Chinese stocks start to recover from Monday’s slump in premarket trading as the global selloff moderates. Alibaba (BABA US), Baidu (BIDU US), Nio (NIO US), Tencent Music (TME US)and Bilibili (BILI US) are among the gainers Verrica Pharma (VRCA US) plunges 30% in premarket trading after failing to get FDA approval for VP-102 for the treatment of molluscum contagiosum ReWalk Robotics (RWLK US) shares jump 43% in U.S. premarket trading amid a spike in volume in the stock. Being discussed on StockTwits Aprea Therapeutics gains 21% in U.S. premarket trading after the company reported complete remission in a bladder cancer patient in Phase 1/2 clinical trial of eprenetapopt in combination with pembrolizumab Lennar (LEN US) shares fell 3% in Monday postmarket trading after the homebuilder forecast 4Q new orders below analysts’ consensus hurt by unprecedented supply chain challenges ConocoPhillips (COP US) ticks higher in U.S. premarket trading after it agreed to buy Shell’s  Permian Basin assets for $9.5 billion in cash, accelerating the consolidation of the largest U.S. oil patch SmileDirect (SDC US) slightly higher in premarket trading after it said on Monday that it plans to enter France with an initial location in Paris KAR Global (KAR US) shares fell 4.6% in post-market trading on Monday after the company withdrew is full-year financial outlook citing disruption caused by chip shortage Sportradar (SRAD US) shares jumped 4.5% in Monday postmarket trading, after the company said basketball legend Michael Jordan will serve as a special adviser to its board and also increase his investment in the sports betting and entertainment services provider, effective immediately Orbital Energy Group (OEG US) gained 6% postmarket Monday after a unit won a contract  to construct 1,910 miles of rural broadband network in Virginia. Terms were not disclosed “So much of this information is already known that we don’t think it will necessary set off a wave of problems,” John Bilton, head of global multi-asset strategy at JPMorgan Asset Management, said on Bloomberg TV. “I’m more concerned about knock-on sentiment at a time when investor sentiment is a bit fragile. But when we look at the fundamentals -- the general growth, and direction in the wider economy -- we still feel reasonably confident that the situation will right itself.” Aside from worries over Evergrande’s ability to make good on $300 billion of liabilities, investors are also positioning for the two-day Fed meeting starting Tuesday, where policy makers are expected to start laying the groundwork for paring stimulus.  Europe's Stoxx 600 index climbed more than 1%, rebounding from the biggest slump in two months, with energy companies leading the advance and all industry sectors in the green. Royal Dutch Shell rose after the company offered shareholders a payout from the sale of shale oil fields. Universal Music Group BV shares soared in their stock market debut after being spun off from Vivendi SE. European airlines other travel-related stocks rise for a second day following the U.S. decision to soon allow entry to most foreign air travelers as long as they’re fully vaccinated against Covid-19; British Airways parent IAG soars as much as 6.9%, extending Monday’s 11% jump. Here are some of the biggest European movers today: Stagecoach shares jump as much as 24% after the company confirmed it is in takeover talks with peer National Express. Shell climbs as much as 4.4% after selling its Permian Basin assets to ConocoPhillips for $9.5 billion. Bechtle gains as much as 4.3% after UBS initiated coverage at buy. Husqvarna tumbles as much as 9% after the company said it is suing Briggs & Stratton in the U.S. for failing to deliver sufficient lawn mower engines for the 2022 season. Kingfisher slides as much as 6.4% after the DIY retailer posted 1H results and forecast higher profits this fiscal year. The mood was decidedly more sour earlier in the session, when Asian stocks fell for a second day amid continued concerns over China’s property sector, with Japan leading regional declines as the market reopened after a holiday. The MSCI Asia Pacific Index was down 0.5%, headed for its lowest close since Aug. 30, with Alibaba and SoftBank the biggest drags. China Evergrande Group slid deeper in equity and credit markets Tuesday after S&P said the developer is on the brink of default. Markets in China, Taiwan and South Korea were closed for holidays. Worries over contagion risk from the Chinese developer’s debt problems and Beijing’s ongoing crackdowns, combined with concern over Federal Reserve tapering, sent global stocks tumbling Monday. The MSCI All-Country World Index fell 1.6%, the most since July 19. Japan’s stocks joined the selloff Tuesday as investor concerns grew over China’s real-estate sector as well as Federal Reserve tapering, with the Nikkei 225 sliding 2.2% - its biggest drop in three months, catching up with losses in global peers after a holiday - after a four-week rally boosted by expectations for favorable economic policies from a new government. Electronics makers were the biggest drag on the Topix, which declined 1.7%. SoftBank Group and Fast Retailing were the largest contributors to a 2.2% loss in the Nikkei 225. Japanese stocks with high China exposure including Toto and Nippon Paint also dropped. “The outsized reaction in global markets may be a function of having too many uncertainties bunched into this period,” Eugene Leow, a macro strategist at DBS Bank Ltd., wrote in a note. “It probably does not help that risk taking (especially in equities) has gone on for an extended period and may be vulnerable to a correction.” “The proportion of Japan’s exports to China is greater than those to the U.S. or Europe, making it sensitive to any slowdown worries in the Chinese economy,” said Hideyuki Ishiguro, a senior strategist at Nomura Asset Management in Tokyo. “The stock market has yet to fully price in the possibility of a bankruptcy by Evergrande Group.” The Nikkei 225 has been the best-performing major stock gauge in the world this month, up 6.2%, buoyed by expectations for favorable policies from a new government and an inflow of foreign cash. The Topix is up 5.3% so far in September. In FX, the Bloomberg Dollar Spot Index inched lower and the greenback fell versus most of its Group-of-10 peers as a selloff in global stocks over the past two sessions abated; the euro hovered while commodity currencies led by the Norwegian krone were the best performers amid an advance in crude oil prices. Sweden’s krona was little changed after the Riksbank steered clear of signaling any post-pandemic tightening, as it remains unconvinced that a recent surge in inflation will last. The pound bucked a three-day losing streak as global risk appetite revived, while investors look to Thursday’s Bank of England meeting for policy clues. The yen erased earlier gains as signs that risk appetite is stabilizing damped demand for haven assets. At the same time, losses were capped due to uncertainty over China’s handling of the Evergrande debt crisis. In rates, Treasuries were lower, although off worst levels of the day as U.S. stock futures recover around half of Monday’s losses while European equities trade with a strong bid tone. Yields are cheaper by up to 2.5bp across long-end of the curve, steepening 5s30s spread by 1.2bp; 10-year yields around 1.3226%, cheaper by 1.5bp on the day, lagging bunds and gilts by 1bp-2bp. The long-end of the curve lags ahead of $24b 20-year bond reopening. Treasury will auction $24b 20-year bonds in first reopening at 1pm ET; WI yield ~1.82% is below auction stops since January and ~3bp richer than last month’s new-issue result In commodities, crude futures rose, with the front month WTI up 1.5% near $71.50. Brent stalls near $75. Spot gold trades a narrow range near $1,765/oz. Base metals are mostly in the green with LME aluminum the best performer Looking at the day ahead now, and data releases include US housing starts and building permits for August, along with the UK public finances for September. From central banks, we’ll hear from ECB Vice President de Guindos. Otherwise, the General Debate will begin at the UN General Assembly, and the OECD publishes their Interim Economic Outlook. Market Snapshot S&P 500 futures up 1.0% to 4,392.75 STOXX Europe 600 up 1.1% to 459.10 MXAP down 0.5% to 200.25 MXAPJ up 0.2% to 640.31 Nikkei down 2.2% to 29,839.71 Topix down 1.7% to 2,064.55 Hang Seng Index up 0.5% to 24,221.54 Shanghai Composite up 0.2% to 3,613.97 Sensex up 0.4% to 58,751.30 Australia S&P/ASX 200 up 0.4% to 7,273.83 Kospi up 0.3% to 3,140.51 Brent Futures up 1.6% to $75.13/bbl Gold spot down 0.1% to $1,761.68 U.S. Dollar Index little changed at 93.19 German 10Y yield fell 5.0 bps to -0.304% Euro little changed at $1.1729 Top Overnight News from Bloomberg Lael Brainard is a leading candidate to be the Federal Reserve’s banking watchdog and is also being discussed for more prominent Biden administration appointments, including to replace Fed chairman Jerome Powell and, potentially, for Treasury secretary if Janet Yellen leaves Federal Reserve Chair Jerome Powell will this week face the challenge of convincing investors that plans to scale back asset purchases aren’t a runway to raising interest rates for the first time since 2018 ECB Vice President Luis de Guindos says there is “good news” with respect to the euro-area recovery after a strong development in the second and third quarter The ECB is likely to continue purchasing junk-rated Greek sovereign debt even after the pandemic crisis has passed, according to Governing Council member and Greek central bank chief Yannis Stournaras U.K. government borrowing was well below official forecasts in the first five months of the fiscal year, providing a fillip for Chancellor of the Exchequer Rishi Sunak as he prepares for a review of tax and spending next month U.K. Business Secretary Kwasi Kwarteng warned the next few days will be challenging as the energy crisis deepens, and meat producers struggle with a crunch in carbon dioxide supplies The U.K.’s green bond debut broke demand records for the nation’s debt as investors leaped on the long-anticipated sterling asset. The nation is offering a green bond maturing in 2033 via banks on Tuesday at 7.5 basis points over the June 2032 gilt. It has not given an exact size target for the sale, which has attracted a record of more than 90 billion pounds ($123 billion) in orders Germany cut planned debt sales in the fourth quarter by 4 billion euros ($4.7 billion), suggesting the surge in borrowing triggered by the coronavirus pandemic is receding Contagion from China Evergrande Group has started to engulf even safer debt in Asia, sparking the worst sustained selloff of the securities since April. Premiums on Asian investment-grade dollar bonds widened 2-3 basis points Tuesday, according to credit traders, after a jump of 3.4 basis points on Monday Swiss National Bank policy makers watching the effects of negative interest rates on the economy are worrying about the real-estate bubble that their policy is helping to foster Global central banks need to set out clear strategies for coping with inflation risks as the world economy experiences faster-than-expected cost increases amid an uneven recovery from the pandemic, the OECD said A quick look at global markets courtesy of Newsquawk Asian equities traded cautiously following the recent downbeat global risk appetite due to Evergrande contagion concerns which resulted in the worst day for Wall Street since May, with the region also contending with holiday-thinned conditions due to the ongoing closures in China, South Korea and Taiwan. ASX 200 (+0.2%) was indecisive with a rebound in the mining-related sectors counterbalanced by underperformance in utilities, financials and tech, while there were also reports that the Byron Bay area in New South Wales will be subject to a seven-day lockdown from this evening. Nikkei 225 (-1.8%) was heavily pressured and relinquished the 30k status as it played catch up to the contagion downturn on return from the extended weekend with recent detrimental currency inflows also contributing to the losses for exporters. Hang Seng (-0.3%) was choppy amid the continued absence of mainland participants with markets second-guessing whether Chinese authorities will intervene in the event of an Evergrande collapse, while shares in the world’s most indebted developer fluctuated and wiped out an early rebound, although affiliate Evergrande Property Services and other property names fared better after Sun Hung Kai disputed reports of China pressuring Hong Kong developers and with Guangzhou R&F Properties boosted by reports major shareholders pledged funds in the Co. which is also selling key assets to Country Garden. Finally, 10yr JGBs were higher amid the underperformance in Japanese stocks and with the Japan Securities Dealers Association recently noting that global funds purchased the most ultra-long Japanese bonds since 2014, although upside was limited amid softer demand at the enhanced liquidity auction for 2yr-20yr maturities and with the BoJ kickstarting its two-day policy meeting. Top Asian News Richest Banker Says Evergrande Is China’s ‘Lehman Moment’ Hong Kong Tycoons, Casino Giants Find Respite in Stock Rebound Taliban Add More Male Ministers, Say Will Include Women Later Asian Stocks Drop to Lowest Level This Month; Japan Leads Losses European equities (Stoxx 600 +1.1%) trade on a firmer footing attempting to recoup some of yesterday’s losses with not much in the way of incremental newsflow driving the upside. Despite the attempt to claw back some of the prior session’s lost ground, the Stoxx 600 is still lower by around 1.6% on the week. The Asia-Pac session was one characterised by caution and regional market closures with China remaining away from market. Focus remains on whether Evergrande will meet USD 83mln in interest payments due on Thursday and what actions Chinese authorities could take to limit the contagion from the company in the event of further troubles. Stateside, futures are also on a firmer footing with some slight outperformance in the RTY (+1.2%) vs. peers (ES +0.8%). Again, there is not much in the way of fresh positivity driving the upside and instead gains are likely more a by-product of dip-buying; attention for the US is set to become increasingly geared towards tomorrow’s FOMC policy announcement. Sectors in Europe are firmer across the board with outperformance in Oil & Gas names amid a recovery in the crude complex and gains in Shell (+4.4%) after news that the Co. is to sell its Permian Basin assets to ConocoPhillips (COP) for USD 9.5bln in cash. Other outperforming sectors include Tech, Insurance and Basic Resources. IAG (+4.1%) and Deutsche Lufthansa (+3.8%) both sit at the top of the Stoxx 600 as the Co.’s continue to enjoy the fallout from yesterday’s decision by the US to allow travel from vaccinated EU and UK passengers. Swatch (-0.7%) is lagging in the luxury space following a downgrade at RBC, whilst data showed Swiss watch exports were +11.5% Y/Y in August (prev. 29.1%). Finally, National Express (+7.7%) is reportedly considering a takeover of Stagecoach (+21.4%), which is valued at around GBP 370mln. Top European News U.K. Warns of Challenging Few Days as Energy Crisis Deepens Germany Trims Planned Debt Sales as Pandemic Impact Recedes U.K.’s Green Bond Debut Draws Record Demand of $123 Billion Goldman Plans $1.5 Billion Petershill Partners IPO in London In FX, all the signs are constructive for a classic turnaround Tuesday when it comes to Loonie fortunes as broad risk sentiment improves markedly, WTI consolidates within a firm range around Usd 71/brl compared to yesterday’s sub-Usd 70 low and incoming results from Canada’s general election indicate victory for the incumbent Liberal party that will secure a 3rd term for PM Trudeau. Hence, it’s better the devil you know as such and Usd/Cad retreated further from its stop-induced spike to just pips short of 1.2900 to probe 1.2750 at one stage before bouncing ahead of new house price data for August. Conversely, the Swedish Krona seems somewhat reluctant to get carried away with the much better market mood after the latest Riksbank policy meeting only acknowledged significantly stronger than expected inflation data in passing, and the repo rate path remained rooted to zero percent for the full forecast horizon as a consequence. However, Eur/Sek has slipped back to test 10.1600 bids/support following an initial upturn to almost 10.1800, irrespective of a rise in unemployment. NOK/AUD/NZD - No such qualms for the Norwegian Crown as Brent hovers near the top of a Usd 75.18-74.20/brl band and the Norges Bank is widely, if not universally tipped to become the first major Central Bank to shift into tightening mode on Thursday, with Eur/Nok hugging the base of a 10.1700-10.2430 range. Elsewhere, the Aussie and Kiwi look relieved rather than rejuvenated in their own right given dovish RBA minutes, a deterioration in Westpac’s NZ consumer sentiment and near reversal in credit card spending from 6.9% y/y in July to -6.3% last month. Instead, Aud/Usd and Nzd/Usd have rebounded amidst the recovery in risk appetite that has undermined their US rival to top 0.7380 and 0.7050 respectively at best. GBP/CHF/EUR/JPY/DXY - Sterling is latching on to the ongoing Dollar retracement and more supportive backdrop elsewhere to pare losses under 1.3700, while the Franc continues its revival to 0.9250 or so and almost 1.0850 against the Euro even though the SNB is bound to check its stride at the upcoming policy review, and the single currency is also forming a firmer base above 1.1700 vs the Buck. Indeed, the collective reprieve in all components of the Greenback basket, bar the Yen on diminished safe-haven demand, has pushed the index down to 93.116 from 93.277 at the earlier apex, and Monday’s elevated 93.455 perch, while Usd/Jpy is straddling 109.50 and flanked by decent option expiry interest either side. On that note, 1.4 bn resides at the 109.00 strike and 1.1 bn between 109.60-70, while there is 1.6 bn in Usd/Cad bang on 1.2800. EM - Some respite across the board in wake of yesterday’s mauling at the hands of risk-off positioning in favour of the Usd, while the Czk has also been underpinned by more hawkish CNB commentary as Holub echoes the Governor by advocating a 50 bp hike at the end of September and a further 25-50 bp in November. In commodities, WTI and Brent are firmer in the European morning post gains in excess of 1.0%, though the benchmarks are off highs after an early foray saw Brent Nov’21 eclipse USD 75.00/bbl, for instance. While there has been newsflow for the complex, mainly from various energy ministers, there hasn’t been much explicitly for crude to change the dial; thus, the benchmarks are seemingly moving in tandem with broader risk sentiment (see equities). In terms of the energy commentary, the Qatar minister said they are not thinking of re-joining OPEC+ while the UAE minister spoke on the gas situation. On this, reports in Russian press suggests that Russia might allow Rosneft to supply 10bcm of gas to Europe per year under an agency agreement with Gazprom “as an experiment”, developments to this will be closely eyed for any indication that it could serve to ease the current gas situation. Looking ahead, we have the weekly private inventory report which is expected to post a headline draw of 2.4mln and draws, albeit of a smaller magnitude, are expected for distillate and gasoline as well. Moving to metals, spot gold is marginally firmer while silver outperforms with base-metals picking up across the board from the poor performance seen yesterday that, for instance, saw LME copper below the USD 9k mark. Note, the action is more of a steadying from yesterday’s downside performance than any notable upside, with the likes of copper well within Monday’s parameters. US Event Calendar 8:30am: Aug. Building Permits MoM, est. -1.8%, prior 2.6%, revised 2.3% 8:30am: Aug. Housing Starts MoM, est. 1.0%, prior -7.0% 8:30am: Aug. Building Permits, est. 1.6m, prior 1.64m, revised 1.63m 8:30am: Aug. Housing Starts, est. 1.55m, prior 1.53m 8:30am: 2Q Current Account Balance, est. -$190.8b, prior -$195.7b DB's Jim Reid concludes the overnight wrap Global markets slumped across the board yesterday in what was one of the worst days of the year as an array of concerns about the outlook gathered pace. The crisis at Evergrande and in the Chinese real estate sector was the catalyst most people were talking about, but truth be told, the market rout we’re seeing is reflecting a wider set of risks than just Chinese property, and comes after increasing questions have been asked about whether current valuations could still be justified, with talk of a potential correction picking up. Remember that 68% of respondents to my survey last week (link here) thought they’d be at least a 5% correction in equity markets before year end. So this has been front and centre of people’s mind even if the catalyst hasn’t been clear. We’ve all known about Evergrande’s woes and how big it was for a while but it wasn’t until Friday’s story of the Chinese regulatory crackdown extending into property that crystallised the story into having wider implications. As I noted in my chart of the day yesterday link here Chinese USD HY had been widening aggressively over the last couple of months but IG has been pretty rock solid. There were still no domestic signs of contagion by close of business Friday. However as it stands, there will likely be by the reopening post holidays tomorrow which reflects how quickly the story has evolved even without much new news. Before we get to the latest on this, note that we’ve still got a bumper couple of weeks on the calendar to get through, including the Fed decision tomorrow, which comes just as a potential government shutdown and debt ceiling fight are coming into view, alongside big debates on how much spending the Democrats will actually manage to pass. There has been some respite overnight with S&P 500 futures +0.58% higher and 10y UST yields up +1.5bps to 1.327%. Crude oil prices are also up c. 1%. On Evergrande, S&P Global Ratings has said that the company is on the brink of default and that it’s failure is unlikely to result in a scenario where China will be compelled to step in. The report added that they see China stepping in only if “there is a far-reaching contagion causing multiple major developers to fail and posing systemic risks to the economy.” The Hang Seng (-0.32%) is lower but the Hang Seng Properties index is up (+1.59%) and bouncing off the 5 plus year lows it hit yesterday. Elsewhere the ASX (+0.30%) and India’s Nifty (+0.35%) have also advanced. Chinese and South Korean markets are closed for a holiday but the Nikkei has reopened and is -1.80% and catching down to yesterday’s global move. Looking at yesterday’s moves in more depth, the gathering storm clouds saw the S&P 500 shed -1.70% in its worst day since May 12, with cyclical industries leading the declines and with just 10% of S&P 500 index members gaining. There was a late rally at the end of the US trading session that saw equity indices bounce off their lows, with the S&P 500 (-2.87%) and NASDAQ (-3.42%) both looking like they were going to register their worst days since October 2020 and late-February 2021 respectively. However, yesterday was still the 5th worst day for the S&P 500 in 2021. Reflecting the risk-off tone, small caps suffered in particular with the Russell 2000 falling -2.44%, whilst tech stocks were another underperformer as the NASDAQ lost -2.19% and the FANG+ index of 10 megacap tech firms saw an even bigger -3.16% decline. For Europe it was much the same story, with the STOXX 600 (-1.67%) and other bourses including the DAX (-2.31%) seeing significant losses amidst the cyclical underperformance. It was the STOXX 600’s worst performance since mid-July and the 6th worst day of the year overall. Unsurprisingly, there was also a significant spike in volatility, with the VIX index climbing +4.9pts to 25.7 – its highest closing level since mid-May – after trading above 28.0pts midday. In line with the broader risk-off move, especially sovereign bonds rallied strongly as investors downgraded their assessment of the economic outlook and moved to price out the chances of near-term rate hikes. By the close of trade, yields on 10yr Treasuries had fallen -5.1bps to 1.311%, with lower inflation breakevens (-4.1bps) leading the bulk of the declines. Meanwhile in Europe, yields on 10yr bunds (-4.0bps), OATs (-2.6bps) and BTPs (-0.9bps) similarly fell back, although there was a widening in spreads between core and periphery as investors turned more cautious. Elsewhere, commodities took a hit as concerns grew about the economic outlook, with Bloomberg’s Commodity Spot Index (-1.53%) losing ground for a third consecutive session. That said, European natural gas prices (+15.69%) were the massive exception once again, with the latest surge taking them above the peak from last Wednesday, and thus bringing the price gains since the start of August to +84.80%. Here in the UK, Business Secretary Kwarteng said that he didn’t expect an emergency regarding the energy supply, but also said that the government wouldn’t bail out failed companies. Meanwhile, EU transport and energy ministers are set to meet from tomorrow for an informal meeting, at which the massive spike in prices are likely to be discussed. Overnight, we have the first projections of the Canadian federal election with CBC News projecting that the Liberals will win enough seats to form a government for the third time albeit likely a minority government. With the counting still underway, Liberals are currently projected to win 156 seats while Conservatives are projected to win 120 seats. Both the parties are currently projected to win a seat less than last time. The Canadian dollar is up +0.44% overnight as the results remove some election uncertainty. Turning to the pandemic, the main news yesterday was that the US is set to relax its travel rules for foreign arrivals. President Biden announced the move yesterday, mandating that all adult visitors show proof of vaccination before entering the country. Airline stocks outperformed strongly in response, with the S&P 500 airlines (+1.55%) being one of the few industry groups that actually advanced yesterday. Otherwise, we heard from Pfizer and BioNTech that their vaccine trials on 5-11 year olds had successfully produced an antibody response among that age group. The dose was just a third of that used in those aged 12 and above, and they said they planned to share the data with regulators “as soon as possible”. Furthermore, they said that trials for the younger cohorts (2-5 and 6m-2) are expected as soon as Q4. In Germany, there are just 5 days left until the election now, and the last Insa poll before the vote showed a slight tightening in the race, with the centre-left SPD down a point to 25%, whilst the CDU/CSU bloc were up 1.5 points to 22%. Noticeably, that would also put the race back within the +/- 2.5% margin of error. The Greens were unchanged in third place on 15%. Staying with politics and shifting back to the US, there was news last night that Congressional Democratic leaders are looking to tie the suspension of the US debt ceiling vote to the spending bill that is due by the end of this month. If the spending bill is not enacted it would trigger a government shutdown, and if the debt ceiling is not raised it would cause defaults on federal payments as soon as October. Senate Majority Leader Schumer said the House will pass a spending bill that will fund the government through December 3rd and that the “legislation to avoid a government shutdown will also include a suspension of the debt limit through December 2022.” Republicans may balk at the second measure, given that it would take the issue off the table until after the 2022 midterm elections in November of that year. There wasn’t a great deal of data out yesterday, though German producer price inflation rose to +12.0% in August (vs. +11.1% expected), marking the fastest pace since December 1974. Separately in the US, the NAHB’s housing market index unexpectedly rose to 76 in September (vs. 75 expected), the first monthly increase since April. To the day ahead now, and data releases include US housing starts and building permits for August, along with the UK public finances for September. From central banks, we’ll hear from ECB Vice President de Guindos. Otherwise, the General Debate will begin at the UN General Assembly, and the OECD will be publishing their Interim Economic Outlook. Tyler Durden Tue, 09/21/2021 - 07:45.....»»

