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WHO Recommends People Aged 60 & Above Postpone Travel Due To Omicron Variant Concerns

WHO Recommends People Aged 60 & Above Postpone Travel Due To Omicron Variant Concerns Authored by Isaac Teo via The Epoch Times, The World Health Organization is recommending people 60 and older to postpone their travel plans over Omicron variant concerns. The WHO, which named Omicron as a variant of concern (VOC) on Nov. 26, says it is monitoring the spread of the variant, and advised certain travelers to delay their trips to “areas with community transmission.” “Persons who are unwell, or who have not been fully vaccinated or do not have proof of previous SARS-CoV-2 infection and are at increased risk of developing severe disease and dying, including people 60 years of age or older or those with comorbidities that present increased risk of severe COVID-19 (e.g. heart disease, cancer and diabetes) should be advised to postpone travel to areas with community transmission,” the WHO said in a press release on Nov. 30. In its latest update, the Centers for Disease Control and Prevention reported that those aged 65 to 74 account for nearly 22 percent of all deaths by COVID-19 in the United States. The percentage continues to grow as their age increases, with 26 percent for those from 75 to 84, and 28 percent for 85 and older. The WHO said as of Nov. 28, over fifty countries have implemented their version of travel measures prohibiting the entry of travelers arriving from Southern African countries, including South Africa, which first reported the Omicron variant to it on Nov. 24. The organization added that the new variant is expected to be detected around the world as countries step up in their tracking efforts. It recommended countries to test passengers prior to travel and upon arrival for COVID-19 and quarantine international travelers, among several measures. However, it advised against blanket travel bans, saying that the measures “will not prevent the international spread” of Omicron, and will “place a heavy burden on lives and livelihoods.” At the same time, the bans will adversely impact global health efforts by “disincentivizing countries to report and share epidemiological and sequencing data.” “All countries should ensure that the measures are regularly reviewed and updated when new evidence becomes available on the epidemiological and clinical characteristics of Omicron or any other VOC,” the WHO said. While countries doubled their efforts to delay the importation of the new variant, the WHO stressed that essential international travel should still be prioritized at all times during the pandemic. Essential travel includes traveling for emergency and humanitarian missions, and cargo transport for essential supplies. Meanwhile, all other travelers are reminded to “remain vigilant for signs and symptoms of COVID-19, to get vaccinated when it is their turn and to adhere to public health and social measures at all times and regardless of vaccination status,” the WHO said. Tyler Durden Wed, 12/01/2021 - 17:50.....»»

Category: personnelSource: nytDec 1st, 2021

Stocks Soar On Optimism Omicron Is A Dud As Traders Focus On Growing China Stimulus

Stocks Soar On Optimism Omicron Is A Dud As Traders Focus On Growing China Stimulus U.S. index futures rallied, led by gains for Nasdaq 100 contracts, amid waning omicron worries and a booster shot of Chinese stimulus lifted world stock markets and oil on Tuesday and left traders offloading safe-haven currencies and bonds for the second day in a row. Emini S&P futures were up 61 point to 4,650.75 or about 120 points higher then where Gartman said "stocks are headed lower" some 24 hours ago. Nasdaq futures were up 1.8% and Dow futures rose 1% in premarket trading. In fact, futures are now just 50 points away from where they were below the Black Friday Omicron panic plunge. The FTSEurofirst 300 index was on track for its first back-to-back run of plus 1% gains since February while Asia saw record bounces from some of China's biggest firms such as Alibaba which soared by the most since its 2019 listing in Hong Kong, leading a rebound in Chinese tech stocks, as bargain hunters piled in amid improved sentiment following Beijing’s move to bolster the economy. The MSCI Asia Pacific Index climbed 1.7% while Japan’s Topix index closed 2.2% higher. The VIX dropped for a second day, sliding below 24, but remained above this year’s average. The risk-on mood also helped the dollar climb against safe haven currencies such as the Japanese yen, , which had lost 0.6% overnight, as the confidence-sensitive Australian dollar also found buyers. Safe-haven government bonds went the other way with yields  up 2.5% on Germany's benchmark 10-year Bund after falling to a three-month low on Monday. Reports in South Africa said Omicron cases there had only shown mild symptoms and the top U.S. infectious disease official, Anthony Fauci, told CNN "it does not look like there's a great degree of severity" so far. "Good news relating to the severity of Omicron should be taken with a pinch of salt. Faster transmission could offset the benefits of milder symptoms," researchers at ING said in a note. "More broadly, it is still early days, even if markets are starting to display Omicron fatigue." "While epidemiologists have rightly warned against premature conclusions on Omicron, markets arguably surmised that last week's brutal sell-off ought to have been milder," Vishnu Varathan, head of economics and strategy at Mizuho Bank, said in a note. "After all, early assessments of Omicron cases have been declared mild, spurring half-full relief." There are signs of “a fragile improvement in market mood,” said Ipek Ozkardeskaya, senior analyst at Swissquote. Still, “no headline addresses the major concern of the week: the rising U.S. inflation, which is a big threat to the investor mood, as the U.S. CPI data is due Friday, and the expectation is an advance to a strong 6.7%,” Ozkardeskaya wrote in a report. “We could see wild mood swings into the second half of the week.” The gains also came after China's central bank on Monday injected its second shot of stimulus since July by cutting the RRR - or the amount of cash that banks must hold in reserve. Then on Tuesday, the PBOC said that the Interest rate for relending to support rural sector and smaller firms will be cut by 0.25 percentage point, effective from today, with 3-mo, 6-mo and 1-yr relending rates will be cut to 1.7%1.9% and 2%. After pretending it would let the economy falter for months, Beijing is finally firmly in pro-growth mode with the Politburo stating that stability is the top priority ahead of next year’s Communist Party congress. Premier Li Keqiang also said China has room for a variety of monetary policy tools after yesterday’s reserve ratio cut. As a result, the beaten down financial and property stocks were the biggest winners amid the change in tone from policy makers. In Hong Kong, Alibaba Group Holding Ltd. soared by the most since its 2019 listing. Global markets are also getting a lift from the easing policy pivot in world’s second-largest economy which we first flagged more than a weeks ago. * * * In the premarket, Intel shares rose 7.7% in premarket trading after the chipmaker confirmed a WSJ report that it plans to float a minority stake in its Mobileye self-driving car business by the middle of next year. Alibaba jumped as much as 5.4% in U.S. premarket trading Tuesday, adding to a 10% rally on Monday as with Chinese tech stocks rebound. Alibaba’s climb in the U.S. comes after its shares posted their biggest gain since June 2017 on Monday. Cruise operators and airline stocks are trading higher for a second session as investors assess the severity of the omicron virus variant. American Airlines was among the notable outperformers after naming President Robert Isom to replace retiring CEO Doug Parker. AAL rose 3% in premarket trading, while UAL climbs 2.6% and JBLU jumps 2.7%; other gainers include: ALK +2.6%, DAL+2.3%, LUV +2.4%, Royal Caribbean and Norwegian Cruise added 3.3%, while Carnival increased 3.1% in premarket trading. Casino operators also rebounded, led by Las Vegas Sands +3.5%, Wynn Resorts +2.7%, MGM Resorts +2.3% after Hong Kong’s Carrie Lam said the city will prioritize quarantine-free travel for business people when its border with mainland China reopens. In Europe every industry sector rose, led by tech and mining companies, to push the Stoxx 600 Index to a 2% gain led by technology, mining and consumer companies. AstraZeneca was an outliker, falling 2% in London after the company agreed to pay Ionis Pharmaceuticals as much as $3.6 billion to gain rights to a promising medicine for a rare disease. European e-commerce stocks that benefited from increased demand during pandemic-related lockdowns rose in Europe on Tuesday, with many outperforming the benchmark Stoxx 600’s biggest gain since March. Among the names were Allegro +6.3%, Moonpig +5.3%, Global Fashion Group +5.3%, Asos +5.1%, Zalando +4.6%, THG +3.7%, Boozt +3.3%, Ocado +2.4%, Boohoo +1.9%. “As concerns grow over rising case numbers, we expect some people will prefer to shop online again to limit their visits to stores,” Fraser McKevitt, head of retail and consumer insight at Kantar, says in emailed comments. Asian equities advanced, on track for their best day in more than three months, following China’s latest moves to bolster growth in the world’s second-largest economy.  The MSCI Asia Pacific Index rose as much as 1.8%, poised for its biggest gain since Aug. 24. Consumer-discretionary firms contributed most to the market’s climb, led by Alibaba as bargain hunters snapped up recently rattled Chinese tech stocks. Benchmarks in Hong Kong and Japan led broad gains around the region.  China’s central bank said it will cut the amount of cash most banks must keep in reserve from Dec. 15, providing a liquidity boost. Meanwhile the Communist Party’s Politburo signaled an easing of curbs on the battered real-estate sector. “Anxiety over the Chinese economy is abating thanks to the cut in the banks’ reserve ratio and a partial easing of real-estate regulations,” said Hiroshi Namioka, chief strategist at T&D Asset Management Co. Plus, “an overall risk-on mood is being created as people turn increasingly optimistic about any impact from the omicron, leading to higher U.S. equities and long-term yields.”  Financials and industrials also boosted the region’s key equity gauge Tuesday as investors looked toward reopening prospects. The day’s rebound marks a sharp turnaround following weeks of declines since mid-November. U.S. equities overnight rebounded from Friday’s selloff after reports that cases of the omicron variant have been relatively mild. Japanese equities rose by the most in over a month, as investors were cheered by reports of Chinese policy makers moving to support the nation’s economy and that global omicron virus cases have been relatively mild. Electronics makers and telecoms were the biggest boosts to the Topix, which gained 2.2%, the most since Nov. 1. SoftBank Group and Tokyo Electron were the largest contributors to a 1.9% rise in the Nikkei 225. The yen extended its loss against the dollar after weakening 0.6% overnight. U.S. stocks climbed Monday after news from South Africa that showed hospitals haven’t been overwhelmed by the latest wave of Covid cases. Meanwhile, China President Xi Jinping oversaw a meeting of the Communist Party’s Politburo on Monday that concluded with a signal of an easing in curbs on real estate. “Cyclical stocks, China-linked names and automakers that had been sold on a stronger yen will likely be bought up following China’s change in policy stance,” said Hideyuki Ishiguro, a strategist at Nomura Asset Management in Tokyo. “This will alleviate worry over a slowdown in the Chinese economy.” India’s benchmark equity index bounced back from a three-month low on optimism that the global economic recovery may be able to withstand risks associated with the omicron virus variant.  The S&P BSE Sensex climbed 1.6% to 57,633.65, in Mumbai, while the NSE Nifty 50 Index also advanced by a similar magnitude. ICICI Bank Ltd. provided the biggest boost to both the gauges with a 3.5% gain. Out of the 30 shares in the Sensex, 29 rose and one fell. All 19 industry sub-indexes compiled by BSE Ltd. gained, led by a measure of metals companies. The uncertainty from the omicron variant, along with expectations of rapid tapering by the U.S. Federal Reserve have tested the risk appetite of investors in the previous two sessions in India. However, markets across Asia advanced Tuesday after China pledged measures to support slowing economic growth. “Indian markets mirrored the sharp buoyancy in global indices on the back of short-covering by market participants. The rally was backed by a sharp upsurge in banking and metal stocks, which had taken a severe hammering in recent sessions,” Shrikant Chouhan, head of equity research at Kotak Securities Ltd. wrote in a note.  Australia’s central bank -- at its monetary policy meeting Tuesday -- left its key interest rate unchanged and said that while the strain is a source of uncertainty, it’s not expected to derail the recovery. Reserve Bank of India will announce its rate decision on Wednesday.  In FX, the Dollar Spot Index inched lower as commodity currencies led gains among Group-of-10 peers. The volatility skew for the Bloomberg Dollar Spot Index shows bullish bets on the greenback over the one-month tenor stand near their lowest since August. This may change as soon as next week after Friday's CPI report. The euro reversed an Asia session gain to touch a December low of $1.1254 in early European hours. Bunds and Italian bonds slumped, led by the belly after ECB’s Holzmann yesterday said rate hikes are possible while still buying debt. Money markets continue to price the first 10bps rate hike in December 2022 but October pricing jumps to 7.5bps from 6bps on Monday. The pound was steady against the dollar, trailing other risk-sensitive currencies, with focus on next week’s Bank of England meeting and how officials will assess the threat of the omicron strain. The Norwegian krone and the Canadian dollar advanced amid rising oil prices and before the Bank of Canada meeting Wednesday. Australian bond yields extended gains and the Aussie dollar advanced versus all of its G-10 peers as central bank optimism that omicron won’t disrupt the economic recovery underscored bets on sooner-than-expected rate hikes. Australia’s central bank left monetary settings unchanged, citing uncertainties from omicron, while highlighting positive signs in the labor market and broader economy. Finally, the yen fell a second day after easing concern over the coronavirus omicron variant In rates, Treasuries were narrowly mixed with the front-end lagging ahead of today's 3-year auction. Treasury 2-year yields were cheaper by 2.2bp on the day, flattening 2s10s spread by 1.8bp and unwinding portion of Monday’s steepening move; 10-year yields around 1.436%, slightly cheaper on the day. Bunds lag by 1.3bp after ECB’s Holzmann says rate hikes are possible while still buying debt -- BTP’s cheapen 2.5bp vs. Treasuries in 10-year sector. U.S. TSY auctions resume with $54b 3-year note sale at 1pm ET, before $36b 10- and $22b 30-year Wednesday and Thursday; the WI 3-year around 0.973% is above auction stops since Feb. 2020 and ~22bp cheaper than November’s sale, which tailed the WI by 1bp. In commodities, oil prices jumped another 2% to $74.60 a barrel, adding to a near 5% rebound the day before as concerns about the impact of Omicron on global fuel demand eased; WTI rose about 3% near $71.50. Copper prices also ticked higher while gold was steady at $1,778.5 per ounce on expectations U.S. consumer price data due later this week will show inflation quickening. European natural gas futures rose on talk of fresh Russian sanctions. Spot gold is choppy near $1,780/oz. Base metals are well bid given the broader risk-on tone: most of the complex rises over 1% with LME zinc outperforming.  Looking at today's calendar, we have trade balance data for October at 8:30 a.m, while the EIA short-term energy outlook is published at 12:00 p.m. The US sells $54 billion of 3-year notes at 1:00 p.m. Biden and Putin talk from 10:00 a.m. Jeffrey Gundlach hosts his Total Return webcast from 4:15 p.m. Autozone Inc. and Toll Brothers Inc. report results. Market Snapshot S&P 500 futures up 1.3% to 4,650 STOXX Europe 600 up 1.7% to 476.71 MXAP up 1.7% to 193.18 MXAPJ up 1.7% to 627.71 Nikkei up 1.9% to 28,455.60 Topix up 2.2% to 1,989.85 Hang Seng Index up 2.7% to 23,983.66 Shanghai Composite up 0.2% to 3,595.09 Sensex up 1.6% to 57,657.07 Australia S&P/ASX 200 up 0.9% to 7,313.90 Kospi up 0.6% to 2,991.72 Brent Futures up 2.3% to $74.73/bbl Gold spot up 0.0% to $1,778.95 U.S. Dollar Index little changed at 96.36 German 10Y yield little changed at -0.36% Euro down 0.2% to $1.1268 Top Overnight News from Bloomberg The ECB said its supervision arm will focus its scrutiny in the coming three years on risks that lenders face from a potential spike in bad loans and their search for higher returns Hungary’s central bank is nowhere close to stopping a monetary tightening campaign that will make the country’s real interest rates the highest in central Europe, Deputy Governor Barnabas Virag said The U.S. and European allies are weighing sanctions targeting Russia’s biggest banks and the country’s ability to convert rubles for dollars and other foreign currencies should President Vladimir Putin invade Ukraine, according to people familiar with the matter China’s exports and imports grew faster than expected in November, with both hitting records as external demand surged ahead of the year-end holidays and domestic production rebounded on an easing power crunch. Some China Evergrande Group bondholders have not received overdue coupon payments after the end of a month-long grace period, putting the world’s most indebted property developer on the brink of its first default on offshore notes U.K. house prices hit a record in November, with values over the past three months rising at their fastest pace for 15 years, according to mortgage lender Halifax A more detailed look at global markets courtesy of Newsquawk Asia-Pac stocks traded mostly positive following the heightened risk appetite among global peers, including in the US, where the DJIA posted its best performance since March and all sectors in the S&P 500 finished positive. Omicron concerns abated throughout the session and resulted in notable outperformance across travel and leisure stocks, while the region also took its opportunity to digest the PBoC's recent RRR cut announcement and mostly better than expected Chinese trade data. The ASX 200 (+1.0%) was positive with broad gains across its sectors aside from utilities and with momentum helped after a lack of surprises at the RBA policy decision - which refrained from any policy tweaks. Nikkei 225 (+1.9%) outperformed and regained a firm footing above the 28k level as exporters benefitted from a weaker currency, and with the advances led by SoftBank which atoned for the recent declines in its portfolio companies. The Hang Seng (+2.7%) and Shanghai Comp. (+0.2%) were both initially lifted in early trade after the announcement of the PBoC’s RRR cut, which is said to likely calm markets amid increasing developer risks, although the mainland bourse then gave back its gains after the PBoC continued to drain liquidity in its daily open market operations. Furthermore, reports that the PBoC lowered its relending rate by 25bps for agricultural and small companies also failed to boost the mainland as this is viewed as a more targeted supportive measure. Finally, 10yr JGBs declined and re-approached the key psychological 152.00 level on spillover selling from USTs as stocks gained and Omicron fears abated. The results of the latest 30yr JGB auction were mixed with higher accepted prices and lower yield offset by a weaker b/c and wider tail in price. Top Asian News Asian Stocks Set for Best Day in 3 Months as China Tech Rebounds Alibaba Jumps Most Since H.K. Listing as China Tech Rebounds Malaysia Court Dismisses Najib’s Plea, SRC Verdict Due Wednesday LG Energy Seeks Up to 12.75t Won IPO, Biggest in Korea European stocks have conformed to the risk appetite seen across global peers (Euro Stoxx 50 +2.5%; Stoxx 600 +2.0%), which initially emanated from Wall Street, before seeping into APAC and reverberating in Europe. There is no clear catalyst behind the gains, although desks have been attributing the optimism to receding fears regarding the Omicron variant – with no recorded deaths thus far. That being said, some of the key tail risks to markets have not subsided, with liquidity also expected to be more anemic in the run-up to next week’s risk-packed docket before year end. Nonetheless, US equity futures are grinding higher with the NQ (+1.9%) in the lead, closely followed by the RTY (+1.7%), whilst the ES (+1.3%) and YM (+1.0%) see slightly less pronounced gains. Back in Europe, Euro-bourses see broad-based upside but the UK’s FTSE 100 (+1.1%) and the Swiss SMI (+0.7%) are capped by underperformance in the defensive sectors – with Healthcare and Food & Beverages towards the bottom of the bunch. Sectors are overall in the green with a clear and firm pro-cyclical bias. Tech leads the gains following its recent underperformance, with Basic Resources also among the winners as base metals post decent gains. In terms of individual movers GSK (+0.5%) remains supported after pre-clinical data demonstrate the potential for monoclonal antibody Sotrovimab to be effective against the latest variant, Omicron, plus all other variants of concern defined to date by the WHO. As a reminder, the co. last week said its COVID treatment Sotrovimab retains its activity against the Omicron variant. British American Tobacco (+2.1%) is firmer followed by a positive trading update alongside Babcock (+5.2%) and Ferguson (+4.0%). On the downside, AstraZeneca (-1.7%) resides towards the foot of the Stoxx 600 amid a downgrade at Jefferies, alongside the broader anti-defensive narrative. Looking at analysts’ commentary, Barclays suggests that the Fed is unlikely to over-deliver on the rate hikes that are already priced in, with the bank unphased by the recent Powell pivot and Omicron resurgence. Barclays maintains its positive view on 2022 equities and upgraded its European small caps to overweight on improving fundamentals but oversold performance, and downgraded Momentum to market-weight. Top European News U.K. House Prices Post Strongest Quarterly Increase Since 2006 Republicans’ Pecresse Ties With Le Pen in French Poll Ferguson 1Q U.S. Organic Revenue Beats Estimates EU Aims to Unveil Green Rules for Gas, Nuclear Projects Dec. 22 In FX, although the Buck remains bid on bullish US fundamentals and the index is finding plenty of underlying buying interest/support into 96.000, the overall market mood is constructive enough to help riskier currencies outperform, and shrug off another dovish RBA policy meeting in the case of the Aussie. Instead, Aud/Usd and Aud/Nzd are gaining more ground on the coattails of iron ore prices and favourable tradewinds, as Chinese imports surged beyond expectations and outpaced exports that also beat consensus to leave the surplus somewhat short of the mark. The headline pair reached 0.7101 before running into resistance and 1.2 bn option expiry interest at the 0.7100 strike, while the cross has breached 1.0450 convincingly to expose 1.0500 ahead of NZ Q3 manufacturing sales on Wednesday and following RBNZ Assistant Governor Hawkseby sticking to a considered line on further rate normalisation overnight. He also said the Kiwi is in a broad range of where it is expected to be and that a higher currency in the short-term will help us achieve objectives more quickly. Nzd/Usd is still rotating around 0.6750, while the Loonie is latching on to the latest leg up in WTI over Usd 71/brl to test offers protecting 1.2700 vs its US rival in advance of Canadian and US trade data, Ivey PMIs and tomorrow’s BoC, with the DXY fading following a fleeting breach of Monday’s peak within 96.447-168 confines, Note also, 1.1 bn option expiries reside between 1.2750-55 in Usd/Cad and could cap recovery rallies. Elsewhere, the Scandinavian Crowns continue to rebound from recent lows against the Euro, and Brent’s bounce to the brink of Usd 75/brl is helping the Nok probe 10.2000 rather than a somewhat mixed Norges Bank regional network survey, while the Sek is lagging circa 10.2400 amidst Riksbank concerns over the lack of liquidity and transparency in Sweden’s corporate bond market that needs to be addressed. CHF/GBP/EUR/JPY - The G10 laggards to varying degrees, with the Franc trying to pare losses from sub-0.9250 vs the Dollar and more successfully against the Euro from almost 1.0450 towards 1.0400, while the Pound is holding mostly above 1.3250 in Cable terms and Eur/Gbp is pivoting 0.8500 as the single currency remains under the psychological 1.1300 level vs the Greenback irrespective of supportive Eurozone macro impulses via better than forecast German industrial output and ZEW economic sentiment over bleak current conditions. Similarly, the Yen remains weak on risk and rate/yield dynamics and Usd/Jpy is now firmer within a loftier 113.40-74 range before a raft of Japanese releases including Q3 GDP revisions and October’s current account balance. EM - More easing in China, but resilience or even ongoing strength in the Cny and Cnh in wake of the PBoC shaving 25 bp off the relending rate for agricultural and small companies, according to sources in the Securities Times that also suggests in tune with the China Daily that an LPR cut may be in the offing. Conversely, weakness in the Rub awaiting the call between Putin and Biden and the Zar on the back of SA GDP missing already low-key expectations, but the Try is nursing some declines in what could be reasonably described as intervention fashion. In commodities, WTI and Brent front-month futures are firmer on the session, buoyed by the risk appetite across the markets. From a fundamental standpoint, the benchmarks remain underpinned by the lack of progress in Iranian nuclear talks coupled with the OSP hike seen by Saudi Aramco over the weekend for Asia and US customers – typically a reflection of firmer demand. The morning also saw some reports suggesting Yemen Houthis fired several ballistic missiles and 25 armed drones on Saudi Arabia, including Aramco facilities in Jeddah, but details remain light. Aside from that, the morning’s newsflow has been on the quiet side, with the macro environment currently dictating price action. WTI Jan is back on a USD 71/bbl handle (vs low 69.50/bbl) while Brent Feb topped USD 75.00/bbl (vs low USD 73.20/bbl). In terms of bank forecasts, Citi sees a dramatic fall in energy prices from Q4 2021 to Q4 2022 averages – with Brent seen at USD 62/bbl (from USD 79/bbl) and WTI seen at USD 59/bbl (from USD 75/bbl). Over to metals, spot gold and silver move in tandem with the Buck featuring the former around USD 1,780/oz and caged below that cluster of DMAs which today sees the 50, 100 and 200 at USD 1,793/oz, USD 1,790/oz and USD 1,791/oz respectively. Elsewhere LME copper takes impetus from the broader risk appetite, with prices back north of USD 9,500/t and extending on gains, with the Chinese trade data also supportive for the base metal complex. Overnight, Dalian iron ore futures gained focus as prices were bolstered by the recent liquidity action taken by the PBoC coupled with more sanguine commentary surrounding the Chinese housing market, according to some analysts. US Event Calendar 8:30am: 3Q Unit Labor Costs, est. 8.3%, prior 8.3% 8:30am: 3Q Nonfarm Productivity, est. -4.9%, prior -5.0% 8:30am: Oct. Trade Balance, est. -$66.8b, prior -$80.9b 3pm: Oct. Consumer Credit, est. $25b, prior $29.9b DB's Jim Reid concludes the overnight wrap It’s with much trepidation that I take an hour off work this morning to visit my 4-year old twins’ nativity play. They are by far the youngest in their Reception year and given they were premature, in reality there are technically older kids in the nursery year. As such my expectations were always well managed when the parts were being doled out that they wouldn’t be competing for the blockbuster roles such as Joseph! These expectations were met as they have been cast as “presents”. So I think they have to sit there with a bow around them and try to remember some of the words in the songs they have been given to sing. Success would be for them not to have a fight mid-performance as they do most evenings when I see them. Only when you have identical twins can you witness such love and hatred displayed within the space of a few seconds. Markets have been swinging between love and hate over the last 10 days with the former winning out yesterday as investors’ concerns eased around the Omicron variant. Obviously we’re still awaiting definitive data on a number of points, but more generally the suggestions that it could be less likely to cause severe disease has injected some optimism back into markets after the recent selloffs. As a result, we saw a decent bounceback among the major equity indices on both sides of the Atlantic, an advance for oil prices following 6 successive weekly declines, and investors even moved to marginally bring forward the likely timing of central bank rate hikes. We’ll start with equities, where risk appetite only increased as the day went on, with the S&P 500 (+1.17%) posting a broad-based advance that saw over 85% of the index’s members advancing. Europe also put in a strong performance, with the STOXX 600 up +1.3%, whilst many indices saw their biggest advances in months. That included the UK’s FTSE 100 (+1.5%), Spain’s IBEX 35 (+2.4%), and Italy’s FTSE MIB (+2.2%), which, outside of last Wednesday, were the best daily performances since July. European tech shares lagged the broader rally, with the STOXX Technology index down -0.33%, though US tech shares gained steam after the European close, with the Nasdaq up +0.93%, trailing the S&P by a more modest amount. Greater optimism about the new variant proved supportive for oil prices too, with Brent crude (+4.58%) and WTI (+4.87%) posting gains after a run of 6 consecutive weekly declines, having also been supported by Saudi Arabia’s move to raise oil prices to Asia and the US in January. Oil prices are up another 1% this morning. However, there was a big decline in US natural gas futures (-11.50%) yesterday, the worst daily performance since January 2019, as the mild weather outlook has served to dampen demand. Over in sovereign bond markets there was a fresh selloff in US Treasuries, and a steepening of the yield curve, as the optimism about Omicron led investors to bring forward their expectations of future rate hikes. Yields moved higher across the curve, with those on 10yr yields up +9.1bps to 1.43%, as both real yields and inflation breakevens moved higher on the day, whilst the 2s10s curve managed to steepen +4.7bps to 79.9bps. 10yr yields are up another +1.4bps this morning. Near-term, the first Fed rate hike is again fully priced by the June FOMC meeting. Over in Europe, yields were lower, with those on 10yr bunds (-0.1bps), OATs (-0.4bps) and BTPs (-3.8bps) all declining, though the greater risk appetite was reflected in the narrowing of peripheral spreads, with the gap between Italian and Spanish yields over bunds both tightening by the close. Overnight in Asia stocks are all trading up with the Nikkei (+2.09%), Hang Seng (+1.62%), CSI (+0.51%), KOSPI (+0.47%) and Shanghai Composite (+0.12%) all stronger. China’s RRR cut yesterday is certainly helping sentiment. On the data front, China's trade balance for November came in at $71.72 bn (consensus $83.60 bn and $84.54 bn previously), lower than expected as imports grew at +31.7% year-on-year against +21.5% consensus. Exports (+22%) were slightly higher than expected. Elsewhere the Reserve Bank of Australia held its benchmark interest rate unchanged while cautioning that price pressures remain subdued in Australia compared with other economies as the RBA expects it to reach 2.5% by 2023. Our economists put out a note suggesting that if you squint, the RBA commentary was slightly hawkish though. See more here if you’d like their review. Elsewhere futures are pointing to a positive start in the US and Europe with the S&P 500 (+0.34%) and DAX (+0.38%) contracts trading in the green. Looking ahead, one of the important events today will be the scheduled video call between US President Biden and Russian President Putin. The Biden administration, in concert with European allies, is reportedly weighing whether to bring economic tools to bear against Russia in response to the recent flare up on the Ukrainian border. Measures being considered included sanctions against President Putin’s inner circle, energy producers, and banks, as well as the more drastic option of denying Russian access to US-run international payments system, SWIFT. The Ruble depreciated -0.66% against the US dollar after having appreciated +0.50% in the morning before the headlines. In terms of other developments on the pandemic, the global case count has been moving higher for 7 consecutive weeks now, and we got fresh news of tougher restrictions in New York City yesterday. They’re set to place a vaccine mandate on private sector workers from December 27, whilst indoor dining and entertainment will be requiring those aged 12 and over to be fully vaccinated, and those aged 5-11 to have one dose. Here in the UK, over 50k confirmed cases were reported yesterday once again, and the average number of cases over the last week now stands up +9% on the week before. Turning to Germany, the main news yesterday was that the Greens became the final party of the incoming traffic-light coalition to approve the negotiated agreement, with 86% of members in favour. That follows similar moves by the SPD and the FDP, and today the parties are set to formally sign the deal, with Olaf Scholz set to become chancellor tomorrow in a Bundestag vote, which will also bring an end to Chancellor Merkel’s 16-year tenure. For a run down on what to expect from the new government, our research colleagues in Germany have put together a guide on the various policy areas (link here). Staying on Germany, data also showed yesterday that factory orders fell by a much larger-than-expected -6.9% in October (vs. -0.3% expected), with the decline driven by a -13.1% fall in foreign orders, contrary to domestic orders which actually expanded +3.4%. To the day ahead now, and data highlights include German industrial production for October and the ZEW survey for December, along with the US trade balance for October. Otherwise, US President Biden and Russian President Putin will be holding a video call. Tyler Durden Tue, 12/07/2021 - 07:59.....»»

Category: worldSource: nytDec 7th, 2021

WHO Recommends People Aged 60 & Above Postpone Travel Due To Omicron Variant Concerns

WHO Recommends People Aged 60 & Above Postpone Travel Due To Omicron Variant Concerns Authored by Isaac Teo via The Epoch Times, The World Health Organization is recommending people 60 and older to postpone their travel plans over Omicron variant concerns. The WHO, which named Omicron as a variant of concern (VOC) on Nov. 26, says it is monitoring the spread of the variant, and advised certain travelers to delay their trips to “areas with community transmission.” “Persons who are unwell, or who have not been fully vaccinated or do not have proof of previous SARS-CoV-2 infection and are at increased risk of developing severe disease and dying, including people 60 years of age or older or those with comorbidities that present increased risk of severe COVID-19 (e.g. heart disease, cancer and diabetes) should be advised to postpone travel to areas with community transmission,” the WHO said in a press release on Nov. 30. In its latest update, the Centers for Disease Control and Prevention reported that those aged 65 to 74 account for nearly 22 percent of all deaths by COVID-19 in the United States. The percentage continues to grow as their age increases, with 26 percent for those from 75 to 84, and 28 percent for 85 and older. The WHO said as of Nov. 28, over fifty countries have implemented their version of travel measures prohibiting the entry of travelers arriving from Southern African countries, including South Africa, which first reported the Omicron variant to it on Nov. 24. The organization added that the new variant is expected to be detected around the world as countries step up in their tracking efforts. It recommended countries to test passengers prior to travel and upon arrival for COVID-19 and quarantine international travelers, among several measures. However, it advised against blanket travel bans, saying that the measures “will not prevent the international spread” of Omicron, and will “place a heavy burden on lives and livelihoods.” At the same time, the bans will adversely impact global health efforts by “disincentivizing countries to report and share epidemiological and sequencing data.” “All countries should ensure that the measures are regularly reviewed and updated when new evidence becomes available on the epidemiological and clinical characteristics of Omicron or any other VOC,” the WHO said. While countries doubled their efforts to delay the importation of the new variant, the WHO stressed that essential international travel should still be prioritized at all times during the pandemic. Essential travel includes traveling for emergency and humanitarian missions, and cargo transport for essential supplies. Meanwhile, all other travelers are reminded to “remain vigilant for signs and symptoms of COVID-19, to get vaccinated when it is their turn and to adhere to public health and social measures at all times and regardless of vaccination status,” the WHO said. Tyler Durden Wed, 12/01/2021 - 17:50.....»»

Category: personnelSource: nytDec 1st, 2021

Futures Surge To A Record Above 4,800 As Euphoria Grips Global Markets

Futures Surge To A Record Above 4,800 As Euphoria Grips Global Markets US stock futures, European bourses and Asian markets all rose, extending the blistering start to 2022 (just as Goldman predicted in its $125 billion January inflow case), with more strategists cementing their bullish projections as investors shrugged off worries Omicron could choke the global economic recovery as data on U.S. manufacturing and job openings due today will further show the world’s largest economy is resilient against the spread of omicron. Nasdaq 100 futures rose 0.4% and contracts on the S&P 500 climbed 0.3% to a new all time high above 4,800 after the underlying gauge closed at a record on Monday. European stocks also gained. Waning demand for haven assets pushed the yen to a five-year low, while oil fluctuated ahead of an OPEC+ meeting. The dollar and U.S. treasury yields extended their surge - with the 10Y last yielding 1.6630% - after Monday’s worst start to a year since 2009. JPMorgan Chase & Co. strategists advised staying bullish on global stocks, saying positive catalysts are not exhausted, while Credit Suisse reiterated a bullish view on U.S. stocks. In premarket trading, Apple shares rose as much as 0.5%, putting the iPhone maker on track to reclaim $3 trillion in market cap as appetite for risk returns. Meanwhile, Jowell Global plunged 11% after a volatile trading session for the Chinese e-commerce stock on Monday that saw it plunge 59%. Travel stocks rallied for a second day even as the U.S. reported a record of over 1 million Covid cases, amid growing evidence that the omicron variant leads to milder infections. The S&P Supercomposite Airlines Index rose 3.3% Monday to the highest since Nov. 24 and appears set for further gains Tuesday. Most airline companies rose about 1% in premarket trading, while cruise lines were also higher with Carnival +1.8%, Royal Caribbean +1%, Norwegian +1.4%. General Electric rose after the stock was raised to outperform at Credit Suisse and Hewlett Packard Enterprise climbed with an overweight rating from Barclays. Here are some other notable pre-market movers today: Coca-Cola (KO US) sits in a stronger position following a transition year in 2021, Guggenheim Securities writes in note upgrading to buy after almost exactly a year with a neutral stance. Shares up 1% in premarket. Stryker (SYK US) and Globus Medical (GMED US) both upgraded to overweight at Piper Sandler, which says in a note that the two stocks have momentum to continue delivering above-average share performance this year. Stryker up 1.4% premarket. Tiny U.S. biotech stocks gain in high premarket volume amid a broader return of risk appetite and following positive updates on studies. Oragenics (OGEN US) +23%, Indaptus Therapeutics (INDP US) +7%. Intra-Cellular Therapies (ITCI US) falls 7% in premarket after launching a $400 million share sale. AFC Gamma (AFCG US) falls 11% premarket after launching a stock offering. Core & Main (CNM US) dropped 7.6% postmarket after holders offered a stake. In Europe, the Euro STOXX 600 gained as much as 0.9% in early trading, pushing beyond its all-time high of 489.99 points scaled a day earlier, with the FTSE 100 and CAC 40 up over 1.25%. Travel and leisure stocks jumped 2.7%, with Ryanair adding 8% and British Airways-owner IAG gaining over 9%, reflecting expectations Omicron's impact on the industry would be less severe than initially feared. Euro Stoxx 50 added as much as 1% with travel, autos and banks the best performing sectors so far. Investors have set aside worries about the highly infectious omicron variant as they continue to trade on the economic recovery from the pandemic which may soon be ending thanks to Omicron which could make covid endemic. “Globally, there is a lot of news regarding the rising omicron cases, but there is also a lot of news that the cases are not as deadly as the previous variants of Covid,” Ipek Ozkardeskaya, a senior analyst at Swissquote, wrote in a note. “And investors prefer focusing on a glass half full rather than a glass half empty at the start of the year.” "The chief reason behind the return of investor confidence is Omicron," said Jeffrey Halley, an analyst at Oanda. Yes, the virus variant is much more contagious, but it is not leading to a proportionally larger number of hospital admissions... (so) it won't stop the global economic recovery." This, incidentally, is precisely what we said over a month ago. That said, markets anticipate an uptick in volatility as they navigate through the omicron variant, supply-chain disruptions and more central banks winding back pandemic stimulus. More than one million people in the U.S. were diagnosed with Covid-19 on Monday, a new global daily record, and yet markets barely winced. Asian stocks gained behind rallies in Japan and Australia on their first trading sessions of 2022, with much of the region tracking the strong performance in the U.S. as investors maintained growth optimism despite a worsening pandemic.  The MSCI Asia Pacific Index rose as much as 1%, the most in two weeks, lifted by technology and financial shares. Metals and mining stocks gave the Australian benchmark gauge a boost, while a weaker yen allowed exporters to provide support for Japan’s Topix. Chinese stocks bucked the regional trend to suffer their weakest start to a year since 2019. The CSI 300 Index fell 0.5% as some investors took profit and assessed developments in the property sector while renewable energy and health-care firms paced declines. Also souring the mood, the People Bank of China cut its net injection of short-term cash to the markets, prompting concerns over support for the financial system. Tuesday’s activities in Asia also showed some traders setting aside their worries over the rapid spread of omicron strain for now to bet on resilience in the global economy.  While the omicron variant will be a negative factor in the short term, Chinese equities will likely help drive emerging markets higher in 2022 as monetary and fiscal stimulus spur economic growth, said Kristina Hooper, chief global market strategist at Invesco.  The Philippine Stock Exchange had to cancel trading following a system glitch, according to a statement by bourse President Ramon Monzon Japanese equities rose in their first trading session of the year, helped by the yen’s drop to a five-year low and a tailwind from U.S. peers’ climb to fresh all-time highs. Electronics and auto makers were the biggest boosts to the Topix, which gained 1.9%, the most in four weeks. All industry groups advanced except papermakers and energy explorers. Tokyo Electron and Advantest were the largest contributors to a 1.8% rise in the Nikkei 225.  The S&P 500 rose to a record and Treasury yields climbed Monday as traders braced for the start of a potentially volatile year and three expected rate hikes from the Federal Reserve. The White House is likely to nominate economist Philip Jefferson for a seat on the Fed board of governors, according to people familiar with the matter. “It’s gradually coming to light who will be the new members of the FRB and it looks like they will be those with quite a dovish stance, which very supportive factor for stocks,” said Hiroshi Matsumoto, senior client portfolio manager at Pictet Asset Management in Tokyo.  Australian stocks jumped themost in over a year, with fresh records in sight. The S&P/ASX 200 index rose 2% to 7,589.80, marking its best session since October 2020. The benchmark closed about 40 points away from the all-time high it reached in August as all sectors gained. Pilbara Minerals was among the top performers, jumping to a record. St. Barbara was among the worst performers after giving an update on its Simberi mine. In New Zealand, the market was closed for a holiday. India’s Sensex rallied for a third day as the outlook for lenders improved on the back of a continued recovery in the economy.  The S&P BSE Sensex rose 1.1% to 59,855.93 in Mumbai, while the NSE Nifty 50 Index rallied 1%. All but three of the 19 sector sub-indexes compiled by BSE Ltd. climbed, led by a gauge of power companies. The S&P BSE Bankex added 1.3% to stretch its rally to a fourth day, its longest streak of gains since Oct. 26.   Financial stocks in India offer an attractive entry point after foreign funds sold more than $3 billion of sector stocks over Nov.-Dec., Jefferies analyst Prakhar Sharma wrote in a note. He expects improved growth, stable asset quality and manageable omicron impact to aid a re-rating of the sector. “Markets are currently following their global counterparts while the domestic factors are showing mixed indications,” Religare Broking analyst Ajit Mishra said in a note.  Reliance Industries contributed the most to the Sensex’s gain on Tuesday, increasing 2.2%. Out of 30 shares in the index, 25 rose and five fell. In FX, Bloomberg Dollar Spot Index trades notably higher for the second day in a row, with AUD and CHF top the G-10 leader board, while the JPY lags pushing through Asia’s worst levels near 116.31/USD.  The euro was confined in a narrow range around $1.13 while the greenback weakened versus all of its Group-of-10 peers apart from the yen and risk-sensitive currencies were the best performers. The pound edged higher, continuing its ascent over the holiday period that was based on firmer global risk sentiment and bets the U.K. economy won’t be derailed by omicron. Gilts slumped as traders caught up with Monday’s jump in U.S. and euro-area yields after the U.K. was closed for a holiday. Australia’s government bonds and the nation’s currency both rose amid speculation the global economic recovery will weather the surge in omicron infections. New Zealand’s markets remained shut for New Year holidays. Purchasing managers’ index for the Australia’s manufacturing sector declined for the first time in four months in December, Markit data showed. The yen dropped to a five-year, with the USDJPY rising above 116 as speculation the global economic recovery will weather omicron saps demand for haven assets. Japanese bonds declined before debt auctions later this week. Options pricing suggests there may be more gains for the dollar in a rally against the yen that’s already taken it to the strongest since 2017. In rates, 10-year Treasury yield spiked to 1.66% after surging 12 basis points on Monday, the biggest jump to start a year since 2009. The two-year rate was at 0.77%. Treasury yields were cheaper by up to 1.5bp across front- and belly of the curve with long-end yields slightly richer vs. Monday close. IG dollar issuance includes a number of bank names headed by NAB 5-part offering. Three-month dollar Libor +0.69bp at 0.21600%. Bunds richen 1.5bps across the belly with a mixed peripheral complex with expectations for a busy issuance slate ahead. Gilts underperform, playing catch up to Monday’s move in bunds and treasuries, cheapening as much as 10bps across the curve with 10s near 1.07%. Looking beyond the current risk-on momentum, traders expect Fed tightening to further boost yields and reset equity valuations. This week’s U.S. December payroll data and minutes from the Fed’s meeting last month may throw more light on the pace of such shift. “We expect 2022 to be far more challenging from an investment perspective,” Heather Wald, vice president at Bel Air Investment Advisors, said in an emailed note. “Rarely has a market delivered three consecutive years of double-digit returns, as we have seen from 2019-2021. With the Federal Reserve set to accelerate tightening and a fairly valued stock market, we anticipate more muted returns for the S&P next year but still expect equities to remain attractive versus other liquid asset classes.” In commodities, crude futures flip a short-lived dip to rise ~0.7%. WTI trades near best levels of the session close to $76.70, Brent near $79.50 ahead of today’s OPEC+ gathering. Spot gold trades a tight range, holding above $1,800/oz. Base metals are mixed, LME copper underperforms. U.S. economic data slate includes the December ISM manufacturing survey, which will show the early impact of the variant on supply chains, while the JOLTS data will show the balance between job openings and unemployment numbers; also this week brings ADP employment change, durable goods orders and December jobs report. Market Snapshot S&P 500 futures up 0.3% to 4,799 STOXX Europe 600 up 0.5% to 492.53 German 10Y yield little changed at -0.13% Euro little changed at $1.1307 MXAP up 0.9% to 194.72 MXAPJ up 0.6% to 633.00 Nikkei up 1.8% to 29,301.79 Topix up 1.9% to 2,030.22 Hang Seng Index little changed at 23,289.84 Shanghai Composite down 0.2% to 3,632.33 Sensex up 1.1% to 59,815.19 Australia S&P/ASX 200 up 1.9% to 7,589.76 Kospi little changed at 2,989.24 Brent Futures up 0.4% to $79.26/bbl Gold spot up 0.3% to $1,806.40 U.S. Dollar Index little changed at 96.18 Top Overnight News from Bloomberg Treasury traders are betting the rapid spread of omicron will increase inflationary pressures in the U.S. economy, rather than weaken them Global central banks are set to spend 2022 diverging, as some take on the menace of inflation and others stay focused on boosting economic growth French inflation stabilized in December, indicating price pressures may be near a peak in the euro area after surging on energy costs in the past few months OPEC and its allies are poised to revive more halted oil production when they meet on Tuesday after predicting a tighter outlook for global markets A more detailed breakdown of global markets courtesy of Newsquawk Asia-Pac stocks eventually traded mixed on the first trading session of the year for most bourses, with the region catching some tailwinds from the positive Eurozone and US sessions on Monday. On Wall Street, the Nasdaq outpaced with gains of 1.2% as Apple became the first-ever public company to reach USD 3tln in market value, whilst Tesla shares were catapulted 13.5% after beating Q4 delivery expectations despite the chip shortage and in spite of last week's mass recall. US equity futures overnight resumed trade with a mild positive bias and thereafter drifted higher - with the US ISM Manufacturing PMI, FOMC Minutes, US labour market report and Fed speakers all on this week’s docket. The ASX 200 (+2.0%) saw gains across its Energy, Mining, Tech and Financial sectors. The Nikkei 225 (+1.8%) briefly dipped under 29k before rising to session highs – with Autos among the top gainers amid a similar performance Stateside, whilst the softer JPY underpinned the index. The KOSPI (U/C) was flat in early trade but thereafter swung between gains and losses. In China, the Shanghai Comp (-0.2%) gave up early gains on its first trading day of 2022 following a CNY 260bln daily liquidity drain by the PBoC, whilst reports also suggested that China is facing USD 708mln cash demand this month, +18% Y/Y according to calculations, amid maturing debt and seasonal demand for cash ahead of the Lunar New Year on 1st February. The Hang Seng (+0.1%) kicked off its second day of trade the year in the green after Monday’s losses. China Evergrande shares resumed trade with gains of 5% after it yesterday suspended its Hong Kong shares in a bid to raise cash and following the order to demolish 39 buildings. Meanwhile, Hong Kong-listed and US-blacklisted AI firm SenseTime shares rose another 20% to almost triple its IPO price. In fixed income, US 10yr Mar'22 futures saw some light buying in early trade, with some suggested regional Asia demand following the heavy cheapening on Monday, albeit this early mild upside faded. Top Asian News Amazon Plays Down Reports It’s Pulling Kindle From China H.K. Finds One Prelim. Local Case With Unknown Source: HK01 China High-Yield Dollar Bonds Fall 1-2 Cents; Developers Lead China South City USD Bonds Slump; Firm Denies Debt-Swap Report European equities trade on a firmer footing with the Stoxx 600 (+0.8%) once again at a record high. The FTSE 100 leads the charge within the region; however, this is largely on account of a catch-up play from yesterday’s bank holiday. Initially to the downside resided the SMI (+0.1%) as the only major bourse in the red amid losses in index-heavyweight Roche (-1.4%); however, this has abated modestly throughout the morning. The lead from the APAC region was a mixed one as the Nikkei 225 (+1.8%) benefited from a softer JPY, the ASX 200 (+1.95%) was lifted by gains in Energy, Mining, Tech and Financial sectors, whilst Chinese bourses (Hang Seng +0.1%, Shanghai Comp. -0.2%) were kept subdued by a PBoC liquidity drain and unable to benefit from an unexpected expansion in the December Chinese Caixin Manufacturing PMI. Stateside, futures are modestly firmer across the board (ES +0.4%, NQ +0.4%, RTY +0.5%) after yesterday’s session which was characterised by Nasdaq outperformance, +1.2%, as Apple became the first-ever public company to reach USD 3tln in market value, whilst Tesla shares were catapulted 13.5% after beating Q4 delivery expectations. In a recent note, analysts at JP Morgan stated they are of the view that there is further upside for stocks as the Omicron variant appears to be milder than previous strains and the impact on mobility is more manageable than previous ones. Furthermore, the bank suggests that there are signs that constraints in supply chains are passing their peak and power prices are easing. Sectors in Europe are mostly firmer with Travel & Leisure names clearly top of the pile UK as airline names benefit from ongoing optimism about the Omicron variant’s impact on mobility and a December passenger update from Wizz Air which has sent its shares higher by 10.1%. Of note for the European banks (which are also a notable gainer on the session), Citigroup is “overweight” on the sector for the upcoming year, citing profit growth, interest rate hikes and potential for capital returns. In terms of specific names, BNP Paribas, Lloyds and UBS were flagged as top picks. Elsewhere, other cyclically-led sectors such as Autos, Oil & Gas and Basic Resources are also trading on a firmer footing. To the downside, Healthcare names sit in the red amid aforementioned losses in Roche, whilst Sanofi (-0.7%) are also seen lower after flagging that Q4 2021 vaccine sales are expected to be lower on a Y/Y basis. Finally, Rolls-Royce (+3.6%) is seen higher on the session after concluding the sale of Bergen Engines. Top European News Italy Starts Search for New President With Draghi as Contender U.K. Mortgage Approvals Fall to 66,964 in Nov. Vs. Est. 66,000 Ukraine Says Russia Reinforced Military Units in Occupied Donbas European Gas Prices Jump a Second Day as Russian Shipments Drop In FX, the Dollar index looks comfortable enough above 96.000 within a 96.336-146 range after eclipsing yesterday’s best (96.328) marginally, but the technical backdrop remains less constructive given its failure to end last week (and 2021) above a key chart level at 96.098. Nevertheless, the most recent spike in US Treasury yields has given the Greenback sufficient impetus to claw back losses, and in DXY terms fresh incentive to rebound firmly or extend gains against funding currencies in particular ahead of the manufacturing ISM and the remainder of a hectic first week of the new year that culminates in NFP and a trio of scheduled Fed speakers, but also comprises minutes of the December FOMC taper and more hawkishly aligned tightening policy meeting. JPY/AUD - As noted above, low yielders are underperforming or lagging in the current environment, and the Yen is also succumbing to the increasingly divergent BoJ vs Fed trajectory that is exacerbating technical forces behind the rally in Usd/Jpy to new 5 year highs just shy of 115.90. Stops are said to have been triggered during the latest leg up and there is little of significance in terms of resistance ahead of 116.00, while option expiry interest is relatively light until 1.13 bn at the half round number above. Conversely, the Aussie has been boosted by higher coal prices overnight and an unexpected return to growth from contraction in China’s Caixin manufacturing PMI, with Aud/Usd trying to establish a base around 0.7200 in wake of an upward revision to the final manufacturing PMI. GBP/NZD/EUR/CHF/CAD - The Pound is next best major, but mainly due to Gilts playing catch-up following Monday’s UK Bank Holiday and only in part on the back of an upgrade to the final manufacturing PMI allied to better than forecast BoE data including consumer credit, mortgage lending and approvals. Cable is probing 1.3500 and Eur/Gbp is edging towards 0.8360 even though the Euro has regained some poise against the Buck to retest 1.1300 with some traction gleaned from stronger than anticipated German retail sales and jobs metrics. Back down under, the Kiwi is trying to keep tabs on 0.6800 in the face of Aud/Nzd headwinds as the cross climbs over 1.0600, while the Franc is holding above 0.9200 post-Swiss CPI that was close to consensus and the Loonie is meandering between 1.2755-23 parameters pre-Canadian PPI and Markit’s manufacturing PMI against the backdrop of firmer crude prices. In commodities, WTI and Brent are firmer this morning and have been grinding towards fresh highs throughout the European session after slightly choppy APAC trade; currently, the peaks are USD 76.82/bbl and USD 79.67/bbl respectively. Newsflow has been fairly slow throughout the morning with catch-up action occurring for participants. Today’s focal point for the space is very much the OPEC+ gathering; albeit, this is expected to result in a continuation of the existing quota adjustments of 400k BPD/month. Thus far, the JTC has reviewed market fundamentals and other developments determining that the Omicron variant’s impact is expected to be both mild and short-term. For reference, today’s timings are 12:00GMT/07:00EST for the JMMC and 13:00GMT/08:00EST for OPEC+ - though, as always with OPEC, these serve only as guidance. While the main decision is expected to be a straightforward one, there is the possibility that underproduction by certain members could cause some tension. Elsewhere, spot gold and silver are contained with a modest positive-bias but are yet to stray too far from the unchanged mark with spot gold, for instance, in a sub-USD 10/oz range just above USD 1800/oz. Separately, coal futures were notable bid in China following reports that Indonesia, a large supplier to China, has banned exports for the month, given domestic power concerns. US Event Calendar 10am: Nov. JOLTs Job Openings, est. 11.1m, prior 11m 10am: Dec. ISM Employment, est. 53.6, prior 53.3 ISM New Orders, est. 60.4, prior 61.5 ISM Prices Paid, est. 79.2, prior 82.4 ISM Manufacturing, est. 60.0, prior 61.1         Tyler Durden Tue, 01/04/2022 - 07:59.....»»