Category: blogSource: zerohedgeSep 21st, 2021

Kiwetinohk Energy Corp. Announces Third Quarter 2021 Results, Operational Update and TSX Conditional Listing Approval

CALGARY, Alberta, Nov. 26, 2021 (GLOBE NEWSWIRE) -- Kiwetinohk Energy Corp. ("Kiwetinohk" or the "Corporation") is pleased to announce its interim unaudited financial and operating results for the three and nine-month periods ended September 30, 2021. Selected financial and operational information is outlined below and should be read in conjunction with Kiwetinohk's unaudited condensed consolidated interim financial statements for the three and nine months ended September 30, 2021 and related Management Discussion and Analysis ("MD&A") which are available on SEDAR at www.sedar.com. Key achievements since the beginning of the third quarter include: Kiwetinohk Resources Corp. ("KRC") and Distinction Energy Corp. announced an agreement to combine on June 28, 2021 and form Kiwetinohk Energy Corp. Under the arrangement KRC acquired all shares of Distinction that it did not already own (approximately 48%) by way of an exchange of 20 KRC shares for each Distinction share. Shareholders of both companies voted overwhelmingly in favor of the arrangement on August 30, 2021. The transaction closed on September 22, 2021. The combined company now has core producing assets in the Fox Creek region of northwest Alberta and the Willesden Green and Ferrier areas of west central Alberta. These lands and the associated production from them are mainly in the Duvernay and Montney formations. The Corporation also has lands that it believes have potential for heavy oil development in the Clearwater formation in the Thorhild Radway central north region of Alberta. The Corporation completed a ten to one share consolidation upon closing of the Distinction plan of arrangement. Kiwetinohk made significant progress during the quarter advancing its portfolio of power development projects. This development work has included preparation of preliminary designs, performance estimates and preliminary cost estimates as part of a staged process that includes stages of increasing refinement and estimate quality as part of the process the Corporation uses to advance projects. Kiwetinohk currently has 1.8 gigawatts of power projects in the Alberta Energy System Operator ("AESO") queue including two solar projects, two natural gas combined cycle projects and one Firm Renewable1 project ranging from AESO stage 1 to 2. Production averaged 15,058 boe/d in the third quarter of 2021 with the legacy Distinction assets contributing approximately 6,463 boe/d. Consolidated revenues from production were $66.9 million. Attribution of production volumes in the third quarter was 31% oil and condensate, 12% NGLs and 57% natural gas. Revenues have increased year over year due to higher production volumes, as a result of the acquisitions, in combination with significant improvements in realized prices over the comparative periods. Net marketing income for the three months ended September 30, 2021 was $5.1 million. This reflects greater realizations through premium sales contracts for rich gas in Chicago. All Kiwetinohk's contracted Alliance pipeline capacity of 103.0 mmcf/d (after temporary assignments) was filled during the third quarter of 2021. Subsequent to the end of the quarter, a temporary assignment contract expired and Kiwetinohk now has total Alliance Pipeline capacity of approximately 120 mmcf/d. Adjusted funds flow from operations in the three months ended September 30, 2021 was $28.2 million. On September 22, 2021, the Corporation amended and restated its credit agreement and entered a single $225.0 million Senior Secured Extendible Revolving Facility with a syndicate of banks. The Corporation's available combined borrowing capacity at September 30, 2021 was $170.0 million after taking into consideration current draws and reserves for outstanding letter of credit amounts. Kiwetinohk invested $12.8 million in exploration and development capital expenditures, excluding acquisition expenditures, during the third quarter. These funded the commencement of drilling for two Duvernay wells in the Simonette area, three Montney wells in the Placid, one of which was a vertical evaluation well to assess the potential lower Montney zone, and one Clearwater vertical strat test well in the Thorhild area. Subsequent to September 30, 2021, the Corporation applied to have its common shares ("Common Shares") listed on the Toronto Stock Exchange (the "TSX"). The TSX has conditionally approved the listing of the Common Shares. Listing is subject to the Corporation fulfilling all of the requirements of the TSX on or before February 22, 2022. RBC Capital Markets acted as Sponsor to the Corporation in connection with the application to list its Common Shares on the TSX and BMO Capital Markets and Peters & Co. Limited acted as co-lead Financial Advisors. In conjunction with the conditional listing approval from the TSX, William (Bill) Slavin will be stepping down from the Board of Directors of the Corporation. Concurrent with today's news release, Kiwetinohk has also filed its 2020 Annual Information Form ("AIF") on SEDAR (www.sedar.com) which contains a in depth review of our energy transition strategy and plans. Operational update During the third quarter of 2021, the Corporation commenced drilling two Duvernay horizontal wells from an existing pad in the Simonette area. Rig release on the second well occurred in mid-November and the Corporation has commenced completion operations and expects to have the two wells onstream in early 2022. In addition, the Corporation has recently drilled two Montney horizontal infill development wells in the Placid region. The rig was released from the second well in mid-November. These two horizontal wells are targeting production from the upper bench of the Montney which is productive in offsetting wells in each case. Completion operations and production are anticipated near the end of the first quarter of 2022. The Corporation recently cored a vertical geological evaluation well in order to evaluate the Middle Montney. Core and logs indicated low porosity relative to the proven upper bench but similar to land proven to be productive elsewhere in the Montney. The Corporation has drilled its first multi-lateral horizontal well in the Thorhild area and put it on production in June 2021. This initial well encountered unusually heavy and high-viscosity crude oil leading to poor production rates and a decision to shut-in the well. A wide variation in crude oil properties is not uncommon in the Clearwater play. Kiwetinohk is evaluating the next steps for this specific well and has cut core in a recent vertical test well in a different part of the play to assess oil and reservoir characteristics. Financial and operating summary:   Q3 2021 Q2 2021 Q3 2020 YTD 2021 YTD 2020 Sales volumes           Condensate (bbl/d) 4,261 3,096 18 2,493 42 Light oil (bbl/d) 308 331 435 327 448 Heavy oil (bbl/d) 39 29 15 34 5 NGLs (bbl/d) 1,814 1,220 64 1,048 72 Natural gas (mcf/d) 51,817 36,723 1,561 30,089 1,476 Total (boe/d) 15,058 10,797 793 8,918 813 Oil and condensate % of production 31%.....»»

Category: earningsSource: benzingaNov 26th, 2021

Real Estate Webmasters Helps Usher RISMedia Into Next Era of Information With New Website

New SEO- and User-Friendly Site Improves Deliverability of RISMedia’s High-Quality Content In what’s been nothing short of a break-out year for Real Estate Webmasters (REW), the web design, branding and SEO powerhouse whose Renaissance website platform helps brokers compete with the Zillows and Compasses of the world, the firm also delivered a highly custom, transformational […] The post Real Estate Webmasters Helps Usher RISMedia Into Next Era of Information With New Website appeared first on RISMedia. New SEO- and User-Friendly Site Improves Deliverability of RISMedia’s High-Quality Content In what’s been nothing short of a break-out year for Real Estate Webmasters (REW), the web design, branding and SEO powerhouse whose Renaissance website platform helps brokers compete with the Zillows and Compasses of the world, the firm also delivered a highly custom, transformational rebrand of RISMedia, as well as a complete overhaul and relaunch of the firm’s real estate news and events website, RISMedia.com. RISMedia unveiled its new, modern brand design and tagline, “Integrity In Real Estate,” in March, and launched its new website and technology platform last month. Real Estate Webmasters refreshed the brand with a modernized and more flexible look and feel, and the website with a clean, accessible and easily navigable layout. In addition to lightning-fast speed and a fresh mobile look, REW and RISMedia embraced more video on the revamped site, as well as less intrusive advertisements. “Being selected by RISMedia to do their rebrand and then be offered the chance to completely rebuild their web platforms has truly been the highlight of my career,” says Real Estate Webmasters CEO Morgan Carey. “RISMedia is the most trusted source of news in the real estate industry and Real Estate magazine is read by the most influential leaders in the space. To have ‘Designed by Real Estate Webmasters’ on this new platform sends a message to the industry that we truly are the firm to hire for highly custom enterprise projects.” A Transformational Year The two teams met online often and worked closely together, initially to take a deeper dive into RISMedia’s 41-year history in the real estate space, their goals and vision for the future, as well as what their technical and content management needs are as a media company now and into the future. Then, over the four-month-long build, the teams continued to collaborate to bring RISMedia’s vision to life. According to RISMedia Founder, CEO and Publisher John Featherston, now was the right time to invest in these significant company upgrades. “We recognized that over the past two years we needed to reinvent the infrastructure that makes RISMedia work,” Featherston explains. “We found in Morgan Carey and his talented team the best partner, with expertise in all the elements necessary to create a state-of-the-art platform that will ensure that RISMedia will serve its customers more efficiently and effectively—in a way they expect, and in a way that will allow us to grow. Information is our currency, and delivering that effectively is just as important as creating it.” Building a Site for the Future According to Carey, with RISMedia’s history and goals now in sight, when it came time to turn from the rebrand to the website build, “admittedly this was much easier for us,” given his company’s expertise in SEO, site design and engineering. “We have 20 years of experience building SEO-friendly, traffic-generating web platforms that are fully responsive and look amazing,” says Carey. “Our specialty is high-end, custom platforms specific to real estate, and so for us, once the rebrand was done, we knew exactly what to do to make RISMedia.com the best it could be.” A big part of that was designing for a media company that has been in the space for a long time, specifically, working with the firm’s legacy content. RISMedia has many different content types and as an early internet adopter, has decades of pages of content, posts, awards, backlinks and file structures, the teams explained. “All of these things contribute to RISMedia.com’s SEO and must be handled with care and precision,” Carey explains. “Luckily REW was founded on SEO consulting, which is a core tenet of everything we do. Real Estate Webmasters provided full audit services and worked hand-in-hand with RISMedia’s content team to not only protect their most valuable asset, but also ensure that they were set up to grow their organic traffic and SEO results over time.” What Else Can RISMedia Website Visitors Now Expect? In addition to the modern, clean design and user-friendly experience, Carey says RISMedia readers will love the fully responsive, mobile experience, more video and how easy the site is to navigate. “As most brokers know, video is the new preferred medium for the next generation of consumers and one of the most effective ways to build authority and connect with your audience,” says Carey. “This is such a great example of how RISMedia embraces change. John Featherston has been doing this for more than 40 years, yet he was the first to agree that video needed to be a part of this project—and in true John fashion, not only did he support the idea, he led from the front. You can see him featured heavily in the video content sections.” Ultimately, the history and experience in the industry and the entrepreneurial spirit of these two companies combined to create just the right synergies needed for a phenomenal end result. “Real Estate Webmasters did an incredible job with the rebranding of RISMedia,” says Kelli McKenna, RISMedia senior vice president of Creative Services and Marketing. “They really took the time to understand who we are and what our future goals are, and translated that into a fresh, modern design that begins with our logo and tagline and carries through across the new website design. That isn’t easy to do for an established brand with over 41 years in the real estate industry. We had such a fun, positive experience working collaboratively with the Real Estate Webmasters team. They truly knocked our rebrand and website redesign out of the park.” What’s Next for These Two Companies? In addition to the rebrand and website, RISMedia has made other significant investments this year, including a series of executive appointments and strategic hires, designed to further strengthen RISMedia’s editorial, creative, technology and customer service teams as the company plans its continued expansion throughout 2022. For Real Estate Webmasters, 2021 has been a break-out year, Carey says, especially in the enterprise space (300-plus agent brokerages). In addition to launching the new RISMedia site in Q4, they are launching several other, very large, custom enterprise projects as well. “We’re starting to see brokerages at the highest level invest in lead generation for their agents and we’re excited to share that we have recently been signed by one of the top 10 brokerages (worldwide) to provide the new Renaissance platform, REW CRM and lead generation services to their agents,” says Carey. “We’re honored to be participating in their story, and look forward to helping support their goals of continued exponential growth.” As for the RISMedia/Real Estate Webmasters relationship, next year, readers can expect the innovation at RISMedia to continue as the two companies have agreed to a multi-year, multi-million-dollar contract extension that has Real Estate Webmasters playing a critical role in other innovative projects at RISMedia, and also driving massive traffic to RISMedia advertisers and Power Brokers, says Carey. “For the Power Brokers, our SEO team has some exciting opportunities to help them benefit from the authority of RISMedia.com to both boost their online reputation and even help their own brokerage websites rank,” he explains. “Stay tuned!” For more information, visit www.realestatewebmasters.com. Beth McGuire is RISMedia’s vice president of Online Editorial. Email her your story ideas at beth@rismedia.com. The post Real Estate Webmasters Helps Usher RISMedia Into Next Era of Information With New Website appeared first on RISMedia......»»

Category: realestateSource: rismediaNov 24th, 2021

A beginner"s guide to trading futures contracts

Futures are financial contracts where buyers and sellers agree to exchange an asset at a predetermined price and date. Here are 4 steps to trading futures. Business InsiderTypically, a trader will become familiar with one or two contract types and specialize in a particular strategy based on their goals, risk tolerance, and comfort level.d3sign/GettyTable of Contents: Masthead Sticky Futures contracts allow traders to speculate on the direction of price movements on asset classes such as livestock, oil, and soybeans. Investing in futures can provide an additional layer of diversification to a portfolio. Futures are more complex and carry more risks than trading stocks or ETFs because of low margin requirements and volatility. Visit Insider's Investing Reference library for more stories. Futures are contracts in which the buyer agrees to buy a commodity or financial instrument at a specified date and quantity at a later point in time, and the seller agrees to sell or deliver the asset as specified in the contract. These contracts were initially created to help businesses navigate unexpected costs.For example, profits in the airline industry can be heavily dependent on the price of fuel. To protect against a sudden surge in prices, an airline company can use a futures contract to lock in current prices, thus nullifying the impact of increasing fuel prices. Futures contracts can be settled in cash or with physical goods. For traders, the settlement is in cash, while some businesses may opt for physical delivery. A futures contract can derive its value from various asset types. The most common types are commodities like wheat, corn, and crude oil. Precious metals like gold and silver, currencies, US Treasuries and stock indexes like the S&P 500. But to trade futures, you'll want to understand the risks and investment strategies before moving forward. Here are four key areas that you'll want to get familiar with.Note: Futures are known as derivatives. Derivatives are contracts that obtain their value from an underlying asset, index, or security.Step 1: Understand how futures work — and the risks Futures work differently from more mainstream investing options like stocks. Other than speculation, some investors prefer futures trading because it can offer a few benefits that are not available with stocks. For example, futures contracts trade at different hours than the stock market. Instead of 9:30 a.m. to 4 p.m. ET, the futures market is open nearly 24 hours a day, six days a week.Another benefit to futures trading are the short-selling requirements and tax benefits. Short selling is the process of selling assets that you've borrowed with the intent on buying it back later for less money. For stocks, short selling has a higher margin requirement but futures contracts have the same margin requirement on long and short positions making it a bit more conducive for traders who are looking for this high-risk, high-reward tactic. As for taxes, some futures trades may qualify for preferential tax rates. "Typically, gains from short-term stock trades are taxed as ordinary income. However, gains from futures contracts are taxed at a 60/40 rate which is 60% long-term and 40% short-term. Currently long-term capital gains tax rates range from 0-20% depending on your federal income tax bracket," says Moswen James, an enrolled agent at Get Help Tax.Futures can also help an investor diversify and participate more directly in certain asset classes. For example, the stock price for a company like Exxon Mobile (XOM) will at-times be dependent upon the price of crude oil because of the nature of the company — and other factors like management and competitors. A futures contract on the other hand can be based directly on the price of crude oil without the added risk factors that a company may bring. That does not mean however that futures contracts are less risky, they are still highly complex financial instruments. One of the largest risk factors with futures is related to the margin requirements and price sensitivity. "Futures contracts are inherently very leveraged because the underlying valuation is very sensitive to the amount of funds invested as margin or collateral," says Chester Spatt, professor of finance at Carnegie Mellon University's Tepper School of Business.Margin is the practice of borrowing money from your brokerage to invest. Current margin requirements for futures contracts are between 3% and 12%. This means an investor could spend $5,000 of their own money to control a $100,000 position, which represents only 5%. If this trade goes in the favor of the investor, there would be a significant windfall. But a negative move could result in serious losses. Before using debt to enter a trade it is wise to carefully consider your risk tolerance. Step 2: Choose a futures contract type and market to trade in There are different types of futures contracts to choose from. Because each market can be so distinct from each other, a futures trader typically focuses on one or two areas, similar to how a chef may specialize in baking or desserts. This allows the trader to have a deeper understanding of that market and may help inform their trading decisions. Below are the most common categories. Precious metals: Gold and silver are the most common metals in this category. Investors who choose these types of futures contracts are generally looking to hedge against inflation or financial uncertainty but precious metals can also be used for more practical applications like platinum for semiconductor chips. Stock index: These contracts derive their value from a stock index like the S&P 500, Nasdaq, or Dow Jones. Investors try to use these types of futures to profit from anticipated movements or announcements from the Federal Reserve. Energy: Futures contracts that are based on energy would include oil and natural gas. These contracts can also serve as a benchmark for oil prices worldwide. Agriculture: Agriculture contracts in this category are usually based on things like soybeans, corn and wheat. These contracts are a bit more unique due to the fact that weather patterns and seasonality play a much bigger role in impacting prices and risk. US Treasury/interest rates: Futures contracts based on interest rates and Treasury bonds play a significant role in international financial markets. Investors in this category closely watch the moves of the Federal Reserve. Livestock: Traders can even speculate on the prices of livestock like cattle and hogs. Price movements here are subject to consumer tastes and supply and demand pressure in addition to standard risks associated with futures.Note: Each type of futures contract is denominated in different values. For example, futures contracts for gold are denominated in 100 troy ounces but wheat contracts are 5,000 bushels.Step 3: Choose your investing strategyThere are several investing strategies to choose from, typically a trader will become familiar with one or two contract types and specialize in a particular strategy based on their goals, risk tolerance, and comfort level. Common futures trading strategies include going long or short in a position and calendar spreads which could be bullish or bearish. Going long: This means that you are buying the contract and you're expecting the underlying asset to rise. The obvious risks with this strategy occur if the underlying asset drops in value. Going short: This strategy involves selling the contract in anticipation that the underlying asset will fall in value. This strategy however is risky because losses can be unlimited should the underlying asset rise in value since there is no true limit to how high prices can rise. Calendar spreads: A calendar spread is a strategy in which the trader takes both a long and short position on the same asset but with two separate expirations. The profit is generated by the spread which is the profit between the contract that was sold and the contract that was purchased. In a bull calendar spread, the trader will go long on the shorter expiration date and go short on the contract with the longer expiration. In a bear calendar spread, the positions are flipped and the trader will sell the shorter expiration contract and buy the longer one. Step 4: Place your futures trade and manage it A best practice for any trade is to understand the risks and price targets prior to entry. Because of the increased risks of trading futures, contracts should be carefully monitored. This is where the different order types to buy and sell may come into play and help manage the trade. A limit order offers control over the entry and exit prices. If you know the levels in which to enter and exit a trade these limit orders, as well as a stop loss can help traders execute their strategies more efficiently. The financial takeawayFutures trading is not suitable for every investor due to its complexity and risk. "Futures contracts have tremendous price sensitivity compared to the amount that needs to be deposited as margin or collateral. If the investor does not want to close his position after an adverse price move he should have substantial reserves available," adds Spatt.What to know about derivatives and how they allow investors to hedge, leverage, and speculateAlternative investments are exotic assets that can diversify your portfolioHow to hedge against inflation with investments that keep pace with rising pricesTrading and investing are two approaches to playing the stock market that bring their own benefits and risksRead the original article on Business Insider.....»»

Category: topSource: businessinsiderNov 18th, 2021

Fusion GPS interview with House panel leaves huge pile of breadcrumbs for Trump-Russia investigators

President Donald Trump listens as Secretary of Housing and Urban Development Ben Carson speaks during an event to honor Dr. Martin Luther King Jr., in the Roosevelt Room of the White House, Friday, Jan. 12, 2018, in Washington.Associated Press/Evan VucciThe House Intelligence Committee released the transcript of its interview with Glenn Simpson, the cofounder of the opposition research firm Fusion GPS.The transcript left a massive pile of breadcrumbs for Trump-Russia investigators to sift through as they pursue their probe into Russia's election interference and whether the Trump campaign colluded with Moscow.Editor's note: This article was updated after a Nov. 3, 2021 federal indictment accused Igor Danchenko, a Russia expert who contributed to the so-called Steele dossier, of lying to investigators about receiving information from Sergei Millian. Millian repeatedly denied he was a source for any material in the dossier.The House Intelligence Committee on Thursday released the transcript of the panel's November interview with Glenn Simpson, the cofounder of the opposition research firm Fusion GPS. The House investigators' line of questioning touched upon subjects that the Senate Judiciary Committee did not delve into, largely due to a shift in focus spearheaded by the committee's top Democrat, Adam Schiff. Rather than home in on the nature of Simpson's relationship with Christopher Steele — the former British intelligence officer hired by Fusion to research Trump's Russia ties — Schiff and his Democratic colleagues asked Simpson pointed questions about Russian money laundering, Russian organized crime, and whether Trump could be susceptible to Russian blackmail.The result was a long trail of breacrumbs for investigators probing Trump's relationship with Russia."You mentioned that you'd done a lot of work as a journalist in terms of Russian organized crime, financial crimes, organized crime more generally," Schiff said. "What can you tell us about how the Russians launder their money and whether that was an issue of concern during the first phase of your work for Free Beacon?"Fusion GPS was first hired by the conservative Washington Free Beacon in late 2015 to conduct opposition research on Trump. The research was later funded by the DNC via the law firm Perkins Coie. "I guess the general thing I would say is that, you know, the Russians are far more sophisticated in their criminal organized crime activities than the Italians, and they're a lot more global," Simpson replied. "They understand finance a lot better. And so they tend to use quite elaborate methods to move money...I mean, if you can think of a way to launder money, the Russians are pretty good at it."Glenn Simpson.Pablo Martinez Monsivais/APSimpson explained that "real estate deals" were a common Russian method of hiding and moving money. Asked whether Fusion had found "evidence" of corruption and illicit finance related to the purchase of Trump properties, Simpson replied that his firm had seen "patterns of buying and selling that we thought were suggestive of money laundering."Schiff pounced: "What facts came to your attention that concerned you that the buying and selling of properties - the buying and selling of Trump properties might indicate money laundering?" he asked."There was -- well, for one thing, there was various criminals were buying the properties," Simpson replied. "So there was a gangster -- a Russian gangster living in Trump Tower."The gangster went by Taiwanchik, and he'd been running a "high-stakes gambling ring" out of Trump Tower, Simpson said. The gangster also "rigged the skating competition at the Salt Lake Olympics" and sat in the VIP section of the Miss Universe Pageant in 2013 along with Trump "and lots of other Kremlin biggies," Simpson said.Panama, Toronto, Scotland and IrelandAsked whether the Russian government would have been aware of the Russian mafia's efforts to move or hide money in Trump properties, Simpson replied: "The Russian mafia is essentially under the dominion of the Russian Government and Russian Intelligence Services.""And many of the oligarchs are also mafia figures," he continued. "And the oligarchs, during this period of consolidation of power by Vladimir Putin, when I was living in Brussels and doing all this work, was about him essentially taking control over both the oligarchs and the mafia groups. And so basically everyone in Russia works for Putin now." Other concerning patterns, Simpson said, included "fast turnover deals and deals where there seemed to have been efforts to disguise the identity of the buyer."Specifically, he said, "a project in Panama, the one in Toronto. Those both got a lot of fraud associated with them, a lot of fraud allegations, a lot of activity that I would say smacks of fraud, and a lot of Russia mafia figures listed as buyers who may or may not have actually put money into it." NBC News reported in November that Trump's Panama hotel had organized crime ties. Donald Trump (2nd L) poses with his children Donald Jr. (L), Ivanka and Eric (R) during a news conference to mark the opening of the Trump International Hotel & Tower in Toronto April 16, 2012.Mike Cassese/ReutersA Russian state-owned bank under US sanctions, whose CEO met with Trump's son-in-law Jared Kushner in December 2016, helped finance the construction of the president's 65-story Trump International Hotel and Tower in Toronto.The bank, Vnesheconombank, or VEB, bought $850 million of stock in a Ukrainian steelmaker from the billionaire Russian-Canadian developer Alexander Shnaider, who was constructing the hotel at the time. Democratic Rep. Jackie Speier asked Simpson about Schnaider during the interview."Schnaider had no previous hotel or condo development experience," she said. "His most apparent qualification seemed to be that he made a lot of money quickly." Simpson called Schnaider among "the most interesting" of the Trump-Russia characters, noting that his father-in-law was a "very important figure in the history of the KGB-Mafia alliance.""I think that there is a lot of information to be had from Canadian law enforcement and from Belgian law enforcement about some of these characters," Simpson said.Simpson said Trump's golf courses in Scotland and Ireland were also "concerning" because financial statements obtained by Fusion showed "enormous amounts of capital flowing into these projects from unknown sources.""At least on paper it says it's from The Trump Organization, but it's hundreds of millions of dollars," Simpson said. "And these golf course are just, you know, they're sinks. They don't actually make any money."GOP Rep. Tom Rooney said "the story about [Trump] financing Doonbeg in Ireland through money that we can't really trace but has sort of the fingerprints of Russian mobsters" was "fascinating."Doonbeg is the home of Trump's hotel and golf course in Ireland."If we knew that Donald Trump was working with the Russian mafia to fund Doonbeg in Ireland, then there's no way he would be President," Rooney said. "So, I mean, that's why it's so fascinating."Roger Stone, Julian Assange, and Nigel FarageSchiff asked Simpson later whether he uncovered "any information regarding a connection between Trump or those around him and Wikileaks" — the self-described radical transparency organization founded by Julian Assange that published emails Russia had stolen from the Democratic National Committee."Roger Stone bragged about having his contact," Simpson replied, referring to Stone's public comments about having an intermediary with Assange. "We tried to figure out who the contact was."We started going into who Stone was and who his relationships were with, and essentially the trail led to sort of international far right. And, you know, Brexit happened, and Nigel Farage became someone that we were very interested in, and I still think it's very interesting."Farage is a British politican who headed the far-right UK Independence Party (UKIP) from 2006-2009 and again from 2010-2016. Farage spearheaded the Brexit movement."So I have formed my own opinions that went through - that there was a somewhat unacknowledged relationship between the Trump people and the UKIP people and that the path to Wikileaks ran through that," Simpson said. "And I still think that today."Donald Trump and Nigel Farage.Nigel Farage/TwitterSchiff then asked whether the data company Cambridge Analytica, whose parent company is based in the UK, was the link between the Trump campaign and the Brexit campaign.Simpson replied that the billionaire Mercer family, which has been credited with paving the way to Trump's victory, were "signficant" — moreso than Cambridge Analytica, which he said may have been "selling snake oil."Simpson also mentioned a "Bannon Stone associate" named Theodore Roosevelt Malloch, an American associated with UKIP who he believed was "a significant figure in this.""Were you able to find any factual links between the Mercers and Assange or Wikileaks or Farage?" Schiff asked.Simpson pointed to Farage's trips to New York, and said he had been told, but had not confirmed, that "Nigel Farage had additional trips to the Ecuadoran Embassy...and that he provided data to Julian Assange.""What kind of data?" Schiff asked."A thumb drive," Simpson replied.'It appears the Russians...infiltrated the NRA'Speier went on to ask Simpson why Russia seemed so interested in the National Rifle Association.A McClatchy article published on Thursday morning revealed that the FBI is investigating whether Russian money flowed into the NRA via a Kremlin-linked banker named Alexander Torshin, which was then donated to the Trump campaign. "It appears the Russians, you know, infiltrated the NRA," Simpson said. "And there is more than one explanation for why. But I would say broadly speaking, it appears that the Russian operation was designed to infiltrate conservative organizations."Simpson said Fusion spent "a lot of time investigating Mr. Torshin," who is "well known to Spanish law enforcement for money laundering activity."Republican presidential candidate Donald Trump addresses members of the National Rifle Association during their NRA-ILA Leadership Forum at their annual meeting in Louisville, Kentucky, May 20, 2016.Reuters/John Sommers II"He is one of the more important figures, but, you know, another woman with whom he was working, Maria Butina, also was a big Trump fan in Russia, and then suddenly showed up here and started hanging around the Trump transition after the election and rented an apartment and enrolled herself at AU, which I assume gets you a visa," Simpson said.Maria Butina has attempted to build a pro-gun movement in Russia, where gun laws are strict and there is little interest by Russian citizens — and Russian President Vladimir Putin — to loosen them.Butina was a former assistant to Torshin and reportedly claimed at a post-Election Day party that she had been a part of the Trump campaign's communications with Russia, according to The Daily Beast.The Agalarovs, Kaveladze, and Crocus GroupSchiff asked Simpson what he knew about Trump's relationship with Aras Agalarov, the Russian-Azerbaijani billionaire who helped bring Trump's Miss Universe pageant to Moscow in 2013.Simpson replied that the Agalarovs started operating in the US "around the time of the fall of the Soviet Union and are associated with people who are connected to previous episodes of money laundering that are serious." "Knowing what you do about the Agalarovs, what do you think is the significance of the fact that the – that Aras Agalarov was responsible, at least according to these public emails, for setting up the meeting at Trump Tower?" Schiff asked, referring to the June 9 meeting at Trump Tower between top Trump campaign officials and several Russian nationals. "I think it's a reasonable interpretation that that was a Russian Government-directed operation of some sort, based on what I know now," Simpson replied.Russian real estate developer Aras Agalarov (L) talks with his son, singer Emin Agalarov, during a news conference following the 2013 Miss USA pageant at the Planet Hollywood Resort & Casino in Las Vegas, Nevada June 16, 2013.Thomson ReutersHe left another clue: "I think this tax court case involving the Agalarovs is an important document. I think that there's – I guess going back to your subpoena question, I also – you know, the Crocus Group has a much longer history in the United States than people realize, and I think there's all kind of good documents." The Crocus Group is Agalarov's development company. Simpson said that Irakly Kaveladze, a representative of Aras Agalarov and his son, Emin, is another important player."I think that there is a lot to find out about Kaveladze," Simpson said. "But I have a little bit of knowledge of Kaveladze and a little bit of knowledge of the Agalarovs. Kaveladze surfaced in a previous money laundering investigation. I think there is more information about that money laundering investigation in the possession of the government than just the GAO report."Kaveladze was implicated in a Russian money-laundering scheme in 2000, during which investigators found that several Russians and Eastern Europeans had formed shell companies and used them to move money through American banks.Kaveladze has long served a far more important role than just a translator for the Agalarovs. He is the vice president of Crocus Group, and he met with Trump in 2013 during the Miss Universe pageant (Kaveladze can be seen standing behind Emin Agalarov as he speaks with Trump in a video taken in Moscow in 2013.)Simpson also suggested that the committee examine the travel histories of Trump's children, Don Jr. and Ivanka, "and whether they had other meetings with Russians." "And specifically, the connections between the Abramovichs and Ivanka and Jared is something that requires looking into, if it hasn't been," Simpson said, referring to Roman Abramovich and Jared Kushner.Dmitry Rybolovlev and Igor SechinSteele told a reporter in December that investigators examining Trump's Russia connections needed "to look at the contracts for the hotel deals and land deals" that Trump had pursued with Russian nationals."Check their values against the money Trump secured via loans,"  Steele told The Guardian's Luke Harding. "The difference is what's important."Steele did not go into further detail, Harding said, but seemed to be referring to a 2008 home sale to the Russian oligarch Dmitry Rybolovlev that has come under scrutiny by the special counsel Robert Mueller.Simpson emphasized the suspicion surrounding that home sale during his interview."When we first heard about it, it didn't fit with my timeline of when Trump seemed to have gotten deeply involved with the Russians," Simpson said. "Later, as I understood more, I began to realize that I actually was in the sort of first trimester of the Trump-Russia relationship, in that it actually fit in pretty well with some of the early things that had happened."Dmitri Rybolovlev of Russia, President of AS Monaco Football Club attends Monaco's Ligue 1 soccer match against Paris St Germain at Louis II stadium in Monaco March 1, 2015.Reuters/Eric GaillardRybolovlev, a multibillionaire who was an early investor in one of the world's most lucrative fertilizer companies, bought a Palm Beach property from Trump for $95 million in 2008, two years after Trump put it on the market for $125 million; Trump had purchased it for $41 million in 2004.Rybolovlev has never lived in the mansion and has since torn it down, but an adviser, Sergey Chernitsyn, told Business Insider last year that there was "every prospect that this investment will turn out to be profitable."Rybolovlev's cash infusion into Trump's bank account is believed to be the most expensive home sale in US history. According to PolitiFact, 2008 was the year Trump Entertainment Resorts missed a $53.1 million bond interest payment and later filed for Chapter 11 bankruptcy protection to reorganize.Richard Dearlove, who headed the UK foreign-intelligence unit MI6 between 1999 and 2004, told Prospect Magazine in April that Trump borrowed money from Russia for his business during the 2008 financial crisis."What lingers for Trump may be what deals — on what terms — he did after the financial crisis of 2008 to borrow Russian money" when other banks would not loan to him, Dearlove said.Simpson said his view of Rybolvlev's importance changed as he began to learn more about him."In particular, I didn't know in the early period that he was closely linked to Igor Sechin, and that, in fact, he was accused of essentially destroying an entire city environmentally with his potash mining operations," Simpson said.Sechin is the CEO of Russia's state oil company, Rosneft,Rybolvlev "managed to get out of it and walk out of Russia with billions of dollars with the apparent assistance of Sechin and Sechin's people," he continued. "And subsequently, received a report from a Russian émigré who is familiar with these events that...there were political or corruption aspects to that."Additionally, Simpson said, he was "intrigued" by Rybolovelv's travel in August 2016 and the extent to which it coincided with Kushner and Ivanka Trump's travel around the same time."Cohen and Ivanka and Jared and Trump, and I can't remember whether Manafort's in this mix too, are all in the Hamptons area in August, and Dmitry Rybolovlev's plane is somewhere nearby, and flies to Nice," Simpson said, referring to the Trump Organization's lawyer Michael Cohen and former Trump campaign chairman Paul Manafort."And then most of these guys sort of fall off the radar and then, you know, I think it's the 12th of August, Rybolovlev's plane lands in Dubrovnik, and Jared and Ivanka surface in Dubrovnik," he said. "And I don't know how they got there or whether they got there on his plane."Sergei Millian and Michael CohenSimpson mentioned in his testimony that Fusion GPS had begun to scrutinize another trip Trump Organization representatives took to Moscow to promote a vodka brand. That trip was organized by Sergei Millian, the Belarus-born businessman who worked with the Trump Organization."When we looked at him, we found that he ran a sort of shadowy kind of trade group called the Russian-American Chamber of Commerce, which is -- Russians are known to use chambers of commerce and trade groups for intelligence operations," Simpson said.Sergei Millian at an event following Trump's inauguration on January 20th.Screenshot/FacebookMillian, who changed his name when he arrived in the US from Siarhei Kukuts to Sergei Millian, founded the Russian-American Chamber of Commerce in 2006 and has described himself as an exclusive broker for the Trump Organization with respect to the company's potential real-estate dealings in Russia.He attended several black-tie events at Trump's inauguration, and told the Russian news agency RIA that he had been in touch with the Trump Organization as late as April 2016. He was also photographed at the St. Petersburg International Economic Forum in June 2016 with the Russian oligarch Oleg Deripaska, a longtime business associate of Trump's campaign chairman Paul Manafort.It was around that time that Millian's organization, the Russian-American Chamber of Commerce, was looking for "delegates" to attend the Russian Oil & Gas Forum in Moscow.But Millian appears to have begun downplaying his ties to the Trump Organization after Western reporters started digging into Trump's Russia ties last summer.Contrary to what he told RIA, Millian told Business Insider in an email earlier this year that the last time he worked on a Trump-brand project was "in Florida around 2008." He did not respond to a request to clarify the discrepancy.Millian had two different resumes, according to Simpson: "In one resume he said he was from Belarus and he went to Minsk State, and then in another he was from Moscow and went to Moscow State," Simpson said. "In one he said he worked for the Belarussian Foreign Ministry; in the other, he said he worked for the Russian Foreign Ministry."Additionally, Millian "was connected to" Trump's lawyer Michael Cohen.Michael Cohen, Donald Trump's personal lawyer, arrives in Trump Tower in New York City.Stephanie Keith/Reuters"Michael Cohen was very adamant that he didn't actually have a connection to Sergie, even though he was one of only like 100 people who followed Sergi on Twitter," Simpson said. "And they -- we had Twitter messages back and forth between the two of them just - we just pulled them off of Twitter." Cohen acknowledged to Business Insider earlier this year that Millian emailed him during the campaign. But he said he rarely if ever responded to the emails and stopped communicating with Millian in November 2016. Simpson said Fusion came to understand more about Cohen as they continued their research."We gradually began to understand more about ·Michael Cohen, the President's lawyer, and his background, and that he had a lot of connections to the former Soviet Union, and that he seemed to have associations with organized crime figures in New York and Florida, Russian organized crime figures," Simpson said.The Center for National Interest and trips to HungarySchiff asked Simpson whether there were other issues that came to his attention that were not contained in the Steele dossier "that you think we ought to be aware of that you either were able to substantiate in part, or you were not able to fully investigate."Simpon brought up the Center for the National Interest and its president and CEO, Dimitri Simes — a Russian expat described by Simpson as "a suspected Russian agent" known to the FBI.A biography of Simes on the Center's website says he was selected to lead the Center by former President Richard Nixon, "to whom he served as an informal foreign policy advisor and with whom he traveled regularly to Russia and other former Soviet states, as well as Western and Central Europe.""There are a number of Russian defectors who, I think, maybe could speak to that," Simpson said, referring to Simes and the Center for the National Interest."I think there are some records around that might reflect some of that," he continued. "And I think that is — given their fundamental role in creating the Trump foreign policy, I think that is a really important area."Simpson also pointed to "a lot of unexplained travel by various people" associated with Trump to Hungary, whose president Viktor Orban "is essentially a Putin puppet," Simpson said.Orban has ushered in a new era of anti-migrant, pro-Russia policies since taking office in 2010.Russia's military intelligence service, the GRU, "has a big station" in Hungary, too, Simpson said.Among the Trump associates who traveled to Hungary: Sebastian Gorka, "about three times," Simpson noted. Gorka was reportedly wanted by Hungarian police on gun-related charges, BuzzFeed reported on Thursday.Trump campaign advisers Carter Page and JD Gordon also traveled to Hungary in 2016. "I guess this is transitioning into another area, if you are interested in looking at things, is, you know, the European travel of certain people. And I would include Jared and lvanka in that," Simpson said.Read the full transcript below: Simpson testimony by natasha on Scribd Read the original article on Business Insider.....»»