Category: blogSource: zerohedgeJan 4th, 2022

2021 Greatest Hits: The Most Popular Articles Of The Past Year And A Look Ahead

2021 Greatest Hits: The Most Popular Articles Of The Past Year And A Look Ahead One year ago, when looking at the 20 most popular stories of 2020, we said that the year would be a very tough act to follow as there "could not have been more regime shifts, volatility moments, and memes than 2020." And yet despite the exceedingly high bar for 2021, the year did not disappoint and proved to be a successful contender, and if judging by the sheer breadth of narratives, stories, surprises, plot twists and unexpected developments, 2021 was even more memorable and event-filled than 2020. Where does one start? While covid was the story of 2020, the pandemic that emerged out of a (Fauci-funded) genetic lab team in Wuhan, China dominated newsflow, politics and capital markets for the second year in a row. And while the biggest plot twist of 2020 was Biden's victory over Trump in the presidential election (it took the pandemic lockdowns and mail-in ballots to hand the outcome to Biden), largely thanks to Covid, Biden failed to hold to his biggest presidential promise of defeating covid, and not only did he admit in late 2021 that there is "no Federal solution" to covid waving a white flag of surrender less than a year into his presidency, but following the recent emergence of the Xi, pardon Omicron variant, the number of covid cases in the US has just shattered all records. The silver lining is not only that deaths and hospitalizations have failed to follow the number of cases, but that the scaremongering narrative itself is starting to melt in response to growing grassroots discontent with vaccine after vaccine and booster after booster, which by now it is clear, do nothing to contain the pandemic. And now that it is clear that omicron is about as mild as a moderate case of the flu, the hope has finally emerged that this latest strain will finally kill off the pandemic as it becomes the dominant, rapidly-spreading variant, leading to worldwide herd immunity thanks to the immune system's natural response. Yes, it may mean billions less in revenue for Pfizer and Moderna, but it will be a colossal victory for the entire world. The second biggest story of 2021 was undoubtedly the scourge of soaring inflation, which contrary to macrotourist predictions that it would prove "transitory", refused to do so and kept rising, and rising, and rising, until it hit levels not seen since the Volcker galloping inflation days of the 1980s. The only difference of course is that back then, the Fed Funds rate hit 20%. Now it is at 0%, and any attempts to hike aggressively will lead to a horrific market crash, something the Fed knows very well. Whether this was due to supply-chain blockages and a lack of goods and services pushing prices higher, or due to massive stimulus pushing demand for goods - and also prices - higher, or simply the result of a record injection of central bank liquidity into the system, is irrelevant but what does matter is that it got so bad that even Biden, facing a mauling for his Democratic party in next year's midterm elections, freaked out about soaring prices and pushed hard to lower the price of gasoline, ordering releases from the US Strategic Petroleum Reserve and vowing to punish energy companies that dare to make a profit, while ordering Powell to contain the surge in prices even if means the market is hit. Unfortunately for Biden, the market will be hit even as inflation still remain red hot for much of the coming year. And speaking of markets, while 2022 may be a year when the piper finally gets paid, 2021 was yet another blockbuster year for risk assets, largely on the back of the continued global response to the 2020 covid pandemic, when as we wrote last year, we saw "the official arrival of global Helicopter Money, tens of trillions in fiscal and monetary stimulus, an overhaul of the global economy punctuated by an unprecedented explosion in world debt, an Orwellian crackdown on civil liberties by governments everywhere, and ultimately set the scene for what even the World Economic Forum called simply "The Great Reset." Yes, the staggering liquidity injections that started in 2020, continued throughout 2021 and the final tally is that after $3 trillion in emergency liquidity injections in the immediate aftermath of the pandemic to stabilize the world, the Fed injected almost $2 trillion in the subsequent period, of which $1.5 trillion in 2021, a year where economists were "puzzled" why inflation was soaring. This, of course, excludes the tens of trillions of monetary stimulus injected by other central banks as well as the boundless fiscal stimulus that was greenlighted with the launch of helicopter money (i.e., MMT) in 2020. It's also why with inflation running red hot and real rates the lowest they have ever been, everyone was forced to rush into the "safety" of stocks (or stonks as they came to be known among GenZ), and why after last year's torrid stock market returns, the S&P rose another 27% in 2021 and up a staggering 114% from the March 2020 lows, in the process trouncing all previous mega-rallies (including those in 1929, 1938, 1974 and 2009)... ... making this the third consecutive year of double-digit returns. This reminds us of something we said last year: "it's almost as if the world's richest asset owners requested the covid pandemic." A year later, we got confirmation for this rhetorical statement, when we calculated that in the 18 months since the covid pandemic, the richest 1% of US society have seen their net worth increase by over $30 trillion. As a result, the US is now officially a banana republic where the middle 60% of US households by income - a measure economists use as a definition of the middle class - saw their combined assets drop from 26.7% to 26.6% of national wealth as of June, the lowest in Federal Reserve data, while for the first time the super rich had a bigger share, at 27%. Yes, the 1% now own more wealth than the entire US middle class, a definition traditionally reserve for kleptocracies and despotic African banana republics. It wasn't just the rich, however: politicians the world over would benefit from the transition from QE to outright helicopter money and MMT which made the over monetization of deficits widely accepted in the blink of an eye. The common theme here is simple: no matter what happens, capital markets can never again be allowed to drop, regardless of the cost or how much more debt has to be incurred. Indeed, as we look back at the news barrage over the past year, and past decade for that matter, the one thing that becomes especially clear amid the constant din of markets, of politics, of social upheaval and geopolitical strife - and now pandemics -  in fact a world that is so flooded with constant conflicting newsflow and changing storylines that many now say it has become virtually impossible to even try to predict the future, is that despite the people's desire for change, for something original and untried, the world's established forces will not allow it and will fight to preserve the broken status quo at any price - even global coordinated shutdowns - which is perhaps why it always boils down to one thing - capital markets, that bedrock of Western capitalism and the "modern way of life", where control, even if it means central planning the likes of which have not been seen since the days of the USSR, and an upward trajectory must be preserved at all costs, as the alternative is a global, socio-economic collapse. And since it is the daily gyrations of stocks that sway popular moods the interplay between capital markets and politics has never been more profound or more consequential. The more powerful message here is the implicit realization and admission by politicians, not just Trump who had a penchant of tweeting about the S&P every time it rose, but also his peers on both sides of the aisle, that the stock market is now seen as the consummate barometer of one's political achievements and approval. Which is also why capital markets are now, more than ever, a political tool whose purpose is no longer to distribute capital efficiently and discount the future, but to manipulate voter sentiments far more efficiently than any fake Russian election interference attempt ever could. Which brings us back to 2021 and the past decade, which was best summarized by a recent Bill Blain article who said that "the last 10-years has been a story of massive central banking distortion to address the 2008 crisis. Now central banks face the consequences and are trapped. The distortion can’t go uncorrected indefinitely." He is right: the distortion will eventually collapse especially if the Fed follows through with its attempt rate hikes some time in mid-2020, but so far the establishment and the "top 1%" have been successful - perhaps the correct word is lucky - in preserving the value of risk assets: on the back of the Fed's firehose of liquidity the S&P500 returned an impressive 27% in 2021, following a 15.5% return in 2020 and 28.50% in 2019. It did so by staging the greatest rally off all time from the March lows, surpassing all of the 4 greatest rallies off the lows of the past century (1929,1938, 1974, and 2009). Yet this continued can-kicking by the establishment - all of which was made possible by the covid pandemic and lockdowns which served as an all too convenient scapegoat for the unprecedented response that served to propel risk assets (and fiat alternatives such as gold and bitcoin) to all time highs - has come with a price... and an increasingly higher price in fact. As even Bank of America CIO Michael Hartnett admits, Fed's response to the the pandemic "worsened inequality" as the value of financial assets - Wall Street -  relative to economy - Main Street - hit all-time high of 6.3x. And while the Fed was the dynamo that has propelled markets higher ever since the Lehman collapse, last year certainly had its share of breakout moments. Here is a sampling. Gamestop and the emergence of meme stonks and the daytrading apes: In January markets were hypnotized by the massive trading volumes, rolling short squeezes and surging share prices of unremarkable established companies such as consoles retailer GameStop and cinema chain AMC and various other micro and midcap names. What began as a discussion on untapped value at GameStop on Reddit months earlier by Keith Gill, better known as Roaring Kitty, morphed into a hedge fund-orchestrated, crowdsourced effort to squeeze out the short position held by a hedge fund, Melvin Capital. The momentum flooded through the retail market, where daytraders shunned stocks and bought massive out of the money calls, sparking rampant "gamma squeezes" in the process forcing some brokers to curb trading. Robinhood, a popular broker for day traders and Citadel's most lucrative "subsidiary", required a cash injection to withstand the demands placed on it by its clearing house. The company IPOed later in the year only to see its shares collapse as it emerged its business model was disappointing hollow absent constant retail euphoria. Ultimately, the market received a crash course in the power of retail investors on a mission. Ultimately, "retail favorite" stocks ended the year on a subdued note as the trading frenzy from earlier in the year petered out, but despite underperforming the S&P500, retail traders still outperformed hedge funds by more than 100%. Failed seven-year Treasury auction:  Whereas auctions of seven-year US government debt generally spark interest only among specialists, on on February 25 2021, one such typically boring event sparked shockwaves across financial markets, as the weakest demand on record hit prices across the whole spectrum of Treasury bonds. The five-, seven- and 10-year notes all fell sharply in price. Researchers at the Federal Reserve called it a “flash event”; we called it a "catastrophic, tailing" auction, the closest thing the US has had to a failed Trasury auction. The flare-up, as the FT put it, reflects one of the most pressing investor concerns of the year: inflation. At the time, fund managers were just starting to realize that consumer price rises were back with a vengeance — a huge threat to the bond market which still remembers the dire days of the Volcker Fed when inflation was about as high as it is today but the 30Y was trading around 15%. The February auaction also illustrated that the world’s most important market was far less liquid and not as structurally robust as investors had hoped. It was an extreme example of a long-running issue: since the financial crisis the traditional providers of liquidity, a group of 24 Wall Street banks, have pulled back because of higher costs associated with post-2008 capital requirements, while leaving liquidity provision to the Fed. Those banks, in their reduced role, as well as the hedge funds and high-frequency traders that have stepped into their place, have tended to withdraw in moments of market volatility. Needless to say, with the Fed now tapering its record QE, we expect many more such "flash" episodes in the bond market in the year ahead. The arch ego of Archegos: In March 2021 several banks received a brutal reminder that some of family offices, which manage some $6 trillion in wealth of successful billionaires and entrepreneurs and which have minimal reporting requirements, take risks that would make the most serrated hedge fund manager wince, when Bill Hwang’s Archegos Capital Management imploded in spectacular style. As we learned in late March when several high-flying stocks suddenly collapsed, Hwang - a former protege of fabled hedge fund group Tiger Management - had built up a vast pile of leverage using opaque Total Return Swaps with a handful of banks to boost bets on a small number of stocks (the same banks were quite happy to help despite Hwang’s having been barred from US markets in 2013 over allegations of an insider-trading scheme, as he paid generously for the privilege of borrowing the banks' balance sheet). When one of Archegos more recent bets, ViacomCBS, suddenly tumbled it set off a liquidation cascade that left banks including Credit Suisse and Nomura with billions of dollars in losses. Conveniently, as the FT noted, the damage was contained to the banks rather than leaking across financial markets, but the episode sparked a rethink among banks over how to treat these clients and how much leverage to extend. The second coming of cryptos: After hitting an all time high in late 2017 and subsequently slumping into a "crypto winter", cryptocurrencies enjoyed a huge rebound in early 2021 which sent their prices soaring amid fears of galloping inflation (as shown below, and contrary to some financial speculation, the crypto space has traditionally been a hedge either to too much liquidity or a hedge to too much inflation). As a result, Bitcoin rose to a series of new record highs that culminated at just below $62,000, nearly three times higher than their previous all time high. But the smooth ride came to a halt in May when China’s crackdown on the cryptocurrency and its production, or “mining”, sparked the first serious crash of 2021. The price of bitcoin then collapsed as much as 30% on May 19, hitting a low of $30,000 amid a liquidation of levered positions in chaotic trading conditions following a warning from Chinese authorities of tighter curbs ahead. A public acceptance by Tesla chief and crypto cheerleader Elon Musk of the industry’s environmental impact added to the declines. However, as with all previous crypto crashes, this one too proved transitory, and prices resumed their upward trajectory in late September when investors started to price in the launch of futures-based bitcoin exchange traded funds in the US. The launch of these contracts subsequently pushed bitcoin to a new all-time high in early November before prices stumbled again in early December, this time due to a rise in institutional ownership when an overall drop in the market dragged down cryptos as well. That demonstrated the growing linkage between Wall Street and cryptocurrencies, due to the growing sway of large investors in digital markets. China's common prosperity crash: China’s education and tech sectors were one of the perennial Wall Street darlings. Companies such as New Oriental, TAL Education as well as Alibaba and Didi had come to be worth billions of dollars after highly publicized US stock market flotations. So when Beijing effectively outlawed swaths of the country’s for-profit education industry in July 2021, followed by draconian anti-trust regulations on the country's fintech names (where Xi Jinping also meant to teach the country's billionaire class a lesson who is truly in charge), the short-term market impact was brutal. Beijing’s initial measures emerged as part of a wider effort to make education more affordable as part of president Xi Jinping’s drive for "common prosperity" but that quickly raised questions over whether growth prospects across corporate China are countered by the capacity of the government to overhaul entire business models overnight. Sure enough, volatility stemming from the education sector was soon overshadowed by another set of government reforms related to common prosperity, a crackdown on leverage across the real estate sector where the biggest casualty was Evergrande, the world’s most indebted developer. The company, whose boss was not long ago China's 2nd richest man, was engulfed by a liquidity crisis in the summer that eventually resulted in a default in early December. Still, as the FT notes, China continues to draw in huge amounts of foreign capital, pushing the Chinese yuan to end 2021 at the strongest level since May 2018, a major hurdle to China's attempts to kickstart its slowing economy, and surely a precursor to even more monetary easing. Natgas hyperinflation: Natural gas supplanted crude oil as the world’s most important commodity in October and December as prices exploded to unprecedented levels and the world scrambled for scarce supplies amid the developed world's catastrophic transition to "green" energy. The crunch was particularly acute in Europe, which has become increasingly reliant on imports. Futures linked to TTF, the region’s wholesale gas price, hit a record €137 per megawatt hour in early October, rising more than 75%. In Asia, spot liquefied natural gas prices briefly passed the equivalent of more than $320 a barrel of oil in October. (At the time, Brent crude was trading at $80). A number of factors contributed, including rising demand as pandemic restrictions eased, supply disruptions in the LNG market and weather-induced shortfalls in renewable energy. In Europe, this was aggravated by plunging export volumes from Gazprom, Russia’s state-backed monopoly pipeline supplier, amid a bitter political fight over the launch of the Nordstream 2 pipeline. And with delays to the Nord Stream 2 gas pipeline from Russia to Germany, analysts say the European gas market - where storage is only 66% full - a cold snap or supply disruption away from another price spike Turkey's (latest) currency crisis:  As the FT's Jonathan Wheatley writes, Recep Tayyip Erdogan was once a source of strength for the Turkish lira, and in his first five years in power from 2003, the currency rallied from TL1.6 per US dollar to near parity at TL1.2. But those days are long gone, as Erdogan's bizarre fascination with unorthodox economics, namely the theory that lower rates lead to lower inflation also known as "Erdoganomics", has sparked a historic collapse in the: having traded at about TL7 to the dollar in February, it has since fallen beyond TL17, making it the worst performing currency of 2021. The lira’s defining moment in 2021 came on November 18 when the central bank, in spite of soaring inflation, cut its policy rate for the third time since September, at Erdogan’s behest (any central banker in Turkey who disagrees with "Erdoganomics" is promptly fired and replaced with an ideological puppet). The lira recovered some of its losses in late December when Erdogan came up with the "brilliant" idea of erecting the infamous "doom loop" which ties Turkey's balance sheet to its currency. It has worked for now (the lira surged from TL18 against the dollar to TL12, but this particular band aid solution will only last so long). The lira’s problems are not only Erdogan’s doing. A strengthening dollar, rising oil prices, the relentless covid pandemic and weak growth in developing economies have been bad for other emerging market currencies, too, but as long as Erdogan is in charge, shorting the lira remains the best trade entering 2022. While these, and many more, stories provided a diversion from the boring existence of centrally-planned markets, we are confident that the trends observed in recent years will continue: coming years will be marked by even bigger government (because only more government can "fix" problems created by government), higher stock prices and dollar debasement (because only more Fed intervention can "fix" the problems created by the Fed), and a policy flip from monetary and QE to fiscal & MMT, all of which will keep inflation at scorching levels, much to the persistent confusion of economists everywhere. Of course, we said much of this last year as well, but while we got most trends right, we were wrong about one thing: we were confident that China's aggressive roll out of the digital yuan would be a bang - or as we put it "it is very likely that while 2020 was an insane year, it may prove to be just an appetizer to the shockwaves that will be unleashed in 2021 when we see the first stage of the most historic overhaul of the fiat payment system in history" - however it turned out to be a whimper. A big reason for that was that the initial reception of the "revolutionary" currency was nothing short of disastrous, with Chinese admitting they were "not at all excited" about the prospect of yet one more surveillance mechanism for Beijing, because that's really what digital currencies are: a way for central banks everywhere to micromanage and scrutinize every single transaction, allowing the powers that be to demonetize any one person - or whole groups - with the flick of a switch. Then again, while digital money may not have made its triumphant arrival in 2021, we are confident that the launch date has merely been pushed back to 2022 when the rollout of the next monetary revolution is expected to begin in earnest. Here we should again note one thing: in a world undergoing historic transformations, any free press must be throttled and controlled, and over the past year we have seen unprecedented efforts by legacy media and its corporate owners, as well as the new "social media" overlords do everything in their power to stifle independent thought. For us it had been especially "personal" on more than one occasions. Last January, Twitter suspended our account because we dared to challenge the conventional narrative about the source of the Wuhan virus. It was only six months later that Twitter apologized, and set us free, admitting it had made a mistake. Yet barely had twitter readmitted us, when something even more unprecedented happened: for the first time ever (to our knowledge) Google - the world's largest online ad provider and monopoly - demonetized our website not because of any complaints about our writing but because of the contents of our comment section. It then held us hostage until we agreed to implement some prerequisite screening and moderation of the comments section. Google's action was followed by the likes of PayPal, Amazon, and many other financial and ad platforms, who rushed to demonetize and suspend us simply because they disagreed with what we had to say. This was a stark lesson in how quickly an ad-funded business can disintegrate in this world which resembles the dystopia of 1984 more and more each day, and we have since taken measures. One year ago, for the first time in our 13 year history, we launched a paid version of our website, which is entirely ad and moderation free, and offers readers a variety of premium content. It wasn't our intention to make this transformation but unfortunately we know which way the wind is blowing and it is only a matter of time before the gatekeepers of online ad spending block us again. As such, if we are to have any hope in continuing it will come directly from you, our readers. We will keep the free website running for as long as possible, but we are certain that it is only a matter of time before the hammer falls as the censorship bandwagon rolls out much more aggressively in the coming year. That said, whether the story of 2022, and the next decade for that matter, is one of helicopter or digital money, of (hyper)inflation or deflation: what is key, and what we learned in the past decade, is that the status quo will throw anything at the problem to kick the can, it will certainly not let any crisis go to waste... even the deadliest pandemic in over a century. And while many already knew that, the events of 2021 made it clear to a fault that not even a modest market correction can be tolerated going forward. After all, if central banks aim to punish all selling, then the logical outcome is to buy everything, and investors, traders and speculators did just that armed with the clearest backstop guarantee from the Fed, which in the deapths of the covid crash crossed the Rubicon when it formally nationalized the bond market as it started buying both investment grade bonds and junk bond ETFs in the open market. As such it is no longer even a debatable issue if the Fed will buy stocks after the next crash - the only question is when. Meanwhile, for all those lamenting the relentless coverage of politics in a financial blog, why finance appears to have taken a secondary role, and why the political "narrative" has taken a dominant role for financial analysts, the past year showed vividly why that is the case: in a world where markets gyrated, and "rotated" from value stocks to growth and vice versa, purely on speculation of how big the next stimulus out of Washington will be, the narrative over Biden's trillions proved to be one of the biggest market moving events for much of the year. And with the Biden stimulus plan off the table for now, the Fed will find it very difficult to tighten financial conditions, especially if it does so just as the economy is slowing. Here we like to remind readers of one of our favorite charts: every financial crisis is the result of Fed tightening. As for predictions about the future, as the past two years so vividly showed, when it comes to actual surprises and all true "black swans", it won't be what anyone had expected. And so while many themes, both in the political and financial realm, did get some accelerated closure courtesy of China's covid pandemic, dramatic changes in 2021 persisted, and will continue to manifest themselves in often violent and unexpected ways - from the ongoing record polarization in the US political arena, to "populist" upheavals around the developed world, to the gradual transition to a global Universal Basic (i.e., socialized) Income regime, to China's ongoing fight with preserving stability in its gargantuan financial system which is now two and a half times the size of the US. As always, we thank all of our readers for making this website - which has never seen one dollar of outside funding (and despite amusing recurring allegations, has certainly never seen a ruble from the KGB either, although now that the entire Russian hysteria episode is over, those allegations have finally quieted down), and has never spent one dollar on marketing - a small (or not so small) part of your daily routine. Which also brings us to another critical topic: that of fake news, and something we - and others who do not comply with the established narrative - have been accused of. While we find the narrative of fake news laughable, after all every single article in this website is backed by facts and links to outside sources, it is clearly a dangerous development, and a very slippery slope that the entire developed world is pushing for what is, when stripped of fancy jargon, internet censorship under the guise of protecting the average person from "dangerous, fake information." It's also why we are preparing for the next onslaught against independent thought and why we had no choice but to roll out a premium version of this website. In addition to the other themes noted above, we expect the crackdown on free speech to accelerate in the coming year when key midterm elections will be held, especially as the following list of Top 20 articles for 2021 reveals, many of the most popular articles in the past year were precisely those which the conventional media would not touch out of fear of repercussions, which in turn allowed the alternative media to continue to flourish in an orchestrated information vacuum and take significant market share from the established outlets by covering topics which the public relations arm of established media outlets refused to do, in the process earning itself the derogatory "fake news" condemnation. We are grateful that our readers - who hit a new record high in 2021 - have realized it is incumbent upon them to decide what is, and isn't "fake news." * * * And so, before we get into the details of what has now become an annual tradition for the last day of the year, those who wish to jog down memory lane, can refresh our most popular articles for every year during our no longer that brief, almost 11-year existence, starting with 2009 and continuing with 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019 and 2020. So without further ado, here are the articles that you, our readers, found to be the most engaging, interesting and popular based on the number of hits, during the past year. In 20th spot with 600,000 reads, was an article that touched on one of the most defining features of the market: the reflation theme the sparked a massive rally at the start of the year courtesy of the surprise outcome in the Georgia Senate race, where Democrats ended up wining both seats up for grabs, effectively giving the Dems a majority in both the House and the Senate, where despite the even, 50-seat split, Kamala Harris would cast the winning tie-breaker vote to pursue a historic fiscal stimulus. And sure enough, as we described in "Bitcoin Surges To Record High, Stocks & Bonds Battered As Dems Look Set To Take Both Georgia Senate Seats", with trillions in "stimmies" flooding both the economy and the market, not only did retail traders enjoy unprecedented returns when trading meme "stonks" and forcing short squeezes that crippled numerous hedge funds, but expectations of sharply higher inflation also helped push bitcoin and the entire crypto sector to new all time highs, which in turn legitimized the product across institutional investors and helped it reach a market cap north of $3 trillion.  In 19th spot, over 613,000 readers were thrilled to read at the start of September that "Biden Unveils Most Severe COVID Actions Yet: Mandates Vax For All Federal Workers, Contractors, & Large Private Companies." Of course, just a few weeks later much of Biden's mandate would be struck down in courts, where it is now headed to a decision by SCOTUS, while the constantly shifting "scientific" goal posts mean that just a few months later the latest set of CDC regulations have seen regulators and officials reverse the constant drone of fearmongering and are now even seeking to cut back on the duration of quarantine and other lockdown measures amid a public mood that is growing increasingly hostile to the government response. One of the defining political events of 2021 was the so-called "Jan 6 Insurrection", which the for America's conservatives was blown wildly out of proportion yet which the leftist media and Democrats in Congress have been periodically trying to push to the front pages in hopes of distracting from the growing list of failures of the Obama admin. Yet as we asked back in January, "Why Was Founder Of Far-Left BLM Group Filming Inside Capitol As Police Shot Protester?" No less than 614,000 readers found this question worthy of a response. Since then many more questions have emerged surrounding this event, many of which focus on what role the FBI had in organizing and encouraging this event, including the use of various informants and instigators. For now, a response will have to wait at least until the mid-term elections of 2022 when Republicans are expected to sweep one if not both chambers. Linked to the above, the 17th most read article of 2021 with 617,000 views, was an article we published on the very same day, which detailed that "Armed Protesters Begin To Arrive At State Capitols Around The Nation." At the end of the day, it was much ado about nothing and all protests concluded peacefully and without incident: perhaps the FBI was simply spread too thin? 2021 was a year defined by various waves of the covid pandemic which hammered poor Americans forced to hunker down at home and missing on pay, and crippled countless small mom and pop businesses. And yet, it was also a bonanza for a handful of pharma companies such as Pfizer and Moderna which made billions from the sale of "vaccines" which we now know do little if anything to halt the spread of the virus, and are instead now being pitched as palliatives, preventing a far worse clinical outcome. The same pharma companies also benefited from an unconditional indemnity, which surely would come in useful when the full side-effects of their mRNA-based therapies became apparent. One such condition to emerge was myocarditis among a subset of the vaxxed. And while the vaccines continue to be broadly rolled out across most developed nations, one place that said enough was Sweden. As over 620,000 readers found out in "Sweden Suspends Moderna Shot Indefinitely After Vaxxed Patients Develop Crippling Heart Condition", not every country was willing to use its citizens as experimental guniea pigs. This was enough to make the article the 16th most read on these pages, but perhaps in light of the (lack of) debate over the pros and cons of the covid vaccines, this should have been the most read article this year? Moving on to the 15th most popular article, 628,000 readers were shocked to learn that "Chase Bank Cancels General Mike Flynn's Credit Cards." The action, which was taken by the largest US bank due to "reputational risk" echoed a broad push by tech giants to deplatform and silence dissenting voices by literally freezing them out of the financial system. In the end, following widespread blowback from millions of Americans, JPMorgan reversed, and reactivated Flynn's cards saying the action was made in error, but unfortunately this is just one example of how those in power can lock out any dissenters with the flick of a switch. And while democrats cheer such deplatforming today, the political winds are fickle, and we doubt they will be as excited once they find themselves on the receiving end of such actions. And speaking of censorship and media blackouts, few terms sparked greater response from those in power than the term Ivermectin. Viewed by millions as a cheap, effective alternative to offerings from the pharmaceutical complex, social networks did everything in their power to silence any mention of a drug which the Journal of Antibiotics said in 2017 was an "enigmatic multifaceted ‘wonder’ drug which continues to surprise and exceed expectations." Nowhere was this more obvious than in the discussion of how widespread use of Ivermectin beat Covid in India, the topic of the 14th most popular article of 2021 "India's Ivermectin Blackout" which was read by over 653,000 readers. Unfortunately, while vaccines continue to fail upward and now some countries are now pushing with a 4th, 5th and even 6th vaccine, Ivermectin remains a dirty word. There was more covid coverage in the 13th most popular article of 2021, "Surprise Surprise - Fauci Lied Again": Rand Paul Reacts To Wuhan Bombshell" which was viewed no less than 725,000 times. Paul's reaction came following a report which revealed that Anthony Fauci's NIAID and its parent, the NIH, funded Gain-of-Function research in Wuhan, China, strongly hinting that the emergence of covid was the result of illicit US funding. Not that long ago, Fauci had called Paul a 'liar' for accusing him of funding the risky research, in which viruses are genetically modified or otherwise altered to make them more transmissible to humans. And while we could say that Paul got the last laugh, Fauci still remains Biden's top covid advisor, which may explain why one year after Biden vowed he would shut down the pandemic, the number of new cases just hit a new all time high. One hope we have for 2022 is that people will finally open their eyes... 2021 was not just about covid - soaring prices and relentless inflation were one of the most poignant topics. It got so bad that Biden's approval rating - and that of Democrats in general - tumbled toward the end of the year, putting their mid-term ambitions in jeopardy, as the public mood soured dramatically in response to the explosion in prices. And while one can debate whether it was due to supply-issues, such as the collapse in trans-pacific supply chains and the chronic lack of labor to grow the US infrastructure, or due to roaring demand sparked by trillions in fiscal stimulus, but when the "Big Short" Michael Burry warned that hyperinflation is coming, the people listened, and with over 731,000 reads, the 12th most popular article of 2021 was "Michael Burry Warns Weimar Hyperinflation Is Coming."  Of course, Burry did not say anything we haven't warned about for the past 12 years, but at least he got the people's attention, and even mainstream names such as Twitter founder Jack Dorsey agreed with him, predicting that bitcoin will be what is left after the dollar has collapsed. While hyperinflation may will be the endgame, the question remains: when. For the 11th most read article of 2021, we go back to a topic touched upon moments ago when we addressed the full-blown media campaign seeking to discredit Ivermectin, in this case via the D-grade liberal tabloid Rolling Stone (whose modern incarnation is sadly a pale shadow of the legend that house Hunter S. Thompson's unforgettable dispatches) which published the very definition of fake news when it called Ivermectin a "horse dewormer" and claimed that, according to a hospital employee, people were overdosing on it. Just a few hours later, the article was retracted as we explained in "Rolling Stone Issues 'Update' After Horse Dewormer Hit-Piece Debunked" and over 812,000 readers found out that pretty much everything had been a fabrication. But of course, by then it was too late, and the reputation of Ivermectin as a potential covid cure had been further tarnished, much to the relief of the pharma giants who had a carte blanche to sell their experimental wares. The 10th most popular article of 2021 brings us to another issue that had split America down the middle, namely the story surrounding Kyle Rittenhouse and the full-blown media campaign that declared the teenager guilty, even when eventually proven innocent. Just days before the dramatic acquittal, we learned that "FBI Sat On Bombshell Footage From Kyle Rittenhouse Shooting", which was read by over 822,000 readers. It was unfortunate to learn that once again the scandal-plagued FBI stood at the center of yet another attempt at mass misinformation, and we can only hope that one day this "deep state" agency will be overhauled from its core, or better yet, shut down completely. As for Kyle, he will have the last laugh: according to unconfirmed rumors, his numerous legal settlements with various media outlets will be in the tens if not hundreds of millions of dollars.  And from the great US social schism, we again go back to Covid for the 9th most popular article of 2021, which described the terrifying details of one of the most draconian responses to covid in the entire world: that of Australia. Over 900,000 readers were stunned to read that the "Australian Army Begins Transferring COVID-Positive Cases, Contacts To Quarantine Camps." Alas, the latest surge in Australian cases to nosebleed, record highs merely confirms that this unprecedented government lockdown - including masks and vaccines - is nothing more than an exercise in how far government can treat its population as a herd of sheep without provoking a violent response.  The 8th most popular article of 2021 looks at the market insanity of early 2021 when, at the end of January, we saw some of the most-shorted, "meme" stocks explode higher as the Reddit daytrading horde fixed their sights on a handful of hedge funds and spent billions in stimmies in an attempt to force unprecedented ramps. That was the case with "GME Soars 75% After-Hours, Erases Losses After Liquidity-Constrained Robinhood Lifts Trading Ban", which profiled the daytrading craze that gave an entire generation the feeling that it too could win in these manipulated capital markets. Then again, judging by the waning retail interest, it is possible that the excitement of the daytrading army is fading as rapidly as it first emerged, and that absent more "stimmies" markets will remain the playground of the rich and central banks. Kyle Rittenhouse may soon be a very rich man after the ordeal he went through, but the media's mission of further polarizing US society succeeded, and millions of Americans will never accept that the teenager was innocent. It's also why with just over 1 million reads, the 7th most read article on Zero Hedge this year was that "Portland Rittenhouse Protest Escalates Into Riot." Luckily, this is not a mid-term election year and there were no moneyed interests seeking to prolong this particular riot, unlike what happened in the summer of 2020... and what we are very much afraid will again happen next year when very critical elections are on deck.  With just over 1.03 million views, the 6th most popular post focused on a viral Twitter thread on Friday from Dr Robert Laone, which laid out a disturbing trend; the most-vaccinated countries in the world are experiencing  a surge in COVID-19 cases, while the least-vaccinated countries were not. As we originally discussed in ""This Is Worrying Me Quite A Bit": mRNA Vaccine Inventor Shares Viral Thread Showing COVID Surge In Most-Vaxxed Countries", this trend has only accelerated in recent weeks with the emergence of the Omicron strain. Unfortunately, instead of engaging in a constructive discussion to see why the science keeps failing again and again, Twitter's response was chilling: with just days left in 2021, it suspended the account of Dr. Malone, one of the inventors of mRNA technology. Which brings to mind something Aaron Rogers said: "If science can't be questioned it's not science anymore it's propaganda & that's the truth." In a year that was marked a flurry of domestic fiascoes by the Biden administration, it is easy to forget that the aged president was also responsible for the biggest US foreign policy disaster since Vietnam, when the botched evacuation of Afghanistan made the US laughing stock of the world after 12 US servicemembers were killed. So it's probably not surprising that over 1.1 million readers were stunned to watch what happened next, which we profiled in the 5th most popular post of 2021, where in response to the Afghan trajedy, "Biden Delivers Surreal Press Conference, Vows To Hunt Down Isis, Blames Trump." One person watching the Biden presser was Xi Jinping, who may have once harbored doubts about reclaiming Taiwan but certainly does not any more. The 4th most popular article of 2021 again has to do with with covid, and specifically the increasingly bizarre clinical response to the disease. As we detailed in "Something Really Strange Is Happening At Hospitals All Over America" while emergency rooms were overflowing, it certainly wasn't from covid cases. Even more curiously, one of the primary ailments leading to an onslaught on ERs across the nation was heart-related issues, whether arrhytmia, cardiac incidents or general heart conditions. We hope that one day there will be a candid discussion on this topic, but until then it remains one of the topics seen as taboo by the mainstream media and the deplatforming overlords, so we'll just leave it at that. We previously discussed the anti-Ivermectin narrative that dominated the mainstream press throughout 2021 and the 3rd most popular article of the year may hold clues as to why: in late September, pharma giant Pfizer and one of the two companies to peddle an mRNA based vaccine, announced that it's launching an accelerated Phase 2/3 trial for a COVID prophylactic pill designed to ward off COVID in those may have come in contact with the disease. And, as we described in "Pfizer Launches Final Study For COVID Drug That's Suspiciously Similar To 'Horse Paste'," 1.75 million readers learned that Pfizer's drug shared at least one mechanism of action as Ivermectin - an anti-parasitic used in humans for decades, which functions as a protease inhibitor against Covid-19, which researchers speculate "could be the biophysical basis behind its antiviral efficiency." Surely, this too was just another huge coincidence. In the second most popular article of 2021, almost 2 million readers discovered (to their "shock") that Fauci and the rest of Biden's COVID advisors were proven wrong about "the science" of COVID vaccines yet again. After telling Americans that vaccines offer better protection than natural infection, a new study out of Israel suggested the opposite is true: natural infection offers a much better shield against the delta variant than vaccines, something we profiled in "This Ends The Debate' - Israeli Study Shows Natural Immunity 13x More Effective Than Vaccines At Stopping Delta." We were right about one thing: anyone who dared to suggest that natural immunity was indeed more effective than vaccines was promptly canceled and censored, and all debate almost instantly ended. Since then we have had tens of millions of "breakout" cases where vaccinated people catch covid again, while any discussion why those with natural immunity do much better remains under lock and key. It may come as a surprise to many that the most read article of 2021 was not about covid, or Biden, or inflation, or China, or even the extremely polarized US congress (and/or society), but was about one of the most long-suffering topics on these pages: precious metals and their prices. Yes, back in February the retail mania briefly targeted silver and as millions of reddit daytraders piled in in hopes of squeezing the precious metal higher, the price of silver surged higher only to tumble just as quickly as it has risen as the seller(s) once again proved more powerful than the buyers. We described this in "Silver Futures Soar 8%, Rise Above $29 As Reddit Hordes Pile In", an article which some 2.4 million gold and silver bugs read with hope, only to see their favorite precious metals slump for much of the rest of the year. And yes, the fact that both gold and silver ended the year sharply lower than where they started even though inflation hit the highest level in 40 years, remains one of the great mysteries of 2021. With all that behind us, and as we wave goodbye to another bizarre, exciting, surreal year, what lies in store for 2022, and the next decade? We don't know: as frequent and not so frequent readers are aware, we do not pretend to be able to predict the future and we don't try despite endless allegations that we constantly predict the collapse of civilization: we leave the predicting to the "smartest people in the room" who year after year have been consistently wrong about everything, and never more so than in 2021 (even the Fed admitted it is clueless when Powell said it was time to retire the term "transitory"), which destroyed the reputation of central banks, of economists, of conventional media and the professional "polling" and "strategist" class forever, not to mention all those "scientists" who made a mockery of the "expertise class" with their bungled response to the covid pandemic. We merely observe, find what is unexpected, entertaining, amusing, surprising or grotesque in an increasingly bizarre, sad, and increasingly crazy world, and then just write about it. We do know, however, that after a record $30 trillion in stimulus was conjured out of thin air by the world's central banks and politicians in the past two years, the attempt to reverse this monetary and fiscal firehose in a world addicted to trillions in newly created liquidity now that central banks are freaking out after finally getting ot the inflation they were hoping to create for so long, will end in tears. We are confident, however, that in the end it will be the very final backstoppers of the status quo regime, the central banking emperors of the New Normal, who will eventually be revealed as fully naked. When that happens and what happens after is anyone's guess. But, as we have promised - and delivered - every year for the past 13, we will be there to document every aspect of it. Finally, and as always, we wish all our readers the best of luck in 2022, with much success in trading and every other avenue of life. We bid farewell to 2021 with our traditional and unwavering year-end promise: Zero Hedge will be there each and every day - usually with a cynical smile - helping readers expose, unravel and comprehend the fallacy, fiction, fraud and farce that defines every aspect of our increasingly broken system. Tyler Durden Sun, 01/02/2022 - 03:44.....»»