Category: topSource: businessinsiderNov 16th, 2021

Futures Rise Boosted By JNJ Split As Treasuries, Dollar Slide

Futures Rise Boosted By JNJ Split As Treasuries, Dollar Slide U.S. equity index futures were slightly up at the end of a volatile week, trading in a narrow 20 point range for the second day in a row, while Treasuries resumed declines in response to the recent shock inflation data from the world’s largest economies. Contracts on the three main U.S. gauges were higher, with Johnson & Johnson rising in premarket trading after saying it will split into two companies, while tech stocks again led gains at the end of a week scarred by deepening concerns over prolonged inflation. All the major U.S. indexes were set for a more than 1% weekly drop, their first since the week ended Oct. 1, as hot inflation numbers sapped investor sentiment and halted an earnings-driven streak of record closing highs. At 7:15 a.m. ET, Dow e-minis were up 106 points, or 0.3%, S&P 500 e-minis were up 8.5 points, or 0.18%, and Nasdaq 100 e-minis were up 40.25points, or 0.25%. The same bullish sentiment that lifted US futures pushed European shares up as luxury shares gained after Cartier owner Richemont posted better-than-forecast earnings, offsetting a drop in travel stocks. Asian shares also climbed, helped by a rally in Japan. At the same time, Treasuries resumed a selloff after a trading holiday Thursday, with this week’s shock US inflation figures still reverberating through the bond market. Five-year notes led losses on concern the price pressure will force the Federal Reserve to raise rates earlier than anticipated. A gauge of the yield curve flattened to the least since March 2020. While global stocks are set for their first weekly drop since early October, their swings have been muted compared with the gyrations in the bond market. Investor focus on a strong earnings season has tempered worries about higher inflation. “Inflation could remain elevated in the coming months, and each inflation release that comes in above expectations has the potential to cause volatility in rate and equity markets, but we still don’t expect inflation to derail the equity rally,” Mark Haefele, chief investment officer at UBS Global Wealth Management, wrote in a note. In US premarket trading, Johnson & Johnson jumped 4.7% in premarket trading after the drugmaker said it is planning to break up into two companies focused on its consumer health division and the large pharmaceuticals unit. Shares of the GAMMA giga techs (fka as FAAMG) also inched up. Tesla’s boss Elon Musk sold even more shares of the electric car maker, regulatory filings showed, after offloading about $5 billion worth of stock following a poll he posted on Twitter. The sale news naturally pushed TSLA stock price higher.  A gauge of U.S.-listed Chinese stocks jumped more than 5%, helped by Alibaba’s blowout Singles’ Day shopping festival and a report that Didi is getting ready to relaunch its apps. Rivian shares gain as much as 5% in U.S. premarket trading, extending the surge for the EV maker seen since its IPO this week which has sent its market value over $100b. Rivian trading at $122.99 in at 5am in New York, compared to IPO price of $78 Rising price pressures across the globe have been a top concern for market participants, with focus now shifting towards how consumer spending would fare as the holiday shopping season approaches. “The risk-on trading stance remains,” said Pierre Veyret, a technical analyst at ActivTrades in London. “However, markets are likely to remain volatile as investors will need to have more clues on where both the economy and monetary policies are going.” In Europe, gains for consumer and retail stocks balanced out declines for mining and energy companies. The Stoxx Europe 600 Index fluctuated as Bank of America strategists predicted a fall of at least 10% for the continent’s equities by early next year. Here are some of the biggest European movers today: Richemont shares jump as much as 9.8% to a record high, with analysts seeing scope for earnings estimates to be upgraded after the company reported first-half results that Citigroup described as “stellar.” Peer Swatch also bounced. Renault shares gain as much as 4.6% after Morgan Stanley upgraded the French automaker to overweight, saying it should have a stronger 2022 if it can raise production levels from a currently low base. Deutsche Telekom rises as much as 3% with analysts highlighting a good revenue performance and upgraded earnings and cash flow guidance as key positives from its earnings. Intertrust shares surge as much as 40% after the trust and corporate-services firm entered talks to be acquired by private-equity firm CVC. AstraZeneca falls as much as 5.9% after the drugmaker’s 3Q results missed estimates, with analysts noting a big miss for cancer drug Tagrisso. Wise shares sink as much as 8.8% after the money-transfer company won’t be added to an MSCI index in the latest rejig as some investors had expected. JDE Peet’s, Atos and Investor AB also all moved after the MSCI review. Fortum shares decline as much as 3.6% after the Finnish utility’s 3Q sales missed estimates. Uniper, in which Fortum owns a 75% stake, also slid after Fortum said it stopped share purchases in the German group in July owing to high prices. Avon Protection plummet as much as 44% after it warned of testing failures for some body-armor plates ordered by the U.S. military. SimCorp shares drop as much as 7.1% after the financial software and services company’s 3Q earnings, with Handelsbanken calling the quarter “weak,” and saying it raises doubts for the 2022 outlook Earlier in the session, Asia’s regional benchmark advanced, on track for a second day of gains, after sales in the Singles’ Day shopping festival boosted optimism. The MSCI Asia Pacific Index rose as much as 0.9%, with materials and communication stocks driving the benchmark. Tencent climbed 1.6%, after it bought a Japanese game studio and sold HengTen Networks shares. JD.com gained 5.2% after it received record Singles’ Day orders. Adding to sentiment were the mandate for China’s President Xi Jinping to potentially rule for life, which may mean policy continuity and fewer regulatory surprises and Goldman Sachs’ upgrade of offshore China stocks. A report that Didi Global is getting ready to relaunch apps in China further fueled optimism. “Investors are hoping that greenshoots of a loosening of reforms are upon us,” said Justin Tang head of Asian research at United First Partners. It’s clear “tech shares got a little boost from Singles’ Day and the anointing of Xi as forever leader.” JD.com Shines in Muted Singles Day After Sales Beat: Street Wrap South Korea and Japan benchmarks posted the top gains in the region. Australia’s shares also advanced, boosted by mining stocks. Japanese equities also rose, following gains in U.S. peers, erasing virtually all of their losses from earlier in the week. Electronics makers and telecoms were the biggest boosts to the Topix, which gained 1.3%. All 33 industry groups were in the green except energy products. Tokyo Electron and SoftBank Group were the largest contributors to a 1.1% rise in the Nikkei 225. The yen has weakened more than 1% against the dollar since Tuesday. “It’s a favorable environment for risk-taking thanks to China,” said Shogo Maekawa, a strategist at JP Morgan Asset Management in Tokyo, referring to Evergrande’s latest interest payment. Rising U.S. yields and a weaker yen “may serve as a trigger for foreign investors to re-evaluate Japanese equities and shift their focus to stocks here.” Indian stocks also rose, snapping three sessions of declines, boosted by gains in software exporter Infosys. The S&P BSE Sensex climbed 1.3% to 60,686.69 to a two-week high and completed a second successive week of gains with a 1% advance. The NSE Nifty 50 Index increased 1.3% on Friday. All 19 sub-indexes compiled by BSE Ltd. rose, led by a measure of technology companies. In earnings, of the 45 Nifty 50 companies that have announced results so far, 29 have either met or exceeded consensus analyst expectations, 15 have missed estimates, while one couldn’t be compared. Oil & Natural Gas Corp. and Coal India are among those scheduled to announce results today.  Expectations of the U.S. Fed raising interest rates earlier than expected after a surge in inflation weighed on most emerging markets this week. In India, consumer prices probably quickened for the first time in five months in October, according to economists in a Bloomberg survey. The data will be released on Friday after market hours.   In FX, the Bloomberg Dollar Spot Index was little changed, even as the dollar added to gains versus most its Group-of-10 peers, and Treasury yields rose across the curve on concern that rising U.S. inflation would warrant earlier rate hikes. The euro hovered around a more than a one-year low of $1.1450. The pound extended an Asia session advance and was the best performer among G-10 peers; the currency still heads for a third week of losses, having touched its lowest level since Christmas and options suggest the move may have legs to follow. Australian and New Zealand dollars are headed for back-to-back weekly declines as rising Treasury yields stoke further demand for the greenback; A 60% drop in the price of iron ore signals a blow to the Australian government’s efforts to stabilize the fiscal position following massive spending to support the economy through the coronavirus pandemic.Meanwhile, the ruble extended its losses, tracking a decline in Brent crude, as tensions flared up between Russia and Western nations over energy supplies and migrants. The currency tumbled as much as 1.1% to 72.4375 per dollar after the U.S. sounded out its EU allies that Russia may invade Ukraine. That made the ruble the worst performing currency in emerging markets.  In rates, Treasuries were off session lows, but cheaper by 2bp-3bp across belly of the curve which underperforms as reopened cash market catches up with Thursday’s slide in futures. Treasury 10-year yields around 1.566%, cheaper by 2bp on the day, while 5-year topped at 1.262% in early Asia session; curve is flatter amid belly-led losses, with 5s30s spread tighter by ~1bp on the day after touching 63.7bp, lowest since March 2020. On the 2s5s30s fly, belly cheapened 3.5bp on the day, re-testing 2018 levels that were highest since 2008. Bunds advanced, led by the front end, while Italian bonds slid across the curve, pushing the 10-year yield above 1% for the first time since Nov. 4, as money markets held on to aggressive ECB rate-hike bets. The Asia session was relatively calm, while during the European morning, Italian bonds lagged as futures continue to price in aggressive ECB policy. Treasury options activity in U.S. session has included downside protection on 5-year sector, where yields reached YTD high.     In commodities, crude futures dip to lowest levels for the week: WTI drops 1.4% before finding support near $80, Brent dips 1% back onto a $81-handle. Spot gold drifts lower near $1,852/oz. Base metals are mixed: LME aluminum, nickel and tin post modest gains, copper and zinc lag. Looking at the day ahead, data releases from the US include the University of Michigan’s preliminary consumer sentiment index for November, as well as the JOLTS job openings for September. In the Euro Area, there’ll also be industrial production for September. From central banks, we’ll hear from New York Fed President Williams, ECB Chief Economist Lane, and the BoE’s Haskel. Market Snapshot S&P 500 futures little changed at 4,646.50 STOXX Europe 600 little changed at 485.18 MXAP up 0.8% to 199.85 MXAPJ up 0.6% to 653.35 Nikkei up 1.1% to 29,609.97 Topix up 1.3% to 2,040.60 Hang Seng Index up 0.3% to 25,327.97 Shanghai Composite up 0.2% to 3,539.10 Sensex up 1.3% to 60,697.82 Australia S&P/ASX 200 up 0.8% to 7,443.05 Kospi up 1.5% to 2,968.80 Brent Futures down 1.3% to $81.83/bbl Gold spot down 0.5% to $1,853.43 U.S. Dollar Index little changed at 95.20 German 10Y yield little changed at -0.23% Euro little changed at $1.1441 Top Overnight News From Bloomberg Inflation is soaring across the euro area, but it’s also diverging by the most in years in a further complication for the European Central Bank’s ongoing pandemic stimulus The White House is debating whether to act immediately to try to lower U.S. energy prices or hold off on dramatic measures in the hope markets settle, as President Joe Biden’s concern about inflation runs up against climate, trade and foreign policy considerations Reports U.S. is concerned that Russia may be planning to invade Ukraine are “empty and unfounded efforts to exacerbate tensions,” Kremlin spokesman Dmitry Peskov says on conference call Financial problems faced by institutions like China Evergrande Group are “controllable” and spillovers from the nation’s markets to the rest of the world are limited, a former central bank adviser said Hapag-Lloyd AG warned that a crunch in global container shipments could persist into next year, with labor negotiations, environmental pressures and disruptive weather combining to hamper goods flows Japan’s government plans to compile an economic stimulus package of more than 40 trillion yen ($350 billion) in fiscal spending, according to the Nikkei newspaper President Xi Jinping appeared more certain than ever to rule China well into the current decade, as senior Communist Party officials declared that the country had reached a new “historical starting point” under his leadership Italian President Sergio Mattarella tried to quash speculation that he could stay on for a second term, leaving Prime Minister Mario Draghi as the top contender for the role early next year A more detailed look at global markets courtesy of Newsquawk Asian equity markets traded mostly higher heading into the weekend as the region attempted to build on the somewhat mixed performance stateside, where price action was contained amid Veterans Day and with US equity futures also slightly picking up from the quasi-holiday conditions. ASX 200 (+0.8%) was lifted in which mining stocks and the tech industry spearheaded the broad gains across sectors aside from healthcare as Ramsay Health Care remained pressured after it recently announced a near-40% decline in Q1 net profit. Nikkei 225 (+1.1%) was underpinned with Japanese exporters benefitting from recent favourable currency flows and with the biggest stock movers influenced by a deluge of earnings. Hang Seng (+0.3%) and Shanghai Comp. (+0.2%) were indecisive with Hong Kong tech stocks encouraged after e-commerce retailers Alibaba and JD.com posted record Singles Day sales, despite a deceleration in revenue growth from the shopping festival to its slowest annual pace since its conception in 2009 amid a toned-down event due to Beijing’s tech crackdown and emphasis on common prosperity. Conversely, mainland bourses were indecisive following a neutral liquidity operation by the PBoC and after US President Biden recently signed the Secure Equipment Act which prevents companies deemed as security threats from receiving new equipment licences from US regulators, which comes ahead of Monday’s potential Biden-Xi virtual meeting. Finally, 10yr JGBs were lower due to a lack of momentum from US treasuries as cash bond markets were closed for the federal holiday, with demand for JGBs also hampered by the gains in stocks and lack of BoJ purchases in the government debt market. Top European News Macron and Draghi Have Plans to Fill the Void Left by Merkel Johnson Burns Through Political Capital Built Up With Tory MPs JPMorgan Hires Zahn as Head of DACH Equity Capital Markets Hapag-Lloyd CEO Says Global Shipping Crunch Could Extend in 2022 European equities (Stoxx 600 -0.1%) have seen a relatively directionless start to the session with the Stoxx 600 set to close the week out with modest gains of around 0.4%. Macro updates have been particularly sparse thus far with today’s data docket also relatively light (highlights include US JOLTS and Uni. of Michigan sentiment). The handover from the APAC region was a predominantly positive one as Japanese equities benefited from favourable currency dynamics and Chinese markets focused on the fallout from Singles Day which saw record sales for Alibaba and JD.com. Stateside, futures are also relatively directionless (ES -0.1%) ahead of aforementioned US data points and Fedspeak from NY Fed President Williams (voter), who will be speaking on heterogeneity in macroeconomics. The latest BofA Flow Show revealed USD 7.3bln of inflows for US equities, whilst tech stocks saw outflows of USD 1.6bln; the largest outflow since June. In Europe, equities saw their largest outflows in seven weeks with USD 1.7bln of selling. In a separate note, BofA projects 10+% of downside by early next year for European stocks amid weakening growth momentum and rising bond yields. Sectors in Europe are mixed with outperformance seen in Personal & Household Goods with Richemont (+8.6%) shares boosted following better-than-expected Q3 results. LVMH (+1.4%) also gained at the open following reports that the Co. could consider opening duty-free stores in China. Telecom names are firmer with Deutsche Telekom (+2.6%) one of the best performers in the DAX after posting solid results and raising guidance. To the downside, commodity-exposed names are lagging peers with Basic Resources and Oil & Gas names hampered by price action in their underlying markets. FTSE-100 heavyweight AstraZeneca (-4.4%) sits at the foot of the index after Q3 profits fell short of expectations. Finally, Renault (+4.3%) is the best performer in the CAC after being upgraded to overweight from equalweight at Morgan Stanley with MS expecting the Co. to have a better year next year. Top Asian News JPMorgan Japan Stocks Downgrade Shows Doubts Before Stimulus Japan Stimulus Package to Top 40 Trillion Yen, Nikkei Reports Hon Hai Warns Chip Shortage Will Outweigh IPhone Boost to Sales AirAsia X Gets Over 95% Support From Creditors for Revamp In FX, it would be far too premature to suggest that the Buck’s winning streak is over, but having rallied so far in relatively short order some consolidation is hardly surprising, especially on a Friday in between a semi US market holiday and the weekend. Hence, the index is hovering just above 95.000 within a 95.078-266 range after a minor extension from yesterday’s peak to set a new 2021 best, and the Dollar is on a more mixed footing vs basket components plus other G10 and EM counterparts, awaiting the return of those not in on Veteran’s Day, JOLTS, preliminary Michigan sentiment and Fed’s Williams for some fresh or additional impetus and direction. GBP/CAD - The Pound and Loonie are flanking the major ranks even though the latest retreat in Brent and WTI is pretty uniform from a change on the day in Usd terms perspective, so it seems like Sterling is getting a boost from a downturn in the Eur/Gbp cross ahead of the UK-EU showdown on Brexit and Article 16, while Usd/Cad remains bullish on technical impulses before the BoC’s Q3 Senior Loan Officer Survey. Cable has bounced from just over 1.3350 to retest 1.3400 with Eur/Gbp probing 0.8550 to the downside, but Usd/Cad is probing 1.2600 irrespective of the Greenback stalling. AUD/JPY - Both fractionally firmer as the Buck takes another breather, though the Aussie is also deriving some traction from favourable Aud/Nzd tailwinds again. Aud/Usd has pared losses sub-0.7300 as the cross hovers around 1.0400, while Usd/Jpy has retreated from around 114.30 towards 1.9 bn option expiries at the 114.00 strike amidst reports that the Japanese Government's economic stimulus package will increase to Yen 40+ tn in fiscal spending, according to the Nikkei citing sources. EUR/NZD/CHF - The Euro is still hanging in following its close below a key technical level for a second consecutive session and fall further from the psychological 1.1500 mark, especially as better than forecast Eurozone ip has not prompted any upside, However, option expiry interest at 1.1450 (1.2 bn) may keep Eur/Usd afloat if only until the NY cut. Similarly, the Kiwi has not gleaned anything via a decent pick-up in NZ’s manufacturing PMI as Nzd/Usd clings to 0.7000+ status and the Franc remains under 0.9200 regardless of an acceleration in Swiss import and producer prices. SCANDI/EM - More transitory inflation remarks from Riksbank Governor Ingves are not helping the Sek fend off another dip through 10.0000 vs the Eur. but the Nok is getting protection from weaker oil prices via unusually large option expiries spanning the same big figure given 1.2 bn at 9.7500, 1.7 bn on the round number and 1 bn at 10.2000. Conversely, the Rub is underperforming as tensions rise around the Russian/Ukraine border and the Kremlin aims blame at the feet of the US alongside NATO, while the Try only just survived the latest assault on 10.00000 against the Usd in wake of below forecast Turkish ip and CBRT survey-based CPI projections for year end rising again. Elsewhere, the Mxn is softer following confirmation of a 25 bp Banxico hike on the basis that the verdict was not unanimous and some were looking for +50 bp, but the Zar retains an underlying bid after Thursday’s supportive SA MTBS and with Eskom reporting no load shedding at present, while the Cnh and Cny are holding gains in advance of the virtual Chinese/US Presidential meeting scheduled for Monday. In commodities, WTI and Brent are pressured in the European morning, experiencing more pronounced downside after a gradual decline occurred in APAC hours. However, the magnitude of today’s performance is comparably minimal when placed against that seen earlier in the week and particularly on Wednesday; in-spite of the earlier pronounced movements, benchmarks are currently set to end the week with losses of less than USD 1.00/bbl – albeit the range is in excess of USD 5.00/bbl. Newsflow this morning has been minimal and thus yesterday’s themes remain in-focus where a firmer USD likely continues to factor but more specifically COVID-19 concerns, with Germany’s Spahn on the wires, and geopolitics via Russia drawing attention. On the latter, tensions are becoming increasingly inflamed as the US said they are concerned that Russia could attack Ukraine and in response Russia said they are not a threat to anyone, but, says US military activity is aggressive and a threat. Moving to metals, spot gold and silver are softer on the session, but remain notably firmer on the week given the CPI-induced move. On this, UBS highlights the risk of additional inflation strength next year which could stoke further gold demand. Elsewhere, base metals are, broadly speaking, marginally softer given tentative APAC performance and the aforementioned COVID concerns, particularly those pertinent for China. In terms of associated bank commentary, SocGen looks for copper to average USD 9.2k/T and USD 8.0k/T in 2021 and 2022 respectively. US Event Calendar 10am: Sept. JOLTs Job Openings, est. 10.3m, prior 10.4m 10am: Nov. U. of Mich. 1 Yr Inflation, est. 4.9%, prior 4.8%; 5-10 Yr Inflation, prior 2.9% 10am: Nov. U. of Mich. Sentiment, est. 72.5, prior 71.7; Current Conditions, est. 77.2, prior 77.7; Expectations, est. 68.8, prior 67.9 DB's Henry Allen concludes the overnight wrap there wasn’t much to speak of in markets yesterday as US bond markets were closed for Veterans Day and investors elsewhere continued to digest the bumper CPI print from the previous session. We did see a bit of residual concern at the prospect of a faster tightening in monetary policy, and implied rates on Eurodollar futures continued to climb, gaining between +4bps and +8bps on contracts maturing through 2023. However, on the whole equities were relatively unfazed on both sides of the Atlantic, and the S&P 500 (+0.06%) stabilised after 2 successive declines thanks to a bounceback among the more cyclical sectors. Looking at those moves in more depth, interest-sensitive tech stocks were a big outperformer yesterday as both the NASDSAQ (+0.52%) and the FANG+ index (+0.98%) of megacap tech stocks moved higher. Material stocks in the S&P (+0.85%) were another sectoral winner, and the VIX index of volatility (-1.07pts) ticked down from its 4-week high on Wednesday. In Europe, the advance was even more prominent, where the STOXX 600 (+0.32%), the DAX (+0.10%) and the CAC 40 (+0.20%) all reached fresh records. Indeed, for the STOXX 600, that now marks the 13th advance in the last 15 sessions, with the index having risen by over +6% in the space of a month. As mentioned, it was a quieter day for sovereign bond markets with the US not trading, but the sell-off continued in Europe as yields on 10yr bunds (+1.7bps), OATs (+1.4bps) and BTPs (+2.7bps) all moved higher. We didn’t get any fresh news on the Fed officials either given the US holiday, but a Washington Post article yesterday said that officials from the White House had stayed in touch with Governor Brainard since her meeting with President Biden last week, albeit still emphasising that no final decision had yet been made. Separately, Bloomberg reported that senior Biden advisors did not view the recent trading scandal at the Federal Reserve as disqualifying Chair Powell. US Treasury markets have reopened overnight, with 10yr yields following their European counterparts higher, moving up +1.4bps to 1.563%. That’s been driven by a +2.4bps rise in the real yield, though 10yr real yields still remain close to their all-time lows since TIPS started trading back in 1997. Otherwise in Asia, markets are mostly trading higher with the KOSPI (+1.48%), Nikkei (+1.07%) and Hang Seng (+0.22%) all advancing, though the Shanghai Composite (-0.01%) is basically unchanged whilst the CSI (-0.31%) is trading lower. Data showed further signs of inflationary pressures in the region, with South Korea’s import price index up +35.8% in October on a year-on-year basis, the highest since 2008. Elsewhere in India, Prime Minister Modi is expected to announce an opening up of the sovereign bond market to retail investors today, which comes amidst rising inflation concerns as well. Looking ahead, futures are indicating a positive start in the US and Europe with those on the S&P 500 (+0.16%) and the DAX (+0.15%) pointing higher. Turning to the geopolitical scene, it was reported by Bloomberg that US officials had briefed their counterparts in the EU about a potential Russian invasion of Ukraine. It follows a build-up in Russian forces near the Ukrainian border that have been reported more widely, and echoes a similar situation back in the spring. The Russian ruble weakened -0.57% against the US dollar yesterday in response, with the declines occurring after the report came out. This comes amidst a number of broader tensions in the region, and natural gas prices in Europe were up +6.66% yesterday after Belarus’ President Lukashenko threatened to cut the transit of gas if the EU placed additional sanctions on his regime. Meanwhile on Brexit, there were potential signs of compromise in the dispute over Northern Ireland, with the Telegraph reporting that the EU was prepared to improve its offer when it came to reducing customs checks. However, the report also said that this would be contingent on the UK ending its demands to remove the European Court of Justice’s role in overseeing the agreement. There has been growing speculation in recent days that the UK could be about to trigger Article 16 of the Northern Ireland Protocol, which allows either side to take unilateral safeguard measures if the deal was causing serious issues. This would risk EU retaliation that could in theory even led to a suspension of the entire trade deal agreed last year, which is an option that has been talked up in recent weeks. For those wanting further reading on the issue, DB’s FX strategist Shreyas Gopal put out a note on Tuesday (link here) looking at the issues surrounding Article 16 and its implications for sterling. Another important thing to keep an eye on over the coming weeks will be any further signs of deterioration in the Covid-19 situation. Cases have been ticking up at the global level for around 4 weeks now, and a number of European countries (including Germany) have seen a major surge over the last few days. In the Netherlands, they actually set a record for the entire pandemic yesterday, and Prime Minister Rutte is due to hold a press conference today where it’s been speculated he’ll announce fresh restrictions. Separately in Austria, Chancellor Schallenberg said that a lockdown for the unvaccinated was “probably unavoidable”, and said that “I don’t see why two-thirds should lose their freedom because one-third is dithering”. On the data front, the only major release was the UK’s Q3 GDP reading yesterday, which surprised on the downside with growth of +1.3% (vs. +1.5% expected), even though Covid-19 restrictions were much easier in Q3 relative to Q2. To be fair, the monthly reading for September did surprise on the upside, with growth of +0.6% (vs. +0.4% expected), but it came as July and August saw downward revisions. On a monthly basis, the September reading meant the UK economy was just -0.6% beneath its pre-pandemic size in February 2020. To the day ahead now, and data releases from the US include the University of Michigan’s preliminary consumer sentiment index for November, as well as the JOLTS job openings for September. In the Euro Area, there’ll also be industrial production for September. From central banks, we’ll hear from New York Fed President Williams, ECB Chief Economist Lane, and the BoE’s Haskel. Tyler Durden Fri, 11/12/2021 - 07:48.....»»