Category: personnelSource: nytJan 2nd, 2022

A Tale Of Two Omicrons

A Tale Of Two Omicrons By Peter Tchir of Academy Securities I, like many of you, spent part of this long weekend searching for information on COVID and omicron. It is difficult to get good information because: Omicron is still relatively new in most areas of the world, and data is limited. Very little data distinguishes between Omicron and Delta (as discussed in Chalk & Cheese). Those are some valid issues that we have to deal with, though I think with some effort, even without more sequencing) we could do a better job of distinguishing between variants. The big problem I find is that many people don’t want you to know the facts. For purposes of today’s T-Report, I will use one set of data. I’ve chosen to use London in GOV.UK. I’ve chosen to use London, because: Omicron seems to have been in the U.K. longer than here and the data seems robust. London, as a contained area, seems more likely to have up to date data that is consistent across sources. It is in the Northern Hemisphere which is likely useful in extrapolating to the U.S. While London has its own quirks (city living, high vaccination rate, etc.), the data and stories that I’m going to tell seem consistent whether we switch to the broader U.K., go back to South Africa, or delve into the data from almost any other country or region (at least that is what I’ve seen so far). From this data, we will tell two stories: The scary version. What the data really says. Cases Are Skyrocketing. This is true. The number of cases is surging everywhere (actually the number of cases in South Africa has already started to drop, but that isn’t relevant for today’s piece, it is extremely good news, but not a focus for today’s piece). So, where you want to create fear, or want to dig deeper into the data, there is no doubt that cases are rising. Not only are cases rising, but due to a lack of testing in many places, the cases are being under reported. Also, and this does cut both ways… Cases are even higher because self-testers aren’t reporting. Cases are even higher because self-testers aren’t reporting, because they have mild symptoms. How you choose to describe the under-reporting does make a big difference to the tone of a report. There is no doubt in my mind that cases are heavily underreported right now, but (at least to me,) it makes a huge difference as to why cases are being underreported. In the early days of COVID, there were people very sick who wanted to be tested but couldn’t get tested (that is bad and is scary). Many right now who aren’t able to get tested, want the tests not because they feel bad, but because they need them to travel or to see family (not a scary reason for being underreported). For those who test positive but aren’t particularly sick, the danger as I see it, is that the official data makes all the percentages (hospitalizations, for example) look worse. Right now, it seems clear that underreporting makes the consequences of having omicron seem worse, and the hype about case counts is largely just that – hype! (we will address the situation of cases and severity amongst healthcare workers shortly). Hospital Usage Is Rising Rapidly (always expressed as a percentage change) After cases, which I highly discount, we quickly move into hospital utilization. We are all well aware that swamping the healthcare system is a risk that we want to avoid. So if you want to generate fear, you immediately target this area. This is factually correct. Since late November, hospitalizations have gone from 100 to 300 (and were still rising on December 24th, the last date for which data was published. The tripling is scary, but it is provided without context. Daily admittances were consistently above 600 during two prior waves and broached 900 at their peak. While it is possible that Omicron will continue to get worse, the fact is that 300 isn’t as alarming, in the context of where we’ve been, as it sounds. I am not saying that I discount the rise in cases, and I am concerned about their trajectory, but too many pieces stop at the “alarming” tripling and do little to contextualize that in terms of total numbers (300 out of the population of London is manageable). This chart examines the number of patients in hospital. One, it demonstrates that patients in hospital is still small relative to the two prior waves. What is also interesting, is that there were 1,200 people in hospitals at the end of August and “only” 2,100 now. Since 200 or so patients have been admitted every day for the past couple of weeks, it seems to me that the much slower increase in hospitalized means that patients are spending less time being hospitalized. There is absolutely zero evidence that people are dying at an incredible pace from Omicron (in fact, very few deaths have been attributed to Omicron), so the only way that the rise in admittances meshes with the reported level of beds occupied is that people are being treated and released relatively quickly. Where is the length of stay data? So little data is available, even for those inclined to search for it, about how quickly and successfully patients are being treated! But The Ventilators! You will find that almost no fear story goes after ventilator usage right now. Lest I be accused of using longer term data to obscure more ominous short term trends, here is a “better” headline! This chart seems to indicate that very few patients are needing ventilators. Part of the reason for this may be that using ventilators has fallen out of favor. That is a possibility as many argued that ventilators seemed ineffective at helping in the recovery process. I’m inclined to believe that improved treatments and lack of severity is why ventilator usage has remained low. Gotcha #1 – Lag Effects Yes, there is a lag from the time that someone becomes infected, to the time that they test positive, to the time that they need hospitalization, to the time that they need ventilation. Those are all legitimate concerns. The fear story argues we just haven’t had time to experience the severity. That is a risk, but it is why I chose London rather than the U.S., because we should have seen some of those issues come to fruition for the fear side of the equation. Also, now is a good time to bring up South Africa, which has been dealing with Omicron longer than almost any other country. According to the WHO, cases in South Africa are already potentially tumbling (though we need to see if the holidays impacted those results), but more importantly, death from COVID never spiked during the Omicron wave. For the first time, at least in South Africa, the chart of cases versus the chart of deaths has no correlation whatsoever. While the “lag effect” might have some merit in London, it has been quashed in South Africa, and for a period of time every positive story about South Africa was accompanied by admonishments to not get comfortable because of the lag. The lag effect was a more legitimate concern two weeks ago than it is today, where it really does seem to lean heavily towards fear mongering rather than anything the data is telling us. Gotcha #2 – Long Covid Even the stories that begrudgingly admit that the current data isn’t so bad, seem to end with stoking our fears about long term covid. Yes, some people with previous variants have suffered from long covid. That is awful, but the two things that I keep thinking about are: Does this variant pose the same threat of long covid? If it has mutated to something far less severe, is it possible that it is less likely to leave victims with long covid? I am not sure about the answer to that, but since the fears about this variant seem to have been wrong (so far), I think we need to wait and see before panicking about long covid. I have no reason to believe that we won’t find treatments for long covid over time. The medical community has been attacking covid on many fronts. While we all know about the vaccinations and boosters (more on that later), we are seeing more and more treatments being developed. From single pills to effective treatments using a multitude of pharmaceuticals, we have many more tools to help those infected. As the world’s attention shifts to long covid, there is no reason to expect failure. I am strongly in the camp that long covid, while an issue today, is something that will be addressed in the coming months and quarters. Yes, that sucks for those who have it today, but assuming long covid is permanent seems overly pessimistic and betting way too heavily against modern science. What About Healthcare Workers? This is a legitimate concern. If healthcare workers are hit hard by Omicron, we could see a rapid decline in availability of hospital beds and treatments. It is something that the fear side has correct, to a large extent. But the CDC updated guidelines on December 23rd start to address this. They already are easing some restrictions on healthcare workers and they caveat the updated guidelines with the statement that “isolation time can be cut further if there are staffing shortages). Personally, I suspect that if the CDC was scared of this variant’s severity, they wouldn’t be so quick to change the rules. They have to balance the availability of care, with the safety of healthcare providers. Maybe I am reading too much between the lines here, but I suspect that the CDC understands that the severity is lower and that is influencing their policy regarding healthcare workers. It is “Prudent” For Governments to Stoke Fear Ahead of the holiday season, when gathering and traffic are at their peak, governments across the globe have no interest in encouraging a potential spike. They know how easily Omicron is transmitted, and so long as they have any doubt about the severity or the ability of the system to handle the already likely surge, they have no interest in encouraging more spread. As mentioned in “Last Thing I Wanted to Write About is Omicron”, public policy already pushes their modelers to “worst” case scenarios. So even if governments thought Omicron is less severe, they will not encourage that viewpoint, at least not until after the holidays. So, I would expect every government proclamation to err to the cautious side, and even with that bias (which is a rational bias), we are seeing positive headlines come out. I expect that once we get through the holiday crush, we will see a change of tone from officials as their fear of a holiday induced spike recedes and we can all dig deeper into the details. Remember, President Biden’s address on Tuesday seemed to be skewed towards the realization that people need really good reasons to enter another lockdown. Vaccines, Boosters and the Unvaccinated I don’t even want to enter into this can of worms. This is one area where we would benefit so much from the details begged for in Chalk & Cheese, but the reality is that we don’t have that level of granularity. Vaccines and boosters seem to help reduce the severity of all types of COVID including Omicron. For many, the wave of infections in vaccinated people and the ability of vaccinated people to spread Omicron seems to be above levels that public perception thought was likely. This is to a large degree an issue over the messaging surrounding what the vaccines can and cannot do that needs to be better addressed, especially as we seem to be moving to a 4th booster for many, and quarterly boosters not out of the realm of possibility. Omicron at least, doesn’t seem that bad for unvaccinated people. While there is “worry” that this only encourages fewer vaccinations for me, at the moment, it seems like a huge victory for us as it is one reason that Omicron (with its high transmissibility), isn’t causing severe illness and death to escalate. The battlelines around vaccinations have been firmly established, and I suspect that little about Omicron will changes those battlelines significantly given the bullet points above. Since this is such a touchy subject (that I am attempting to dance around), I feel that it is appropriate to disclose that I have had two shots but am a couple months behind on my booster (and the rest of my family has original vaccinations and is up to speed on recommended boosters). The Next Variant Could Be Worse. So far, it seems like Omicron is mild compared to earlier variants. While there is a strong tendency for viruses to mutate to less dangerous versions, there is no guarantee of that. While viruses are mindless, their mutations are effectively “solving” for how to propagate their species. Killing a host too quickly isn’t a particularly successful strategy for propagation. Ebola, for example, is so deadly and transmissible, that it could wipe out mankind, except its sheer virulence tends to be self-defeating in its efforts to propagate (it kills entire populations so quickly that it doesn’t spread as much as it could, relative to how transmissible it is). Assuming for the moment, that Omicron isn’t that severe, we have to take this victory (and it is a victory) and use the time to ensure that any shortcomings that were obvious in how we have dealt with Omicron be fixed for future variants. And while I’m not necessarily a fan of ‘worst case’ scenario modelling for public policy, I do think that being properly prepared for worst case scenarios is a good public policy goal. Bottom Line Hopefully, the Tale of Two Omicrons, provides a helpful framework for digesting news and headlines in this environment. Markets were already ahead of politicians and the mass media in estimating the severity of Omicron, so there is a limited rally left in that. While this shortened week is more likely to continue with last week’s strength (seasonality, more good news on Omicron getting published than bad news, etc.), we then have to turn to the economy, consumers, less helpful central bank policy and what is or isn’t truly priced in. In the meantime, enjoy this holiday season and be happy and grateful that Omicron does seem mild. Tyler Durden Mon, 12/27/2021 - 13:12.....»»

Category: blogSource: zerohedgeDec 27th, 2021

Airline Stock Roundup: DAL"s Bullish Q4 View, ALGT"s Rosy November Traffic & More

Delta (DAL) expects to be profitable in Q4. Allegiant's (ALGT) November traffic improves substantially on strong air-travel demand. In the past week, Delta Air Lines DAL boosted its guidance for the fourth quarter of 2021, mainly owing to strong passenger demand during the holidays and waning omicron-related fears. Also, on the back of improved air-travel demand in the United States, Allegiant Travel Company ALGT posted a substantial year-over-year increase in scheduled traffic for November 2021.Further, with COVID-19’s omicron variant ravaging Europe, particularly the UK and Ireland, Ryanair Holdings’ RYAAY CEO Michael O'Leary expects the carrier’s capacity for the current and the next month to be dented.An expansion-related update on the Northeast Alliance betweenAmerican Airlines AAL and JetBlue Airways JBLU was available in the past week. We note that the partnershipis under scrutiny over concerns related to reducing competition and jacking up air fares. JetBlue also recently grabbed headlines following its decision to expand its codeshare partnership with the Irish carrier Aer Lingus. This story was covered in detail in the previous week’s roundup.Recap of the Past Week’s Big Events1 Per an SEC filing, Delta expects to generate an adjusted pre-tax profit of approximately $200 million in the December quarter. During the third-quarter 2021 earnings release in October, the airline had warned that rising fuel prices might put pressure on its ability to generate profits in the fourth quarter. DAL had then expected to incur a moderate loss in the December quarter.Delta expects adjusted total revenues (excluding third-party refinery sales) to be 74% recovered in the fourth quarter compared with the same-period level in 2019. Previously, the airline had expected to generate total revenues in the low 70s (in percentage terms) compared with the 2019 level. The improved outlook is owing to better-than-anticipated total revenue per available seat mile and positive passenger revenue per available seat mile (compared with the 2019 reading) on account of strong travel demand during the holidays. Non-fuel unit costs are estimated to increase approximately 7% in the December quarter from the 2019 level. The same is compared with the previous guidance of an increase in the 6-8% range. Fuel price per gallon (adjusted) is predicted to be $2.05-$2.15 for the fourth quarter compared with the previously guided range of $2.25-$2.40. Total capacity is still expected to be 80% of the 2019 level. Delta currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.2. Under the alliance with JetBlue, American Airlines is expanding its global footprint in 2022, with new nonstop services between New York’s John F. Kennedy International Airport (JFK) and Doha’s (Qatar) Hamad International Airport. From LaGuardia airport, the carrier added routes to Houston, TX; Kansas City, MO; Oklahoma City, OK and Omaha, NE.From Boston, American Airlines announced new nonstop services to Halifax, Nova Scotia; Louisville, KY; Memphis, TN; Pensacola, FL; and Traverse City, MI. These new flights from Boston add to the carrier’s recently announced routes to Columbus, OH; Cincinnati, OH; Indianapolis, IN; Wilmington, N.C. and Toronto, Canada. From LaGuardia airport, JetBlue will begin a service to Portland, ME in 2022.3. At Allegiant, scheduled traffic for November 2021 surged 78.8% from the November 2020 levels. Capacity for scheduled service increased 32.8% from the November 2020 reading. With the traffic surge outweighing capacity expansion, the load factor (% of seats filled by passengers) in November expanded 20 points to 77.6% from the year-ago period’s levels. For the total system (including scheduled service and fixed fee contract), Allegiant carried 74.9% more passengers in November 2021 from the year-ago period’s level.4. Per a Reuters report, Ryanair’s chief executive Michael O'Leary told the Guardian newspaper that the carrier will carry roughly 10% less passengers in December 2021 and January 2022. According to O’Leary, RYAAY intends to fly about 10 million people in the final month of 2021 (1 million less than the estimated figure). Moreover, RYAAY aims to trim its January schedule by nearly 10%.PerformanceThe following table shows the price movement of major airline players over the past week and during the last six months.Image Source: Zacks Investment Research  The table above shows that almost all airline stocks have traded in the green over the past week, leading the NYSE ARCA Airline Index to increase 4.3% to $82.10. Over the past six months, the NYSE ARCA Airline Index has depreciated 21.1%.What's Next in the Airline Space?With air-travel demand improving, expansion-related updates by carriers may be available in the coming days. 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 Ryanair Holdings PLC (RYAAY): Free Stock Analysis Report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report American Airlines Group Inc. (AAL): Free Stock Analysis Report Allegiant Travel Company (ALGT): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksDec 23rd, 2021

WHO director recommends you cancel or postpone holiday events amid COVID-19 surge: "Better than a life canceled"

As COVID-19 cases are spiking, the World Health Organization's director-general suggested putting holiday celebrations on hold. World Health Organization (WHO) Director-General Tedros Adhanom Ghebreyesus speaks during a press conference on December 20, 2021 at the WHO headquarters in Geneva.Photo by FABRICE COFFRINI/AFP via Getty Images Dr. Tedros Adhanom Ghebreyesus, WHO director, advised canceling holiday plans as COVID-19 cases spike. Top US health officials say the Omicron variant will be dominant in the US within weeks. In areas with local Omicron transmission, infections are doubling every 1.5 to 3 days, per the WHO. The World Health Organization's director-general recommended on Monday that people cancel or postpone their holiday events as the new Omicron variant drives a spike in COVID-19 cases. "An event canceled is better than a life canceled," Dr. Tedros Adhanom Ghebreyesus said at a press conference. He added: "It's better to cancel now and celebrate later, than to celebrate now and grieve later."The director-general's comments come as the Omicron variant spreads across the world at a rapid pace, breaking records in several countries, Insider's Marianne Guenot previously reported. In the United States, the seven-day rolling average for new COVID-19 infections was 125,775 on Friday, according to data from the Centers for Disease Control and Prevention. The nation's seven-day average test positivity rate currently stands at 7.2%, higher than the 5% threshold the WHO recommends staying below. New York State has been particularly hard hit, logging 21,027 positive COVID-19 cases Thursday, the highest number of single-day new infections the state has reported since the pandemic began, according to state data.On Monday, Mayor Muriel Bowser declared a state of emergency over the spike in cases in Washington, DC. Omicron will be dominant in the US in weeks, top health officials sayPresident Joe Biden and Dr. Anthony Fauci discuss the Omicron COVID-19 variant at the White House on November 29, 2021.Anna Moneymaker/Getty ImagesThe United States' troubling surge is thought to be fueled by the highly infectious Omicron variant, which was first identified last month. In areas with local Omicron transmission, infections are doubling every 1.5 to 3 days, per the WHO."Although Delta continues to circulate widely in the United States, Omicron is increasing rapidly," Dr. Rochelle Walensky, director of the CDC, said during a Friday White House briefing. "We expect it to become the dominant strain in the United States, as it has in other countries, in the coming weeks.""It's going to take over," Dr. Anthony Fauci, the nation's top infectious disease expert, said of Omicron during an interview with CNN's "State of the Union" Sunday. He stressed that Americans should get vaccinated and topped off with booster shots if they haven't already, adding, "Be prudent in everything else you do: When you travel in your indoor settings that are congregated, wear a mask."But although Fauci warned Americans earlier this month of a "really dark time ahead" come mid-January, he has stopped short of telling them not to gather for the holidays.Instead, he advised getting tested before attending indoor celebrations and avoiding gatherings entirely if it wasn't clear that all guests had been vaccinated.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderDec 20th, 2021

More European Countries Impose Travel Curbs As Regulators Greenlight Novavax Jab

More European Countries Impose Travel Curbs As Regulators Greenlight Novavax Jab It started with the Netherlands reimposing its COVID lockdown on Saturday, but now that the surge in cases and hospitalizations (coinciding with the arrival of the much-discussed but seldom seen omicron variant) has arrived both in the UK and across the channel on the Continent, it seems more major European economies are following suit. Per the FT, more European countries are rushing to tighten restrictions in an effort to help reduce the stop the COVID surge after the Netherlands reimposed a strict nationwide lockdown on Saturday. Germany, the biggest economy in the bloc (it's often seen as the EU's de facto leader, along with France), set new entry restrictions on people entering the country from the UK: they will be required to quarantine for 14 days regardless of their vaccination status. According to Berlin, the UK is now officially a "virus variant region", which warrants the tightest entry restrictions. What's more, only German citizens entering from the UK will be allowed in; Brits are temporarily banned from entering Germany. New travel restrictions have also been imposed on arrivals from Denmark, France and Norway, with new arrivals needing to quarantine for at least five days if they are not vaccinated or recovered from the virus. But foreigners aren't the only ones facing tighter restrictions in Germany. The German people are also facing new rules, with private gatherings over the holiday season capped at 10 people starting Dec. 28. Austria, which is just emerging from a nation-wide COVID lockdown, said it would allow entry only to vaccinated travelers starting Monday. However, those who haven't received a booster shot would be required to take a test in order to enter the country. But the most restrictive measures have been implemented by the Dutch government, which has closed all bars, non-essential shops, hospitality venues, cinemas and gyms until at least Jan. 14. And households are only allowed to invite four guests over during the Christmas holiday season. Additionally, Ireland is introducing an 2000 local time curfew for pubs and restaurants starting Monday after the government rowed back from recommendations from health experts to order hospitality venues to shut at 1700ET. Italy’s health ministry this weekend told regions to strengthen measures to manage the epidemic as officials fret about a potential surge in hospitalizations. Campania, the region that subsumes Naples and the Amalfi coast, has temporarily banned indoor gatherings including children’s parties. Finally, back in the UK, the media reported Monday morning that PM Boris Johnson likely won't impose any further restrictions before Christmas. The PM called a cabinet meeting this afternoon to discuss the latest data on the spread of the omicron variant and whether a two-week "circuit breaker" barring mixing indoors might be necessary. As more western governments resort to lockdowns and other restrictions, it's important to remember: deaths have remained well below their levels from a year ago. That's it, I am calling the Omicron variant a FUD here. Enough of lock-downs without convincing evidence that the cost-benefits is worth it. pic.twitter.com/dVx0fGEKlt — Arthur (@Arthur_0x) December 20, 2021 And while Moderna and Pfizer pump out new study data touting the efficacy of their respective vaccines, the EMA - Europe's top vaccine authority - has just officially recommended the Novavax vaccine for use in the bloc. Of course each individual member will need to decide on their own whether to approve it or not. European regulator recommends authorization of Novavax #covid19 vaccine pic.twitter.com/RObTy6NFr7 — Meg Tirrell (@megtirrell) December 20, 2021 COVID infections haven't only surged in Europe - they're rising in New York as well: both New York State and Washington DC, have reported successive days of record cases. On Sunday, Dr. Fauci warned of mounting “stress” on the US hospital system as new cases are "raging" through America and the world (although right now the US waves have mostly been contained to New York and Washington). "Our hospitals, if things look like they’re looking now, in the next week or two, are going to be very stressed with people," Fauci told ABC on Sunday. As for whether that will translate into more deaths, well, that remains to be seen. Tyler Durden Mon, 12/20/2021 - 11:42.....»»

Category: blogSource: zerohedgeDec 20th, 2021

"Santa Rally Is Finally Here": Futures Hit All Time High Day After Powell Goes Full Jean-Claude Trichet

"Santa Rally Is Finally Here": Futures Hit All Time High Day After Powell Goes Full Jean-Claude Trichet One day before what everyone knew would be a hawkish pivot by the Fed, the mood was dour with tech names tumbling and futures hanging one for dear life. One day after, Jerome Powell confirmed he would go full Jean-Claude Trichet as the Fed would not only turbo-taper into a sharply slowing economy, ending its QE program by March but then proceed with hiking rates as many as 3 times in 2022 (more than the 2 hike consensus), with the BOE shocking markets moments ago with a surprise rate hike and even the ECB trimming its turbo QE, and futures are.... at all time highs. That's right - eminis are higher by 140 points in 24 hours because the Fed was more hawkish than consensus expected.  At 8:00 a.m. ET, Dow e-minis were up 215 points, or 0.61%, S&P 500 e-minis were up 27.25 points, or 0.57%, and Nasdaq 100 e-minis were up 100 points, or 0.61%. Treasury yields jumped alongside European bonds after the BOE became the first major central bank to raise rates since the pandemic, while the dollar fell and the pound jumped. The Euro also hit session highs after the ECB seemed to turn ever so slightly more hawkish as its monthly QE is set to shrink in the coming year. "The market likes facts it can digest. With the uncertainty now gone, it finds relief,” said Frederik Hildner, a portfolio manager at Salm-Salm & Partner. Gradual rising rates “provides more firepower for the next downturn, as it displays the ability normalize monetary policy.” On Wednesday, Jerome Powell said the U.S. economy no longer needed increasing amounts of policy support as annual inflation has been running at more than double the central bank's target in recent months, while the economy nears full employment. Recent readings on surging producer and consumer prices as well as the fast-spreading Omicron variant of the coronavirus have fueled anxiety as the benchmark S&P 500 inches closer to a record high. "Is the Santa Rally finally here? Markets certainly seem to have a spring in their step... the prospect of three interest rate hikes in 2022 would suggest the central bank has a clear plan to not let inflation get out of control," Russ Mould, investment director at AJ Bell wrote in a client note. "Equally, it isn't being too aggressive to trip up the economy. This sense of balance is exactly what investors want, and an upbeat tone from the Fed certainly seems to have rubbed off on markets" Bell said, clearly goalseeking his narrative to the market's response as just 24 hours later he would be saying just the opposite when futures were tanking of hawkish Fed fears. Big tech stocks and banks led gains in premarket trading. Shares in Tesla, Microsoft, Meta and Amazon.com rose between 0.7% and 2.4%, with the lift pushing Apple shares nearer to an historic market value of $3 trillion. Bank stocks including JPMorgan, Morgan Stanley, Bank of America, Wells Fargo and Citigroup all gained between 0.7% and 0.8%. Here are some of the biggest U.S. movers today: Apple (APPL) and other big U.S. tech stocks rise after the Federal Reserve said that it would speed up its taper, joining in with a broader relief rally across risk assets. Apple shares are up 0.6%, with the stock drawing nearer to an historic market capitalization of $3 trillion. Also Thursday, Goldman Sachs said lead times for Apple’s iPhone have declined in the latest week. Assertio (ASRT US) shares rise 4% after the company announced the $44 million acquisition of the Otrexup device from Antares Pharma. Blue Bird (BLBD US) dropped 6% after the school bus-maker provided a weaker-than-expected sales outlook. The company also offered $75m shares at $16/share in a private placement. Danimer Scientific (DNMR) falls 10% after announcing that it plans to offer $175 million of convertible senior notes. Delta Air Lines (DAL) is up 2% after saying it expects to report a profit for the fourth quarter, citing a strong demand for travel over the winter holiday period and a decline in jet fuel prices. Other airline stocks are also higher. DocuSign (DOCU) falls 2% as Morgan Stanley issued a downgrade, saying third-quarter results changed the firm’s view regarding the durability of growth through tough post-pandemic comparables. Freyr Battery (FREY) gains 14% after executing its inaugural offtake agreement for at least 31 GWh of low-carbon battery cells. IronNet (IRNT US) slumps 25% after the cybersecurity company’s results fell short of expectations, prompting a Street-low target from Jefferies. Lennar Corp. (LEN US) declined 6% after it reported a forecast for purchase contracts that was weaker than expected. Plug Power (PLUG) gains 5% after signing an agreement with Korean electric-vehicle manufacturer Edison Motors to develop an electric city bus powered by hydrogen fuel cells. Syndax Pharmaceuticals (SNDX) falls 8% after pricing 3.2 million shares at $17.50 each. Tesla (TSLA) is up 2%, rising with other electric vehicle stocks amid a broader gain in technology stocks and U.S. futures on hopes that the Federal Reserve’s policy tightening will fight high inflation without hampering economic growth. Wayfair (W) falls 2% after BofA downgraded the stock to underperform, citing weak near-term data and difficult comparisons through the first quarter of 2022 for the online furniture retailer. European equities rally with Euro Stoxx 50 up as much as 2.1% before drifting off best levels. The U.K.’s exporter-heavy FTSE 100 Index pared some gains after the BOE decision, while European dipped modestly after the European Central Bank’s meeting.  Miners, tech and autos are the best performers, utilities and media names lag. Equities have whipsawed in recent weeks as investors attempted to price in the prospect of rate hikes, while assessing risks from the spread of the omicron variant. The market’s early response to the Fed signals some relief arising from policy clarity, and optimism that the rebound from pandemic lows can weather the pivot away from ultra-loose monetary settings. “The market is breathing a sigh of relief that the FOMC meeting suggested that it is taking inflation risks in the United States more seriously,” Ann-Katrin Petersen, an investment strategist at Allianz Global Investors, said in an interview with Bloomberg TV. “The question really will be whether the Fed will dare to do even more in order to taper the inflation risk.” Asian stocks rose, halting a four-day slide, as confidence in Federal Reserve policy allowed investors to take on riskier assets. The MSCI Asia Pacific Index climbed as much as 0.8%, buoyed by energy and technology shares. Japan was Asia’s top performer, aided by a weaker yen. Hong Kong and China stocks eked out gains amid ongoing concern over U.S. sanctions. Australian equities declined for a third day. Asia’s benchmark advanced for the first time this week on hopes the Fed will effectively combat surging prices without choking off economic growth. The U.S. central bank said it will double the pace of its asset tapering program to $30 billion a month and projected three interest-rate increases in 2022. In the run-up to the Fed’s decision, Asia’s equity gauge slumped almost 2% over the past four days, keeping it below the 50-day moving average.    The short-term boost to stock market sentiment is from Fed Chair Jerome Powell’s comments about wage inflation not being the main issue for now, and expectations that there’ll be full employment next year, said Ilya Spivak, head of Greater Asia at DailyFX. However, there’s a “meaningful risk” that the Fed’s latest policy stance will trigger liquidation as Asia stock portfolios are de-risked, Spivak said. Japan’s stocks rose for a second day after the yen weakened and U.S. stocks rallied amid speculation the Federal Reserve will combat surging prices without choking off economic growth. The Topix index climbed 1.5% to close at 2,013.08 in Tokyo, while the Nikkei 225 Stock Average advanced 2.1% to 29,066.32. Keyence Corp. contributed the most to the Topix’s gain, increasing 2.5%. Out of 2,181 shares in the index, 1,674 rose and 421 fell, while 86 were unchanged. “It wouldn’t be strange to see the discount on Japanese equities narrowing following the FOMC meeting results, with market interest centered around electronics, machinery, automakers and marine transportation stocks,” said Takashi Ito, an equity market strategist at Nomura Securities. Electronics firms and automakers helped lift the Topix as the yen headed for a four-day slump against the dollar, with the currency falling 0.1% to 114.19 Australia's S&P/ASX 200 index fell 0.4% to close at 7,295.70, extending its losing streak to a third day.  CSL was the worst performer after the benchmark’s second-biggest company by weighting completed a placement to fund its Vifor acquisition. Mesoblast was the top performer after saying it plans to conduct an additional U.S. Phase 3 trial of rexlemestrocel-L in patients with chronic low back pain.  Investors also digested November jobs data. Australian employment soared last month, smashing expectations and pushing the jobless rate lower as virus restrictions eased on the east coast. In New Zealand, the S&P/NZX 50 index fell 0.7% to 12,777.54 In rates, cash USTs bull steepened, bolstered by a large curve steepener that blocked in early London. Bunds are soft at the back end, peripherals slightly wider ahead of today’s ECB meeting. Gilts bear steepen slightly, white pack sonia futures are lower by 2-3.5 ticks. In FX, the dollar slipped for a second day and oil rose; cable snapped to best levels of the week after the BOE unexpectedly hiked rates.  The Bloomberg Dollar Spot Index fell for a second day as the greenback weakened against all its Group-of-10 peers apart from the yen; Tresury yields fell, led by the belly of the curve. Commodity currencies were the best G-10 performers, led by the krone, which reversed an earlier loss after Norway’s central bank raised its interest rate for the second time this year and flagged another increase in March as officials acted to cool the rebounding economy despite renewed coronavirus concerns. The Australian and New Zealand dollars reversed earlier losses amid upbeat stock markets; the Aussie earlier weakened as RBA Governor Lowe hinted at the prospect of no rate hikes next year. The yen fell as the Federal Reserve’s decision reaffirmed yield differentials ahead of the Bank of Japan’s outcome on Friday. Bonds rose after a solid auction. Elsewhere in FX, NOK outperforms in G-10 after Norges Bank rate action, other commodity currencies are similarly well bid. In commodities, Crude futures hold a narrow range around best levels of the session. WTI is up 1.1% near $71.70, Brent near $74.70. Spot gold grinds higher, adding ~$9 near $1,786/oz. LME copper outperforms in a well-bid base metals complex To the day ahead now, and the main highlights will be the aforementioned policy decisions from the ECB and the BoE. On the data side, we’ll also get the flash PMIs for December from around the world, the Euro Area trade balance for October, and in the US there’s November data on industrial production, housing starts and building permits, as well as the weekly initial jobless claims. Finally, EU leaders will be meeting for a summit in Brussels. Market Snapshot S&P 500 futures up 0.5% to 4,734.25 STOXX Europe 600 up 1.2% to 476.39 MXAP up 0.8% to 193.11 MXAPJ up 0.5% to 623.76 Nikkei up 2.1% to 29,066.32 Topix up 1.5% to 2,013.08 Hang Seng Index up 0.2% to 23,475.50 Shanghai Composite up 0.8% to 3,675.02 Sensex up 0.1% to 57,851.57 Australia S&P/ASX 200 down 0.4% to 7,295.66 Kospi up 0.6% to 3,006.41 Brent Futures up 1.0% to $74.59/bbl Gold spot up 0.5% to $1,786.03 U.S. Dollar Index down 0.36% to 96.16 German 10Y yield little changed at -0.36% Euro up 0.2% to $1.1316 Top Overnight News from Bloomberg The greenback is set for its biggest annual gain in six years and its rally appears to be far from over, market participants say. The prime mover: a hawkish Federal Reserve that’s drawn a roadmap of interest-rate increases over the next three years, while other central banks look much more reticent to withdraw stimulus The ECB is poised to unveil a gradual withdrawal from extraordinary pandemic stimulus in the face of soaring inflation whose path is further clouded by the omicron coronavirus variant The “phenomenal pace” at which the new Covid-19 omicron strain is spreading across the U.K. will trigger a surge in hospital admissions over the holiday period, according to Boris Johnson’s top medical adviser The Swiss National Bank kept both the deposit and the policy rate at -0.75%, as widely predicted by economists. With the global economic recovery on shaky footing due to the omicron variant, President Thomas Jordan and fellow policy makers also reiterated their pledge to supplement subzero rates with currency interventions as needed France will impose tougher rules on people traveling from the U.K., including a ban on non-essential trips and a requirement to self-isolate, as it tries to slow the spread of the omicron variant IHS Markit said its index tracking output across the U.K. economy fell to 53.2 this month from 57.6 in November, reflecting weaker-than-expected growth in service industries including hotels, restaurants and travel-related businesses. Business-to-business services stalled European power prices soared to records after Electricite de France SA said that two nuclear reactors will stop unexpectedly and two will have prolonged halts -- just as the continent heads for a cold snap with already depleted gas inventories Hungary’s central bank increased the effective base interest rate for the fifth time in as many weeks to tackle the fastest inflation since 2007 and shore up the battered forint A more detailed look at global markets courtesy of Newsquawk Asian equity markets traded mixed as the region digested the FOMC meeting. The ASX 200 (-0.4%) was negative with heavy losses in the healthcare sector and as COVID infections remained rampant. There were also notable comments from RBA Governor Lowe that the board discussed tapering bond purchases in February and ending it in May or could even end purchases in February if economic progress is better than expected, although it is also open to reviewing bond buying again in May if the data disappoints. The Nikkei 225 (+2.1%) outperformed and reclaimed the 29k level after the Lower House recently passed the record extra budget stimulus and with the latest trade data showing double-digit percentage surges in Imports and Exports, despite the latter slightly missing on expectations. The Hang Seng (+0.2%) and Shanghai Comp. (+0.8%) were varied with Hong Kong pressured by losses in the big tech names amid ongoing frictions between the world’s two largest economies and as US lawmakers proposed a bill to allow the US oversight of China audits, although the mainland was kept afloat amid further speculation of a potential LPR cut this month, as well as reports that China will boost financial support for small businesses and offer more longer-term loans to manufacturers. Finally, 10yr JGBs were indecisive despite the constructive mood in Tokyo and with price action stuck near the 152.00 focal point, while demand was also sidelined amid mixed results at the 20yr JGB auction and as the BoJ kickstarts its two-day meeting. Top Asian News Indonesia Reports First Omicron Case in Jakarta Facility Asia Stocks Snap Four-Day Drop as Traders Take on Risk After Fed Shimao Group Shares Set for Best Day in Month Money Manager Vanishes With $313 Million From China Builder Equities in Europe have taken their cue from the post-FOMC rally seen across Wall Street (Euro Stoxx 50 +1.6%; Stoxx 600 +1.1%) following somewhat mixed APAC trade. As a reminder, markets saw relief with one of the major risk events out of the way, and with Chair Powell refraining from throwing hawkish curveballs. That being said, the forecast does see three rate hikes next year, whilst the Fed Board next year will also be more hawkish – at least within the rotating voters - with George, Mester and Bullard poised to vote from 2022. Nonetheless, US equity future continues grinding higher with all contracts in the green and the RTY (+1.3%) outperforming vs the NQ (+0.7%), ES (+0.6%), and YM (+0.5%). Bourses in Europe also experience broad-based gains with no real outliers, although the upside momentum somewhat waned amid some softer-than-expected PMI metrics ahead of ECB. Sectors in Europe paint a clear pro-cyclical bias. Tech outperforms following a similar sectorial performance seen on Wall Street. Basic Resources and Oil & Gas follow a close second, with Autos and Travel & Leisure also among the biggest gainers. The downside sees Personal & Household Goods, Telecoms and Food & Beverages. Healthcare meanwhile fares better than its defensive peers as Novartis (+4%) is bolstered after commencing a new USD 15bln buyback, highlighting confidence in growth and pipeline. On the flip side, EDF (-12%) shares have slipped after it narrowed FY EBITDA forecasts and highlighted some faults with some nuclear reactors amid corrosion. Top European News Britain’s Covid Resurgence Cuts Growth to Slowest Since Lockdown SNB Says Franc Is Highly Valued as Omicron Clouds Outlook Norway Delivers Rate Hike That Omicron Had Threatened to Derail Erdogan Approves Third Capital Boost for State Banks Since 2019 In FX, not much bang for the Buck fits the bill accurately as it is panning out in the FOMC aftermath even though market expectations were matched and arguably exceeded in terms of dot plots showing three hikes in 2022 vs two anticipated by most and only one previously, while the unwinding of asset purchases will occur in double quick time to end in March next year instead of June. However, there appears to be enough in the overall statement, SEP and Fed chair Powell’s post-meeting press conference to offset the initial knee-jerk spike in the Dollar and index that lifted the latter very close to its current y-t-d peak at 96.914 vs 96.938 from November 24. Indeed, the terminal rate was maintained at 2.5%, no decision has been taken about whether to take a break after tapering before tightening, and the recovery in labour market participation has been disappointing to the point that it will now take longer to return to higher levels. In response, or on further reflection, the DXY has recoiled to 96.141 and through the 21 DMA that comes in at 96.238 today. NZD/AUD/CAD/GBP/EUR/CHF - All on the rebound vs their US counterpart, with the Kiwi back on the 0.6800 handle and also encouraged by NZ GDP contracting less than feared in Q3, while the Aussie is hovering around 0.7200 in wake of a stellar jobs report only partly tempered by dovish remarks from RBA Governor Lowe who is still not in the 2022 hike camp and non-committal about ending QE next February or extending until May. Elsewhere, the Loonie has clawed back a chunk of its losses amidst recovering crude prices to regain 1.2800+ status ahead of Canadian wholesale trade that is buried between a raft of US data and survey releases, Sterling is flirting with 1.3300 in advance of the BoE that is likely to hold fire irrespective of significantly hotter than forecast UK inflation, the Euro is pivoting 1.1300 pre-ECB that is eyed for details of life after the PEPP and the Franc is somewhat mixed post-SNB that maintained rates and a highly valued assessment of the Chf with readiness to intervene as required. Note, Usd/Chf is meandering from 0.9256 to 0.9221 vs Eur/Chf more elevated within a 1.0455-30 band. JPY - The Yen is underperforming on the eve of the BoJ and looking technically weak to compound its yield and rate disadvantage after Usd/Jpy closed above a key chart level on Wednesday (at 114.03). As such, Fib resistance is now exposed at 114.38 vs the circa 114.25 high, so far, while decent option expiry interest may be influential one way or the other into the NY cut given around 1.3 bn at the 114.25 strike, 1.7 bn at 114.30 and 1.2 bn or so at 114.50. In commodities, WTI and Brent front-month futures are taking advantage of the risk appetite coupled with the softer Buck. WTI Jan trades on either side of USD 71.50/bbl (vs low USD 71.39/bbl) while Brent Feb sees itself around USD 74.50/bbl (vs low USD 74.28/bbl). Complex-specific news has again been on the quiet end, with prices working off the macro impulses for the time being, and with volumes also light heading into Christmas trade. Elsewhere spot gold and silver ebb higher – in tandem with the Dollar, with the former eyeing a group of DMAs to the upside including the 100 (1,788/oz), 21 (1,789/oz) 200 (1,794/oz) and 50 (1,796/oz). Turning to base metals, LME copper has been catapulted higher amid the risk and weaker Dollar, with prices re-testing USD 9,500/t to the upside. Meanwhile, a Chinese government consultancy has said that China's steel consumption will dip 0.7% on an annual basis in 2022 amid policies for the real estate market and uncertainties linked to COVID-19 curb demand. US event calendar 8:30am: Dec. Initial Jobless Claims, est. 200,000, prior 184,000; Continuing Claims, est. 1.94m, prior 1.99m 8:30am: Nov. Housing Starts MoM, est. 3.1%, prior -0.7% 8:30am: Nov. Housing Starts, est. 1.57m, prior 1.52m 8:30am: Nov. Building Permits MoM, est. 0.5%, prior 4.0%, revised 4.2% 8:30am: Nov. Building Permits, est. 1.66m, prior 1.65m, revised 1.65m 8:30am: Dec. Philadelphia Fed Business Outl, est. 29.6, prior 39.0 9:15am: Nov. Manufacturing (SIC) Production, est. 0.7%, prior 1.2%; Industrial Production MoM, est. 0.6%, prior 1.6% 9:45am: Dec. Markit US Manufacturing PMI, est. 58.5, prior 58.3 9:45am: Dec. Markit US Services PMI, est. 58.8, prior 58.0 DB's Jim Reid concludes the overnight wrap Yesterday’s biggest story was obviously the Fed. In line with our US economists call (their full recap here), the FOMC doubled the pace of taper to $30bn a month, which would bring an end to QE in mid-March. The new dot plot showed three rate hikes in 2022, up from the Committee being split over one hike in September. Farther out, the median dot had 3 additional hikes in 2023 and 2 hikes in 2024, bringing fed funds just below their estimate of the longer-term rate. Notably, all 18 Committee members have liftoff occurring next year, and 10 have 3 hikes penciled in, suggesting consensus behind the recent hawkish turn was strong. Short-end market pricing increased in line and now has around 2.9 hikes priced for 2022. The first hike is fully priced for the June meeting, but notably, meetings as early as March are priced as live, more on that in a bit. In the statement, the Committee admitted that inflation had exceeded target for some time (dropping ‘transitory’ completely), and that liftoff would be tied to the economy reaching full employment. By the sounds of the press conference, progress toward full employment has proceeded pretty rapidly. Chair Powell noted that while labour force participation progress has been disappointing, almost every other measure of labour market strength shows a very strong labour market, and could create upside risks to inflation should wage growth start to increase beyond productivity. It is within that context that he framed the decision to taper faster, it will leave the Fed in a position to react as needed, providing optionality. In that vein, he stressed a few times that the lag between the end of taper and liftoff need not be as long as it was in the last cycle, and that the Fed will raise rates after taper is done whenever needed, hence meetings as early as March being live. Notably on Omicron, the Chair, like the rest of us, recognises we don’t know much about the variant yet, but seemed optimistic about the economy’s ability to withstand subsequent Covid shocks, regardless of Omicron’s specifics. While Covid shocks can tighten supply chains, discourage labour participation, and reduce demand, as more people get vaccinated those impacts should dwindle over time, so his argument went. Hammering the point home, he sounded confident that the economy can handle whatever Omicron brings without any additional QE, justifying the accelerated taper path despite Covid risks. The hawkish turn had been well forecast through Fed speakers since the last meeting, not least of which the Chair himself during Congressional testimony, which served to dull the market impact. Treasury yields were slightly higher, (2yr Tsys +0.6bps and 10yr Tsys +1.5 bps) but were quite docile for an FOMC afternoon. The dollar initially strengthened on the statement release before reversing course and ending the day -0.24% lower. Stocks were the real outperformers, as the S&P 500 rallied through the FOMC events, gaining +1.63%, the best daily performance in two months, while the Nasdaq increased +2.15%. The Russell 2000 matched the S&P, gaining +1.65%. Obviously the market was anticipating the change in policy, but if doubling taper and adding three rate hikes in the next year isn’t enough to tighten financial conditions, what is? The Chair was asked about that in so many words in the press conference, where he responded by noting financial conditions could change on a dime. Indeed, they will have to tighten from historically easy levels if the Fed is to bring inflation back to target through policy. The Fed may be out of the way now, but the central bank excitement continues today as both the ECB and the BoE announce their own policy decisions later on. We’ll start with the ECB, who like the Fed have faced much higher than expected inflation lately, with the November flash estimate coming in at +4.9%, which is the highest since the formation of the single currency. Whilst Omicron has cast a shadow of uncertainty, with Commission President von der Leyen saying yesterday that it was likely to become dominant in Europe by mid-January, our European economics team doesn’t think there has been anything concrete enough to alter the ECB from their course (like the Fed). In our European economists’ preview (link here) they write the ECB appears on track to initiate a transition to a monetary policy stance based more on policy rates and rates guidance and less on liquidity provision. The ECB is set to confirm that PEPP net purchases will end in March, but will cushion the blow by working flexibility into the post-PEPP asset purchase arrangement. They are also set to make the policy framework more flexible to better respond to inflation uncertainties. One thing to keep an eye out for in particular will be the latest inflation projections, with a report from Bloomberg suggesting that they’ll show inflation beneath the 2% target in both 2023 and 2024. So if that’s true, that could offer a route to arguing against a tightening of monetary policy for the time being, since the ECB’s forward guidance has been that it won’t raise rates until it sees inflation at the target “durably for the rest of the projection horizon”. Today’s other big decision comes from the BoE, where our UK economist is expecting that there’ll be a 15bps increase in Bank Rate, taking it up to 0.25% although they suggest it’s a very close call. See here for the rationale. Ahead of that decision later on, we received a very strong UK inflation print for November, with CPI rising to +5.1% (vs. +4.8% expected), up from +4.2% in October and the fastest pace in a decade. That’s running ahead of the BoE’s own staff forecasts in the November Monetary Policy Report, which had seen inflation at just +4.5% that month, so six-tenths beneath the realised figure. We’ll get their decision at 12:00 London time, 45 minutes ahead of the ECB’s. In terms of the latest on the Omicron variant, there are continued signs of concern in South Africa, with cases coming in at a record 26,976 yesterday, whilst the number in hospital at 7,339 is up +73% compared to a week ago. Meanwhile the UK recorded their highest number of cases since the pandemic began, at 78,610. England’s Chief Medical Officer, Chris Whitty, said that a lot of Covid records would be broken in the coming weeks, and also that a majority of cases in London were now from the Omicron variant. Separately, the French government is set to hold a meeting tomorrow on Covid measures, and EU leaders will be discussing the pandemic at their summit today. When it comes to Omicron’s economic impact, we could see some light shed on that today as the December flash PMIs are released from around the world. Overnight we’ve already had the numbers out of Australia and Japan where hints of a slowdown are apparent. Japan's Manufacturing PMI came out at 54.2 (54.5 previous) and the Composite at 51.8 (53.3 previous) while Australia’s Manufacturing and Composite came in at 57.4 and 54.9 respectively (59.2 and 55.7 previous). Overnight in Asia stocks are trading mostly higher led by the Nikkei (+1.78%) followed by the Shanghai Composite (+0.28%), and KOSPI (+0.22%). However the CSI (-0.07%) and Hang Seng (-0.81%) are losing ground on concerns of US sanctions on Chinese tech companies. In Australia, the November employment report registered a strong beat by adding 366.1k jobs against 200k consensus. This is being reflected in a +12.75 bps surge in Australia's 3y bond. Elsewhere, in India wholesale inflation for November rose +14.2% year on year, levels last seen in 2000 against a consensus of +11.98% on the back of higher food and input prices. DM futures are indicating a positive start to markets today with S&P 500 (+0.19%) and DAX (+1.04%) contracts both higher as we type. Ahead of the Fed, European markets had put in a fairly steady performance yesterday, with the STOXX 600 up +0.26%. That brought an end to a run of 5 successive declines, with technology stocks in particular seeing an outperformance. Sovereign bond markets were also subdued ahead of the ECB and BoE meetings later, with yields on 10yr bunds (+0.9bps), OATs (+0.5bps) and gilts (+1.2bps) only seeing modest moves higher. In DC, despite optimistic sounding talks earlier in the week, the latest yesterday was President Biden and Senator Manchin remained far apart on the administration’s build back better bill, imperiling its chances of passing before Christmas. Elsewhere, reports suggested the President would have more nominations for the remaining Fed Board vacancies this week. Looking at yesterday’s other data, US retail sales underwhelmed in November with growth of just +0.3% (vs. +0.8% expected), and measure excluding gas and motor vehicles was also up just +0.2% (vs. +0.8% expected). Also the NAHB’s housing market index for December moved up to a 10-month high of 84, in line with expectations. To the day ahead now, and the main highlights will be the aforementioned policy decisions from the ECB and the BoE. On the data side, we’ll also get the flash PMIs for December from around the world, the Euro Area trade balance for October, and in the US there’s November data on industrial production, housing starts and building permits, as well as the weekly initial jobless claims. Finally, EU leaders will be meeting for a summit in Brussels. Tyler Durden Thu, 12/16/2021 - 08:29.....»»