Category: blogSource: zerohedgeNov 12th, 2021

Frenzied Futures Rally Fizzles As All Eyes Turn To Fed"s Taper Announcement

Frenzied Futures Rally Fizzles As All Eyes Turn To Fed's Taper Announcement US futures and European bourses retreated slightly from record highs as investors weighed the ever worsening supply crunch and virus curbs in China against strong earnings with all eyes turning to the conclusion of the Fed's 2-day meeting tomorrow, when Powell will announce the launch of a $15BN/month taper. At 7:20 a.m. ET, Dow e-minis were up 7 points, or 0.02%, S&P 500 e-minis were down 0.50 points, or 0.01%, and Nasdaq 100 e-minis were down 28.75 points, or 0.18%. Iron-ore futures tumbled on shrinking steal output in China. Tesla led premarket losses in New York. Investors paused to reflect on a rally that’s taken U.S. and European stocks to record highs. With a post-pandemic supply crunch stoking inflation and pushing central banks to tighten monetary policy, they have begun to question valuations. Economic recovery is also under strain as countries from China to Bulgaria report rising Covid cases. Both the S&P 500 Index and the Dow have been scaling new peaks as U.S. companies post another stellar quarter for earnings. Of the 295 companies in the equity benchmark that have reported results, 87% have either met or surpassed estimates. Dow futures slipped after the underlying gauge briefly surged past the 36,000 mark on Monday. Russell 2000 contracts rose. Bonds from Europe to the U.S. jumped after Australia signaled patience with rate increases despite abandoning Yield Curve Control due to "economic improvement." Yields on the two-year and five-year Treasuries fell as the RBA joined global central banks inching closer to policy tightening. However, the central bank’s insistence on remaining patient with rate hikes pushed traders to pare back hawkish bets in Australia as well as in global bond markets during European hours. “The Fed meeting could still shake the markets, because even though we know the concrete outcome of the meeting, which is the opening bell of the QE tapering, the risks remain tilted to the hawkish side,” said Ipek Ozkardeskaya, senior analyst at Swissquote. “Still, investors prefer seeing the glass half full.” In early trading, Tesla tumbled 5%, retreating from a gamma-squeeze record on Monday after Elon Musk said the carmaker hasn’t yet signed a contract with Hertz Global for Model 3 sedans. Chegg slumped 32% after the online-education company cut revenue forecasts and its results missed estimates, prompting a raft of downgrades. Clorox rose 1.6% after the bleach maker posted upbeat first-quarter results. Simon Property Group added 4.2% after the mall operator raised its 2021 forecast for profit and quarterly dividend. Pfizer gained 2.4% after the drugmaker boosted (get it "boosted"?) its full-year sales forecast for the company’s COVID-19 vaccine to $36 billion. Here are some of the biggest U.S. movers today: Tesla drops as much as 6.9% in premarket trading after closing at a record on Monday after Elon Musk said the electric vehicle-maker hasn’t yet signed a contract with Hertz Global. Chegg slumps 31% after the online education company slashed revenue forecasts and posted quarterly results that missed estimates. Novavax gains 5.3%, signaling an extension of Monday’s 16% rally, amid optimism over Covid vaccine approvals. Triterras tumbles as much as 20% after the short seller target said it encountered an “unanticipated delay in the finalization” of an independent audit of its financial statements. Teva Pharmaceutical Industries depositary receipts rise 7.7% and Endo International (ENDP US) gains 6.3% after the firms joined other former opioid makers in scoring a litigation win. Geron gains 4.5% and and SAB Bio (SABS US) soars 39% after Baird starts coverage of both with outperform ratings. Cryptocurrency-related stocks gained in premarket trading on Tuesday, as Bitcoin climbed and Etherium hit a record high.    NXT-ID up 38.18% premarket, Marathon Digital +4.0%, Riot Blockchain +2.9%, Bit Digital +2.5%, Canaan +3.2%, Coinbase +2.0%, MicroStrategy +1.5% While stocks continue to trade in a world of their own, just shy of all time highs, bond and currency markets are bracing for the Fed to announce a tapering of asset purchases as an initial step to eventually raising interest rates to contain inflation. Equity markets, on the other hand, are focusing on earnings growth and valuations. Meanwhile, mixed data on the global economic revival is further clouding the picture as the pandemic is making a comeback in parts of the world. “We expect volatility in financial markets to remain high as not only the Fed, but other central banks around the world, extract liquidity to combat the rise in inflation,” Lon Erickson, portfolio manager at Thornburg Investment Management, wrote in a note. Despite Fed rhetoric, “we’ve started to see the market price in earlier policy rate moves, perhaps losing confidence in the ‘transitory’ nature of inflation.” In Europe, the Stoxx Europe 600 Index slid 0.1% from a record reached on Monday, led lower by miners and travel companies. Spain's IBEX and the UK FTSE 100 dropped 0.6%. DAX outperforms. BP dropped 2.8% in London even as the oil giant announced an additional $1.25 billion buyback. HelloFresh jumped 14%, the most this year, after the German meal-kit company raised its full-year outlook. Basic-materials stocks were the weakest of 20 sector indexes in Europe as falling iron ore and steel prices weigh on miners and steel producers. Here are some of the biggest European movers today: HelloFresh shares surge as much as 16%, their best day since Dec. 2020, with analysts positive on the meal-kit maker’s guidance hike. Jefferies says that the company’s 3Q results included “little not to like.” Demant shares rise as much as 6.5%, the most intraday since March 23, after the hearing-aid maker raised its earnings forecast and topped estimates. Fresenius SE shares gain as much as 6.5% after reporting 3Q earnings slightly ahead of analyst estimates, with Jefferies saying the focus lies on the company’s cost-savings efforts and future plans for Kabi. Fresenius Medical shares up as much as 4.5% after posting 3Q earnings. Company’s FY22 recovery is “key to share price development from here,” according to Jefferies. Sinch shares drop as much as 17%, the most on record, after reporting 3Q results which showed organic growth slowing down, a trend Handelsbanken expects to worsen. Standard Chartered shares fall as much as 9.5%, the most since March 2020, as the lender’s third-quarter margins disappointed amid suppressed Asia rates and analysts flagged weakness in its retail operations. Flutter shares drop as much as 9% in London, the most intraday since March 2020, after the gaming company cut its profit outlook on unfavorable sporting results and a regulatory change in the Netherlands. Analysts expect ex-U.S. earnings consensus to fall. Steel makers underperform, with Kloeckner -5.3%, ArcelorMittal -2.9%, ThyssenKrupp -2.5%, Salzgitter -2.5% Asian stocks dipped, led by Chinese shares on concerns about the impact of measures to curb Covid-19 infections, while financials underperformed ahead of key central bank decisions this week. The MSCI Asia Pacific Index erased earlier gains of as much as 0.4% to fall 0.2% in afternoon trading. Blue-chip financial stocks including China Merchants Bank and Westpac Banking were among the biggest drags. Traders are focused on this week’s U.S. Federal Reserve meeting amid concerns about elevated inflation. Sentiment turned sour after authorities in Beijing halted classes at 18 schools amid Covid-19 resurgence. China’s benchmark CSI 300 Index fell 1%, while Hong Kong’s Hang Seng Index reversed an earlier gain of 1.9% to close in negative territory.  China’s CSI 300 Index falls by as much as 1.9% after Beijing’s suspension of classes across 18 schools heightened concerns over the impact of the recent Covid-19 outbreak. China Tourism Group Duty Free slumped as much as 9.8%, the worst performer in the benchmark and one of its biggest drags. The Shanghai Composite Index also extends decline to 1.9% while the ChiNext Index pares a 1.2% gain to trade little changed. “Investors are worried that Beijing’s virus measures may cool down China’s economic activities and hamper its recovery,” said Steven Leung, executive director at UOB Kay Hian in Hong Kong. Asian stocks rose on Monday, a turnaround after a drop of 1.5% during last week, the worst such performance since early October. Shares have been whipsawed by ongoing concern over supply-chain constraints impacting industries such as technology and auto making. Investors are also parsing through earnings data, with more than half of the companies on MSCI’s Asia gauge having reported results.  “At this level, it can be said that investors are no longer pessimistic but are not yet hopeful either,” Olivier d’Assier, head of APAC applied research at Qontigo, wrote in a note.  Japanese stocks fell, halting a two-day rally, as some investors adjusted positions after the market jumped yesterday.  The Topix index slid 0.6% to 2,031.67 at the 3 p.m. close in Tokyo, while the Nikkei 225 declined 0.4% to 29,520.90.  Mitsui & Co. contributed most to the Topix’s loss, decreasing 4%. Out of 2,181 shares in the index, 538 rose and 1,583 fell, while 60 were unchanged. Both the Topix and Nikkei 225 gained more than 2% on Monday after the ruling coalition secured an election victory that was better than many had expected. Japan’s stock market will be closed Wednesday for a national holiday. Australian stocks slide, with the S&P/ASX 200 index falling 0.6% to close at 7,324.30, after the Reserve Bank of Australia abandoned a bond-yield target, following an acceleration in inflation that spurred traders to price in higher borrowing costs. Banks and miners slumped, while real estate and consumer discretionary stocks climbed. Goodman Group was the biggest gainer after the company raised its full-year guidance. Insurance Australia Group tumbled after the firm cut its reported insurance margin forecast for the full year.  In New Zealand, the S&P/NZX 50 index fell 0.3% to 12,992.50. In rates, Treasuries were higher across both the front-end and belly of the curve, led by bull-steepening gains across European bonds with peripherals outperforming. Treasury yields were lower by 2bp-3bp across front-end of the curve, steepening 2s10s by that amount with 10-year little changed around 1.55%; German 10-year is lower by ~4bp, U.K. by ~1bp. Aussie front-end rallied during Asia session after the RBA abandoned its yield target but maintained its bond buying pace; euro-zone money markets subsequently pared the amount of ECB policy tightening that’s priced in. European fixed income rallied with curves bull steepening. Belly of the German curve outperforms, trading ~2-3bps richer to gilts and USTs respectively. Peripheral spreads tighten; long-end Italy outperforms, narrowing ~6bps near 170bps. In FX, the Bloomberg Dollar Spot Index inched up and the greenback advanced versus all its Group-of-10 peers apart from the yen; Treasury yields fell by up to 3bps as the curve bull- steepened. The euro hovered around $1.16 while Italian bonds and bunds jumped, snapping three days of declines and tracking short-end Australian debt. The Australian dollar declined against all Group-of-10 peers and Australian short-end bond yields fell after the central bank dispensed with its bond-yield target and damped expectations of interest-rate hikes.  One-week volatility in the Australian dollar dropped a second day as spot pulls back from its 200-DMA of 0.7556 after the central bank’s policy decision. The pound fell for a third day, to nearly a three-week low, as investors weighed up the possibilities for the Bank of England’s policy meeting on Thursday. The yen strengthened ahead of a local holiday in Japan and amid souring market sentiment. In commodities, crude futures hold a narrow range with WTI near $84 and Brent stalling near $85. Spot gold drift close to $1,795/oz. The base and ferrous metals complex remains under pressure: LME nickel and zinc drop ~1%, iron ore down over 6%. Looking at the day ahead now, and the data highlights include the October manufacturing PMIs for the Euro Area, Germany, France and Italy. Central bank speakers will include the ECB’s Elderson and de Cos, whilst today’s earnings releases include Pfizer, T-Mobile, Estee Lauder and Amgen. Finally, there are US gubernatorial elections in Virginia and New Jersey. Virginia is the more interesting race from a macro perspective: a big, diverse state that has bounced between Democratic and Republican candidates on the national stage. So it could provide the first read of American voter sentiment heading into next year’s mid-terms. Market Snapshot S&P 500 futures little changed at 4,605.25 STOXX Europe 600 down 0.2% to 477.90 MXAP down 0.2% to 198.29 MXAPJ down 0.2% to 646.50 Nikkei down 0.4% to 29,520.90 Topix down 0.6% to 2,031.67 Hang Seng Index down 0.2% to 25,099.67 Shanghai Composite down 1.1% to 3,505.63 Sensex down 0.3% to 59,984.88 Australia S&P/ASX 200 down 0.6% to 7,324.32 Kospi up 1.2% to 3,013.49 German 10Y yield little changed at -0.14% Euro little changed at $1.1603 Brent Futures up 0.5% to $85.17/bbl Gold spot down 0.1% to $1,791.04 U.S. Dollar Index little changed at 93.89 Top Overnight News from Bloomberg Federal Reserve policy makers are expected to announce this week that they will start scaling back their massive asset-purchase program amid greater concern over inflation, economists surveyed by Bloomberg said President Emmanuel Macron backed away from his imminent threat to punish the U.K. for restricting the access of French fishing boats to British waters, saying he would give negotiations more time The Reserve Bank of Australia’s dovish policy statement and downplaying of the inflation threat is likely to reignite a steepening of the yield curve from near the flattest in a year. The spread between three- and 10-year yields jumped as much as 10 basis points on Tuesday after central bank Governor Philip Lowe cooled expectations for any near-term interest-rate increase even though the RBA scrapped its yield- curve control policy A more detailed look at global markets courtesy of Newsquawk Asian equities traded mixed as upcoming risk events kept participants cautious and offset the momentum from the US, where stocks began the month on the front foot in a continuation of recent advances to lift the major indices to fresh record highs. Nonetheless, ASX 200 (-0.6%) was pressured by underperformance in the top-weighted financials sector and notable weakness in mining names, while quasi holiday conditions due to the Melbourne Cup in Australia’s second most populous state of Victoria and the crucial RBA policy announcement in which it maintained the Cash Rate Target at 0.10% but dropped the April 2024 government bond yield target and tweaked its guidance, further added to the cautious mood. Nikkei 225 (-0.4%) was lacklustre as it took a breather from the prior day’s surge after stalling just shy of the 29,600 level and with the index not helped by a slight reversal of the recent beneficial currency flows. Hang Seng (-0.3%) and Shanghai Comp. (-1.4%) were varied as the former initially atoned for yesterday’s losses led by strength in tech and biotech including Alibaba shares with its Singles Day sales event underway. In addition, Hong Kong participants were seemingly unfazed by the recent weaker than expected GDP for Q3 as the data showed it narrowly averted a technical recession, although the gains were later wiped out and the mainland suffered following another substantial liquidity drain and with Chinese commodity prices pressured including iron futures which hit limit down. Finally, 10yr JGBs were flat with price action muted despite the subdued mood for Tokyo stocks and with the presence of the BoJ in the market for over JPY 1tln of JGBs in mostly 1yr-5yr maturities, doing little to spur demand. Top Asian News Bank of Korea Minutes Show Majority Sees Need for Rate Hike China’s Gas Prices Are Surging Just as Coal Market Cools Off China Shares Fall as Shut Schools Spark Concern on Virus Curbs SMBC Nikko Is Working With Securities Watchdog on Investigation Bourses in Europe have now adopted more of a mixed picture (Euro Stoxx 50 +0.1%; Stoxx 600 -0.2%) Stoxx 600 following the lacklustre cash open and downbeat APAC handover. US equity futures meanwhile are somewhat mixed with the RTY (+0.2%) narrowly outperforming the ES (-0.1%), YM (Unch), and NQ (-0.2%) – with the latter also seeing some pressure from Tesla (-6.0% pre-market) after CEO Musk said no deal was signed yet with Hertz and that a deal would have zero impact on Tesla's economics. Back to Europe, a divergence is evident with the DAX 40 (+0.4%) outpacing amid post-earnings gains from HelloFresh (+14%), Fresenius SE (+4.6%) and Fresenius Medical Care (+2.0%). The FTSE 100 (-0.5%) meanwhile lags with the Dec futures and cash both under 7,250 – with the index pressured by heft losses in some of its heaviest sectors. Basic resources sit at the foot of the bunch due to softer base metal prices across the board, which saw Dalian iron ore futures hit limit down at least twice in the overnight session. Travel & Leisure closely follows as sector heavyweight Flutter Entertainment (~23% weighting) slipped after cutting guidance. Oil & Gas and Banks closely follow due to the recent declines in crude (and BP post-earnings) and yields respectively. On the flip side, some of the more defensive sectors stand at the top of the leader board with Healthcare and Food & Beverages the current winners. In terms of other individual movers, THG (-6.1%) resides near the bottom of the Stoxx 600 second-largest shareholder BlackRock (9.5% stake) is reportedly planning to sell 55mln shares equating to around 4% of its holding. It’s also worth noting Apple (-0.1% pre-market) has reportedly reduced iPad production to feed chips to the iPhone 13, according to Nikkei sources; iPad production was reportedly -50% from Apple's original plans, sources added. In terms of broad equity commentary, Credit Suisse remains overweight value in Europe, whilst raising US small caps to overnight and reducing the UK to underweight. Looking at the rationale, CS notes that European value tend to outperform while inflation expectations or Bund yields rise. US small caps meanwhile have underperformed almost all macro drivers, whilst earnings momentum takes a turn for the better. Finally, CS argues UK small caps are much more cyclical than large caps and could face further tailwinds from UK’s macro landscape and with some tightening potentially on the table this week. Top European News BP Grows Buyback as Profit Rises on Higher Prices, Trading Ferrexpo Drops as Credit Suisse Downgrades on Lower Pricing OPEC+ Gets a Warning From Japan Before Key Supply Meeting THG Extends Decline as Key Shareholder BlackRock Reduces Stake In FX, the Aussie has reversed even more sharply from its recent core inflation and yield induced highs in wake of the RBA policy meeting overnight and confirmation of the moves/tweaks most were expecting. To recap, YCT was officially withdrawn after the Bank allowed the 3 year target rate to soar through the 0.1% ceiling and guidance on rates being held at the same level until 2024, at the earliest, was also withdrawn and replaced by a more flexible or conditional timeframe when inflation is sustainably in the 2-3% remit range. However, Governor Lowe retained a decidedly dovish tone in the aftermath, pushing back against more aggressive market pricing for tightening and stressing that it is entirely plausible that the first increase in the Cash Rate will not be before the maturity of the current April 2024 target bond, though it is also plausible that a hike could be appropriate in 2023 and there is genuine uncertainty as to the timing of future adjustments in the Cash Rate. Aud/Usd is now closer to 0.7450 than 0.7550 and the Aud/Nzd cross nearer 1.0400 than the round number above with added weight applied by weakness in copper and iron ore prices especially (latter hit limit down on China’s Dallian exchange). Meanwhile, the Kiwi also felt some contagion after a drop in NZ building consents and as attention turns to the Q3 HLFS report, with Nzd/Usd eyeing 0.7150 having got to within pips of 0.7200 only yesterday. EUR/DXY - Technical forces seem to be having an influence on direction in Eur/Usd amidst somewhat mixed Eurozone manufacturing PMIs as the headline pair topped out precisely or pretty much bang on a 50% retracement of the reversal from 1.1692 to 1.1535 at 1.1613 and subsequently probed the 21 DMA that comes in at 1.1598 today. Moreover, the Euro appears reliant on hefty option expiry interest for support given 1.9 bn rolling off at 1.1585 if it cannot reclaim 1.1600+ status, as the Dollar regroups and trades firmer against most majors, bar the Yen. Indeed, in stark contrast to Monday, the index has bounced off a marginally deeper sub-94.000 low between tight 93.818-985 confines, albeit in cautious, choppy pre-FOMC mood. CHF/CAD/GBP - No traction for the Franc via firmer than forecast Swiss CPI or a faster pace of consumption, while the Loonie is on the defensive ahead of Canadian building permits and Sterling is still on a softer footing awaiting the BoE on Thursday alongside what could be a make or break meeting in France where UK Brexit Minister Frost is due to tackle the fishing dispute face-to-face with Secretary of State for European Affairs Beaune. Usd/Chf is straddling 0.9100, Usd/Cad is hovering around 1.2400, Cable pivots 1.3650 and Eur/Gbp is probing 0.8500. JPY - As noted above, the Yen is bucking the broad G10 trend with gains vs the Greenback amidst appreciably softer US Treasury and global bond yields, as Usd/Jpy retreats from 114.00+ peaks to test support circa 113.50. In commodities, WTI and Brent front-month futures are moving sideways ahead of the OPEC+ meeting on Thursday, whereby expectations are skewed towards an unwind of current curbs by 400k BPD despite outside pressure for the group to further open the taps. Ministers, including de-facto heads Russia and Saudi, have been vocal in their support towards a maintained pace of production hikes. There have also been reports of Angola and Nigeria struggling to keep up with the output hikes, which may further dissuade the producer to further ramp up output. The morning also saw macro commentary from BP, whereby the CFO suggested global oil demand has returned to levels above 100mln BPD. The Co. expects oil prices to be supported by continued inventory draw-down, with the potential for additional demand from gas to oil switching. OPEC+ decision making on production levels continues to be a key factor in oil prices and market rebalancing. Gas markets were very strong in the quarter and BP expect the market to remain tight during the period of peak winter demand. In the fourth quarter industry refining margins are expected to be lower compared to the third quarter driven by seasonal demand. WTI Dec trades on either side of USD 84/bbl and Brent on either side of USD 85/bbl. Elsewhere, spot gold and silver are relatively flat with the former in close proximity to its 200 DMA (1,790/oz), 100 DMA (1,785/oz), 50 DMA (1,780/oz) and 21 DMA (1,778/oz). Over to base metals, Dalian iron ore futures were in focus overnight after prices hit limit down at least twice and nearly hit 1yr lows amid high supply and lower demand, with the latter namely a function of China cutting steel output forecasts. LME copper meanwhile has clambered off worst levels (USD 9,430/t) but remains just under USD 9,500/t as prices track sentiment. US Event Calendar Oct. Wards Total Vehicle Sales, est. 12.5mm, prior 12.2mm DB's Jim Reid concludes the overnight wrap The RBA press conference is still going onas we type this but the key outcome has been that they’ve abandoned the 0.1% target for the April 2024 bond. However they seem to be making it clear in the presser that their expectation is only that rate hikes might creep into 2023 rather than 2024 previously. The governor has said that market expectations of hikes in 2022 are “a complete overreaction to recent inflation data”. So they are trying to pull back the market expectations that ran away from them last week. The reality is that they’ll now be hostage to the data. They don’t expect inflation to be a big problem going forward but time will tell. Yield moves have been relatively subdued but are generally lower with a small steepening seen. 2y (-0.2bps), 3y (-4.5bps) and 5y (-3.3bps) are falling but with the 10y (+0.3bps) steadier. Ahead of the RBA, risk assets got the month off to a strong start as investors awaited tomorrow’s all-important Federal Reserve meeting conclusion. However there was little sign of caution in equities as a range of global indices advanced to all-time records yesterday, including the S&P 500 (+0.18%), the NASDAQ (+0.63%), the STOXX 600 (+0.71%), and the MSCI World Index (+0.50%). Energy (+1.59%) and consumer discretionary (+1.46%) were the clear outperformers in the S&P, with Tesla (+8.49%) doing a lot of the work of boosting the latter sector. While it’s a busy week for earnings, only 2 S&P companies reported during trading hours yesterday, so it didn’t materially drive sentiment. 11 more companies reported after hours, with 7 beating earnings estimates. Elsewhere, the Dow Jones actually crossed the 36,000 mark in trading for the first time. Readers of a certain age may remember an infamous book published in 1999 called “Dow 36,000” during the dot com bubble, which predicted the Dow would more than triple over the next 3-5 years to that level. In reality, even the half way mark of 18k wasn’t reached until late-2014, and of course it took 22 years to get to yesterday’s 36k milestone. So a good case study of the heady optimism many had back then. We’ll see if yesterday’s milestones are the first step on the path to Dow 100k, but one asset inching its way to $100 in oil, with yesterday seeing a fresh recovery in many commodity prices after their declines last week. Both WTI (+0.57%) and Brent crude (+0.39%) posted gains, with copper (+0.58%) also seeing a modest advance. Agricultural prices set fresh records, with wheat prices (+3.17%) climbing above $8/bushel in intraday trading for the first time since 2012. It may be a pretty busy macro week with the Fed, BoE and the US jobs report, but the OPEC+ meeting on output this Thursday could also be a vital one for the global economy in light of the resurgence in energy prices lately. We’ve already heard some frustration at the group from a number of countries, with President Biden saying this Sunday at the G20 that “I do think that the idea that Russia and Saudi Arabia and other major producers are not gonna pump more oil so people can have gasoline to get to and from work for example, is … not right”. So one to keep an eye on, with potentially big implications for inflation and hence central banks. Staying on an inflation theme, investors got a further glimpse of ongoing supply chain issues from the ISM manufacturing print as well yesterday. The overall reading for October actually came in slightly above expectations at 60.8 (vs. 60.5 expected), but the prices paid order similarly rose to 85.7 (vs. 82.0 expected) in its second successive monthly increase. Bear in mind it’s been above the 80 mark for all but one month so far this year, and there were further signs of supply-chain issues from the supplier delivery time measure, which hit a 5-month high of 75.6. With markets attuned to inflation and the potential for plenty of central bank action this week, sovereign bonds came under further pressure yesterday on both sides of the Atlantic, even if they finished well off the yield highs. Yields on 10yr Treasuries ended the session up +0.7 bps to 1.56%, which comes as markets are almost pricing an initial full hike from the Fed by the time of their June 2022 meeting. However we were off the day’s high of 1.60%. Meanwhile in Europe, yields on 10yr bunds (+0.4 bps), OATs (+0.3 bps) and gilts (+2.8 bps) moved higher as well, but interestingly we also saw peripheral sovereign bond spreads closing in on their highest levels for some time. Indeed by the close of trade yesterday, the gap between Italian (+4.4 bps) and Spanish (+2.2 bps) 10yr yields over bunds had widened to their biggest level in almost a year. Meanwhile, 10yr breakevens widened +4.5 bps in the UK and +2.0 bps in Germany. US breakevens were the outlier, narrowing -7.5 bps to 2.51% and now -18.0 bps below the highs reached just a week ago. In Asia, the Nikkei 225 (-0.56%) and the Shanghai Composite (-0.62%) are trading lower, while the Hang Seng (+0.74%) and the KOSPI (+1.36%) are edging higher. Some of the news weighing on Chinese stocks are surging gas prices, which reached a record high today. Elsewhere, the S&P 500 futures (-0.22%) is down this morning and the 10y US Treasury is at 1.55% (-0.9bps). Heads of state gave their opening salvos at COP26 yesterday. The biggest commitment came from Indian Prime Minister Narendra Modi, who said the world’s third-biggest emitter will have zero net pollution by 2070, while also making more near-term commitments to increase reliance on non-fossil fuel energy sources. Looking at yesterday’s other data, German retail sales unexpectedly fell by -2.5% in September (vs. +0.4% expected). However, the final UK manufacturing PMI for October was revised up a tenth from the flash reading to 57.8. Over in the US though, there was a downward revision to 58.4 (vs. flash 59.2). To the day ahead now, and the data highlights include the October manufacturing PMIs for the Euro Area, Germany, France and Italy. Central bank speakers will include the ECB’s Elderson and de Cos, whilst today’s earnings releases include Pfizer, T-Mobile, Estee Lauder and Amgen. Finally, there are US gubernatorial elections in Virginia and New Jersey. Virginia is the more interesting race from a macro perspective: a big, diverse state that has bounced between Democratic and Republican candidates on the national stage. So it could provide the first read of American voter sentiment heading into next year’s mid-terms. Tyler Durden Tue, 11/02/2021 - 07:52.....»»