Category: blogSource: zerohedgeDec 16th, 2021

Omicron Cases Have Companies Rethinking Return to Work Plans

Companies of all sizes are rethinking their plans to send workers back to the office as the new omicron variant adds another layer of uncertainty. Alphabet’s Google and the nation’s second largest automaker Ford Motor Co. are among those once again delaying their return-to-office plans, while other businesses whose employees have already returned are considering… Companies of all sizes are rethinking their plans to send workers back to the office as the new omicron variant adds another layer of uncertainty. Alphabet’s Google and the nation’s second largest automaker Ford Motor Co. are among those once again delaying their return-to-office plans, while other businesses whose employees have already returned are considering adding extra precautions like requiring masks. Officials in the United Kingdom, Denmark, Norway and Sweden also have asked people in recent days to work from home if they can because of concerns about the variant. Meta, formerly known as Facebook, and ridesharing company Lyft separately announced Tuesday that they’re letting workers delay their return when offices fully reopen early next year. Meta still plans to open its headquarters at the end of January but will allow workers to delay their return as late as June. Lyft says it won’t require workers to come back to its offices for all of next year, though they will fully reopen as planned in February. [time-brightcove not-tgx=”true”] Janelle Gale, vice president of human resources for Meta, said the latest decision recognizes “some aren’t quite ready to come back.” The moves are the latest indication of how difficult it is for companies to set firm plans for their employees’ mandatory return as worries about a spike in new cases or new variants keep shifting deadlines. This fall, the delta variant spurred many big companies to postpone a mandatory return to early next year. “A year and a half ago, we thought this would be for a very short time,” said Jeff Levin-Scherz, population health leader at Willis Towers Watson, a global advisory firm. “But the pandemic has thrown us many curves, and employers need to continue to be nimble.” The firm’s survey of 543 employers with 5.2 million workers showed on average 34% of remote-capable employees remain remote, but that would decline to 27% by the first quarter of 2022. However, the survey was conducted before news of omicron surfaced. The delayed plans are yet another blow to already struggling restaurants, bars, dry cleaners and other businesses that rely on office workers as patrons. Particularly hard-hit are those in downtown or midtown areas of cities like New York dominated by office buildings that remain largely empty. The delays come even as U.S. health officials say early indications suggest omicron may be less dangerous than delta, which continues to fuel hospitalizations. Lawrence Gostin, a public health expert at Georgetown University, doesn’t believe there’s enough scientific information on omicron to warrant companies delaying their return-to-office plans. “There will be a constant stream of new variants as well as surges and waning of cases,” Gostin said. “We shouldn’t disrupt normal business activity at every possible trigger.” He noted that layered protection like masks, vaccinations and ventilation are highly effective at preventing virus spread in a workplace. Still, the stream of new variants is having a psychological impact on business owners. “Omicron has made me realize work life will never return to the way it was pre-COVID,” said Gisela Girard, president of advertising agency Creative Civilization, whose 12 employees have been working remotely since March 2020. “It made me realize how working from home is likely to keep employees, their families and also our clients safe.” This summer, Girard’s company aimed for a mandatory hybrid work plan to start in fall, but delta pushed back those plans to early next year. Now, omicron has her reconsidering not only those plans but whether employees should return at all. She renewed the office lease last year but said she’s rethinking the physical office space. For companies that have already brought workers back to the office, it’s harder to retreat and allow them to be remote again. Still, some are considering new safety measures. Kent Swig, president of Swig Equities LLC, a privately owned real estate investment and development company in Manhattan, said its 65 employees returned to the office in fall 2020 on a hybrid basis and went to five days a week in the office in May, after all were vaccinated. However, Swig says he’s now closely monitoring the new variant and will consider mandating masks and even requiring COVID-19 testing a few times a week if the threat increases. He said he will reverse course and start hybrid or remote work if the situation gets worse. “My first and foremost job is to protect all my staff,” Swig said. “I am going to err on the side of caution.” Levin-Scherz noted many employers have set multiple dates for return to the workplace over the past year, and at this point are looking to resolve more uncertainty before they set new dates. Target CEO Brian Cornell recently told The Associated Press that it’s “avoiding putting dates on the calendar” for a mandated return to its Minneapolis headquarters. Target started gradually opening collaboration areas and workspaces in the fall for employees who wanted an option to work on-site. “We’re going to learn along the way and make sure we make the right steps for our team,” Cornell said. Lyft said the decision to let workers choose to work remotely for all of 2022 wasn’t tied exclusively to omicron but said new variants are a factor contributing to uncertainty. “We’ve heard from our team members that they value continued flexibility in determining where they work and would benefit from additional time to plan,” said Ashley Adams, a Lyft spokeswoman. Meanwhile, Google is indefinitely delaying the mandatory return to its offices. A company spokesperson said in an email that the update was in line with its earlier guidance that a return would start no sooner than Jan. 10 and depend on local conditions. The company said it safely opened more than 90% of its U.S. offices and nearly 40% of U.S. workers came into the office in recent weeks. Ford said Monday that it will delay plans for hybrid work at its Dearborn, Michigan, headquarters until March and plans to start a pilot phase for select employees in February. It had previously said it wouldn’t start the hybrid work model before January. Ford said that the hybrid work model affects approximately 18,000 employees in North America. Hourly manufacturing employees returned to work in May 2020......»»

Category: topSource: timeDec 10th, 2021

Futures Drift Lower In Illiquid Session As Virus Fears Resurface

Futures Drift Lower In Illiquid Session As Virus Fears Resurface After three days of torrid gains, US futures and European markets fell as concerns about economic risks from restrictions to control the new variant outweighed optimism about the efficacy of vaccines after a study from Japan found that the omicron variant is 4.2 times more transmissible (as largely expected) in its early stage than delta. Both S&P 500 and Nasdaq futures dropped around -0.4% as traders awaited earnings from Broadcom, Oracle and Costco after the market close and tomorrow's key CPI print, while European equities drifted lower in quiet trade with little fresh news flow to drive price action. Uncertainty about monetary policy could keep stocks “significantly volatile,” according to Pierre Veyret, a technical analyst at ActivTrades in London. “Investors are likely to remain cautious and keep on monitoring the macro outlook, especially today’s U.S. initial jobless claims, in order to gather more clues on what and when could be the Fed’s next move,” said Veyret. In Asia, China Evergrande Group and Kaisa Group Holdings Ltd. officially defaulted on their dollar debt, while the People’s Bank of China raised its foreign currency reserve requirement ratio for a second time this year after the yuan climbed to the highest since 2018. Among individual moves, CVS Health Corp. jumped in pre-market trading after saying it would buy back shares and raise dividends. Drugmakers including Pfizer rose, while travel companies and airlines declined. European stocks erased gains of as much as 0.3% with the Stoxx 600 trading -0.1% in the red as investors weigh new economic restrictions prompted by the omicron variant against earlier optimism. The real estate subgroup was best performer, up 0.7%; energy company shares lead declines with a drop of 1.2%. The Euro Stoxx 50 is down 0.25%, reversing a modest push into the green at the open. Other cash indexes trade either side of flat. Oil & gas and retail names are the weakest sectors. UniCredit SpA rose after saying it will return at least 16 billion euros ($18.1 billion) to shareholders by 2024. Meanwhile, Electricite de France SA fell with the government considering a cap on regulated power tariffs to help curb soaring electricity prices. Here are some of the biggest European movers today: LPP shares rose as much as 12% after its 3Q earnings beat expectations. The figures confirm a rebound of sales in traditional stores and stronger margins, according to analysts. UniCredit shares gain as much as 8.4%, the most since November 2020, after the Italian lender unveiled its new strategic plan that includes the distribution of at least EU16b to shareholders by 2024. Société Marseillaise du Tunnel Prado Carénage (SMTPC) shares rise as much as 5.5% after Vinci Concessions and Eiffage said they reached a pact to act in concert for a tender offer at EU27/share. Zur Rose drops as much as 7.3% in Zurich after an offering of 650,000 shares priced at CHF290 apiece, representing a 12% discount to the last close. Neste Oyj shares slid as much as 5.7% as investors digested the unexpected resignation of Chief Executive Officer Peter Vanacker from the helm of the world’s biggest maker of renewable diesel. FirstGroup shares fall as much as 5.9% after 1H results, with Chairman David Martin saying the U.K.’s work-from- home edict will “clearly have an impact” on commuter trips. There are potential downside risks to estimates in the short term, if Covid restrictions tighten, according to Liberum (buy). Dr. Martens released solid 1H results, but there’s “nothing material to flag” and unlikely to be upgrades to FY Ebitda estimates, Morgan Stanley says in a note. Shares drop as much as 5.2% after initially gaining 8.9%. Electricite de France shares fall as much as 5.1% after Le Figaro said the French government is considering taking additional steps to keep electricity prices from rising too much amid a spike in energy costs. The global equity rally will be tested as traders expect volatility until there’s more clarity on omicron’s threat to the economy, and ahead of U.S. consumer inflation numbers this week and a Federal Reserve meeting next week that may provide clues on the pace of tapering and interest rate increases. “We are looking to potentially have a rise in volatility even if the market continues higher around those events next week,” said Frances Stacy, Optimal Capital portfolio strategist, on Bloomberg Television. “Many of the catalysts that gave us this boom out of Covid are slowing. And then you have the Fed potentially tapering into a decelerating economy.” Geopolitical tensions are also adding to investor concerns. Germany’s new foreign minister Annalena Baerbock doubled down on warnings from western politicians to Russia over Ukraine, saying that Moscow would pay a high price if it went ahead with an invasion of its neighbor. Separately, the U.S. said it will place SenseTime Group Inc. on an investment blacklist Friday, accusing the artificial intelligence startup of enabling human rights abuses. That’s after the U.S. House of Representatives on Wednesday passed legislation designed to punish China for its treatment of Uyghur Muslims in the country’s Xinjiang province. Asian stocks rose for a third day as investors reassessed concerns over the new virus strain and factored in the possibility that the Federal Reserve will accelerate the end of its quantitative easing.  The MSCI Asia Pacific Index added as much as 0.5%, extending its advance since Tuesday to almost 3%. Information technology and communication services were the sectors providing the biggest support to the climb, with benchmarks in China and Hong Kong among the region’s best performers. The CSI 300 Index gained 1.7% as consumer stocks rallied.   “The market had been initially wary of the Fed’s hawkish tilt in their stance, and a change in how they view inflation, but investors don’t seem too worried about it anymore,” said Tetsuo Seshimo, a fund manager at Saison Asset Management Co. “But this isn’t a theme that’s going away in the short term.”  Asia’s benchmark headed for its highest since Nov. 25, set to erase losses since the omicron variant was detected during the U.S. Thanksgiving holidays, but still in negative territory for 2021. The S&P 500 Index is up 25% this year, after gaining Wednesday on announcements by Pfizer Inc. and BioNTech SE that early lab studies showed a third dose of their Covid-19 vaccine neutralizes the omicron variant. “Funds are flowing into growth stocks with high estimated profit growth and ROE levels, a continuation of moves seen from yesterday,” said Takashi Ito, an equity market strategist at Nomura Securities in Tokyo. “But there could be some profit taking after the market rose for a few consecutive sessions.” Japanese stocks fell, cooling off after a two-day rally as investors weighed the potential impact of the omicron variant on the global economy. Electronics and auto makers were the biggest drags on the Topix, which fell 0.6%. Fanuc and Tokyo Electron were the largest contributors to a 0.5% loss in the Nikkei 225 Indian stocks ended higher, after swinging between gains and losses several times through the session, as traders shifted their focus to key economic data globally and at home in the days ahead.  The S&P BSE Sensex rose 0.3% to close at 58,807.13 in Mumbai, after falling as much as 0.5% earlier in the day. The gauge has gained 3.6% in the last three sessions, its biggest three-day advance in over a seven-month period, on optimism the economic recovery will be resilient despite the spread of the new Covid variant, with the RBI continuing its policy support intact.  The NSE Nifty 50 Index also advanced by similar magnitude on Thursday. Reliance Industries Ltd. contributed the most to the Sensex gain, rising 1.6%. Out of 30 shares in the Sensex index, equal number of stocks rose and fell. Fifteen of 19 sectoral indexes compiled by BSE Ltd. gained, led by a gauge of capital goods companies. The Reserve Bank of India kept borrowing costs at a record-low on Wednesday and voted 5-1 to retain its accommodative policy stance for as long as is necessary, reflecting its bias to support economic growth. The RBI expects the economy to expand 9.5% expansion in the year ending March, one of the fastest paces among the major growing world economies.  Markets’ focus will now shift to U.S. inflation data this week and a Federal Reserve meeting next week, which may provide clues on the pace of tapering and policy tightening. India will release its factory output data on Friday and consumer-price inflation on Monday.  “All eyes will be on crucial macro data (CPI & IIP) outcome which may further provide some direction to the markets,” Ajit Mishra, vice-president research at Religare Broking Ltd., wrote in a note. “The focus will remain on the global cues and updates regarding the new variant. We reiterate our cautious yet positive stance on the markets and suggest traders to focus on managing risk.” Australian stocks edged lower as miners, consumer shares retreated. The S&P/ASX 200 Index fell 0.3% to close at 7,384.50, snapping a four-day winning streak. Miners and consumer discretionary shares contributed the most to the benchmark’s decline. Redbubble was the worst performer, dropping the most since Oct. 14. Sydney Airport was among the top performers after regulators cleared a proposed takeover of the company. The stock also joined a global rally in travel shares after Pfizer and BioNTech said initial lab studies show a third dose of their Covid-19 vaccine may be effective at neutralizing the omicron variant. In New Zealand, the S&P/NZX 50 index fell 0.8% to 12,771.83 In rates, Treasury yields were mostly lower, led by the long end of the curve, while underperforming German bunds. 10Y TSY yields are lower by ~2bp at 1.4973%, trailing declines of 3bp-5bp for most European 10-year yields but remaining above 200-DMA, which it closed above Wednesday for first time since Nov. 29. Treasury futures trade near session highs, with cash yields lower by 3bp-4bp from the 5-year sector to the long end, inside Wednesday’s bear-steepening ranges. European bond markets lead the move, led by Ireland which cut 2022 issuance plans, as virus concerns weighed on most equity markets. U.S. auction cycle concludes with $22b 30-year reopening at 1pm ET, following two Fed purchase operations. Wednesday’s 10Y reopening auction drew 1.518%, tailing by about 0.4bp; Tuesday’s 3Y, which drew 1.000%, also trades at a profit, yielding 0.989% The WI 30Y yield 1.865% is below auction stops since January as sector has benefited from expectations that Fed rate increases beginning next year may strain the economy, as well as from strong equity-market performance driving increased allocation to bonds In FX, the Bloomberg Dollar Spot Index resumed its ascent, climbing 0.2% as the dollar advanced versus all Group-of-10 peers apart from the yen. TRY and ZAR are the weakest in EMFX.  The euro retreated, nearing the $1.13 handle and after touching a one-week high yesterday. One-week volatility for euro and sterling has risen to multi-month highs, with meetings by the Federal Reserve, the European Central Bank and the Bank of England in focus. The British pound fell as Goldman Sachs Group Inc. pushed back its forecast for a U.K. rate hike and business groups called for government support after Prime Minister Boris Johnson announced restrictions to curb the spread of the variant, which Bloomberg Economics estimates could cost the economy as much as 2 billion pounds ($2.6 billion) a month. A study found omicron is 4.2 times more transmissible than the delta variant in its early stages.   The pound hovered near its lowest level in more than a year against the dollar as fresh coronavirus restrictions weighed on the U.K.’s economic outlook. Expectations that the Bank of England will raise interest rates next Thursday continue to wane, with markets pricing less than six basis points of hikes. Goldman pushed back its forecast for a U.K. rate hike and business groups called for government support after Prime Minister Boris Johnson announced restrictions to curb the spread of the variant, which Bloomberg Economics estimates could cost the economy as much as 2 billion pounds ($2.6 billion) a month. A study found omicron is 4.2 times more transmissible than the delta variant in its early stages. Norway’s krone led losses among G-10 currencies as it snapped a three-day rally that had taken it to an almost three-week high against the greenback. In commodities, Crude futures drift lower. WTI slips back near $72 having stalled near $73 during Asian trade. Brent dips 0.5%, finding support just above $75. Spot gold trades flat near $1,782/oz Looking at the day ahead now, and it’s a quiet one on the calendar, with data releases including the US weekly initial jobless claims, as well as the German trade balance for October. Market Snapshot S&P 500 futures down 0.2% to 4,691.00 STOXX Europe 600 up 0.2% to 478.52 MXAP up 0.4% to 195.63 MXAPJ up 0.7% to 638.47 Nikkei down 0.5% to 28,725.47 Topix down 0.6% to 1,990.79 Hang Seng Index up 1.1% to 24,254.86 Shanghai Composite up 1.0% to 3,673.04 Sensex up 0.3% to 58,839.03 Australia S&P/ASX 200 down 0.3% to 7,384.46 Kospi up 0.9% to 3,029.57 Brent Futures down 0.3% to $75.58/bbl Gold spot up 0.0% to $1,783.15 U.S. Dollar Index up 0.20% to 96.09 German 10Y yield little changed at -0.34% Euro down 0.2% to $1.1318 Top Overnight News from Bloomberg European Central Bank governors are to discuss a temporary increase in the Asset Purchase Program with limits on the size and time of the commitment at a Dec. 16 meeting, Reuters reports, citing six people familiar with the matter Hungary raised interest rates for a fifth time in less than a month as policy makers try to rein in the fastest inflation in 14 years. The central bank hiked the one-week deposit rate by 20 basis points on Thursday to 3.3%, broadly matching the median estimate in a Bloomberg survey China’s central bank has signaled a limit to its tolerance for the yuan’s recent advance by setting its reference rate at a weaker-than-expected level China Evergrande Group and Kaisa Group Holdings were downgraded to restricted default by Fitch Ratings, which cited missed dollar bond interest payments in Evergrande’s case and failure to repay a $400 million dollar bond in Kaisa’s. Evergrande Group’s inability to meet its obligations will be dealt with in a market-oriented way, the head of the nation’s central bank said PBOC is exploring interlinking the e-CNY, as the digital yuan is known, system into the Faster Payment System in Hong Kong, says Mu Changchun, head of the Chinese central bank’s Digital Currency Institute Money managers have shown some tentative signs that they may be willing to start buying more Chinese dollar bonds again, after demand for the securities plunged to a 27-month low in November Greece plans to early repay the total amount of IMF’s bailout loan to the country in the first quarter of 2022, Finance Minister Christos Staikouras says in a Parapolitika radio interview The omicron variant of Covid-19 is 4.2 times more transmissible in its early stage than delta, according to a study by a Japanese scientist who advises the country’s health ministry, a finding likely to confirm fears about the new strain’s contagiousness Pfizer will have data telling how well its vaccine prevents infections with the omicron variant before the end of the year A detailed look at global markets courtesy of newsquawk Asian equity markets eventually traded mixed as the early tailwinds from the US gradually waned despite the recent encouragement on the vaccine front. All major US indices were underpinned in which the S&P 500 reclaimed the 4,700 level and approached closer to its ATHs, while Apple extended on record levels and moved closer to USD 3tln valuation. The ASX 200 (-0.3%) was initially kept afloat by resilience in defensives, although upside was restricted amid weakness in tech alongside concerns of a further deterioration in ties with China after Australia’s decision to boycott the Beijing Winter Olympics. The Nikkei 225 (-0.5%) was rangebound with the Japanese benchmark stalled by resistance ahead of the 29k level, although the downside was cushioned by recent currency weakness and a modest improvement in the Business Survey Index. The Hang Seng (+1.1%) and Shanghai Comp. (+1.0%) outperformed after China’s NDRC pledged support measures to boost consumption in rural areas and with some chatter regarding the possibility of another RRR cut in Q1 next year according SGH Macro citing a senior Chinese official. Furthermore, participants digested mixed inflation data from China including firmer than expected factory gate prices. CPI Y/Y was softer than forecast but it still registered the fastest pace of increase since August last year. Finally, 10yr JGBs briefly declined below the 152.00 level following the bear steepening stateside in which T-notes tested 130.00 to the downside and following a somewhat tepid US 10yr offering in which the b/c increased from prior but remained short of the six-auction average, while the results of the 5yr JGB auction were mixed and failed to spur prices with higher accepted prices offset by a weaker b/c. Top Asian News Evergrande Declared in Default as Massive Restructuring Looms China Dollar Junk Bonds Up After Fitch Move on Kaisa, Evergrande Gold Steady as Traders Assess Virus Risk Before Inflation Data China’s Credit Growth Rebounds After Slowing for Almost a Year Stocks in Europe trade have drifted lower in recent trade, giving up the modest gains seen at the open (Euro Stoxx 50 -0.5%, Stoxx 600 -0.2%), and following the mixed lead from APAC and amidst a lack of fresh fundamental catalysts. US equity futures are also subdued, with a relatively broad-based performance seen across the ES (-0.3%), NQ (-0.4%), YM (-0.3%) alongside some mild underperformance in the RTY (-0.6%). Markets are awaiting tomorrow’s US CPI metrics, but more importantly, are gearing up for next week’s blockbuster FOMC confab. Desks have attributed this week’s rebound to several factors working in unison, including a milder Omicron variant (thus far), Chinese policy easing, FOMO, buybacks/upbeat corporate commentary alongside the widely telegraphed hawkish Fed pivot. On the last note, it’s also worth keeping in mind that the rotating voters next year on the FOMC will be more hawkish with the addition of George, Mester and Bullard as voters, albeit some empty spots remain – namely Brainard’s spot as she takes over the Vice-Chair position. Back to Europe, sectors are mostly in the green but portray a defensive bias – with Healthcare, Telecoms, Food & Beverages and Personal & Household Goods at the top of the bunch, whilst Oil & Gas, Retail and Travel & Leisure resides on the other end of the spectrum. In terms of individual moves, UniCredit (+7.8%) shot up to the top of the Stoxx 600 after unveiling its 2024 targets – with the Co. looking to return at least EUR 16bln via dividend and buybacks between 2021-24. Sticking with banks, Deutsche Bank (-2.1%) is pressured after the US DoJ reportedly told Deutsche Bank it may have violated a criminal settlement, due to failures in alerting authorities about internal complaints at its asset management unit, according to sources. Elsewhere, AstraZeneca (+1.0%) is supported as its long-acting antibody combination received emergency use authorisation in the US for COVID-19 prevention in some individuals. Finally, Rolls-Royce (-3.7%) slipped despite an overall positive trading update. Top European News Rolls-Royce Sinks as Omicron Clouds Outlook for 2022 Comeback Harbour Energy Plans Dividend But Pushes Back Tolmount Again Toxic U.K. Tory Press Is Flashing Warning Sign for Boris Johnson Credit Suisse Chairman Horta-Osorio Broke Quarantine Rules In FX, the Greenback remains rangy amidst undulating US Treasury yields and a fluid flow of Omicron related headlines that are filling the void until this week’s main macro release arrives tomorrow in the form of CPI data. However, the index is drifting down in almost ever decreasing circles having retreated a bit further from peaks to a marginally deeper sub-96.000 trough on Wednesday, at 95.848, and forming a fractionally firmer base currently to stay within contact of the psychological level within a narrow 96.154-95.941 band, thus far. Ahead, latest jobless claims updates and the last refunding leg comprising Usd 22 bn long bonds after a reasonable 10 year outing, overall. CHF/EUR/CAD - No obvious reaction to Swiss SECO forecasts even though supply bottlenecks and stricter COVID-19 measures are putting a strain on the economy internationally in winter 2021/22, according to the Government affiliated body. Similarly, ECB sources reporting that views on the GC are converging on a limited, temporary increase of the APP at December’s policy meeting, via an envelope or time specified increase with more frequent reviews, hardly impacted the Euro, as Eur/Usd remained towards the bottom of a 1.1346-16 range and Usd/Chf continued to straddle 0.9200, albeit mostly on the weaker side. Meanwhile, the Loonie has also slipped to the back of the major ranks following yesterday’s largely non BoC event against the backdrop of softer crude prices and an indifferent risk tone, with Usd/Cad hovering mainly above 1.2650 between 1.2645-80 parameters. JPY/GBP/NZD/AUD - All sticking to tight confines against their US peer, as the Yen rotates around 113.50 again and Pound pivots 1.3200 in limbo awaiting top tier UK data on Friday that might shed more light on what is gearing up to be another tight BoE rate call next week. Moreover, Usd/Jpy looks pretty well and heavily flanked by option expiry interest either side and in between its 113.81-35 extremes given large amounts running off at the NY cut - see 6.59GMT post on the Headline Feed for full details. Elsewhere, the pendulum has swung down under in favour of the hitherto underperforming Kiwi, as Nzd/Usd popped over 0.6800 and Aud/Nzd stalled ahead of 1.0550 alongside a pull back in Aud/Usd from 0.7185+ at best to test support into 0.7150 in wake of comments by RBA’s Harker and the RBNZ rebalancing its TWI. In short, the former said Australia’s economy can run hot while dodging the runaway inflation that’s plaguing much of the world, signaling monetary policy will stay ultra-loose for some time yet, while the latter culminated in a bigger Cny contribution at 27% from 23.5%. SCANDI/EM - Another day and more appreciation for the Cnh and Cny, at least in early hours, with validation via the PBoC setting a sub-6.3500 midpoint fix for the onshore Yuan vs Buck. However, the offshore then re-weakened past 6.3500 per Dollar after the Chinese central bank opted to raise the FX RRR by 2ppts - effective 15th Dec. Meanwhile, the Nok gives back after midweek gains as Brent slips with WTI to the detriment of the Rub and Mxn as well. Conversely, the Huf has a further 20 bp 1 week repo hike from the NBH to lean on and the Brl got a boost from 150 bp tightening on top of the BCB signalling the same again when COPOM delivers its next SELIC rate call. In commodities, WTI and Brent front month futures have drifted lower from their best levels printed overnight, which saw WTI Jan briefly mount USD 73.00/bbl and Brent Feb eclipse 76.50/bbl. The complex was unfazed by WSJ source reports suggesting the Biden administration is said to be moving to tighten enforcement of sanctions against Iran, whilst US officials say if there is no progress in the nuclear talks. This comes ahead of the resumption of nuclear talks today, albeit the US delegation will only travel to Vienne over the weekend. With the likelihood of an imminent deal somewhat slim, participants will be eyeing any further deterioration in relations alongside additional demand/sanctions. Aside from that, price action will likely be dictated by the overall market tone in the absence of macro catalysts. Elsewhere, reports suggested the Marathon pipeline has been shut due to a crude oil leak estimated to be around 10 barrels from the 20-inch diameter Illinois pipeline, but again the headlines failed to spur the oil complex. Over to metals, spot gold trades sideways and remains under that cluster of DMAs which today sees the 100 at 1,790/oz, 200 and 1,792.50/oz and 50 and 1,795/oz. LME copper meanwhile has been drifting lower since the end of APAC trade, but the contract remains north of USD 9,500/t. US Event Calendar 8:30am: Dec. Initial Jobless Claims, est. 220,000, prior 222,000; Continuing Claims, est. 1.91m, prior 1.96m 9:45am: Dec. Langer Consumer Comfort, prior 51.0 10am: Oct. Wholesale Inventories MoM, est. 2.2%, prior 2.2%; Wholesale Trade Sales MoM, est. 1.0%, prior 1.1% 12pm: 3Q US Household Change in Net Wor, prior $5.85t DB's Jim Reid concludes the overnight wrap On the theme of advertising, here’s a final reminder about our special monthly survey for 2022, which will be closing today at 1pm London time. We ask about rates, equities, and the path of Covid-19 in 2022, amongst other things, and also return to a festive question we asked in 2019, namely your favourite ever Christmas songs. The link is here and it’s your last chance to complete. All help filling in very much appreciated. Following the strongest 2-day equity performance so far this year, yesterday saw the rally begin to peter out amidst growing concern that another round of restrictions over the coming weeks could set back the economic recovery. Ultimately the issue from a health perspective is that even if Omicron does prove to be less severe, which the initial indications so far have pointed to, a rise in transmissibility could offset that, and ultimately mean that more people are in hospital as a much bigger number of people would actually get Covid-19, even if a lower proportion of them are severely affected. We’ll start with the good news, and one new piece of information yesterday was that Pfizer and BioNTech announced the results from an initial study showing that three doses of their vaccine neutralised the Omicron variant of Covid-19. President Biden tweeted that the new data was “encouraging” and said it reinforced the point that boosters offer the highest protection, whilst Pfizer’s chief executive said that the final verdict would be the real-world efficacy data, which they expect to see toward the end of this year. We also had an update from the EU’s ECDC, who said that of the 337 Omicron cases reported in the EU/EEA so far, all of them were either asymptomatic or mild where severity was available, and that no deaths had yet been reported. Obviously, these sample sizes aren’t big enough to come to concrete conclusions yet, but if things continue this way that’s clearly a promising sign. On the other hand, the spread of infections has continued in South Africa, and the country reported 19,482 cases, which is the highest number since Omicron was first reported. That comes as a study from a Japanese scientist advising the health ministry in Japan said that Omicron was 4.2 times more transmissible than delta in its early stage. That hasn’t been peer-reviewed yet but would certainly back up all the other indications that this is a much more transmissible variant than seen before. These growing warning signs have led governments to keep toughening up restrictions, and here in the UK, the government announced they’d be moving to “Plan B” in England, which will see the reintroduction of guidance to work from home from Monday, and an extension of face masks to most public indoor venues. They will also be making Covid-19 passes mandatory for nightclubs and venues with large crowds, though a negative test will also be sufficient. That comes as cases have continued to rise, with the 7-day average now above 48,000 and at its highest level since January. Separately in Denmark, the government said that schools would close early for the Christmas break, amongst other restrictions. Equities struggled against this backdrop, with Europe’s STOXX 600 down -0.59%, although the S&P 500 managed to pare back its earlier losses to eke out a +0.31% gain. Cyclicals underperformed, but we did see volatility continue to subside, with the VIX down to its lowest closing level since Omicron emerged, at 19.9pts. In addition, there was an outperformance from tech stocks, with the NASDAQ (+0.64%) and the FANG+ index (+0.62%) seeing solid gains. The increasing risk-off tone didn’t bother oil prices either, with Brent crude (+0.50%) and WTI (+0.43%) continuing their run of gains this week, including further gains overnight, whilst European natural gas futures (+5.86%) closed above €100 per megawatt-hour for the first time in nearly 2 months. Over in sovereign bond markets, yields moved higher on both sides of the Atlantic for the most part, with those on 10yr Treasuries up +4.8bps to 1.52%, though this morning they’re down by -1.2bps. That’s the first time they’ve closed back above 1.5% since the session just before Thanksgiving, ahead of the news emerging about the Omicron variant. In Europe, there was an even bigger sell-off, with yields on 10yr bunds (+6.3bps), OATs (+6.9bps) and BTPs (+10.4bps) all moving higher, alongside a further widening in peripheral spreads. This more mixed performance has continued overnight in Asia, with a number of indices trading higher including the CSI (+1.76%), the Shanghai Composite (+1.03%), Hang Seng (+0.89%), and the KOSPI (+0.37%). However, both the Nikkei (-0.27%) and Australia’s ASX 200 (-0.28%) lost ground. On the data front, China’s inflation numbers this morning showed that CPI rose to +2.3% year-on-year in November, slightly lower than forecast +2.5%, albeit still the highest since last August. The PPI readings remained much stronger, but did fall back from a 26-year high last month to +12.9% year-on-year (vs. +12.1% forecast). Looking ahead, futures are indicating a mixed start in the US & Europe with S&P 500 (-0.13%) and DAX (+0.12%) seeing modest moves in either direction. Overnight we also heard from President Biden on Russia, who said that he hoped to announce high-level talks by tomorrow where they would discuss Russian concerns about NATO, and that this would include at least four major NATO allies. President Biden said the meeting was an explicit attempt to “bring down the temperature along the eastern front” that’s ramped up over recent days and weeks. Nevertheless, President Biden reinforced that the US was ready to implement severe economic sanctions should Russia invade Ukraine, telling reporters that he said to Putin there would be “economic consequences like none he’s ever seen”. Back to yesterday, and the Bank of Canada kept policy on hold at their meeting, as was expected. The bank reinforced their expectation for the 2 percent inflation target to be sustainably achieved in the “middle quarters of 2022”. Like other DM central banks, they are focused on persistently elevated inflation, which they tied to supply constraints that will take some time to alleviate. We had some rate hikes elsewhere, however, yesterday with Brazil’s central bank taking rates up by 150bps to 9.25%, whilst Poland’s hiked rates by +50bps to 1.75%. The main data of note yesterday were the US job openings for October, which rose to 11.033m (vs. 10.469m expected) after 2 successive monthly declines. Notably the quits rate, which is a good indicator of labour market tightness, saw its first monthly decline since May as it came down to 2.8%, from an all-time record of 3.0%. To the day ahead now, and it’s a quiet one on the calendar, with data releases including the US weekly initial jobless claims, as well as the German trade balance for October. Tyler Durden Thu, 12/09/2021 - 07:55.....»»

Category: dealsSource: nytDec 9th, 2021

Futures Jump In Volatile Session Dragged By Latest Twists In Omicron Saga

Futures Jump In Volatile Session Dragged By Latest Twists In Omicron Saga Much of the overnight session was a snooze fest with stocks drifting first higher then lower after surging on Tuesday, as the narrative meandered from "omicron fears ease" optimism to "vaccines won't work" pessimism, before futures took a sudden leg lower, dropping into the red just after 530am ET, following news that UK's Boris Johnson would introduce new restrictions in England to curb Omicron spread, sparking fears that Omicron is more dangerous that expected (and than futures reflected). However, this episode of pessimism proved short-lived because just an hour later, the WSJ confirmed that Omicron is really just a pitch for covid booster shots when it reported that even though the covid vaccine loses significant effectiveness against Omicron in an early study, this is miraculously reversed with a booster shot as three doses of the vaccine were able to neutralize the variant in an initial laboratory study, and the companies said two doses may still protect against severe disease. Futures quickly shot up on the news, spiking above the gamma "all clear" level of 4,700 in a move best summarized with the following chart. And so, after going nowhere, S&P futures climbed for a third day, last seen 12 points, or 0.3% higher, just around 4,700 after rising the most since March on Tuesday. Europe’s Stoxx 600 Index rose following the biggest jump in more than a year. In addition to the omicron soap opera, which as we noted yesterday turns out was just one staged covid booster shot advertisement (because Pfizer and Moderna can always do with a bigger yacth), sentiment was also lifted by Chinese authorities' reversal to "easing mode" and aggressive efforts to limit the fallout from property market woes which lifted risk assets in Asia even as key debt deadlines at China Evergrande Group and Kaisa Group Holdings Ltd. passed without any sign of payment. "Clearly in the very short term uncertainty has risen over the Omicron virus... but overall at this stage we do not believe it will derail the macro picture in the medium-term," said Jeremy Gatto, multi-asset portfolio manager at Unigestion. Treasury yields were little changed after rising across the curve Tuesday. The VIX spiked first on the FT news, then dropped back into the red, while the dollar was flat and crude rose after turning red. Besides macro, micro was also in play and here are some other notable premarket movers Apple (AAPL US) ticks 1% higher in premarket trading following a Nikkei report that the tech giant told suppliers to speed up iPhone output for Nov.-Jan, citing people it didn’t identify. Amazon.com (AMZN US) shares in focus after an Amazon Web Services outage is wreaking havoc on the e-commerce giant’s delivery operation Stitch Fix (SFIX US) tumbles 25% in U.S. premarket trading after a 2Q forecast miss that analysts called “surprising,” while customer additions also disappointed Pfizer (PFE US) shares drop 2% in U.S. premarket trading after an early study showed that the company’s vaccine provides less immunity to the omicron variant Dare Bioscience (DARE US) soars 41% in premarket trading after Xaciato gets FDA approval for treating bacterial vaginosis EPAM Systems (EPAM US) soars 8% in premarket after S&P Dow Jones Indices said co. will replace Kansas City Southern in the S&P 500 effective prior to the opening of trading on Dec. 14 Goodyear Tire & Rubber (GT US) upgraded to buy from hold and target boosted to Street-high $32 from $29 at Deutsche Bank with the company seen as a major beneficiary from the shift to electric vehicles. Shares up 4.3% in premarket trading NXP Semiconductor (NXPI US) shares slide 2.2% in U.S. premarket trading after the chipmaker got a new sell rating at UBS Dave & Buster’s (PLAY US) gained 3.5% postmarket after the dining and entertainment company reported EPS that beat the average analyst estimate and authorized a $100 million share buyback program "Every day that passes without a wave of severe cases driven by Omicron is offering more hope that this won't be the curveball to throw the recovery off course," wrote Deutsche Bank strategist Jim Reid in a note to clients. In Europe, the Stoxx Europe 600 Index initially drifted both higher and lower then bounced 0.3% on the favorable Pfizer and BioNTech news one day after posting its bigger surge in a year. European benchmark index earlier rose as much as 2%, dropped 2.1%. Health care sub-index leads gains, rising 1.2%, followed by travel stocks. The Stoxx 600 closed 2.5% higher on Tuesday, biggest gain since November 2020 Earlier in the session, Asia stocks also rose for a second day as concerns about the omicron variant and China’s economic slowdown eased. The MSCI AsiaPacific Index climbed as much as 0.9% after capping its biggest one-day gain in more than three months on Tuesday. Technology and health-care shares provided the biggest boosts. Benchmarks in New Zealand and India -- where the central bank held rates at a record low -- were among the day’s best performers. “The biggest point appealing to investors is that the Omicron variant doesn’t seem to be too fatal,” which is encouraging to those who had been going short to close out their positions, said Tomoichiro Kubota, a senior market analyst at Matsui Securities in Tokyo. “Worry that the Chinese economy will lose its growth momentum has subsided quite a bit.” Thus far, Omicron cases haven’t overwhelmed hospitals while vaccine developments indicate some promise in dealing with the variant. While vaccines like the one made by Pfizer and BioNTech SE may be less powerful against the new strain, protection can be fortified with boosters. The two-day rally in the Asian stock benchmark marks a sharp turnaround following weeks of declines since mid-November. Stocks in China also climbed for a second day. The nation’s central bank said Monday it will cut the amount of cash most banks must keep in reserve from Dec. 15, providing a liquidity boost and helping restore investor confidence In FX, news on the Omicron variant rippled through G-10 currencies after a report the Pfizer vaccine could neutralize the Omicron variant boosted risk appetite. The pound underperformed other Group-of-10 peers, extending declines after reports that the U.K. government is poised to introduce new Covid-19 restrictions.  A gauge of the dollar’s strength fluctuated as Treasuries pare gains and stocks rally after a report that said Pfizer and BioNTech claim three vaccine doses neutralize the omicron variant. EUR/USD rose 0.1% to 1.1277; USD/NOK falls as much as 0.8% to 8.9459, lowest since Nov. 25 Sterling fell against the euro and the dollar, as traders pare bets on the path of Bank of England rate hikes following reports that the U.K. could introduce fresh Covid-19 restrictions such as working from home and vaccine passports for large venues. Money markets pare rate hike bets, with just six basis points of interest rate hikes priced in for the BOE meeting next week. GBP/USD falls as much as 0.6% to 1.3163, testing the key level of 1.3165, the 38.2% Fibonacci retracement of gains since March 2020. EUR/GBP gains as much as 0.7% to 0.85695, the highest since Nov. 11. “The market will probably see this as more U.K. specific and therefore an issue for the pound at least in the short term,” said Stuart Bennett, FX strategist at Santander. In rates, Treasuries were mixed with markets reacting in a risk-on manner to the Dow Jones report that Pfizer and BioNTech claim three vaccine doses neutralize the omicron variant. Yields remain richer by less than 1bp across long-end of the curve while front-end trades cheaper on the day, flattening curve spreads. Session’s focal points include $36b 10-year note reopening at 1pm ET, following Tuesday’s strong 3-year note auction. Treasury 10-year yields around 1.475%, near flat on the day; gilts outperform slightly after Financial Times report that further Covid restrictions will be announced imminently to curb the variant’s spread. U.S. 2-year yields were cheaper by 1bp on the day, rose to new 2021 high following Pfizer vaccine report; 2s10s spread erased a flattening move In commodities, crude futures turned red, WTI falling 0.8%, popping back below $72. Spot gold holds Asia’s modest gains, adding $8 to trade near $1,792/oz. Looking at the day ahead, and Olaf Scholz is expected to become German Chancellor in a Bundestag vote today. From central banks, the Bank of Canada will be deciding on rates, and we’ll also hear from ECB President Lagarde, Vice President de Guindos and the ECB’s Schnabel. Finally, data releases include the JOLTS job openings from the US for October. Market Snapshot S&P 500 futures up 0.2% to 4,693.75 STOXX Europe 600 little changed at 480.55 MXAP up 0.7% to 194.84 MXAPJ up 0.6% to 632.78 Nikkei up 1.4% to 28,860.62 Topix up 0.6% to 2,002.24 Hang Seng Index little changed at 23,996.87 Shanghai Composite up 1.2% to 3,637.57 Sensex up 1.8% to 58,654.25 Australia S&P/ASX 200 up 1.3% to 7,405.45 Kospi up 0.3% to 3,001.80 Brent Futures down 0.5% to $75.04/bbl Gold spot up 0.3% to $1,790.33 U.S. Dollar Index down 0.17% to 96.20 German 10Y yield little changed at -0.38% Euro up 0.2% to $1.1286 Brent Futures down 0.5% to $75.04/bbl Top Overnight News from Bloomberg The omicron variant of Covid-19 must inflict significant damage on the euro-area economy for European Central Bank Governing Council member Martins Kazaks to back additional stimulus “The current phase of higher inflation could last longer than expected only some months ago,” ECB vice president Luis de Guindos says at event The earliest studies on omicron are in and the glimpse they’re providing is cautiously optimistic: while vaccines like the one made by Pfizer Inc. and BioNTech SE may be less powerful against the new variant, protection can be fortified with boosters U.K. Prime Minister Boris Johnson is set to announce new Covid-19 restrictions in England, known as “Plan B,” to stop the spread of the Omicron variant, the Financial Times reported, citing three senior Whitehall officials familiar with the matter. French economic activity will continue to rise in December, despite another wave of the Covid-19 pandemic and fresh uncertainty over the omicron variant, according the Bank of France The Kingdom of Denmark will sell a sovereign green bond for the first time next month to help the Nordic nation meet one of the world’s most ambitious climate targets Tom Hayes, the former UBS Group AG and Citigroup Inc. trader who became the face of the sprawling Libor scandal, has lost his bid to appeal his U.K. criminal conviction Poland is poised for a hefty increase in interest rates after a spike in inflation to a two- decade high convinced central bankers that spiraling price growth isn’t transitory. Of 32 economists surveyed by Bloomberg, 20 expect a 50 basis-point hike to 1.75% today and 10 see the rate rising to 2%. The other two expect a 25 basis-point increase Australia is weighing plans for a central bank-issued digital currency alongside the regulation of the crypto market as it seeks to overhaul how the nation’s consumers and businesses pay for goods and services Bank of Japan Deputy Governor Masayoshi Amamiya dropped a strong hint that big firms are in less need of funding support, a comment that will likely fuel speculation the BOJ will scale back its pandemic buying of corporate bonds and commercial paper A detailed summary of global markets courtesy of Newsquawk Asian equity markets traded positively as the region took impetus from the global risk momentum following the tech-led rally in the US, where Apple shares rose to a record high and amid increased optimism that Omicron could be less dangerous than prior variants. This was after early hospitalisation data from South Africa showed the new variant could result in less severe COVID and NIH's Fauci also suggested that Omicron was 'almost certainly' not more severe than Delta, although there were some slight headwinds in late Wall Street trade after a small study pointed to reduced vaccine efficacy against the new variant. The ASX 200 (+1.3%) was underpinned in which tech led the broad gains across sectors as it found inspiration from the outperformance of big tech stateside, and with energy bolstered by the recent rebound in underlying oil prices. The Nikkei 225 (+1.4%) conformed to the upbeat mood although further advances were capped after USD/JPY eased off the prior day’s highs and following a wider-than-expected contraction to the economy with the final annualised Q3 GDP at -3.6% vs exp. -3.1%. The Hang Seng (+0.1%) and Shanghai Comp. (+1.2%) were less decisive and initially lagged behind their peers as sentiment was mired by default concerns due to the failure by Evergrande to pay bondholders in the lapsed 30-day grace period on two USD-denominated bond payments and with Kaisa Group in a trading halt after missing the deadline for USD 400mln in offshore debt which didn’t bode well for its affiliates. Furthermore, China Aoyuan Property Group received over USD 650mln in repayment demands and warned it may not be able to meet debt obligations, while a subdued Hong Kong debut for Weibo shares which declined around 6% from the offer price added to the glum mood for Hong Kong’s blue-chip tech stocks, as did reports that China is to tighten rules for tech companies seeking foreign funding. Finally, 10yr JGBs languished after spillover selling from T-notes and due to the heightened global risk appetite, but with downside stemmed by support at the key psychological 152.00 level and amid the presence of the BoJ in the market today for over JPY 1.0tln of JGBs. Top Asian News China Clean Car Sales Spike as Consumers Embrace Electric Gold Edges Higher as Traders Weigh Vaccine Efficacy, Geopolitics Paint Maker Avia Avian Falls in Debut After $763 Million IPO Tokyo Prepares to Introduce Same-Sex Partnerships Next Year Equities in Europe shifted to a lower configuration after a mixed open (Euro Stoxx 50 -0.7%; Stoxx 600 -0.1%) as sentiment was dented by rumours of tightening COVID measures in the UK. Markets have been awaiting the next catalyst to latch onto for direction amidst a lack of fresh fundamentals. US equity futures have also been dented but to a lesser extent, with the YM (-0.1%) and ES (Unch) straddling behind the NQ (+0.2%) and RTY (+0.2%). Sources in recent trade suggested an 85% chance of the UK implementing COVID Plan B, according to Times' Dunn; reports indicate such restrictions could be implemented on Thursday, with the potential for an announcement today. In terms of the timings, the UK cabinet is penciled in for 15:45GMT and presser for 17:30GMT on Plan B, according to BBC's Goodall. Note, this will not be a formal lockdown but more so work-from-home guidance, vaccine passports for nightlife and numerical restrictions on indoor/outdoor gatherings. APAC closed in the green across the board following the tech-led rally in the US. The upside overnight was attributed to a continuation of market optimism after early hospitalisation data from South Africa showed the new variant could result in less severe COVID, albeit after a small study pointed to reduced vaccine efficacy against the new variant. Participants will be closely watching any updates from the vaccine-makers, with the BioNTech CEO stating the drugmaker has data coming Wednesday or Thursday related to the new COVID-19 variant, thus markets will be eyeing a potential update this week ahead of the Pfizer investor call next Friday. Back to European, the UK’s FTSE 100 (Unch) and the Swiss SMI (+0.8%) are largely buoyed by their defensive stocks, with sectors seeing a defensive formation, albeit to a slightly lesser extent vs the open. Healthcare retains its top spot closely followed by Food & Beverages, although Personal & Household Goods and Telecoms have moved down the ranks. On the flip side, Retail, Banks and Travel & Leisure trade at the bottom of the bunch, whilst Tech nursed some earlier losses after opening as the lagging sector. In terms of individual movers, Nestle (+1.8%) is bolstered after announcing a CHF 20bln share repurchase programme alongside a stake reduction in L'Oreal (+1.0%) to 20.1% from 23.3% - worth some EUR 9bln. L’Oreal has shrugged off the stake sale and conforms to the firm sectoral performance across the Personal & Household Goods. Meanwhile, chip names are under pressure after Nikkei sources reported that Apple (+0.8% pre-market) was forced to scale back the total output target for 2021, with iPhone and iPad assembly halted for several days due to supply chain constraints and restrictions on the use of power in China, multiple sources told Nikkei. STMicroelectronics (-1.7%) and Infineon (-5.0%) are among the losers, with the latter also weighed on by a broker downgrade at JPM. Top European News ECB’s Kazaks Sets High Bar for Omicron-Driven Extra Stimulus Biden Is Left Guessing Over Putin’s Ultimate Aim in Ukraine Byju’s Buys Austria’s GeoGebra to Bolster Online Math Courses Scholz Elected by Parliament to Take Charge as German Chancellor In FX, the Dollar index continues to hold above 96.000, but bounces have become less pronounced and the range so far today is distinctly narrower (96.285-130) in fitting with the generally restrained trade in pairings within the basket and beyond, bar a few exceptions. Price action suggests a relatively muted midweek session unless a major game-changer arrives and Wednesday’s agenda does not bode that well in terms of catalysts aside from JOLTS and the BoC policy meeting before the second leg of this week’s refunding in the form of Usd 36 bn 10 year notes. AUD/EUR - Notwithstanding the largely contained currency moves noted above, the Aussie is maintaining bullish momentum on specific factors including strength in iron ore prices and encouraging Chinese data plus PBoC easing that should have a positive knock-on effect for one of its main trading partners even though diplomatic relations between the two nations are increasingly strained. Aud/Usd has also cleared a couple of technical hurdles on the way up to circa 0.7143 and Aud/Nzd is firmer on the 1.0500 handle ahead of the RBA’s latest chart pack release and a speech by Governor Lowe. Elsewhere, the Euro has regained composure after its sub-1.1250 tumble on Tuesday vs the Buck and dip through 0.8500 against the Pound, but still faces psychological resistance at 1.1300 and the 21 DMA that comes in at 1.1317 today, while Eur/Gbp needs to breach the 100 DMA (0.8513) convincingly or close above to confirm a change in direction for the cross from a chart perspective. CHF/CAD/JPY/GBP/NZD - All sitting tight in relation to their US counterpart, with the Franc paring some declines between 0.9255-30 parameters and the Loonie straddling 1.2650 in the run up to the aforementioned BoC that is widely seen as a non-event given no new MPR or press conference, not to mention the actual changes in QE and rate guidance last time. Nevertheless, implied volatility is quite high via a 63 pip breakeven for Usd/Cad. Meanwhile, Sterling lost grip of the 1.3200 handle amidst swirling speculation about the UK reverting to plan B and more Tory MPs calling for PM Johnson to resign, the Yen is rotating around 113.50 eyeing broad risk sentiment and US Treasury yields in context of spreads to JGBs, and the Kiwi is lagging after touching 0.6800 awaiting independent impetus from NZ manufacturing sales for Q3. SCANDI/EM - The Nok extended its advantage/outperformance against the Sek as Brent rebounded towards Usd 76/brl in early trade and Riksbank’s Jansson retained reservations about flagging a repo rate hike at the end of the forecast horizon, while the Mxn and Rub also initially derived some support from oil with the latter also taking on board latest hawkish talk from the CBR. However, the Cny and Cnh are outpacing their rivals again with some assistance from a firmer PBoC midpoint fix to hit multi-year peaks vs the Usd and probe 6.3500 ahead of option expiry interest at 6.3000 and a Fib retracement at 6.2946, in stark contrast to the Try that is unwinding recent recovery gains with no help from the latest blast from Turkish President Erdogan - see 10.00GMT post in the Headline Feed for more. Conversely, the Czk has taken heed of CNB’s Holub underscoring tightening signals and expectations for the next rate convene and the Pln and Brl are anticipating hikes from the NBP and BCB. In commodities, crude futures have been hit on the prospect of imminent COVID-related measures in the UK, albeit the measures do not involve lockdowns. Brent and WTI front month futures slipped from European highs to breach APAC lows. The former dipped below USD 74.50/bbl from a USD 76.00/bbl European peak while its WTI counterpart tested USD 71.00/bbl from USD 72.50/bbl at best. Overnight the benchmarks traded on either side the USD 75/bbl mark and just under USD 72/bbl after the weekly Private Inventories printed a larger-than-expected draw (-3.6mln vs exp. -3.1mln), albeit the internals were less bullish. Yesterday also saw the release of the EIA STEO, cut its 2021 world oil demand growth forecast by an insignificant 10k BPD but raised the 2022 metric by 200k BPD – with the IEA and OPEC monthly reports poised to be released next week. On the vaccine front, a small preliminary study of 12 people showed a 40x reduction in neutralization capacity of the Pfizer vaccine against Omicron, but early hospitalisation data from South Africa showed the new variant could result in less severe COVID. BioNTech CEO said they have data coming in on Wednesday or Thursday related to the new Omicron variant. The geopolitical space is also worth keeping on the radar, with US President Biden yesterday warning Russian President Putin that gas exports via Nord Stream 2 will be targeted and more troops will be deployed if he orders an invasion of Ukraine. Further, reports suggested, an Indian army helicopter crashed in Tamil Nadu, with Chief of Defence staff reportedly on board, according to Sputnik. Note, Tamil Nadu is located towards the south of the country and away from conflict zones. Elsewhere spot gold was supported by the overnight pullback in the Dollar, but the recent risk aversion took the yellow metal above the 100 DMA around USD 1,790/oz, with nearby upside levels including the 200 DMA (1,792/oz) and the 50 DMA (1,794/oz). Copper prices meanwhile consolidated within a tight range, with LME copper holding onto a USD 9,500/t handle (just about). Dalian iron ore extended on gains in a continuation of the upside seen in recent trade. US Event Calendar 7am: Dec. MBA Mortgage Applications, prior -7.2% 10am: Oct. JOLTs Job Openings, est. 10.5m, prior 10.4m DB's Jim Reid concludes the overnight wrap A reminder that we are currently conducting our special 2022 survey. We ask about rates, equities, bond yields and the path of covid in 2022, amongst other things, and also return to a festive question we asked in 2019, namely your favourite ever Christmas songs. The link is here and it’ll be open until tomorrow. All help filling in very much appreciated. My optimism for life has been shattered this morning. Not from the markets or the virus but just as I woke this morning England cricketers finally surrendered and collapsed in a heap on the first day of the Ashes - one the oldest international rivalries in sport. It was all I could do not to turn round and go back to bed. However out of duty I’m soldering on. After the twins nativity play went without incident yesterday, this morning it’s Maisie’s turn. Given she’s in a wheelchair at the moment she can’t get on stage so they’ve given her a solo singing spot at the start. I’m going so I can bring a bucket for all my wife’s tears as she sings!! If I shed a tear I’ll pretend it’s because of the cricket. The global market rebound continued to gather strength yesterday as investors became increasingly optimistic that the Omicron variant wouldn’t prove as bad as initially feared. To be honest, it was more the absence of bad news rather than any concrete good news helping to drive sentiment. Late in the US session we did see some headlines suggesting that the Pfizer vaccine may provide some defence against Omicron but also that the new variant does evade some of the immunity produced by this vaccine. This report of the small study (12 people!!) from South Africa lacked substance but you could take positives and negatives from it. More information is clearly needed. For the markets though, every day that passes without a wave of severe cases driven by Omicron is offering more hope that this won’t be the curveball to throw the recovery off course. Indeed, to get a sense of the scale of the market rebound, both the S&P 500 and the STOXX 600 in Europe have now clocked in their strongest 2-day performances of 2021 so far, with the indices up by +3.27% and +3.76% respectively since the start of the week. Meanwhile, the VIX fell below 25 for the first time in a week. On the day, the S&P 500 (+2.07%) put in its strongest daily performance since March, whilst the STOXX 600 (+2.45%) saw its strongest daily performance since the news that the Pfizer vaccine was successful in trials back in November 2020. Once again the gains were incredibly broad-based, albeit with cyclical sectors leading the way. The Nasdaq (+3.03%) outperformed the S&P 500 for the first time in a week as tech shares led the rally. Small cap stocks also had a strong day, with the Russell 2000 up +2.28%, on the back of Omicron optimism. This recovery in risk assets was also seen in the bounceback in oil prices, with Brent crude (+3.23%) and WTI (+3.68%) now both up by more than $5.5/bbl since the start of the week, which puts them well on the way to ending a run of 6 consecutive weekly declines. For further evidence of this increased optimism, we can also look at the way that investors have been dialling back up their estimates of future rate hikes from the Fed, with yesterday seeing another push in this direction. Before the Omicron news hit, Fed fund futures were fully pricing in an initial hike by the June meeting, but by the close on the Monday after Thanksgiving they’d moved down those odds to just 61% in June, with an initial hike not fully priced until September. Fast forward just over a week however, and we’re now not only back to pricing in a June hike, but the odds of a May hike are standing at +78.8%, which is actually higher than the +66.1% chance priced before the Omicron news hit. A reminder that we’re just a week away now from the Fed’s next decision, where it’s hotly anticipated they could accelerate the pace at which they’ll taper their asset purchases. With investors bringing forward their bets on monetary tightening, front-end US Treasury yields were hitting post-pandemic highs yesterday, with the 2yr Treasury yield up +5.8bps to 0.69%, a level we haven’t seen since March 2020. Longer-dated yield increases weren’t as large, with the 10yr yield up +3.9bps to 1.47%, and the 5s30s curve flattened another -1.8bps to 54.4bps, just above the post-pandemic low of 53.7bps. Over in Europe there was similarly a rise in most countries’ bond yields, with those on 10yr bunds (+1.4bps), OATs (+1.0bps) and BTPs (+4.4bps) all moving higher, though incidentally, the 5s30s curve in Germany was also down -2.2bps to its own post-pandemic low of 50.0bps. One pretty big news story that markets have been relatively unperturbed by so far is the rising tensions between the US and Russia over Ukraine. Yesterday saw a video call between US President Biden and Russian President Putin. The US readout from the call did not offer much in the way of concrete details, but if you’re looking for any optimistic news, it said that both sides tasked their teams with following up. Setting the background for the call, there were reports immediately beforehand that the US was considering evacuating their citizens and posturing to stop Nord Stream 2 if Russia invaded Ukraine. The Ruble appreciated +0.42% against the dollar, and is now only slightly weaker versus the dollar on the week. Overnight in Asia stocks are trading mostly higher led by the Nikkei (+1.49%), CSI (+1.11%), Shanghai Composite (+0.86%) and the KOSPI (+0.78%) as markets respond positively to the Pfizer study mentioned at the top. The Hang Seng (-0.12%) is lagging though. In Japan, the final Q3 GDP contracted -3.6% quarter on quarter annualised against consensus expectations of -3.1% on lower consumer spending than initially estimated. In India, the RBI left the key policy rate unchanged for the ninth consecutive meeting today while underscoring increasing headwinds from the Omicron variant. Futures markets indicate a positive start in the US and Europe with S&P 500 (+0.41%) and DAX (+0.12%) futures trading in the green. Back on the pandemic, despite the relative benign news on Omicron, rising global case counts mean that the direction of travel is still towards tougher restrictions across a range of countries. In fact here in the UK, we saw the 7-day average of reported cases move above 48,000 for the first time since January. In terms of fresh restrictions, yesterday saw Canada announce that they’d be extending their vaccine mandate, which will now require employees in all federally regulated workplaces to be vaccinated, including road transportation, telecommunications and banking. In Sweden, the government is preparing a bill that would see Covid passes introduced for gyms and restaurants, while Poland put further measures in place, including remote schooling from December 20 until January 9, while vaccines would become mandatory for health workers, teachers and uniformed services from March 1. One move to ease restrictions came in Austria, where it was confirmed shops would be reopening on Monday, albeit only for those vaccinated, while restaurants and hotels would reopen the following week. If you see our daily charts you’ll see that cases in Austria have dropped sharply since the peaks a couple of weeks ago, albeit still high internationally. In DC, Congressional leaders apparently agreed to a deal that would ultimately lead to the debt ceiling being increased, after some procedural chicanery. Senate Majority Leader McConnell voiced support for the measure, which is a good sign for its ultimate prospects of passing, but it still needs at least 10 Republican votes in the Senate to pass. McConnell indicated the votes would be there when the Senate ultimately takes it up, which is reportedly set to happen this week. The House passed the measure last night. Yields on Treasury bills maturing in December fell following the headlines. Looking ahead, today will mark the end of an era in Germany, as Olaf Scholz is set to become Chancellor in a Bundestag vote later on, marking an end to Chancellor Merkel’s 16-year tenure. That vote will simply be a formality given the three parties of the incoming coalition (the centre-left SPD, the Greens and the liberal FDP) have a comfortable majority between them, and the new cabinet will feature 7 SPD ministers, 5 Green ministers, and 4 from the FDP. Among the positions will include Green co-leader Robert Habeck as Vice Chancellor, Green co-leader Annalena Baerbock as foreign minister, and FDP leader Christian Lindner as finance minister. Running through yesterday’s data, the US trade deficit narrowed to $67.1bn in October (vs. $66.8bn expected), marking its smallest level since April. Meanwhile in the Euro Area, the latest Q3 growth estimate was left unchanged at +2.2%, but both Q1 and Q2’s growth was revised up a tenth. Over in Germany, industrial production grew by a stronger-than-expected +2.8% in October (vs. +1.0% expected), with the previous month’s contraction also revised to show a smaller -0.5% decline. In addition, the expectations component of the December ZEW survey fell by less than expected to 29.9 (vs. 25.4 expected), but the current situation measure fell to a 6-month low of -7.4 (vs. 5.7 expected). To the day ahead now, and Olaf Scholz is expected to become German Chancellor in a Bundestag vote today. From central banks, the Bank of Canada will be deciding on rates, and we’ll also hear from ECB President Lagarde, Vice President de Guindos and the ECB’s Schnabel. Finally, data releases include the JOLTS job openings from the US for October. Tyler Durden Wed, 12/08/2021 - 07:58.....»»