Category: dealsSource: nytNov 2nd, 2021

Buy Peloton Stock Before Earnings for Big Growth Upside?

Despite the 2021 fall, investors might want to consider buying beaten-down Peloton stock with it set to release first quarter FY22 financial results on Thursday, November 4... Peloton PTON stock was an early coronavirus superstar and it went on a massive run until early 2021. Since then, the high-end, high-tech stationary bike company has fallen back to Earth amid shipment delays, product safety issues, and other Wall Street concerns.Despite the fall, investors might want to consider buying beaten-down PTON stock with it set to release first quarter FY22 financial results on Thursday, November 4.Home Workout Growth Peloton sells different tiers of connected bikes and treadmills, starting at a recently-reduced $1,495 for the bike and $2,495 for the tread. The company also makes money from recurring subscription fees, which are crucial to its long-term success.These include its $39 per month All-Access Memberships. Plus, consumers who don’t own PTON equipment can pay $12.99 a month for a digital membership that allows them to take classes for indoor cycling, running, strength, and more.The firm is poised to grow for years as part of a broader connected fitness world that features Lululemon’s LULU Mirror, other up-and-coming players, and revamped legacy firms such NordicTrack. In fact, Apple AAPL is rolling out health-focused and fitness offerings.Even as things return closer to normal, it’s unclear how quickly gyms will return to pre-covid levels. There is also no reason why many of Peloton’s wealthier customers won’t simply decide to do both down the road.Peloton is also focused on other ways to expand its business. The company in April completed its purchase of commercial fitness firm Precor. The deal will improve its manufacturing and help it break into areas such as hotels and condo buildings. And it has a partnership with it UnitedHealthcare.Other Fundamentals PTON shares skyrocketed from under $30 in March 2020 to over $150 by early 2021. The stock then began to tumble as Wall Street sold overheated pandemic winners and stocks they worried would suffer in a reopened economy. On top of that, Peloton officially recalled on May 5 the Tread+ Treadmills “after one child death and 70 incidents; recall of tread treadmills due to risk of injury.”PTON has dropped 40% in 2021 and 45% from its records. The stock began a short-lived comeback in early May after it fell below some key technical levels. And it’s popped 13% in the last month to close regular trading hours Monday at $92.83 a share.Peloton stock is currently attempting to fight its way above its 50-day moving average. PTON also sits at neutral RSI levels of 50, even as many tech names reach overbought territory.Investors should also note that the current Zacks consensus price target of $137.04 a share marks 47% upside to Peloton’s current levels. And the stock is trading right near its year-long lows at 4.7X forward 12-month sales, which represents a 50% discount vs. its highly ranked Leisure and Recreation Products (top 11% of over 250 Zacks industries).Growth and Outlook PTON’s fiscal 2020 sales soared 100% to $1.8 billion and its FY21 revenue skyrocketed another 120% to $4.0 billion (the firm went public in September 2019). The firm closed the year with over 2.33 million Connected Fitness Subscriptions, up 114% YoY. Meanwhile, its paid Digital Subscriptions grew 176% over 874K.Zacks estimates call for its 2022 revenue to climb 34% to reach $5.37 billion, adding another $1.4 billion to the top-line, or more than its entire FY19 revenue. The home fitness power is then projected to grow its sales by another 25% to pull in $6.73 billion in FY23.PTON is projected to report a larger adjusted loss this year of -$2.13 a share vs. -$0.64 in FY21. It is then projected to trim its adjusted loss to -$0.55 in FY23. Prior to its big miss last quarter, Peloton had crushed our quarterly EPS estimates.Bottom LinePTON currently lands a Zacks Rank #3 (Hold) and many investors might want to wait for its actual Q1 results and guidance before they consider hopping on Peloton. That said, Wall Street remains largely high on the beaten-down new-age home gym firm, with 14 of the 19 broker recommendations Zacks has at “Strong Buys,” with only one “Strong Sell.” Infrastructure Stock Boom to Sweep America A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made. The only question is “Will you get into the right stocks early when their growth potential is greatest?” Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.Download FREE: How to Profit from Trillions on Spending for Infrastructure >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Apple Inc. (AAPL): Free Stock Analysis Report lululemon athletica inc. (LULU): Free Stock Analysis Report Peloton Interactive, Inc. (PTON): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksNov 1st, 2021

Telecom Stock Roundup: AT&T Beats, Corning Misses Q3 Earnings Estimates & More

While AT&T (T) beats third-quarter earnings estimates driven by strength in key areas of 5G, fiber and HBO Max, Corning (GLW) misses the same despite record revenues. Over the past five trading days, U.S. telecom stocks have witnessed a steep decline as the $1.2 trillion infrastructure bill failed to make any headway in the House despite President Biden’s continued efforts to broker a deal between the warring factions of the Democrats. The bill has been stuck in a potential stalemate for weeks, as several progressive Democrats wanted it to be tied to the larger $3.5 trillion budget reconciliation bill that is facing massive backlash from both Republicans and Democrats. As the Oct 31 deadline (set by the Democrats to pass the bill) inch closer, frantic negotiations pick up the pace to dispel the uncertainty brewing within the sector. The Democrats have currently put forth a range of $1.5 trillion to $2 trillion for the social spending reconciliation package, slashing it from $3.5 trillion and abandoning some key provisions within the bill in order to win the trust of the progressives. The ongoing negotiations are expected to lead to a broader consensus on some of the sweeping policies that the government is aiming to implement before the November 2022 congressional elections.While the policy paralysis continued to cripple operations, the administration aimed to steady the ship by recommending Jessica Rosenworcel as the permanent chairwoman of the FCC. The government also nominated consumer advocate Gigi Sohn for the third empty Democratic Commissioner seat. The five-member FCC was deadlocked with two Republican and two Democratic representations and the government reportedly waited more than nine months to make the due nominations. The current nominations enjoy broad-based support from various advocacy groups and are likely to prove beneficial for the federal government in the long run in implementing key policy changes. The White House is further expected to nominate Alan Davidson as director of the Commerce Department's National Telecommunications and Information Administration, which advises the government on telecommunications and information policy issues and is likely to oversee the funding for expanding the ambit of Internet access to all Americans.Meanwhile, the FCC has issued an order to bar China Telecom from operating in the United States over national security concerns. The federal agency has offered the China-based telecommunications firm 60 days to discontinue its services in the country. Although the punitive move is not likely to cause significant losses to the carrier that generates the bulk of its revenue from domestic operations, it is expected to aggravate the strained Sino-US relationship as the battle for 5G supremacy heats up. The latest FCC move follows an earlier decision by the NYSE in January to delist three China-based telecom firms, namely China Mobile, China Telecom, and China Unicom, from major U.S. indices in compliance with a November 2020 executive order by President Trump over alleged ties with the state-owned military.  Regarding company-specific news, quarterly earnings and preliminary results primarily took the center stage over the past five trading days.Recap of the Week’s Most Important Stories1.     AT&T Inc. T reported mixed third-quarter 2021 results as healthy wireless traction was partially offset by lower contribution from divested businesses and lower demand for legacy voice and data services. The company recorded modest subscriber growth backed by a resilient business model and robust cash flow position driven by a diligent execution of operational plans. AT&T expects to continue investing in key areas of 5G, fiber and HBO Max and adjust its business according to the evolving market scenario to fuel long-term growth while maintaining a healthy dividend payment and actively pruning debt.Excluding non-recurring items, adjusted earnings were 87 cents per share compared with 76 cents in the year-earlier quarter. Adjusted earnings for the third quarter beat the Zacks Consensus Estimate by 9 cents. Quarterly GAAP operating revenues decreased 5.7% year over year to $39,922 million, largely due to the divestment of the U.S. video business and other businesses, partially offset by higher equipment sales within the Mobility business and growth in subscription-based revenues within WarnerMedia. The top line missed the consensus mark of $40,542 million.      2.     Corning Incorporated GLW reported unimpressive third-quarter 2021 results, wherein both the bottom and the top lines missed the Zacks Consensus Estimate. Lower production levels in the automotive industry due to the semiconductor chip shortage affected sales by almost $40 million and earnings per share (EPS) by 2 cents.Core net income increased to $485 million or 56 cents per share from $380 million or 43 cents per share in the year-ago quarter. The bottom line, however, missed the Zacks Consensus Estimate by 2 cents. Core sales grew to $3,639 million from $3,007 million. The top line, however, missed the consensus estimate of $3,665 million.3.    Juniper Networks, Inc. JNPR reported modest third-quarter 2021 results, wherein the bottom line matched the Zacks Consensus Estimate but the top line missed the same. Investments in customer solutions and sales organizations are enabling the company to capitalize on the solid demand across each of its end markets.Non-GAAP net income was $152 million or 46 cents per share (in line with the company’s guidance) compared with $144.4 million or 43 cents per share in the year-ago quarter. The bottom line matched the Zacks Consensus Estimate. Quarterly total revenues increased to $1,188.8 million (slightly below the mid-point of the company’s guidance due to the negative impact of supply chain constraints) from $1,138.2 million in the prior-year quarter driven by solid demand. The top line, however, missed the consensus estimate of $1,206 million.4.    Knowles Corporation KN reported healthy third-quarter 2021 results, wherein both the bottom and the top lines beat the Zacks Consensus Estimate. The company is focused on delivering high-value, differentiated solutions to a diverse set of growing end markets to expand its gross margin. Non-GAAP net income was $43 million or 45 cents per share (above the high end of the company’s guidance) compared with $22.3 million or 24 cents per share in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate by 6 cents. Quarterly revenues grew 13.2% year over year to $233 million (above the mid-point of the company’s guidance), driven by solid demand across its Audio and Precision Devices segments. The top line surpassed the consensus estimate of $232 million.  5.    Bandwidth Inc. BAND recently issued preliminary results for third-quarter 2021. The selective preliminary metrics offer clarity regarding its business operations as it aims to navigate through an adverse revenue impact from distributed denial of service attack in September.Management currently expects third-quarter GAAP revenues to be about $131 million, up 54% year over year, and well above prior expectations of $123.6-$124.6 million. This includes Communications Platform-as-a-Service revenues of $107.4 million (up 46% year over year) compared with earlier expectations of $106.1-$107.1 million. The higher revenue projection is primarily attributable to healthy demand trends driven by a customized networking infrastructure. The Zacks Consensus Estimate for revenues is currently pegged at $124 million.Price PerformanceThe following table shows the price movement of some of the major telecom stocks over the past week and six months.Image Source: Zacks Investment ResearchIn the past five trading days, Juniper has been the best performer with its stock gaining 4.3% while Bandwidth has declined the most with its stock falling 5.8%.Over the past six months, Motorola has been the best performer with its stock appreciating 24.6% while Bandwidth has declined the most with its stock falling 58.3%.Over the past six months, the Zacks Telecommunications Services industry has declined 12.2% while the S&P 500 has rallied 8.7%.Image Source: Zacks Investment ResearchWhat’s Next in the Telecom Space?In addition to 5G deployments and product launches, all eyes will remain glued to how the administration implements key policy changes to safeguard the interests of the industry and address the bottlenecks to spur growth as the earnings season moves to the business end. Bitcoin, Like the Internet Itself, Could Change Everything Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities. Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. See 3 crypto-related stocks now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report AT&T Inc. (T): Free Stock Analysis Report Juniper Networks, Inc. (JNPR): Free Stock Analysis Report Corning Incorporated (GLW): Free Stock Analysis Report Knowles Corporation (KN): Free Stock Analysis Report Bandwidth Inc. (BAND): Free Stock Analysis Report To read this article on Zacks.com click here......»»

Category: topSource: zacksOct 28th, 2021

How Colombian drug smugglers almost got their hands on a Soviet submarine

For Colombian traffickers, flush with cash, Soviet submarines were appealing ways to move multi-ton loads of drugs. A Coast Guardsman from the cutter Munro introducing himself to the crew a narco sub in the Pacific Ocean, June 18, 2019. US Coast Guard After the collapse of the Soviet Union, a wide array of military hardware hit the black market. For Colombian traffickers, flush with cash, Soviet submarines were appealing ways to move multi-ton loads of drugs. In the late 1980s and early 1990s, a shady effort to acquire such a sub unfolded, drawing in smugglers, Russian mobsters, and Soviet officials. In 2019, footage of a US Coast Guard interdiction of a homemade drug smuggling submarine took the world by storm, and for good reason.As we watched one of the baddest dudes we're ever apt to see anywhere outside of a movie pounding on the hatch of the mostly submerged sub, many of us were shocked to learn that drug cartels actually have their own submarines.What may surprise you more is that these amateur submarines were really a consolation prize for drug smugglers out of Colombia.Their first choice? An actual Soviet Foxtrot-class submarine. What's even crazier, however, is that the Russians seemed to be more than happy to sell them one.The Soviet legacy of desperationThe Cold War that erupted between the United States and Soviet Union immediately after World War II came to an end prompted a massive build-up of military hardware in both nations. The Soviets, championing their communist political and economic model, secured a number of early PR victories over the capitalist US, being the first nation to send a satellite, a dog, and a person into earth's orbit.This early lead created what some have taken to calling the "Sputnik Crises" in America and its Western allies. The Soviets weren't just matching the technological might of the world's first nuclear power. They were exceeding it and showing the world just how effective their governmental model could be.For the United States and its allies, dead set on preventing the spread of communism around the globe, these technological successes were seen as a clear and present danger to the American way of life.Those early Soviet wins led directly to the establishment of NASA, and the re-orienting of famed-former Nazi scientist Wernher von Braun away from the Redstone missiles he was tasked with building and toward the heavens. Von Braun's work led to the development of the Saturn V rocket-a platform that took America to the moon and still remains the most powerful spacecraft ever constructed. Russian diesel-electric submarine B-143 Foxtrot Type 641 at the Seafront Maritime Theme Park in Zeebrugge, Belgium. Arterra/Universal Images Group via Getty Images America's eventual victory in the Space Race can be seen as indicative of America's broad approach to battling the Soviets on technological and financial grounds. In fact, many credit President Ronald Reagan with effectively spending the Soviets into ruin, fielding increasingly capable military platforms and weapons, which forced the Soviets to respond in kind, despite their struggling economy.Of course, the fall of the Soviet Union can really be attributed to a number of factors, including the will of its populous, but it's tough to discount the dire financial straights the former superpower found itself in by 1991-the year the Soviet Union ceased to exist, and a new Russian government took its place.It was during this transitional time that the former Soviet Union gained a reputation for offloading military hardware to the highest bidder. The new Russian state lacked the funds needed to operate or maintain its massive military apparatus, or even to sufficiently pay large swaths of its personnel. As a result, military officials participated in the sale of military assets as a means of survival amid the nation's economic collapse.In one instance, the Russian government themselves even traded the American soft drink company Pepsi a fleet of warships and submarines in exchange for a new shipment of soda. In another, members of the Russian Navy actually conspired to sell a diesel-electric submarine directly to drug cartels in Colombia for the purposes of smuggling as much as 40 tons worth of cocaine into the US with each trip.Tarzan, Vanilla Ice, and Pablo Escobar? Sebastian Marroquin/Sins of my Father In 1980, a Russian man named Ludwig Fainberg arrived in Miami with his sights set on the American dream. He quickly found work as an enforcer for the Gambino crime family, doing the sort of work we've come to expect from Russians with mob connections - beating money out of people.Fainberg, who went by the name "Tarzan," eventually made enough money to open his own strip club near the Miami airport that he dubbed "Porky's!" after the sexploitation flick of the same name, which reportedly filmed in the same building. It wasn't long before the strip club owned by a Russian with mob ties became the hangout of choice for members of Russia's own organized-crime community who were operating within the opulence of 1980s Miami.Tarzan's crime-connections and booming business helped him meet a number of powerful or influential figures on both sides of the law. '90s rapper Vanilla Ice was one such friend - and it was actually Mr. Ice himself who first introduced Tarzan to the man who would become his partner-in-crime: Juan Almeida.Almeida was a prominent businessman and crook who dealt in high-end boats and exotic cars. Before long, Tarzan and Almeida were in business together, flying in and out of post-collapse Russia, and purchasing everything from motorcycles to helicopters for pennies on the American dollar, which they would then sell to customers for a tidy profit.Before long, the exploits of Tazan and Almeida would lead them into a business-based friendship with a man who would go on to be the star of his own episode of "America's Most Wanted," Nelson "Tony" Yester.Yester had strong ties to the Medellín drug cartel run by none other than Pablo Escobar. By all accounts, Yester was a serious criminal - more serious than the somewhat jovial (and notably less-murderous) Tarzan and Almeida.Nonetheless, Tarzan and his new drug contact became fast friends. That friendship turned highly profitable when Tarzan and Almeida brokered a deal with Escobar's cartel through Yester to purchase two heavy-payload Russian Kamov helicopters intended to transport drugs throughout Colombia.That deal led to even deeper ties with Yester as a connection to Escobar, as the Russian mafia weren't going to allow the helicopters to leave without getting a cut of the deal. In a turn of events that sounds like a movie, Almeida flew back to Moscow pretending to be Escobar and managed to broker another deal for cocaine distribution in newly minted Russia.Do you want your drug submarine with missiles or without? INS Kursura, a Russian-built Foxtrot-class submarine, on display in Visakhapatnam, India, July 25, 2009. NOAH SEELAM/AFP via Getty Images Having proven their value to the cartel, Tarzan and Almeida became the go-between of choice for sourcing Russian hardware. But the next request sounded crazy, even to the two men who had managed to charter a military cargo aircraft to smuggle their ill-gotten helicopters to Colombia.A part of Escobar's cartel known as the Cali Cartel had split from his organization and quickly became a significant player in the drug business. They wanted a better way to smuggle drugs into the United States, so they approached Yester to see if his new friends could purchase a working Soviet Navy submarine for the job.Yester, shooting from the hip, told them it would cost him $50 million - a figure that gave the Cali Cartel pause, that is until Yester told them he could ship $40 million worth of cocaine with it in each trip. For the cartel, it seemed like an investment that was worth the risk.Once he was given the green light from his sources within the Cali Cartel, Yester contacted Tarzan to have him reach out to his connections in Russia. According to Tarzan's own statements, he reached out to inquire, but was told it would take a few days to find out for sure. Two days later, Tarzan got the call."Do you want the submarine with missiles or without?" Tarzan recalls his contact saying in a 2018 documentary about the ordeal called "Operation Odessa." Just like that, the ball was rolling to equip Escobar's former drug cartel with their own military submarine.Diesel-electric subs are easier to spot than the nuclear variety employed by the United States while on the surface, thanks to their loud engines and the need to vent their exhaust. However, the submarines themselves don't actually run off of diesel. The props that give the submarines their propulsion are run with electric motors that are recharged by diesel engines.As a result, even diesel subs are incredibly tough to spot when submerged. In fact, in a series of war games held in 2005, the massive USS Ronald Reagan, a Nimitz-class aircraft carrier, was "sunk" repeatedly by a Swedish diesel-electric submarine that managed to sneak past the carrier strike group's defenses.The Russian sub in question was a Foxtrot-class, which had been in service since the 1950s. At 300 feet long, the sub had space to spare for all the drugs the Cali Cartel could want … as well as 10 torpedo tubes, in case things got dicey under the sea.It goes without saying that a vessel of this sort would come in particularly handy for a drug cartel looking for a way to transport large amounts of cocaine into Miami - which is a well-known distribution hub for drugs smuggled in from South and Central America.Instead of buying a sub, Yester ripped off the cartel US Coast Guardsmen sit on a narco sub in the Pacific Ocean in early September 2016. US Coast Guard Tarzan and Almeida flew to Russia, where to their surprise, they were able to meet directly with a number of high-ranking members of the Russian Navy who took them to one of their secret submarine installations to tour a sub similar to the one they were offering to sell.While the facility was a secret and the pending purchase would have been seen as highly illegal by just about every nation on the planet, Tarzan and Almeida felt they wouldn't be able to secure the funds without proof that there really was a submarine on the other end of the deal. They asked if they could take pictures with the subs as proof, but the Russians refused to permit it for obvious reasons.Undeterred, Tarzan offered one of the Russians $200 American, which was a significant sum in mid-'90s Russia. Money in hand, the Russian officer changed his tune and even posed in pictures with the duo. Tarzan and Almeida had done their job, now they just needed Yester and his cartel connections to do theirs.According to Tarzan and Yester, the Russian's even offered to sell them a nuclear weapon.Warning: This video contains graphic language.Of course, things weren't actually moving as smoothly as they may have seemed. Unbeknownst to Tarzan, he had been under federal surveillance for months. They had even managed to introduce a mole into Tarzan's circle of friends and co-conspirators - and it was that mole who first spotted the pictures of Tarzan posing in front of a Russian sub, left out carelessly on his desk.That same mole even gifted Tarzan a phone he claimed had been jailbroken to allow for free international calls, so Tarzan wouldn't have a paper trail reflecting his frequent contacts with Russian sources. Of course, the phone wasn't jailbroken … it was bugged, resulting in thousands of hours of conversation for law enforcement to pour through.That betrayal of Tarzan's trust, however, wasn't to be the last. Yester, who had told the Cali Cartel that they should pay for the submarine in bi-weekly payments of $10 million, also had plans of his own. US Coast Guard Cutter Munro crew members inspect a self-propelled semi-submersible in the Eastern Pacific, June 19, 2019. US Coast Guard photo When the first shipment of money arrived in Europe for Yester to funnel to Moscow … he simply didn't. Instead, he hid the $10 million in a friend's home and paid that friend $10,000 to make himself scarce.Soon, the Cali Cartel was in Miami - looking for Yester and their money. Of course, Tarzan and Almeida had no idea. Their side of the deal was done and besides, Yester had a habit of uprooting frequently, never living in any one country for too long at a time.Ultimately, Tarzan, Almeida, and Yester all managed to avoid doing any hard time for the drug submarine deal, though both Tarzan and Yester would ultimately find their ways into prison for other crimes down the road.Almeida was convicted of charges stemming from his dealings with the Cartel and Russians, based largely on Tarzan's own testimony. However, Tarzan later recanted that testimony, resulting in Almeida going free.Two years ago, Showtime premiered a documentary about the whole ordeal titled "Operation Odessa." You can now watch it streaming on Netflix.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderOct 12th, 2021

Futures Slide As Soaring Oil Nears $85

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

Category: blogSource: zerohedgeOct 11th, 2021

Telecom Stock Roundup: Qualcomm Buys Veoneer, Viasat Boosts IFC in Brazil & More

While Qualcomm (QCOM) will acquire Veoneer to gain a firmer footing in the self-driving vehicle market, Viasat (VSAT) is offering enhanced in-flight connectivity solutions for the business aviation market in Brazil. Over the past five trading days, U.S. telecom stocks have traded relatively flat as the $1.2 trillion infrastructure bill failed to progress in the House despite the best efforts of the government to broker a compromise with the dissident groups. It remained stuck in a potential stalemate as several progressive Democrats wanted it to be tied to the larger $3.5 trillion budget reconciliation bill that is facing massive backlash from both Republicans and Democrats. This, in turn, forced Democratic Speaker Nancy Pelosi to delay voting on the bill until a wider consensus was reached. The infusion of federal funds to improve broadband infrastructure for greater access and deeper penetration in the underserved domestic markets is likely to bridge the digital divide and help realize President’s Biden goal of providing all Americans with affordable Internet connectivity. However, uncertainty over the much sought-after infrastructure bill has failed to spur any growth momentum in the industry.The Democrats have presently set a deadline of Oct 31 to pass the bill, the day on which major transportation funding programs are slated to expire. President Biden is reportedly negotiating with the progressives and has put forth a range of $1.9 trillion to $2.2 trillion for the social spending reconciliation package. The ongoing negotiations are expected to lead to a broader consensus on some of the sweeping policies that the government is aiming to implement before November 2022 congressional elections. The infrastructure investments are also billed as a critical factor to better compete with adversaries such as China. While the policy paralysis has continued to cripple operations, the ‘rip and replace’ policy of the FCC has led to widespread resentment among rural telecom firms. The removal of the low-cost gear is likely to affect rural network service, hurt profitability, and risk sustainability as most local operators are forced to reshuffle their existing infrastructure without focusing on infrastructure upgrades for 5G deployment to help realize the President’s broadband objective. Although the FCC is slated to initiate a $1.9 billion program to reimburse the carriers by seeking applications from Oct 29 through Jan 14, 2022, it is unlikely to pacify the huge number of rural telecom operators that are likely to go out of office.Regarding company-specific news, acquisition, strategic agreements, portfolio enhancements, and product launches primarily took the center stage over the past five trading days.Recap of the Week’s Most Important Stories1.     Qualcomm Incorporated QCOM has inked a definitive agreement with SSW Partners to acquire Veoneer, Inc. in an all-stock deal worth $4.5 billion, or $37.00 per share. The transaction is likely to be completed in 2022, subject to mandatory regulatory approvals and other closing conditions. The transformative deal is expected to offer Qualcomm a firmer footing in the emerging market of driver-assistance technology, as it aims to extend the Snapdragon Ride Advanced Driver Assistance Systems (ADAS) portfolio.With the acquisition, Qualcomm aims to incorporate Arriver's Computer Vision, Drive Policy, and Driver Assistance assets into its ADAS portfolio to deliver an open and competitive platform for automakers to better compete with rivals within the self-driving vehicle market. This, in turn, is likely to augment its automotive business as it strives to boost revenues beyond chipmaking for the smartphone market.      2.     Viasat Inc. VSAT has secured a prime contract for Ka-band satellite in-flight connectivity (IFC) solutions for the business aviation market in Brazil. The improved IFC services will offer enhanced Internet capabilities with best-in-class in-flight entertainment options to entice more customers and will likely contribute to the gradual recovery of the airline industry from the COVID-19 setbacks.The business aviation market in Brazil is reportedly the third largest in the world and assumes relative importance as the key gateway to Latin American markets. Business aviation is often considered as an economic lifeline for areas with limited options for business transportation and contributes significantly to the local and national economies. With government-friendly policies, the business aviation market in Brazil is likely to witness a healthy growth momentum, benefiting companies like Viasat in the long run.3.    CommScope Holding Company, Inc. COMM has unveiled two avant-garde home networking solutions — ARRIS SURFboard G34 and G36 DOCSIS 3.1 cable modem and Wi-Fi 6 routers. The groundbreaking products have been specifically designed to power and upgrade a customer’s home network with enhanced coverage and capacity on the back of future-proof Wi-Fi 6 technology.The innovative Home Network Management solutions help operators to minimize day-to-day operational overheads on the back of efficient subscriber experience management. The services provide a unified view of subscriber networks with consistent connectivity across business operations and create revenue streams for maximum profitability. ARRIS SURFboard G34 and G36 are two such solutions, which keep up with the modern in-home network service and technology.4.    Motorola Solutions, Inc. MSI recently secured a prime contract for an undisclosed amount from SJ AB to provide VB400 body-worn cameras for the safety and security of employees and passengers across the rail network of Sweden. With train travel gradually picking up pace, the contract will offer the requisite wherewithal to the government-owned passenger train operator that boasts 1,500 departures across 400 stations each day to ensure better passenger and employee security against any untoward incident. The VB400 body-worn cameras are known for their ruggedness and are built to withstand adverse temperature conditions to support the rigors of the job. Designed to capture high-quality video from the wearer’s viewpoint with an intuitive recording function, it delivers transparency with an extended battery life that lasts up to 12 hours of operation. The device can be securely assigned using an employee’s ID badge at the beginning of a shift and is easily activated by the wearer, combining Bluetooth sensors with peer-assisted recording. In addition to live streaming facilities for enhanced situational awareness, the integration with Bluetooth sensors and beacons facilitates automated recording functionality.  5.    Nokia Corporation NOK has launched a charging configurator microservice for its existing Nokia Converged Charging (NCC) monetization solution. Built for the dynamic needs of the 5G economy, NCC provides real-time charging capabilities that enable communications service providers (CSPs) to monetize new revenue opportunities and provide a better experience to their customers.Converged charging brings together online and offline systems to address emerging 5G use cases. Introduced by the 3rd Generation Partnership Project, the charging function collects all network and service usage data. In April, Nokia deployed its cloud-native convergent charging solution on Amazon Web Services to accelerate CSPs migration of high-frequency charging applications to the public cloud, and to deliver the benefits of the cloud for 5G.Price PerformanceThe following table shows the price movement of some of the major telecom stocks over the past week and six months. Image Source: Zacks Investment ResearchIn the past five trading days, Arista has been the best performer with its stock gaining 2.1% while Bandwidth has declined the most with its stock falling 7.9%.Over the past six months, Motorola has been the best performer with its stock appreciating 18.8% while Bandwidth has declined the most with its stock falling 51.1%.Over the past six months, the Zacks Telecommunications Services industry has gained 2.3% and the S&P 500 has rallied 6.4%.Image Source: Zacks Investment ResearchWhat’s Next in the Telecom Space?In addition to 5G deployments and product launches, all eyes will remain glued to how the administration implements key policy changes to safeguard the interests of the industry and address the bottlenecks to spur growth. Breakout Biotech Stocks with Triple-Digit Profit Potential The biotech sector is projected to surge beyond $2.4 trillion by 2028 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases. Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Recommendations from previous editions of this report have produced gains of +205%, +258% and +477%. The stocks in this report could perform even better.See these 7 breakthrough stocks now>>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report QUALCOMM Incorporated (QCOM): Free Stock Analysis Report Nokia Corporation (NOK): Free Stock Analysis Report Motorola Solutions, Inc. (MSI): Free Stock Analysis Report Viasat Inc. (VSAT): Free Stock Analysis Report CommScope Holding Company, Inc. (COMM): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksOct 7th, 2021

Futures Fade Rally With Congress Set To Avert Government Shutdown

Futures Fade Rally With Congress Set To Avert Government Shutdown US equity futures faded an overnight rally on the last day of September as lingering global-growth risks underscored by China's official manufacturing PMI contracted for the first time since Feb 2020 as widely expected offset a debt-ceiling deal in Washington and central-bank assurances about transitory inflation. The deal to extend government funding removes one uncertainty from the minds of investors, amid China risks and concerns over Federal Reserve tapering. Comments from Fed Chair Powell and ECB head Christine Lagarde about inflation being transitory rather than permanent also helped sentiment, even if nobody actually believes them any more.In China, authorities told bankers to help local governments support the property market and homebuyers, signaling concern at the economic fallout from the debt crisis at China Evergrande As of 7:15am ET, S&P futures were up 18 points ot 0.44%, trimming an earlier gain of 0.9%. Dow eminis were up 135 or 0.4% and Nasdaq futs rose 0.43%. 10Y TSY yields were higher, rising as high as 1.54% and last seen at 1.5289%; the US Dollar erased earlier losses and was unchanged. All the three major indexes are set for a monthly drop, with the benchmark S&P 500 on track to break its seven-month winning streak as worries about persistent inflation, the fallout from China Evergrande’s potential default and political wrangling over the debt ceiling rattled sentiment. The index was, however, on course to mark its sixth straight quarterly gain, albeit its smallest, since March 2020’s drop. The rate-sensitive FAANG stocks have lost about $415 billion in value this month after the Federal Reserve’s hawkish shift on monetary policy sparked a rally in Treasury yields and prompted investors to move into energy, banks and small-cap sectors that stand to benefit the most from an economic revival. Among individual stocks, oil-and-gas companies APA Corp. and Devon Energy Corp. led premarket gains among S&P 500 members. Virgin Galactic shares surged 9.7% in premarket trading after the U.S. aviation regulator gave the company a green-light to resume flights to the brink of space. Perrigo climbed 14% after reporting a settlement in a tax dispute with Ireland.  U.S.-listed Macau casino operators may get a boost Thursday after Macau Chief Executive Ho Iat Seng said the region will strive to resume quarantine-free travel to Zhuhai by Oct. 1, the start of the Golden Week holiday, if the Covid-19 situation in Macau is stable. Here are some of the other biggest U.S. movers today: Retail investor favorites Farmmi (FAMI US) and Camber Energy (CEI US) both rise in U.S. premarket trading, continuing their strong recent runs on high volumes Virgin Galactic (SPCE US) shares rise 8.9% in U.S. premarket trading after the U.S. aviation regulator gave co. a green-light to resume flights to the brink of space Perrigo (PRGO US) rises 15% in U.S. premarket trading after reporting a settlement in a tax dispute with Ireland. The stock was raised to buy from hold at Jefferies over the “very favorable” resolution Landec (LNDC US) shares fell 17% in Wednesday postmarket trading after fiscal 1Q revenue and adjusted loss per share miss consensus estimates Affimed (AFMD US) rises 4.3% in Wednesday postmarket trading after Stifel analyst Bradley Canino initiates at a buy with a $12 price target, implying the stock may more than double over the next year Herman Miller (MLHR US) up ~2.8% in Wednesday postmarket trading after the office furnishings maker posts fiscal 1Q net sales that beat the consensus estimate Orion Group Holdings (ORN US) shares surged as much as 43% in Wednesday extended trading after the company disclosed two contract awards for its Marine segment totaling nearly $200m Kaival Brands (KAVL US) fell 18% Wednesday postmarket after offering shares, warrants via Maxim An agreement among U.S. lawmakers to extend government funding removes one uncertainty from a litany of risks investors are contenting with, ranging from China’s growth slowdown to Federal Reserve tapering. “Republicans and Democrats showed some compromise by averting a government shutdown,” Sebastien Galy, a senior macro strategist at Nordea Investment Funds. “By removing what felt like a significant risk for a retail audience, it helps sentiment in the equity market.” Still, president Joe Biden’s agenda remains at risk of being derailed by divisions among his own Democrats, as moderates voiced anger on Wednesday at the idea of delaying a $1 trillion infrastructure bill ahead of a critical vote to avert a government shutdown. The big overnight economic news came from China whose September NBS manufacturing PMI fell to 49.6 from 50.1 in August, the first contraction since Feb 2020, likely due to the production cuts caused by energy constraints. Both the output sub-index and the new orders sub-index in the NBS manufacturing PMI survey decreased in September. The NBS non-manufacturing PMI rebounded to 53.2 in September from 47.5 in August on a recovery of services activities as COVID restrictions eased. However, the numbers may not capture full impact of energy restrictions as the NBS survey was taken around 22nd-25th of the month: expect far worse number in the months ahead unless China manages to contain its energy crisis. Europe’s Stoxx 600 Index advanced 0.3%, trimming a monthly loss but fading an earlier gain of 0.9%, led by gains in basic resources companies as iron ore climbed, with the CAC and FTSE 100 outperforming at the margin. Technology stocks, battered earlier this week, also extended their rebound.  Miners, oil & gas and media are the strongest sectors; utility and industrial names lag. European natural gas and power markets hit fresh record highs as supply constraints persist. Perrigo jumped 13.8% after the drugmaker agreed to settle with Irish tax authorities over a 2018 issue by paying $1.90 billion in taxes Asian stocks were poised to cap their first quarterly loss since March 2020 as Chinese technology names fell and as investors remained wary over a recent rise in U.S. Treasury yields.  The MSCI Asia Pacific Index is set to end the September quarter with a loss of more than 5%, snapping a winning streak of five straight quarters. A combination of higher yields, Beijing’s corporate crackdown and worry over slowing economic growth in Asia’s biggest economy have hurt sentiment, bringing the market down following a brief rally in late August.  The Asian benchmark rose less than 0.1% after posting its worst single-day drop in six weeks on Wednesday. Consumer discretionary and communication services groups fell, while financials advanced. The Hang Seng Tech Index ended 1.3% lower as Beijing announced new curbs on the sector, while higher yields hurt sentiment toward growth stocks.  “Because there’s growing worry over U.S. inflation, we need to keep an eye on the potential risks, globally,” said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management. “Also, there’s the Evergrande issue. The market is in a wait-and-see mode now, with a focus on whether the group will be able to make future interest rate payments.”  Benchmarks in Thailand and Malaysia were the biggest losers, while Indonesia and Australia outperformed. Japan’s Topix and the Nikkei 225 Stock Average slipped for a fourth day as investors weighed Fumio Kishida’s election victory as the new ruling party leader. Global stocks are poised to end the quarter with a small loss, after a five-quarter rally, as investors braced for the Fed to wind down its stimulus. They also remain concerned about slowing growth and elevated inflation, supply-chain bottlenecks, an energy crunch and regulatory risks emanating from China. A majority of participants in a Citigroup survey said a 20% pullback in stocks is more likely than a 20% rally. In rates, Treasuries were slightly cheaper across the curve, off session lows as stock futures pare gains. 10-year TSY yields were around 1.53%, cheaper by 1.2bp on the day vs 2.3bp for U.K. 10-year; MPC-dated OIS rates price in ~65bps of BOE hikes by December 2022. Gilts lead the selloff, with U.K. curve bear-steepening as BOE rate-hike expectations continue to ramp up. Host of Fed speakers are in focus during U.S. session, while month-end extension may serve to underpin long-end of the curve.   A gauge of the dollar’s strength headed for its first drop in five days as Treasury yields steadied after a recent rise, and amid quarter-end flows. The Bloomberg Dollar Spot Index fell as the dollar steady or weaker against most of its Group-of-10 peers. The euro hovered around $1.16 and the pound was steady while Gilts inched lower, underperforming Bunds and Treasuries. Money markets now see around 65 basis points of tightening by the BOE’s December 2022 meeting, according to sterling overnight index swaps. That means they’re betting the key rate will rise to 0.75% next year from 0.1% currently. The Australian dollar led gains after it rose off its lowest level since August 23 amid exporter month-end demand and as iron ore buyers locked in purchases ahead of a week-long holiday in China. Norway’s krone was the worst G-10 performer and slipped a fifth day versus the dollar, its longest loosing streak in a year. In commodities, oil surrendered gains, still heading for a monthly gain amid tighter supplies. West Texas Intermediate futures briefly recaptured the level above $75 per barrel, before trading at $74.71. APA and Devon rose at least 1.8% in early New York trading. European gas prices meanwhile hit a new all time high. Looking at the day ahead, one of the highlights will be Fed Chair Powell’s appearance at the House Financial Services Committee, alongside Treasury Secretary Yellen. Other central bank speakers include the Fed’s Williams, Bostic, Harker, Evans, Bullard and Daly, as well as the ECB’s Centeno, Visco and Hernandez de Cos. On the data side, today’s highlights include German, French and Italian CPI for September, while in the US there’s the weekly initial jobless claims, the third estimate of Q2 GDP and the MNI Chicago PMI for September. Market Snapshot S&P 500 futures up 0.7% to 4,379.00 STOXX Europe 600 up 0.6% to 457.59 MXAP little changed at 196.85 MXAPJ up 0.3% to 635.71 Nikkei down 0.3% to 29,452.66 Topix down 0.4% to 2,030.16 Hang Seng Index down 0.4% to 24,575.64 Shanghai Composite up 0.9% to 3,568.17 Sensex down 0.3% to 59,239.76 Australia S&P/ASX 200 up 1.9% to 7,332.16 Kospi up 0.3% to 3,068.82 Brent Futures up 0.4% to $78.98/bbl Gold spot up 0.4% to $1,732.86 U.S. Dollar Index little changed at 94.27 German 10Y yield fell 0.5 bps to -0.212% Euro little changed at $1.1607 Top Overnight News from Bloomberg U.K. gross domestic product rose 5.5% in the second quarter instead of the 4.8% earlier estimated, official figures published Thursday show. The data, which reflected the reopening of stores and the hospitality industry, mean the economy was still 3.3% smaller than it was before the pandemic struck. China has urged financial institutions to help local governments stabilize the rapidly cooling housing market and ease mortgages for some home buyers, another signal that authorities are worried about fallout from the debt crisis at China Evergrande Group. The U.S. currency’s surge is helping the Chinese yuan record its largest gain in eight months on a trade-weighted basis in September. It adds to headwinds for the world’s second- largest economy already slowing due to a resurgence in Covid cases, a power crisis and regulatory curbs. The Swiss National Bank bought foreign exchange worth 5.44 billion francs ($5.8 billion) in the second quarter, part of its long-running policy to alleviate appreciation pressure on the franc   A few members of the Riksbank’s executive board discussed a rate path that could indicate a rate rise at the end of the forecast period, Sweden’s central bank says in minutes from its Sept. 20 meeting French inflation accelerated in September as households in the euro area’s second-largest economy faced a jump in the costs of energy and services. A more detailed look at global markets courtesy of Newsquawk Asia-Pac stocks traded somewhat varied with the region indecisive at quarter-end and as participants digested a slew of data releases including mixed Chinese PMI figures. ASX 200 (+1.7%) was underpinned by broad strength across its industries including the top-weighted financials sector and with the large cap miners lifted as iron ore futures surge by double-digit percentages, while the surprise expansion in Building Approvals also helped markets overlook the 51% spike in daily new infections for Victoria state. Nikkei 225 (+0.1%) was subdued for most of the session after disappointing Industrial Production and Retail Sales data which prompted the government to cut its assessment of industrial output which it stated was stalling. The government also warned that factory output could decline for a third consecutive month in September and that October has large downside risk due to uncertainty from auto manufacturing cuts. However, Nikkei 225 then recovered with the index marginally supported by currency flows. Hang Seng (-1.0%) and Shanghai Comp. (+0.4%) diverged heading into the National Day holidays and week-long closure for the mainland with tech names in Hong Kong pressured by ongoing regulatory concerns as China is to tighten regulation of algorithms related to internet information services. Nonetheless, mainland bourses were kept afloat after a further liquidity injection by the PBoC ahead of the Golden Week celebrations and as markets took the latest PMI figures in their strides whereby the official headline Manufacturing PMI disappointed to print its first contraction since February 2020, although Non-Manufacturing PMI and Composite PMI returned to expansionary territory and Caixin Manufacturing PMI topped estimates to print at the 50-benchmark level. Top Asian News S&P Points to Progress as Bondholders Wait: Evergrande Update Bank Linked to Kazakh Leader Buys Kcell Stake After Share Slump Goldman Sachs Names Andy Tai Head of IBD Southeast Asia: Memo What Japan’s Middle-of-the-Road New Leader Means for Markets The upside momentum seen across US and European equity futures overnight stalled, with European cash also drifting from the best seen at the open (Euro Stoxx 50 +0.1%; Stoxx 600 +0.4%). This follows somewhat mixed APAC handover, and as newsflow remains light on month and quarter-end. US equity futures are firmer across the board, but again off best levels, although the RTY (+0.8%) outperforms the ES (+0.4%), YM (+0.4%) and NQ (+0.5%). Back to Europe, the periphery lags vs core markets, whilst the DAX 40 (-0.3%) underperforms within the core market. Sectors in Europe are mostly in the green but do not portray a particular risk bias. Basic Resources top the chart with aid from overnight action in some base metals, particularly iron, in turn aiding the large iron miners BHP (+2.2%), Rio Tinto (+3.4%) and Anglo American (+2.9%). The bottom of the sectors meanwhile consists of Travel & Leisure, Autos & Parts and Industrial Goods & Services, with the former potentially feeling some headwinds from China’s travel restrictions during its upcoming National Day holiday. In terms of M&A, French press reported that CAC-listed Carrefour (-1.3%) is reportedly looking at options for sector consolidation, and talks are said to have taken place with the chain stores Auchan, with peer Casino (Unch) also initially seeing a leg higher in sympathy amid the prospect of sector consolidation. That being said, Carrefour has now reversed its earlier upside with no particular catalyst for the reversal. It is, however, worth keeping in mind that regulatory/competition hurdles cannot be ruled out – as a reminder, earlier this year, France blocked the takeover of Carrefour by Canada’s Alimentation Couche-Tard. In the case of a successful deal, Carrefour will likely be the acquirer as the largest supermarket in France. Sticking with M&A, Eutelsat (+14%) was bolstered at the open amid source reports that French billionaire Patrick Drahi is said to have made an unsolicited takeover offer of EUR 12.10/shr for Eutelsat (vs EUR 10.35 close on Wednesday), whilst the FT reported that this offer was rejected. Top European News European Banks Dangle $26 Billion in Payouts as ECB Cap Ends U.K. Economy Emerged From Lockdown Stronger Than Expected In a First, Uber Joins Drivers in Strike Against Brussels Rules EU, U.S. Seek to Avert Chip-Subsidy Race, Float Supply Links In FX, The non-US Dollars are taking advantage of the Greenback’s loss of momentum, and the Aussie in particular given an unexpected boost from building approvals completely confounding expectations for a fall, while a spike in iron ore prices overnight provided additional incentive amidst somewhat mixed external impulses via Chinese PMIs. Hence, Aud/Usd is leading the chasing pack and back up around 0.7200, Usd/Cad is retreating through 1.2750 and away from decent option expiry interest at 1.2755 and between 1.2750-40 (in 1.3 bn and 1 bn respectively) with some assistance from the latest bounce in crude benchmarks and Nzd/Usd is still trying to tag along, but capped into 0.6900 as the Aud/Nzd cross continues to grind higher and hamper the Kiwi. DXY/GBP/JPY/EUR/CHF - It’s far too early to call time on the Buck’s impressive rally and revival from recent lows, but it has stalled following a midweek extension that propelled the index to the brink of 94.500, at 94.435. The DXY subsequently slipped back to 94.233 and is now meandering around 94.300 having topped out at 94.401 awaiting residual rebalancing flows for the final day of September, Q3 and the half fy that Citi is still classifying as Dollar positive, albeit with tweaks to sd hedges for certain Usd/major pairings. Also ahead, the last US data and survey releases for the month including final Q2 GDP, IJC and Chicago PMI before another raft of Fed speakers. Meanwhile, Sterling has gleaned some much needed support from upward revisions to Q2 UK GDP, a much narrower than forecast current account deficit and upbeat Lloyds business barometer rather than sub-consensus Nationwide house prices to bounce from the low 1.3600 area vs the Greenback and unwind more of its underperformance against the Euro within a 0.8643-12 range. However, the latter is keeping tabs on 1.1600 vs its US peer in wake of firmer German state CPI prints and with the aforementioned Citi model flagging a sub-1 standard deviation for Eur/Usd in contrast to Usd/Jpy that has been elevated to 1.85 from a prelim 1.12. Nevertheless, the Yen is deriving some traction from the calmer yield backdrop rather than disappointing Japanese data in the form of ip and retail sales to contain losses under 112.00, and the Franc is trying to do the same around 0.9350. SCANDI/EM - The tables have been turning and fortunes changing for the Nok and Sek, but the former has now given up all and more its post-Norges Bank hike gains and more as Brent consolidates beneath Usd 80/brl and the foreign currency purchases have been set at the same level for October as the current month. Conversely, the latter has taken heed of a hawkish hue to the latest set of Riksbank minutes and the fact that a few Board members discussed a rate path that could indicate a rise at the end of the forecast period. Elsewhere, the Zar looks underpinned by marginally firmer than anticipated SA ppi and private sector credit, while the Mxn is treading cautiously ahead of Banxico and a widely touted 25 bp hike. In commodities, WTI and Brent futures are choppy but trade with modest gains heading into the US open and in the run-up to Monday’s OPEC+ meeting. The European session thus far has been quiet from a news flow standpoint, but the contracts saw some fleeting upside after breaking above overnight ranges, albeit the momentum did not last long. Eyes turn to OPEC+ commentary heading into the meeting, which is expected to be another smooth affair, according to Argus sources. As a reminder, the group is expected to stick to its plan to raise output by 400k BPD despite outside pressure to further open the taps in a bid to control prices. Elsewhere, as a mild proxy for Chinese demand, China’s Sinopec noted that all LNG receiving terminals are to be operated at full capacity. WTI trades on either side of USD 75/bbl (vs low USD 74.54/bbl), while its Brent counterpart remains north of USD 78/bbl (vs low USD 77.66/bbl). Turning to metals, spot gold and silver continue to consolidate after yesterday’s Dollar induced losses, with the former finding some support around the USD 1,725/oz mark and the latter establishing a floor around USD 21.50/oz. Over to base metals, Dalian iron ore futures rose to three-week highs amid pre-holiday Chinese demand and after Fortescue Metals Group halted mining operations at a Pilbara project. Conversely, LME copper is on a softer footing as the Buck holds onto recent gains. US Event Calendar 8:30am: 2Q PCE Core QoQ, est. 6.1%, prior 6.1% 8:30am: 2Q GDP Price Index, est. 6.1%, prior 6.1% 8:30am: 2Q Personal Consumption, est. 11.9%, prior 11.9% 8:30am: Sept. Continuing Claims, est. 2.79m, prior 2.85m 8:30am: 2Q GDP Annualized QoQ, est. 6.6%, prior 6.6% 8:30am: Sept. Initial Jobless Claims, est. 330,000, prior 351,000 9:45am: Sept. MNI Chicago PMI, est. 65.0, prior 66.8 Central Bank speakers 10am: Fed’s Williams Discusses the Fed’s Pandemic Response 10am: Powell and Yellen Appear Before House Finance Panel 11am: Fed’s Bostic Discusses Economic Mobility 11:30am: Fed’s Harker Discusses Sustainable Assets and Financial... 12:30pm: Fed’s Evans Discusses Economic Outlook 1:05pm: Fed’s Bullard Makes Opening Remarks at Book Launch 2:30pm: Fed’s Daly Speaks at Women and Leadership Event Government Calendar 10am ET: Treasury Secretary Yellen, Fed Chair Powell appear at a House Financial Services Committee hearing on the Treasury, Fed’s pandemic response 10:30am ET: Senate begins voting process for continuing resolution that extends U.S. government funding to December 3 10:30am ET: Senate Commerce subcommittee holds hearing on Facebook, Instagram’s influence on kids with Antigone Davis, Director, Global Head of Safety, Facebook 10:45am ET: House Speaker Nancy Pelosi holds weekly press briefing DB's Jim Reid concludes the overnight wrap I’ll be getting my stitches out of my knee today and will have a chance to grill the surgeon who I think told me I’ll probably soon need a knee replacement. I say think as it was all a bit of a medicated blur post the operation 2 weeks ago. These have been a painfully slow 2 weeks of no weight bearing with another 4 to go and perhaps all to no avail. As you can imagine I’ve done no housework, can’t fend much for myself, or been able to control the kids much over this period. I’m not sure if having bad knees are grounds for divorce but I’m going to further put it to the test over the next month. In sickness and in health I plea. Like me, markets are hobbling into the end of Q3 today even if they’ve seen some signs of stabilising over the last 24 hours following their latest selloff, with equities bouncing back a bit and sovereign bond yields taking a breather from their recent relentless climb. It did feel that we hit yield levels on Tuesday that started to hurt risk enough that some flight to quality money recycled back into bonds. So the next leg higher in yields (which I think will happen) might be met with more risk off resistance, and counter rallies. The latest moves came amidst relatively dovish and supportive comments from central bank governors at the ECB’s forum yesterday, but sentiment was dampened somewhat as uncertainty abounds over a potential US government shutdown and breaching of the debt ceiling, after both houses of Congress could not agree on a plan to extend government funding. Overnight, there have been signs of progress on the shutdown question, with Majority Leader Schumer saying that senators had reached agreement on a stopgap funding measure that will fund the government through December 3, with the Senate set to vote on the measure this morning.However, we’re still no closer to resolving the debt ceiling issue (where the latest estimates from the Treasury Department point to October 18 as the deadline), and tensions within the Democratic party between moderates and progressives are threatening to sink both the $550bn bipartisan infrastructure bill and the $3.5tn reconciliation package, which together contain much of President Biden’s economic agenda. We could see some developments on that soon however, as Speaker Pelosi said yesterday that the House was set to vote on the infrastructure bill today. Assuming the vote goes ahead later, this will be very interesting since a number of progressive Democrats have said that they don’t want to pass the infrastructure bill without the reconciliation bill (which contains the administration’s other priorities on social programs). This is because they fear that with the infrastructure bill passed (which moderates are keen on), the moderates could then scale back the spending in the reconciliation bill, and by holding out on passing the infrastructure bill, this gives them leverage on reconciliation. House Speaker Pelosi and Majority Leader Schumer were in the Oval Office with President Biden yesterday, and a White House statement said that Biden spoke on the phone with lawmakers and engagement would continue into today. So an important day for Biden’s agenda. Against this backdrop, risk assets made a tentative recovery yesterday, with the S&P 500 up +0.16% and Europe’s STOXX 600 up +0.59%. However, unless we get a big surge in either index today, both indices remain on track for their worst monthly performances so far this year, even if they’re still in positive territory for Q3 as a whole. Looking elsewhere, tech stocks had appeared set to pare back some of the previous day’s losses, but a late fade left the NASDAQ down -0.24% and the FANG+ index down a greater -0.72%. Much of the tech weakness was driven by falling semiconductor shares (-1.53%), as producers have offered investors poor revenue guidance on the heels of the ongoing supply chain issues that are driving chip shortages globally. Outside of tech, US equities broadly did better yesterday with 17 of 24 industry groups gaining, led by utilities (+1.30%), biotech (+1.05%) and food & beverages (+1.00%). Similarly, while they initially staged a recovery, small caps in the Russell 2000 (-0.20%) continued to struggle. One asset that remained on trend was the US dollar. The greenback continued its climb yesterday, with the dollar index increasing +0.61% to close at its highest level in over a year, exceeding its closing high from last November. Over in sovereign bond markets, the partial rebound saw yields on 10yr Treasuries down -2.1bps at 1.517%, marking their first move lower in a week. And there was much the same pattern in Europe as well, where yields on 10yr bunds (-1.4bps), OATs (-1.3bps) and BTPs (-3.1bps) all moved lower as well. One continued underperformer were UK gilts (+0.3bps), and yesterday we saw the spread between 10yr gilt and bund yields widen to its biggest gap in over 2 years, at 120bps. Staying on the UK, the pound (-0.81%) continued to slump yesterday, hitting its lowest level against the dollar since last December, which comes as the country has continued to face major issues over its energy supply. Yesterday actually saw natural gas prices take another leg higher in both the UK (+10.09%) and Europe (+10.24%), and the UK regulator said that three smaller suppliers (who supply fewer than 1% of domestic customers between them) had gone out of business. This energy/inflation/BoE conundrum is confusing the life out of Sterling 10 year breakevens. They rose +18bps from Monday morning to Tuesday lunchtime but then entirely reversed the move into last night’s close. This is an exaggerated version of how the world’s financial markets are puzzling over whether breakevens should go up because of energy or go down because of the demand destruction and central bank response. Central bankers were in no mood to panic yesterday though as we saw Fed Chair Powell, ECB President Lagarde, BoE Governor Bailey and BoJ Governor Kuroda all appear on a policy panel at the ECB’s forum on central banking. There was much to discuss but the central bank heads all maintained that this current inflation spike will relent with Powell saying that it was “really a consequence of supply constraints meeting very strong demand, and that is all associated with the reopening of the economy -- which is a process that will have a beginning, a middle and an end.” ECB President Lagarde shared that sentiment, adding that “we certainly have no reason to believe that these price increases that we are seeing now will not be largely transitory going forward.” Overnight in Asia, equities have seen a mixed performance, with the Nikkei (-0.40%), and the Hang Seng (-1.08%) both losing ground, whereas the Kospi (+0.41%) and the Shanghai Composite (+0.30%) have posted gains. The moves came amidst weak September PMI data from China, which showed the manufacturing PMI fall to 49.6 (vs. 50.0 expected), marking its lowest level since the height of the Covid crisis in February 2020. The non-manufacturing PMI held up better however, at a stronger 53.2 (vs. 49.8 expected), although new orders were beneath 50 for a 4th consecutive month. Elsewhere, futures on the S&P 500 (+0.50%) and those on European indices are pointing to a higher start later on, as markets continue to stabilise after their slump earlier in the week. Staying on Asia, shortly after we went to press yesterday, former Japanese foreign minister Fumio Kishida was elected as leader of the governing Liberal Democratic Party, and is set to become the country’s next Prime Minister. The Japanese Diet will hold a vote on Monday to elect Kishida as the new PM, after which he’ll announce a new cabinet, and attention will very soon turn to the upcoming general election, which is due to take place by the end of November. Our Chief Japan economist has written more on Kishida’s victory and his economic policy (link here), but he notes that on fiscal policy, Kishida’s plans to redistribute income echo the shift towards a greater role for government in the US and elsewhere. There wasn’t a massive amount of data yesterday, though Spain’s CPI reading for September rose to an above-expected +4.0% (vs. 3.5% expected), so it will be interesting to see if something similar happens with today’s releases from Germany, France and Italy, ahead of the Euro Area release tomorrow. Otherwise, UK mortgage approvals came in at 74.5k in August (vs. 73.0k expected), and the European Commission’s economic sentiment indicator for the Euro Area rose to 117.8 in September (vs. 117.0 expected). To the day ahead now, and one of the highlights will be Fed Chair Powell’s appearance at the House Financial Services Committee, alongside Treasury Secretary Yellen. Other central bank speakers include the Fed’s Williams, Bostic, Harker, Evans, Bullard and Daly, as well as the ECB’s Centeno, Visco and Hernandez de Cos. On the data side, today’s highlights include German, French and Italian CPI for September, while in the US there’s the weekly initial jobless claims, the third estimate of Q2 GDP and the MNI Chicago PMI for September. Tyler Durden Thu, 09/30/2021 - 07:49.....»»

Category: blogSource: zerohedgeSep 30th, 2021

Tyler (TYL) to Modernize USDA Forest Service"s CJIS via V3Gate

Tyler (TYL) to modernize USDA Forest Service's CJIS through its silver level Partner Alliance, V3Gate, based on its Entellitrak platform solutions. Tyler Technologies TYL recently announced that the United States Department of Agriculture's (“USDA”) Forest Service Law Enforcement and Investigations ("LEI") has modernized its Criminal Justice Information System with Tyler’s Entellitrak, a low-code application development platform for case management.Through one of Tyler Platform Alliance’s Silver partners, V3Gate, which is a recognized IT solutions provider for the US Federal government, USDA’s Forest Service LEI replaced its legacy Law Enforcement Investigations Management Attainment Reporting System — a national Law Enforcement incident reporting database.Tyler’s Entellitrak uses a Data-First approach for building systems, i.e., it is driven by expert knowledge of what information needs to be captured and modeled at every stage of a case. It comes with a bunch of completely integrated solution modules, which include escan, efile, analytics, mobile and document management. It also has a customizable help module, which offers greater access to vital information and instructions to the end users.With Entellitrak, the law enforcement management system will become more convenient and robust. It will allow law officers to create reports, issue violation notices and manage legal documents online, faster than time taken conventionally, from anywhere in the world. This will further validate the reliability of Tyler’s Partner Alliance, a partner program based on Entellitrak solutions.This will not only enable USDA Forest Service to meet the 2021 National Incident Based Reporting System mandate but also make it compliant with the Federal Risk and Authorization Management Program. Tyler Technologies, Inc. Price and Consensus Tyler Technologies, Inc. price-consensus-chart | Tyler Technologies, Inc. QuoteTyler has been benefiting from the federal government’s on-going transition from on-premise and out-dated systems to scalable cloud-based systems. It has been continuously advancing its core software applications and expanding complementary product and service portfolios to cater to the changing needs of customers and keep pace with technological advancements.During second-quarter 2021, the company added 170 new subscription-based arrangements and converted 62 existing on-premises clients, accounting for approximately $73 million in total contract value. The company primarily gained from the post-acquisition contributions of NIC. Its revenues grew 49.4% year over year to $405.4 million. It recently completed the buyouts of VendEngine, a fintech company, and Arx, a cloud-based software service provider.Zacks Rank & Key PicksTyler currently carries a Zacks Rank #3 (Hold).Some better-ranked stocks in the broader technology sector are Avnet AVT, EPAM Systems EPAM and Paycom Software PAYC, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.The long-term earnings growth rate of Avnet, EPAM Systems and Paycom Software are pegged at 25.4%, 26.5% and 25%, respectively. Zacks' Top Picks to Cash in on Artificial Intelligence In 2021, this world-changing technology is projected to generate $327.5 billion in revenue. Now Shark Tank star and billionaire investor Mark Cuban says AI will create "the world's first trillionaires." Zacks' urgent special report reveals 3 AI picks investors need to know about today.See 3 Artificial Intelligence Stocks With Extreme Upside Potential>>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Avnet, Inc. (AVT): Free Stock Analysis Report EPAM Systems, Inc. (EPAM): Free Stock Analysis Report Paycom Software, Inc. (PAYC): Free Stock Analysis Report Tyler Technologies, Inc. (TYL): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 29th, 2021

Futures Rebound As Yields Drop

Futures Rebound As Yields Drop U.S. index futures rebounded on Tuesday from Monday's stagflation-fear driven rout as an increase in Treasury yields abated and the greenback dropped from a 10 month high while Brent crude dropped from a 3 year high of $80/barrel after API showed a surprise stockpile build across all products. One day after one of Wall Street’s worst selloff of this year which saw the S&P's biggest one-day drop since May, dip buyers made yet another another triumphal return to global markets, with Nasdaq 100 futures climbing 130 points or 0.9% after the tech-heavy index tumbled the most since March on Tuesday as U.S. Treasury yields rose on tapering and stagflationconcerns. S&P 500 futures rose 28 points or 0.6% after the underlying gauge also slumped amid mounting concern over the debt-ceiling impasse in Washington. A key catalyst for today's easing in financial conditions was the 10-year yield shedding four basis points and the five-year rate falling below 1%. In the past five sessions, the 10Y yield rose by a whopping 25 basis point, a fast enough move to trigger VaR shocks across risk parity investors. "We think (10-year treasury yields) are likely to around 1.5% to 1.75%, so they obviously still have room to go," said Daniel Lam, senior cross-asset strategist at Standard Chartered, who added that the rise in yields was driven by the fact that the United States was almost definitely going to start tapering its massive asset purchases by the end of this year, and that this would drive a shift from growth stocks into value names. Shares of FAAMG gigatechs rose between 1% and 1.3% in premarket trading as the surge in yields eased. Oil firms and supermajors like Exxon and Chevron dipped as a rally in crude prices petered out. The S&P energy sector has gained 3.9% so far this week and is on track for its best monthly performance since February. Among stocks, Boeing rose 2.5% after it said 737 MAX test flight for China’s aviation regulator last month was successful and the planemaker hopes a two-year grounding will be lifted this year. Cybersecurity firm Fortinet Inc. led premarket gains among S&P 500 Index companies. Here are some of the other big movers this morning: Micron (MU US) shares down more than 3% in U.S. premarket trading after the chipmaker’s forecast came in well below analyst expectations. Co. was hurt by slowing demand from personal-computer makers Lucid (LCID US) shares rise 9.7% in U.S. premarket trading after the electric-vehicle company said it has started production on its debut consumer car EQT Corp. (EQT US) shares fell 4.8% in Tuesday postmarket trading after co. reports offering by certain shareholders who received shares as a part of its acquisition of Alta Resources Development’s upstream and midstream units PTK Acquisition (PTK US) rises in U.S. premarket trading after the blank-check company’s shareholders approved its combination with the Israel-based semiconductor company Valens Cal-Maine (CALM US) shares rose 4.4% postmarket Tuesday after it reported net sales for the first quarter that beat the average analyst estimate as well as a narrower-than-estimated loss Sherwin-Williams (SHW US) dropped 3.5% in Tuesday postmarket trading after its forecasted adjusted earnings per share for the third quarter missed the average analyst estimate Boeing (BA US) and Spirit Aerosystems (SPR US) climb as much as 3% after being upgraded to outperform by Bernstein on travel finally heading to inflection point The S&P 500 is set to break its seven-month winning streak as fears about non-transitory inflation, China Evergrande’s default, potential higher corporate taxes and a sooner-than expected tapering of monetary support by the Federal Reserve clouded investor sentiment in what is usually a seasonally weak month. Meanwhile, Senate Democrats are seeking a vote Wednesday on a stopgap funding bill to avert a government shutdown, but without a provision to increase the federal debt limit. On Tuesday, Jamie Dimon said a U.S. default would be “potentially catastrophic” event, in other words yet another multibillion bailout for his bank. “Many things are in flux: the pandemic is not over, the supply chain bottlenecks we are seeing are affecting all sorts of prices and we’ll need to see how it plays out because the results are not clear in terms of inflation,” Belita Ong, Dalton Investments chairman, said on Bloomberg Television. Europe’s Stoxx 600 gauge rebounded from a two-month low, rising 0.9% and reversing half of yesterday's losses. Semiconductor-equipment company ASM International posted the biggest increase on the index amid positive comments by analysts on its growth outlook. A sharp rebound during the European session marked a turnaround from the downbeat Asian session, when equities extended losses amid concerns over stagflation and China Evergrande Group’s debt crisis. Sentiment improved as a steady flow of buyers emerged in the Treasury market, ranging from foreign and domestic funds to leveraged accounts.  Here are some of the biggest European movers today: Academedia shares rise as much as 6.9% in Stockholm, the most since June 1, after the company said the number of participants for its higher vocational education has increased 25% y/y. ASM International jumps as much as 7.3%, rebounding from a three-day sell-off, boosted by supportive analyst comments and easing bond yields. GEA Group gains as much as 4.7% after the company published new financial targets through 2026, which Citigroup says are above analysts’ consensus and an encouraging signal. DSV bounces as much as 4.4% as JPMorgan upgrades to overweight, saying the recent pullback in the shares presents an opportunity. Genova Property Group falls as much as 10% in Stockholm trading after the real estate services company placed shares at a discount to the last close. ITM Power drops as much as 6.4% after JPMorgan downgrades to neutral from overweight on relative valuation, with a more mixed near-term outlook making risk/reward seem less compelling. Royal Mail slides as much as 6.2% after UBS cuts its rating to sell from buy, expecting U.K. labor shortages and wage inflation pressures to hurt the parcel service company’s profit margins. Earlier in the session, Asian equities slumped in delayed response to the US rout. MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.43% with Australia off 1.5%, and South Korea falling 2.06%. The Hong Kong benchmark shed 1.2% and Chinese blue chips were 1.1% lower. Japan's Nikkei shed 2.35% hurt by the general mood as the country's ruling party votes for a new leader who will almost certainly become the next prime minister ahead of a general election due in weeks.  Also on traders' minds was cash-strapped China Evergrande whose shares rose as much as 12% after it said it plans to sell a 9.99 billion yuan ($1.5 billion) stake it owns in Shengjing Bank. Evergrande is due to make a $47.5 million bond interest payment on its 9.5% March 2024 dollar bond, having missed a similar payment last week, but it said in the stock exchange filing the proceeds of the sale should be used to settle its financial liabilities due to Shengjing Bank. Chinese real estate company Fantasia Holdings Group is struggling to avoid falling deeper into distress, just as the crisis at China Evergrande flags broader risks to other heavily indebted developers. In Japan, the country's PGIF, or Government Pension Investment Fund, the world’s largest pension fund, said it won’t include yuan- denominated Chinese sovereign debt in its portfolio. In rates, as noted above, Treasuries lead global bonds higher, paring large portion of Tuesday’s losses with gains led by intermediates out to long-end of the curve. Treasury yields richer by up to 4bp across long-end of the curve with 10s at around 1.50%, outperforming bunds and gilts both by 2bp; front-end of the curve just marginally richer, flattening 2s10s spread by 3.2bp with 5s30s tighter by 0.5bp. Futures volumes remain elevated amid evidence of dip buyers emerging Tuesday and continuing over Wednesday’s Asia hours. Session highlights include a number of Fed speakers, including Chair Powell.     In FX, the Bloomberg Dollar Spot Index was little changed after earlier advancing, and the dollar slipped versus most of its Group-of-10 peers. The yen was the best G-10 performer as it whipsawed after earlier dropping to 111.68 per dollar, its weakest level since March 2020. The Australian dollar also advanced amid optimism over easing of Covid-related restrictions while the New Zealand dollar was the worst performer amid rising infections. The euro dropped to an 11-month low while the pound touched its weakest level since January against the greenback amid a bout of dollar strength as the London session kicked off. Confidence in the euro-area economy unexpectedly rose in September as consumers turned more optimistic about the outlook and construction companies saw employment prospects improve. The yen climbed from an 18-month low as a decline in stocks around the world helps boost demand for the currency as a haven. Japanese bonds also gained. In commodities, oil prices dropped after touching a near three-year high the day before. Brent crude fell 0.83% to $78.25 per barrel after topping $80 yesterday; WTI dipped 1.09% to $74.47 a barrel. Gold edged higher with the spot price at $1,735.6 an ounce, up 0.1% from the seven-week low hit the day before as higher yields hurt demand for the non interest bearing asset. Base metals are under pressure with LME aluminum and copper lagging. Looking at the day ahead, the biggest highlight will be a policy panel at the ECB forum on central banking featuring ECB President Lagarde, Fed Chair Powell, BoJ Governor Kuroda and BoE Governor Bailey. Other central bank speakers include ECB Vice President de Guindos, the ECB’s Centeno, Stournaras, Makhlouf, Elderson and Lane, as well as the Fed’s Harker, Daly and Bostic. Meanwhile, data releases include UK mortgage approvals for August, the final Euro Area consumer confidence reading for September, and US pending home sales for August. Market Snapshot S&P 500 futures up 0.7% to 4,371.75 STOXX Europe 600 up 0.8% to 455.97 MXAP down 1.2% to 197.38 MXAPJ down 0.7% to 635.17 Nikkei down 2.1% to 29,544.29 Topix down 2.1% to 2,038.29 Hang Seng Index up 0.7% to 24,663.50 Shanghai Composite down 1.8% to 3,536.29 Sensex down 0.4% to 59,445.57 Australia S&P/ASX 200 down 1.1% to 7,196.71 Kospi down 1.2% to 3,060.27 Brent Futures down 0.7% to $78.53/bbl Gold spot up 0.4% to $1,740.79 U.S. Dollar Index little changed at 93.81 German 10Y yield fell 1.1 bps to -0.210% Euro down 0.2% to $1.1664 Top Overnight News from Bloomberg China’s central bank governor said quantitative easing implemented by global peers can be damaging over the long term and vowed to keep policy normal for as long as possible China’s central bank injected liquidity into the financial system for a ninth day in the longest run since December as it sought to meet a surge in seasonal demand for cash China stepped in to buy a stake in a struggling regional bank from China Evergrande Group as it seeks to limit contagion in the financial sector from the embattled property developer The Chinese government is considering raising power prices for industrial consumers to help ease a growing supply crunch Japan’s Government Pension Investment Fund, the world’s largest pension fund, said it won’t include yuan-denominated Chinese sovereign debt in its portfolio. The decision comes as FTSE Russell is set to start adding Chinese debt to its benchmark global bond index, which the GPIF follows, from October Fumio Kishida is set to become Japan’s prime minister, after the ex-foreign minister overcame popular reformer Taro Kono to win leadership of the country’s ruling party, leaving stock traders feeling optimistic ECB Governing Council member Gabriel Makhlouf said policy makers must be ready to respond to persistently higher inflation that could result from lasting supply bottlenecks Inflation accelerated in Spain to the fastest pace in 13 years, evidence of how surging energy costs are feeding through to citizens around the euro-zone economy Sterling-debt sales by corporates exceeded 2020’s annual tally as borrowers rushed to secure ultra-cheap funding costs while they still can. Offerings will top 70 billion pounds ($95 billion) through Wednesday, beating last year’s total sales by at least 600 million pounds, according to data compiled by Bloomberg A more detailed look at global markets courtesy of Newsquawk Asian equity markets were pressured on spillover selling from global peers which saw the S&P 500 suffer its worst day since May after tech losses were magnified as yields climbed and with sentiment also dampened by weak data in the form of US Consumer Confidence and Richmond Fed indexes. ASX 200 (-1.1%) was heavily pressured by tech and with mining-related stocks dragged lower by weakness in underlying commodity prices, with the mood also clouded by reports that Queensland is on alert for a potential lockdown and that Australia will wind down emergency pandemic support payments within weeks. Nikkei 225 (-2.1%) underperformed amid the broad sell-off and as participants awaited the outcome of the LDP leadership vote which saw no candidate win a majority (as expected), triggering a runoff between vaccine minister Kono and former foreign minister Kishida to face off in a second round vote in which Kishida was named the new PM. KOSPI (-1.2%) was heavily pressured by the tech woes and after North Korea confirmed that yesterday’s launch was a new type of hypersonic missile. Hang Seng (+0.7%) and Shanghai Comp. (-1.8%) conformed to the broad risk aversion with tech stocks hit in Hong Kong, although the losses were milder compared to regional peers with Evergrande shares boosted after it sold CNY 10bln of shares in Shengjing Bank that will be used to pay the developer’s debt owed to Shengjing Bank, which is the Co.’s first asset sale amid the current collapse concerns although it still faces another USD 45.2mln in interest payments due today. In addition, the PBoC continued with its liquidity efforts and there was also the absence of Stock Connect flows to Hong Kong with Southbound trading already closed through to the National Holidays. Finally, 10yr JGBs were slightly higher as risk assets took a hit from the tech sell-off and with T-notes finding some reprieve overnight. Furthermore, the BoJ were also in the market for nearly JPY 1tln of JGBs mostly in 3yr-10yr maturities and there were notable comments from Japan’s GPIF that it is to avoid investments in Chinese government bonds due to concerns over China market. Top Asian News L&T Is Said in Talks to Merge Power Unit With Sembcorp India Prosecutors Seek Two Years Jail for Ghosn’s Alleged Accomplice Japan to Start Process to Sell $8.5 Billion Postal Stake Gold Climbs From Seven Week Low as Yields Retreat, Dollar Pauses Bourses in Europe are attempting to claw back some ground lost in the prior session’s global stocks rout (Euro Stoxx 50 +0.9%; Stoxx 600 +0.8%). The upside momentum seen at the cash open has somewhat stabilised amid a lack of news flow and with a busy agenda ahead from a central bank standpoint, with traders also cognizant of potential month-end influence. US equity futures have also been gradually drifting higher since the reopen of electronic trade. As things stand, the NQ (+1.0%) narrowly outperforms the ES (+0.7%), RTY (+0.8%) and YM (+0.6%) following the tech tumble in the prior session, and with yields easing off best levels. Back to European cash, major regional bourses see broad-based gains with no standout performers. Sectors are mostly in the green; Oil & Gas resides at the foot of the bunch as crude prices drift lower and following two consecutive sessions of outperformance. On the flip side, Tech resides among today’s winners in what is seemingly a reversal of yesterday’s sector configuration, although ASML (+1.3%) may be offering some tailwinds after upping its long-term outlook whilst suggesting ASML and its supply chain partners are actively adding and improving capacity to meet this future customer demand – potentially alleviating some concerns in the Auto sector which is outperforming at the time of writing. Retail also stands strong as Next (+3.0%) upped its guidance whilst suggesting the longer-term outlook for the Co. looks more positive than it had been for many years. In terms of individual movers, Unilever (+1.0%) is underpinned by source reports that the Co. has compiled a shortlist of at least four bidders for its PG Tips and Lipton Iced Tea brands for some GBP 4bln. HeidelbergCement (-1.4%) is pressured after acquiring a 45% stake in the software firm Command Alko. Elsewhere, Morrisons (+1.3%) is on the front foot as the takeover of the Co. is to be decided via an auction process as touted earlier in the month. Top European News Makhlouf Says ECB Must Be Ready to Act If Inflation Entrenched ASML to Ride Decade-Long Sales Boom After Chip Supply Crunch Spanish Inflation at 13-Year High in Foretaste of Regional Spike U.K. Mortgage Approvals Fall to 74,453 in Aug. Vs. Est. 73,000 In FX, the yield and risk backdrop is not as constructive for the Dollar directly, but the index has posted another marginal new y-t-d best, at 93.891 compared to 93.805 yesterday with ongoing bullish momentum and the bulk of the US Treasury curve remaining above key or psychological levels, in contrast to other global bond benchmarks. Hence, the Buck is still elevated and on an upward trajectory approaching month end on Thursday, aside from the fact that hedge rebalancing flows are moderately positive and stronger vs the Yen. Indeed, the Euro is the latest domino to fall and slip to a fresh 2021 low around 1.1656, not far from big barriers at 1.1650 and further away from decent option expiry interest at the 1.1700 strike (1 bn), and it may only be a matter of time before Sterling succumbs to the same fate. Cable is currently hovering precariously above 1.3500 and shy of the January 18 base (1.3520) that formed the last pillar of support for the Pound before the trough set a week earlier (circa 1.3451), and ostensibly supportive UK data in the form of BoE mortgage lending and approvals has not provided much relief. AUD/JPY - A rather odd couple in many ways given their contrasting characteristics as a high beta or activity currency vs traditional safe haven, but both are benefiting from an element of corrective trade, consolidation and short covering relative to their US counterpart. Aud/Usd is clinging to 0.7250 in advance of Aussie building approvals on Thursday and Usd/Jpy is retracing from its new 111.68 y-t-d pinnacle amidst the less rampant yield environment and weighing up the implications of ex-Foreign Minister Kishida’s run-off win in the LDP leadership contest and the PM-in-waiting’s pledge to put together a Yen tens of trillion COVID-19 stimulus package before year end. CHF/CAD/NZD - All relatively confined vs their US rival, as the Franc continues to fend off assaults on the 0.9300 level with some impetus from a significant improvement in Swiss investor sentiment, while the Loonie is striving to keep its head above 1.2700 ahead of Canadian ppi data and absent the recent prop of galloping oil prices with WTI back under Usd 75/brl from Usd 76.67 at best on Tuesday. Elsewhere, the Kiwi is pivoting 0.6950 pre-NZ building consents and still being buffeted by strong Aud/Nzd headwinds. SCANDI/EM - Not much purchase for the Sek via upgrades to Swedish GDP and inflation forecast upgrades by NIER as sentiment indices slipped across the board, but some respite for the Try given cheaper crude and an uptick in Turkish economic confidence. Conversely, the Cnh and Cny have not received their customary fillip even though the PBoC added liquidity for the ninth day in a row overnight and China’s currency regulator has tightened control over interbank trade and asked market makers to narrow the bid/ask spread, according to sources. In commodities, WTI and Brent front month futures have been trimming overnight losses in early European trade. Losses overnight were seemingly a function of profit-taking alongside the bearish Private Inventory Report – which showed a surprise build in weekly crude stocks of 4.1mln bbls vs exp. -1.7mln bbls, whilst the headline DoE looks for a draw of 1.652mln bbls. Further, there have been growing calls for OPEC+ to further open the taps beyond the monthly 400k BPD hike, with details also light on the White House’s deliberations with OPEC ahead of the decision-making meeting next week. Despite these calls, it’s worth bearing in mind that OPEC’s latest MOMR stated, “increased risk of COVID-19 cases primarily fuelled by the Delta variant is clouding oil demand prospects going into the final quarter of the year, resulting in downward adjustments to 4Q21 estimates. As a result, 2H21 oil demand has been adjusted slightly lower, partially delaying the oil demand recovery into 1H22.” Brent Dec dipped back under USD 78/bbl (vs low 763.77/bbl) after testing USD 80/bbl yesterday, whilst WTI Nov lost the USD 75/bbl handle (vs low USD 73.37/bbl). Over to metals, spot gold and silver have seen somewhat of divergence as real yields negate some effects of the new YTD peak printed by the Dollar index, whilst spot silver succumbs to the Buck. Over to base metals, LME copper trade is lacklustre as the firmer dollar weighs on the red metal. Shanghai stainless steel meanwhile extended on losses, notching the fourth session of overnight losses with desks citing dampened demand from the Chinese power crunch. US Event Calendar 7am: Sept. MBA Mortgage Applications, prior 4.9% 10am: Aug. Pending Home Sales YoY, est. -13.8%, prior -9.5% 10am: Aug. Pending Home Sales (MoM), est. 1.3%, prior -1.8% Central Bank speakers 9am: Fed’s Harker Discusses Economic Outlook 11:45am: Powell Takes Part in ECB Forum on Central Banking 11:45am: Bailey, Kuroda, Lagarde, Powell on ECB Forum Panel 1pm: Fed’s Daly Gives Speech to UCLA 2pm: Fed’s Bostic Gives Remarks at Chicago Fed Payments DB's Jim Reid concludes the overnight wrap The main story of the last 24 hours has been a big enough rise in yields to cause a major risk-off move, with 10yr Treasury yields up another +5.0bps to 1.537% yesterday, and this morning only seeing a slight -0.3bps pullback to 1.534%. At the intraday peak yesterday, they did climb as high as 1.565% earlier in the session, but this accelerated the risk off and sent yields somewhat lower intraday as a result, which impacted the European bond closes as we’ll see below. All told, US yields closed at their highest level in 3 months and up nearly +24bps since last Wednesday’s close, shortly after the FOMC meeting. That’s the largest 4-day jump in US yields since March 2020, at the outset of the pandemic and shortly after the Fed announced their latest round of QE. This all led to the worst day for the S&P 500 (-2.04%) since mid-May and the worst for the NASDAQ (-2.83%) since mid-March. The S&P 500 is down -4.06% from the highs now – trading just below the Evergrande (remember that?) lows from last week. So the index still has not seen a -5% sell-off on a closing basis for 228 days and counting. If we make it to Halloween it will be a full calendar year. Regardless, the S&P and STOXX 600 remain on track for their worst monthly performances so far this year. Those moves have continued this morning in Asia, where the KOSPI (-2.05%), Nikkei (-1.64%), Hang Seng (-0.60%), and the Shanghai Comp (-1.79%) are all trading lower. The power crisis in China is further dampening sentiment there, and this morning Bloomberg have reported that the government are considering raising prices for industrial users to ease the shortage. Separately, we heard that Evergrande would be selling its stake in a regional bank at 10 billion yuan ($1.55bn) as a step to resolve its debt crisis, and Fitch Ratings also downgraded Evergrande overnight from CC to C. However, US equity futures are pointing to some stabilisation later, with those on the S&P 500 up +0.49%. Running through yesterday’s moves in more depth, 23 of the 24 industry groups in the S&P 500 fell back yesterday with the lone exception being energy stocks (+0.46%), which gained despite the late pullback in oil prices. In fact only 53 S&P constituents gained on the day. The largest losses were in high-growth sectors like semiconductors (-3.82%), media (-3.08%) and software (-3.05%), whilst the FANG+ index was down -2.52% as 9 of the 10 index members lost ground – Alibaba’s +1.47% gain was the sole exception. Over in Europe it was much the same story, with the STOXX 600 (-2.18%) falling to its worst daily performance since July as bourses across the continent fell back, including the German DAX (-2.09%) and France’s CAC 40 (-2.17%). Back to bonds and the rise in 10yr Treasury yields yesterday was primarily led by higher real rates (+2.1bps), which hit a 3-month high of their own, whilst rising inflation breakevens (+2.3bps) also offered support. In turn, higher yields supported the US dollar, which strengthened +0.41% to its highest level since November last year, though precious metals including gold (-0.92%) fell back as investors had less need for the zero-interest safe haven. Over in Europe the sell-off was more muted as bonds rallied into the close before selling off again after. Yields on 10yr bunds (+2.4bps), OATs (+3.0bps) and BTPs (+6.1bps) all moved higher but were well off the peaks for the day. 10yr Gilts closed up +4.2bps but that was -6.6bps off the high print. And staying with the UK, sterling (-1.18%) saw its worst day this year and fell to its lowest level since January 11 as sentiment has increasingly been knocked by the optics of the fuel crisis here. Given this and the hawkish BoE last week many are now talking up the stagflation risk. On the petrol crisis it’s hard to know how much is real and how much is like an old fashion bank run fuelled mostly by wild speculation. Regardless it doesn’t look good to investors for now. All this came against the backdrop of yet further milestones on inflation expectations, as the German 10yr breakeven hit a fresh 8-year high of 1.690%, just as the Euro Area 5y5y forward inflation swap hit a 4-year high of its own at 1.789%. Meanwhile 10yr UK breakevens pulled back some, finishing -6bps lower on the day after initially spiking up nearly +5bps in the opening hours of trading. This highlights the uncertainty as to the implications of a more hawkish BoE last week. As we’ve discussed over recent days, part of the renewed concerns about inflation have come from a fresh spike in energy prices, and yesterday saw Brent crude move above $80/bbl in regards intraday trading for the first time since 2018. Furthermore, natural gas prices continued to hit fresh highs yesterday, with European futures up +2.69% to a fresh high of €78.56 megawatt-hours. That said, oil prices did pare back their gains later in the session as the equity selloff got underway, with Brent crude (-0.55%) and WTI (-0.21%) both closing lower on the day, and this morning they’ve fallen a further -1.49% and -1.54% respectively. Yesterday, Fed Chair Powell and his predecessor Treasury Secretary Yellen appeared jointly before the Senate Banking Committee. The most notable moment came from Senator Warren who criticized Chair Powell for his track record on regulation, saying he was a “dangerous man” and then saying on the record that the she would not support his re-nomination ahead of his term ending in February. Many senators, mostly Republicans, voiced concerns over inflationary pressures, but both Yellen and Powell maintained their stances that the current high level of inflation was temporary and due to the supply chain issues from Covid-19 that they expect to be resolved in time. Lastly, both Powell and Yellen warned the Senators that a potential US default would be “catastrophic” and Treasury Secretary Yellen said in a letter to Congress that the Treasury Department now estimated the US would hit the debt ceiling on October 18. So we’ve got an important few days and weeks coming up. Last night, Senate Majority Leader Schumer tried to pass a vote that would drop the threshold from 60 to a simple majority to suspend the debt limit, but GOP Senator Cruz amongst others blocked this and went forward with forcing Democrats to use the budget reconciliation measure instead. Some Democrats have pushed back saying that the budget process would take too long and increases the risk of a default. While this is all going on we’re now less than 48 hours from a US government shutdown as it stands, though there seems to be an agreement on the funding measure if it were to be raised as clean bill without the debt ceiling provisions. There is also other business in Washington due tomorrow, with the bipartisan infrastructure bill with $550bn of new spending up for a vote. While the funding bill is the higher short-term priority, there was news yesterday that progressive members of the House of Representatives may try and block the infrastructure bill if it comes up ahead of the budget reconciliation vote. That was according to Congressional Progressive Caucus Chair Jayapal who said “Progressives will vote for both bills, but a majority of our members will only vote for the infrastructure bill after the President’s visionary Build Back Better Act passes.” The infrastructure bill could be tabled once again as there is no real urgency to get it voted on until the more pressing debt ceiling and funding bill issues are resolved. Democratic leadership is trying to thread a needle and the key sticking point appears to be if the moderate and progressive wing can agree on the budget quickly enough to beat the clock on the US defaulting on its debt. Shifting back to central bankers, ECB President Lagarde warned against withdrawing stimulus too rapidly as a response to inflationary pressures. She contested that there are “no signs that this increase in inflation is becoming broad-based across the economy,” and continued that the “key challenge is to ensure that we do not overreact to transitory supply shocks that have no bearing on the medium term.” Similar to her US counterpart, Lagarde cited higher energy prices and supply-chain breakdowns as the root cause for the current high inflation data and argued these would recede in due time. The ECB continues to strike a more dovish tone than the Fed and BoE. Speaking of inflation, DB’s chief European economist, Mark Wall, has just put out a podcast where he discusses the ECB, inflation and the value of a flexible asset purchase programme. He and his team have a baseline assumption that the ECB will double the pace of their asset purchases to €40bn per month to smooth the exit from the Pandemic Emergency Purchase Programme, but the upward momentum in the inflation outlook and the latest uncertainty from recent supply shocks puts a premium on policy flexibility. You can listen to the podcast "Focus Europe: Podcast: ECB, inflation and the value of a flexible APP" here. In Germany, there weren’t a great deal of developments regarding the election and coalition negotiations yesterday, but NTV reported that CSU leader Markus Söder had told a regional group meeting of the party that he expected the next government would be a traffic-light coalition of the SPD, the Greens and the FDP. Speaking to reporters later in the day, he went onto say that the SPD’s Olaf Scholz had the best chance of becoming chancellor, and that the SPD had the right to begin coalition negotiations. Running through yesterday’s data, the Conference Board’s consumer confidence reading in the US for September fell to 109.3 (vs. 115.0 expected), which marks the third consecutive decline in the reading and the lowest it’s been since February. Meanwhile house prices continued to rise, with the FHFA’s house price index for July up +1.4% (vs. +1.5% expected), just as the S&P CoreLogic Case-Shiller index saw a record +19.7% increase in July as well. To the day ahead now, and the biggest highlight will be a policy panel at the ECB forum on central banking featuring ECB President Lagarde, Fed Chair Powell, BoJ Governor Kuroda and BoE Governor Bailey. Other central bank speakers include ECB Vice President de Guindos, the ECB’s Centeno, Stournaras, Makhlouf, Elderson and Lane, as well as the Fed’s Harker, Daly and Bostic. Meanwhile, data releases include UK mortgage approvals for August, the final Euro Area consumer confidence reading for September, and US pending home sales for August. Tyler Durden Wed, 09/29/2021 - 07:42.....»»

Category: blogSource: zerohedgeSep 29th, 2021

Telecom Stock Roundup: AT&T Halves HBO Max Price, Verizon 5G for Air Force & More

While AT&T (T) is presently offering HBO MAX at $7.49 per month for six months in a limited promotional deal till Sep 26, Verizon (VZ) will provide 5G mobility service to seven Air Force Reserve Command installations. Over the past five trading days, U.S. telecom stocks continued to mirror the broader benchmark equity indices in a similar trend as the prior week and witnessed a gradual downtrend due to an apparent policy paralysis despite the best intentions of the government to spur a healthy growth momentum. The final passage of the $1.2 trillion infrastructure bill by the House appears to be stuck in a potential stalemate, as several progressive Democrats want the bill to be tied to the larger $3.5 trillion budget reconciliation bill that is facing massive backlash from both Republicans and Democrats. This even forced President Biden to personally meet the dissident groups to seek an early resolution, although it reportedly failed to broker a compromise despite some ‘productive’ discussions. The infusion of federal funds to improve broadband infrastructure for greater access and deeper penetration in the underserved domestic markets is the need of the hour to bridge the digital divide. However, the uncertainty over the much sought-after infrastructure bill that focuses on affordability and low-cost service option has hard hit the industry.In order to stimulate broadband growth across the country, the U.S. Treasury Department has issued fresh guidelines as to how states should allocate money from the $10 billion Capital Projects Fund created as part of the American Rescue Plan Act of 2021. The instruction set encourages states to prioritize investments in fiber-optic connectivity and developing related infrastructure for the future broadband needs of the communities. It also urges states to pursue projects involving broadband networks either owned or affiliated to the government, non-profit or co-operatives in order to serve larger communities with less pressure on profit-making initiatives.   Meanwhile, China-based Hytera – a supplier of radio equipment to emergency first responders – said in a submission to the FCC that it has been unfairly targeted by the government and argued that its radio equipment do not pose any security risk as they do not use broadband connectivity. It urged the FCC to specify which of its equipment are deemed to be potential threats in order to avoid being hit across its entire business. The developments assume significance as the government is reportedly aiming to ease diplomatic relations with Beijing that have worsened over recent times to improve bilateral trade, as several restrictions and economic sanctions were hurting operations of domestic firms.    Regarding company-specific news, business tweaks, portfolio enhancements, a strategic tie-up, and product launch primarily took the center stage over the past five trading days.Recap of the Week’s Most Important Stories1.    Over the past few months, AT&T Inc. T has taken several strategic decisions to focus more on its customer-centric business model. One of these was the decision to phase out HBO and HBO Max subscriptions through Amazon Prime Video Channels of Amazon.com, Inc., as it aimed to develop direct-to-consumer relationships. As HBO subscriptions officially went off the air from Amazon Prime on Sep 15, AT&T apparently lost about 5 million U.S. subscribers who had signed through Amazon. The company is now aiming to woo back these customers and attract newer ones as well through a discounted price offering as the streaming wars heat up.HBO Max subscription was originally priced at $14.99 per month. AT&T is presently offering this streaming service at $7.49 per month for six months in a limited promotional deal till Sep 26. The disruptive pricing is lower than the Prime video membership of $8.99 per month, plus taxes and is likely to be a lucrative offer for both existing and new customers. The offer, however, is available to only U.S. customers as AT&T expects to register healthy growth in HBO Max subscribers in international markets.      2.     Verizon Communications Inc. VZ recently secured a prime contract from the U.S. Department of Defense for an undisclosed amount to provide 5G mobility service to seven Air Force Reserve Command installations. The deal underscores the trust and reliability enjoyed by the carrier as it continues to support the digital transformation initiatives of the federal government.Verizon Public sector, the unit dedicated to serving various public sector entities, has been entrusted to deliver 5G Ultra Wideband service in California, Florida, Massachusetts, New York, Ohio, Pennsylvania, and Texas Air Force bases. This includes the deployment of c-band radios at outdoor locations at the facilities to improve signal bandwidth at higher speed and lower latency.3.     ADTRAN, Inc. ADTN recently announced that it has secured multiple partnerships with service providers to deploy its highly scalable fiber access network in the rural regions of the U.K. The Huntsville, AL-based company has collaborated with Alncom, Wildanet, and Netomnia.The alliances will bridge the digital divide on the back of a cost-effective fiber-to-the-home network, thereby delivering exceptional broadband experiences to customers, particularly based in the underserved areas of the European country.4.    Viasat, Inc. VSAT has secured two research contracts from the U.S. Department of Defense (“DoD”) to evaluate the potential and feasibility of 5G connectivity in the battlefield. The Carlsbad, CA-based company has been working with DoD to address challenging communications issues across multiple network domains. The research contracts, which will be conducted over a span of three years, were awarded through the Information Warfare Research Project. These contracts are part of the $600 million 5G research program that was announced last year by DoD. The initiative aims to assess how the fifth-generation technology can boost warfighting capabilities.  5.    Viavi Solutions Inc. VIAV recently announced that it has augmented the capabilities of its Xgig 5P16 platform. It now supports multi-user functionality and analyzer bifurcation for multiple users and simultaneous tests on a single platform. The Xgig 5P16 Exerciser platform enables real-time analysis of Peripheral Component Interconnect Express or PCIe 5.0 data traffic at all layers of the stack.VIAVI Xgig 5P16 Analyzer is specifically designed to modernize data traffic analysis while addressing the growing demands of AI and IoT with enhanced capabilities. The device is reckoned to be the first-of-its-kind solution in the market. The latest move highlights Viavi’s commitment to drive the influence of bandwidth-intensive computing services globally on the back of its technology prowess.Price PerformanceThe following table shows the price movement of some of the major telecom stocks over the past week and six months.Image Source: Zacks Investment ResearchIn the past five trading days, T-Mobile was the only stock that gained 0.5%, while Bandwidth declined the most with its stock falling 6.5%.Over the past six months, Motorola has been the best performer with its stock appreciating 24.3%, while Bandwidth declined the most with its stock falling 17.2%.Over the past six months, the Zacks Telecommunications Services industry has gained 7.5% and the S&P 500 has rallied 12.7%.Image Source: Zacks Investment ResearchWhat’s Next in the Telecom Space?In addition to 5G deployments and product launches, all eyes will remain glued to how the administration implements key policy changes to safeguard the interests of the industry and address the bottlenecks to spur growth. More Stock News: This Is Bigger than the iPhone! It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market. Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.Click here for the 4 trades >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report ADTRAN, Inc. (ADTN): Free Stock Analysis Report AT&T Inc. (T): Free Stock Analysis Report Verizon Communications Inc. (VZ): Free Stock Analysis Report Viasat Inc. (VSAT): Free Stock Analysis Report Viavi Solutions Inc. (VIAV): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 23rd, 2021

Verizon (VZ) to Power 5G Installations at 7 U.S. Air Force Bases

The deal underscores the trust and reliability enjoyed by Verizon (VZ) as it continues to support the digital transformation initiatives of the federal government. Verizon Communications Inc. VZ recently secured a prime contract from the U.S. Department of Defense (“DoD”) for an undisclosed amount to provide 5G mobility service to seven Air Force Reserve Command installations. The deal underscores the trust and reliability enjoyed by the carrier as it continues to support the digital transformation initiatives of the federal government.Verizon Public sector, the unit dedicated to serving various public sector entities, has been entrusted to deliver 5G Ultra Wideband service in California, Florida, Massachusetts, New York, Ohio, Pennsylvania, and Texas Air Force bases. This includes the deployment of c-band radios at outdoor locations at the facilities to improve signal bandwidth at higher speed and lower latency. The 5G Ultra Wideband technology eliminates the deployment of large towers — typically 100 feet tall 8-foot antennas —  that were traditionally used in military bases and instead utilizes small cells for network connectivity.  Titled Offer to Lease (OTL), the contract reinforces the long-standing business relationship with the federal government as Verizon had earlier secured a similar OTL deal in 2019 to provide 5G Ultra Wideband technology to 10 U.S. Air Force bases. The company is currently continuing with the deployment of high-speed 5G wireless services at Tyndall Air Force Base in Florida. The upgraded technology will enable the defense establishment to support flight line test equipment, animated simulation and training exercises, high-definition video for telemedicine for its airmen, and ultra-fast AI techniques for biometric identification.  The fact that the DoD is engaging with industry participants to gauge the nascent stages of emerging technology and is aiming to leverage its untapped potential to better navigate the perceived threats despite bureaucratic controls and red tapes speak volumes about the strategic importance of 5G and Verizon’s market-leading position in it. The company is continuing with the aggressive rollout of 5G Ultra Wideband service to expand its coverage across the country. It is also offering the best of LTE and 5G Ultrawideband facilities with the launch of On Site 5G — a transformative on-premises, private 5G network — for business enterprises. This customized solution enables firms that were hitherto crippled with coverage gaps, lost connectivity, fractured security, data congestion, and inconsistent service quality to have a dedicated capacity with adequate bandwidth to minimize costly downtime and missed opportunities.Verizon’s 5G mobility service offers an unparalleled experience that impacts industries as diverse as public safety, health care, retail, and sports. The company’s 5G network hinges on three fundamental drivers to deliver the full potential of next-generation wireless technology. These are massive spectrum holdings, particularly in the millimeter-wave bands for faster data transfer, end-to-end deep fiber resources, and the ability to deploy a large number of small cells. In order to expand coverage and improve connectivity, Verizon has acquired 161MHz of mid-band spectrum in the C-Band auction for a total consideration of $45.5 billion. These airwaves offer significant bandwidth with better propagation characteristics for optimum coverage in both rural and urban areas. Verizon reportedly secured 3,511 of the 5,684 licenses up for grabs.The stock has lost 8.3% in the past year compared with the industry’s decline of 2.8%. Image Source: Zacks Investment ResearchNevertheless, we remain impressed with the inherent growth potential of this Zacks Rank #3 (Hold) stock. Some better-ranked stocks in the broader industry are Qualcomm Incorporated QCOM, InterDigital, Inc. IDCC, and Juniper Networks, Inc. JNPR, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Qualcomm has a long-term earnings growth expectation of 21%. It delivered an earnings surprise of 13.5%, on average, in the trailing four quarters.InterDigital has a long-term earnings growth expectation of 15%. It delivered an earnings surprise of 536%, on average, in the trailing four quarters.Juniper has a long-term earnings growth expectation of 8.4%. It delivered an earnings surprise of 7.5%, on average, in the trailing four quarters. Infrastructure Stock Boom to Sweep America A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made. The only question is “Will you get into the right stocks early when their growth potential is greatest?” Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.Download FREE: How to Profit from Trillions on Spending for Infrastructure >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report QUALCOMM Incorporated (QCOM): Free Stock Analysis Report Verizon Communications Inc. (VZ): Free Stock Analysis Report Juniper Networks, Inc. (JNPR): Free Stock Analysis Report InterDigital, Inc. (IDCC): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 22nd, 2021

Merkel Flips Off Biden"s Protest... To Buy Putin"s Gas

Merkel Flips Off Biden's Protest... To Buy Putin's Gas Authored by Pat Buchanan via Buchanan.org, When the U.S. created NATO, a primary purpose of the alliance was to serve as a western wall to defend Germany against the 400,000 Russian troops on the eastern side of the Elbe River. Seventy years later, Germany has decided to double its dependence on Vladimir Putin’s Russia for the natural gas needed to run the German economy, despite the opposition of her great protector, the USA. The Biden administration decided to waive sanctions on Matthias Warnig, the ally of Putin whose company, Nord Stream 2 AG, is laying the pipeline beneath the Baltic Sea from Russia to Germany that is now 95% complete. When done, Nord Stream 2 will make Moscow Germany’s principal supplier of natural gas, and cut Kyiv out of hundreds of millions in transit fees it annually receives for letting Russian gas pass through Ukraine to Germany. Previously, Joe Biden and Secretary of State Anthony Blinken had seemed resolute in opposition. Said Blinken: “We think the (Nord Stream 2) pipeline is a bad idea. It advances Russia’s interests and undermines Europe’s interests and our own. It actually goes against the very principles that the EU has set out in terms of energy security and not being too dependent on any one country, notably, in this case, Russia.” As late as March, the Biden administration had made clear its commitment to complying with sanctions legislation put in place with bipartisan support in Congress, and had called on companies involved in Nord Stream 2 to “immediately abandon work on the pipeline.” Ukraine is stunned and outraged. Its parliament, the Rada, has passed a resolution urging Congress to “use all available tools provided by US law to completely and irreversibly stop the construction of the Nord Stream 2 gas pipeline by applying blocking sanctions against all participants in this Russian geopolitical project.” Why did Biden and Blinken fold? Was it to set the table for the Biden’s June summit with Putin? The decisive factor was probably that Nord Stream 2 is just about complete and America’s principal continental ally, Germany, is wholly committed to the project. Prime Minister Angela Merkel, who is leaving office this year, approved the deal with Putin’s Russia and her legacy is now tied to its completion. Germany’s dependence on Russian gas is certain to grow as Berlin, as it plans to do, phases out its coal and nuclear power plants. This raises a question about NATO, and the commitment of its 30 members to treat an attack against one as an attack against all. Would a Germany that is doubling its dependency on Russia for the natural gas that fuels its economy be willing to go to war against that same Russia, and send German troops to fight alongside NATO? Would Berlin be willing to declare war on its own gas station? Biden’s climbdown on opposition to Nord Stream 2 is startling from another standpoint. He and his team have shown themselves to be true climate change zealots who want to see gas and oil rapidly phased out. On his first day in office, Biden canceled the Keystone XL pipeline, enraging the Canadians and killing off 11,000 American jobs. Biden then outlawed any new drilling permits for oil or gas on federal lands. Michigan Gov. Gretchen Whitmer just told a Canadian energy company, Enbridge, it must shut down a controversial oil and gas pipeline that passes under the Straits of Mackinac, amid rising fears that a spill would be catastrophic to the region. For 67 years, Enbridge has moved oil and gas from western Canada through Michigan and the Great Lakes to refineries in Ontario. But Michigan now says that this one section of the pipeline is too risky to continue operating. Earlier in May, America got a wake-up call about the vulnerability of its energy supply. Colonial Pipeline, which carries refined gasoline and jet fuel from Texas up the East Coast to New York, was forced to shut down after being hit by ransomware. The attack was apparently the act of a criminal group, not a nation-state. But the damage done was considerable. Half the gas stations in several states on the Eastern seaboard had to close when their gasoline pumps were exhausted by long lines of panicked motorists. To get their pipeline fully operating again, Colonial had to pay millions. This demonstrated the vulnerability of the U.S. energy system and its new technology to the kind of cyberattacks that enemies far more serious than the criminal gang who launched the attack on the Colonial Pipeline could launch. Fifty years ago, we confronted a grave threat to U.S. energy security and independence: an oil embargo imposed by the Saudis and other Arab OPEC countries in retaliation for Richard Nixon’s military aid that enabled Israel to survive and prevail in the Yom Kippur War of 1973. Are we still prepared for something of that magnitude? Tyler Durden Wed, 05/26/2021 - 05:00.....»»

Category: dealsSource: nytMay 26th, 2021