Category: blogSource: zerohedgeDec 8th, 2021

Futures Rebound Fizzles On Slowing iPhone Demand, Omicron Fears

Futures Rebound Fizzles On Slowing iPhone Demand, Omicron Fears U.S. index futures regained some ground alongside Asian markets while European stocks slumped to session lows in a delayed response to yesterday's late Omicron-driven US selloff, as markets remained volatile following the biggest two-day plunge in more than a year, spurred by concern about the omicron coronavirus variant and Federal Reserve tightening. Investors await data for unemployment claims, as well as earnings from companies including Dollar General and Kroger. Tech is the weakest sector, dropping in sympathy after Apple warned its suppliers of slowing iPhone demand. Nasdaq futures pared earlier gains of up to 0.8% to trade down 0.1% while S&P futures are only 0.2% higher after rising as much as 0.9%. While the knee-jerk reaction of stock investors may “continue to be to take profits before the end of the year,” there is “plenty of liquidity available to drive stock prices higher as dip-buyers enter the market,” Ed Yardeni wrote in a note. The U.S. economy grew at a modest to moderate pace through mid-November, while price hikes were widespread amid supply-chain disruptions and labor shortages, the Federal Reserve said in its Beige Book survey Tuesday. Cruise-ship operator Carnival jumped 3.8% in premarket trading, while Pfizer and Moderna fell as the World Health Organization said that existing vaccines will likely protect against severe cases of the variant. Boeing contracts gained 3.4% after a report that the flagship 737 Max aircraft has regained airworthiness approval in China. With lots of uncertainty surrounding the pandemic and Fed policy, the size of potential market swings is still considerable.  Here are some other notable premarket movers today: Apple (AAPL US) shares fell 1.8% in premarket trading after the iPhone maker was said to tell suppliers that demand for its flagship product has slowed. Wall Street analysts, however, remained bullish. U.S. stocks tied to former President Donald Trump rise in premarket trading following a report his media group is in talks to raise new financing. Digital World Acquisition (DWAC US) +24%, Phunware (PHUN US) +38%. Katapult (KPLT US) shares sink 14% in premarket after the financial technology firm said its gross originations over a two-month period were lower than 2020 levels. Vir (VIR US) shares jump 8.1% in premarket trading after its Covid-19 antibody treatment, co-developed with Glaxo, looked to be effective against the new omicron variant in early testing. Snowflake (SNOW US) is up 17% premarket following quarterly results that impressed analysts, though some raise questions over the data software company’s valuation. CrowdStrike (CRWD US) shares jumped 5.1% in premarket after it boosted its revenue forecast for the full year. Square’s (SQ US) shares are 0.4% higher premarket. Corporate name change to Block Inc. indicates “a symbolic rebirth,” according to Barclays as it shows a broader set of possibilities than those of a pure payments company. Okta’s (OKTA US) shares advanced in postmarket trading. 3Q results show the cybersecurity company is well- positioned to deliver growth, even if some analysts say its guidance looks conservative and that its growth was not as strong as in prior quarters. The Omicron variant also hurt risk appetite, making the safe-haven bonds more attractive to investors, pushing yields down - although yields picked up again in early European trading. Volatility in equity markets as measured by the Vix hit its highest since February on Wednesday, before easing on Thursday, but remained well above this year’s average and almost twice as high as a month ago. Investors are braced for volatility to continue through December, stirred by tightening central-bank policies to fight inflation just as the omicron variant complicates the outlook for the pandemic recovery. The recent market turmoil may offer investors a chance to position for a trend reversal in reopening and commodity trades, according to JPMorgan Chase & Co. "Investors will need to maintain their calm during a period of uncertainty until the scientific data give a clearer picture of which scenario we face," said Mark Haefele, chief investment officer at UBS Global Wealth Management in Zurich. “This, in turn, will help shape the reaction of central bankers." Also weighing on stock markets, and flattening the U.S. yield curve, were remarks by Federal Reserve Chair Jerome Powell, who said that he would consider a faster end to the Fed's bond-buying programme, which could open the door to earlier interest rate hikes. In his second day of testimony in Congress on Wednesday, Powell reiterated that the U.S. central bank needs to be ready to respond to the possibility that inflation does not recede in the second half of next year. read more "In this past what we’ve seen is central banks using COVID as an excuse to remain dovish, and what we're seeing is central banks turn hawkish despite rising concerns around COVID, so it is a bit of a shift in communication," said Mohammed Kazmi, portfolio manager at UBP.  That said, the market is now so oversold, this is where we usually see aggressive dip-buying. In Europe, tech companies were the worst performers after Apple warned its component suppliers of slowing demand for its iPhone 13, the news dragged index heavyweight ASML Holding NV more than 4%. Meanwhile, travel shares were among the worst performers as the omicron variant continued to pop upin countries around the world, including the U.S., Norway, Ireland and South Korea. The Euro Stoxx 50 dropped as much as 1.7% while the Stoxx 600 Index fell 1.5%, extending declines to trade at a session low, with all sectors in the red and led lower by technology and travel stocks. The Stoxx 600 Technology Index slumped as much as 3.9%, the most in two months. Vifor Pharma surged by a record 18% following a report that Australia’s CSL is in advanced talks to acquire Swiss drugmaker. Here are some of the biggest European movers today: Vifor Pharma shares rise as much as 18% on a report that Australia’s CSL is in advanced talks to acquire the Swiss-based drug maker and developer while working with BofA on a A$4 billion funding package. Argenx jumps as much as 9.5% after Kepler Cheuvreux upgrades the stock to buy, saying the biotech company is on the brink of launching its first commercial product. Duerr gains as much as 7.2%, most since Aug. 10, after Deutsche Bank upgrades to buy and sets aa Street-high PT of EU60 for the German engineering company, citing the digitalization of the industry. Daily Mail & General Trust rises as much as 3.9% after Rothermere Continuation raised its bid for all DMGT’s Class A shares by 5.9% to 270p a share in cash. Klarabo surges as much as 54% as shares start trading on Nasdaq Stockholm after the Swedish property company raised SEK750m in an IPO. Eurofins Scientific declines for a fourth session, falling as much as 3.2%, as Goldman Sachs downgrades the company to neutral from buy “following strong outperformance YTD.” Deliveroo drops as much as 6.4% after an offering of 17.6m shares by CEO Will Shu and CFO Adam Miller at a price of 278p a share, representing a 4.2% discount to the last close. M&S falls as much as 3.4% after UBS cut its rating to neutral from buy, citing limited upside to its new price target as well as “little room for meaningful upgrades.” Earlier in the session, Asian stocks erased an earlier loss to trade slightly up, as traders continued to assess the potential impact of the omicron virus strain and the Federal Reserve’s efforts to keep inflation in check.  The MSCI Asia Pacific Index rose 0.2% after falling 0.4% in the morning. South Korea led regional gains, helped by large-cap chipmakers, while Japan was among the worst performers after the government dropped a plan for a blanket halt to all new incoming flight reservations. Asia’s equity benchmark is still down about 4% so far this year after rebounding in the past two sessions from a one-year low reached earlier this week. Despite the region’s underperformance against the U.S. and Europe, cheap valuations and foreign-investor positioning have prompted brokerages including Credit Suisse Group AG and Nomura Securities Co. Ltd. to turn bullish on Asia’s prospects next year. “Equity markets continue to play omicron tennis and traders looking for short-term direction should just wait for the next virus headline and then act accordingly,” said Jeffrey Halley, a senior market analyst at Oanda Corp. “Volatility, and not market direction, will be the winner this week.” Chinese technology shares including Alibaba Group Holding slid after Beijing was said to be planning to close a loophole used by the sector to go public abroad, fueling concern over existing overseas listings. Japanese equities declined, following U.S. peers lower after the first American case of the omicron coronavirus variant was confirmed. Electronics makers and telecoms were the biggest drags on the Topix, which fell 0.5%. SoftBank Group and TDK were the largest contributors to a 0.7% loss in the Nikkei 225.  The S&P 500 posted its worst two-day selloff since October 2020 after the first U.S. case of the new strain was reported. Federal Reserve Chair Jerome Powell reiterated that officials should consider a quicker reduction of monetary stimulus amid elevated inflation. “Truth is, there’s probably a lot of people who are wanting to buy stocks at some point,” said Naoki Fujiwara, chief fund manager at Shinkin Asset Management. “But, with omicron still an unknown, people are responding sensitively to news development, and that’s keeping them from buying.” India’s benchmark equity index climbed for a second day, led by software exporters, on an improving economic outlook and as investors grabbed some beaten-down stocks after recent declines. The S&P BSE Sensex Index rose 1.4% to close at 58,461.29 in Mumbai, the biggest advance since Nov. 1. Its two-day gains increased to 2.5%, the most since Aug. 31. The NSE Nifty 50 Index also surged by a similar magnitude. All of the 19 sector sub-indexes compiled by BSE Ltd. were up, led by a gauge of utilities companies. “India underperformed the global markets in recent weeks. Investors are now going for value buying in stocks at lower levels,” said A. K. Prabhakar, head of research at IDBI Capital Market Services. The Sensex gained in three of the past four sessions after plunging 2.9% on Friday, the biggest drop since April. The rally, however, is in contrast to most global peers which are witnessing volatility on worries over the spread of the omicron variant. High frequency indicators in India, such as tax collection and manufacturing activities, have shown robust growth in recent months, while the country’s economy expanded 8.4% in the quarter ended in September, according to an official data release on Tuesday. Mortgage lender HDFC contributed the most to the Sensex’s gain, increasing 3.9%. Out of 30 shares in the index, 27 rose and three fell. In rates, trading has been relatively quiet as bunds and gilts bull steepen a touch with risk offered, while cash TSYs bear flatten, cheapening ~5bps across the curve.Treasuries retraced part of yesterday’s rally that sent the benchmark 30-year rate to the lowest since early January. A large buyer of 5-year U.S. Treasury options targets the yield dropping around 17bps. 5s10s, 5s30s spreads flattened by ~1bp and ~2bp to multimonth lows; 10-year yields around 1.43%, cheaper by more than 3bp on the day while bunds and gilt yields are richer by ~1bp. Front-end and belly of the curve underperform vs long-end, while bunds and gilts outperform Treasuries. With little economic data slated, speeches by several Fed officials are main focal points. Peripheral spreads tighten with 10y Spain outperforming after well received auctions, albeit with a small size on offer. U.S. economic data slate includes November Challenger job cuts (7:30am) and initial jobless claims (8:30am) In FX, the Bloomberg Dollar Spot Index fell to a day low in the European session and the greenback traded mixed versus its Group-of-10 peers as most crosses consolidated in recent ranges. Two-week implied volatility in the major currencies trades in the green Thursday as it now captures the next policy decisions by the world’s major central banks. Euro- dollar on the tenor rises by as much as 138 basis points to touch 8.22%, highest in a year; the relative premium, however, remains below parity as realized has risen to levels unseen since August 2020. The pound rose along with some other risk- sensitive currencies following the British currency’s three-day slump against the dollar. Long-end gilts underperformed, leading to some steepening of the curve. The yen fell for the first day in three while the Swiss franc fell a second day. The Hungarian forint rose to almost a three-week high after the central bank in Budapest raised the one-week deposit rate by 20 basis points to 3.10%. Economists in a Bloomberg survey were evenly split in predicting a 10 or 20 basis point increase. The Turkish lira resumed its slump after President Recep Tayyip Erdogan abruptly replaced his finance minister amid deepening rifts in the administration over aggressive interest-rate cuts that have undermined the currency and fueled inflation. Poland’s central bank Governor Adam Glapinski sent the zloty to a three-week high against the euro on Thursday with his changed rhetoric on inflation, which he no longer sees as transitory after prices surged at the fastest pace in more than two decades. Currency market volatility also rose, with euro-dollar one-month volatility gauges below Monday's one-year peak but still at elevate levels . "Liquidity in some areas of the market is still quite poor as people grapple with this news and as we head towards year-end, a lot of it is really liquidity driven, which is leading to some volatility," said UBP's Kazmi. "Even in the most liquid market of the U.S. treasury market we've seen some fairly large moves on very little newsflow at times." In commodities, crude futures extend Asia’s gains. WTI adds 2.2% near $67, Brent near $70.50 ahead of today’s OPEC+ meeting. Spot gold finds support near Tuesday’s, recovering somewhat to trade near $1,774/oz. Base metals are mixed: LME aluminum drops as much as 1.1%, nickel, zinc and tin hold in the green Looking at the day ahead now, and central bank speakers include the Fed’s Quarles, Bostic, Daly and Barkin, as well as the ECB’s Panetta. Data releases include the Euro Area unemployment rate and PPI inflation for October, while there’s also the weekly initial jobless claims. Lastly, the OPEC+ group will be meeting. Market Snapshot S&P 500 futures up 0.7% to 4,540.25 STOXX Europe 600 down 1.0% to 466.37 MXAP up 0.2% to 192.07 MXAPJ up 0.7% to 629.36 Nikkei down 0.7% to 27,753.37 Topix down 0.5% to 1,926.37 Hang Seng Index up 0.5% to 23,788.93 Shanghai Composite little changed at 3,573.84 Sensex up 1.3% to 58,436.52 Australia S&P/ASX 200 down 0.1% to 7,225.18 Kospi up 1.6% to 2,945.27 Brent Futures up 2.4% to $70.53/bbl Gold spot down 0.6% to $1,771.73 U.S. Dollar Index little changed at 96.03 German 10Y yield little changed at -0.35% Euro little changed at $1.1320 Top Overnight News from Bloomberg Federal Reserve Bank of Cleveland President Loretta Mester said she’s “very open” to scaling back the Fed’s asset purchases at a faster pace so it can raise interest rates a couple of times next year if needed A United Nations gauge of global food prices rose 1.2% last month, threatening to make it more expensive for households to put a meal on the table. It’s more evidence of inflation soaring in the world’s largest economies and may make it even harder for the poorest nations to import food, worsening a hunger crisis Germany is poised to clamp down on people who aren’t vaccinated against Covid-19 and drastically curtail social contacts to ease pressure on increasingly stretched hospitals Some investors buffeted by concerns about tighter monetary policy are turning their sights to China’s battered junk bonds, given they offer some of the biggest yield buffers anywhere in global credit markets Pfizer Inc. says data on how well its Covid-19 vaccine protects against the omicron variant should be available within two to three weeks, an executive said GlaxoSmithKline Plc said its Covid-19 antibody treatment looks to be effective against the new omicron variant in early testing A more detailed look at global markets courtesy of Newsquawk Asian equity markets traded tentatively following the declines on Wall St where all major indices extended on losses and selling was exacerbated on confirmation of the first Omicron case in the US, while the Asia-Pac region also contended with its own pandemic concerns. ASX 200 (-0.2%) was subdued amid heavy losses in the tech sector and with a surge of infections in Victoria state, although downside in the index was cushioned amid inline Retail Sales and Trade Balance, as well as M&A optimism after Woolworths made a non-binding indicative proposal for Australian Pharmaceutical Industries. Nikkei 225 (-0.7%) weakened after the government instructed airlines to halt inbound flight bookings for a month due to fears of the new variant and with auto names also pressured by declines in monthly sales amid the chip supply crunch. KOSPI (+1.6%) showed resilience amid expectations for lawmakers to pass a record budget today and recouped opening losses despite the record increase in daily infections and confirmation of its first Omicron cases, while the index also shrugged off the highest CPI reading in a decade which effectively supports the case for further rate increases by the BoK. Hang Seng (+0.6%) and Shanghai Comp. (-0.1%) were choppy following another liquidity drain by the PBoC and with tech pressured in Hong Kong as Alibaba shares extended on declines after recently slipping to a 4-year low in its US listing. Beijing regulatory tightening also provided a headwind as initial reports suggested China is to crack down on loopholes used by tech firms for foreign IPOs, although this was later refuted by China, and the CBIRC is planning stricter regulations on major shareholders of banks and insurance companies, as well as confirmed it will better regulate connected transactions of banks. Finally, 10yr JGBs were higher as prices tracked gains in global counterparts and amid the risk aversion in Japan, although prices are off intraday highs after hitting resistance during a brief incursion to the 152.00 level and despite the marginally improved metrics from 10yr JGB auction. Top Asian News Asia Stocks Swing as Investors Weigh Omicron Impact, Fed Views Apple Tells Suppliers IPhone Demand Slowing as Holidays Near Moody’s Cuts China Property Sales View on Financing Difficulties Faith in Singapore Leaders Hit by Record Covid Wave, Poll Shows Bourses across Europe have held onto losses seen at the cash open (Euro Stoxx 50 -1.4%; Stoxx -1.2%), as the region plays catchup to the downside seen on Wall Street – seemingly sparked by a concoction of hawkish Fed rhetoric and the discovery of the Omicron variant in the US. Nonetheless, US equity futures are firmer across the board but to varying degrees – with the cyclical RTY (+1.1%) and the NQ (+0.3%) the current laggard. European futures ahead of the cash open saw some mild fleeting impetus on reports GlaxoSmithKline's (-0.3%) COVID treatment Sotrovimab retains its activity against Omicron variant, and the UK MHRA simultaneously approved the use of Sotrovimab – but caveated that it is too early to know whether Omicron has any impact on effectiveness. Conversely, brief risk-off crept into the market following commentary from a South African Scientist who warned the country is seeing an exponential rise in new COVID cases with a predominance of Omicron variant across the country – with the variant causing the fastest ever community transmission - but expects fewer active cases and hospitalisations this wave. Back to Europe, Euro indices see broad-based losses whilst the downside in the FTSE 100 (-0.7%) is less severe amid support from its heavyweight Oil & Gas sector – the outperforming sector in the region. Delving deeper, sectors see no overarching theme nor bias – Food & Beverages, Autos and Banks are towards the top of the bunch, whilst Tech, Telecoms, and Travel &Leisure. Tech is predominantly weighed on by reports that Apple (-2% pre-market) reportedly told iPhone component suppliers that demand slowed down. As such ASML (-5.0%), STMicroelectronics (-4.4%) and Infineon (-3.6%) reside among the biggest losers in the Stoxx 600. Deliveroo (-5.3%) is softer following an offering of almost 18mln at a discount to yesterday's close. In terms of market commentary, Morgan Stanley believes that inflation will remain high over the next few months, in turn supporting commodities, financials and some cyclical sectors. The bank identifies beneficiaries including EDF (-1.5%), Engie (-1.2%), SSE (-0.2%), Legrand (-1.3%), Tesco (-0.5%), BT (-0.8%), Michelin (-1.6%) and Sika (-0.9%). Top European News Shell Kicks Off First Wave of Buybacks From Permian Sale Omicron Threatens to Prolong Pain in Bid to Vaccinate the World Apple, Suppliers Drop Premarket After Report Demand Slowed Valeo, Gestamp Gain After Barclays Raises to Overweight In FX, currency markets are still in a state of flux, or limbo bar a few exceptions, and the Greenback is gyrating against major peers awaiting the next major event that could provide clearer direction and a more decisive range break. Thursday’s agenda offers some scope on that front via US initial jobless claims and a host of Fed speakers, but in truth NFP tomorrow is probably more likely to be influential even though chair Powell has effectively given the green light to fast-track tapering from December. In the interim, the index continues to keep a relatively short leash around 96.000, and is holding within 96.138-95.895 confines so far today. JPY/CHF - Although risk considerations look supportive for the Yen, on paper, UST-JGB/Fed-BoJ differentials coupled with technical impulses are keeping Usd/Jpy buoyant on the 113.00 handle, with additional demand said to have come from Japanese exporters overnight. However, the headline pair may run into offers/resistance circa 113.50 and any breach could be capped by decent option expiry interest spanning 113.60-75 (1.5 bn). Similarly, the Franc has slipped back below 0.9200 on yield and Swiss/US Central Bank policy stances plus near term outlooks, and hardly helped by a slowdown in retail sales. GBP/CAD/NZD - All firmer vs their US counterpart, though again well within recent admittedly wide ranges, and the Pound perhaps more attuned to Eur/Gbp fluctuations as the cross retreats to retest 0.8500 and Cable rebounds to have another look at 1.3300 where a fairly big option expiry resides (850 mn). Indeed, Sterling has largely shrugged off the latest BoE Monthly Decision Maker Panel release that in truth did not deliver any clues on what is set to be another knife-edge MPC gathering in December. Elsewhere, the Loonie is straddling 1.2800 with eyes on WTI crude ahead of Canadian jobs data on Friday and the Kiwi is hovering above 0.6800 after weaker NZ Q3 terms of trade were offset to some extent by favourable Aud/Nzd headwinds. AUD/EUR - Both narrowly mixed against US Dollar, with the Aussie pivoting 0.7100 in wake of roughly in line trade and retail sales data overnight, but wary about the latest virus outbreak in the state of Victoria, while the Euro is sitting somewhat uncomfortably on the 1.1300 handle amidst softer EGB yields and heightened uncertainty about what the ECB might or might not do in December on the QE guidance front. In commodities, WTI and Brent front-month futures are firmer intraday as traders gear up for the JMMC and OPEC+ confabs at 12:00GMT and 13:00GMT, respectively. The jury is still split on what the final decision could be, but the case for OPEC+ to pause the planned monthly relaxation of output curbs by 400k BPD has been strengthening against the backdrop of Omicron coupled with the coordinated SPR releases (an updating Rolling Headline is available on the Newsquawk headline feed). As expected, OPEC sources have been testing the waters in the run-up, whilst yesterday's JTC/OPEC meetings largely surrounded the successor to the Secretary-General position. Oil market price action will likely be centred around OPEC+ today in the absence of any macro shocks. WTI Jan resides around USD 66.50/bbl (vs low USD 65.41/bbl) whilst Brent Feb briefly topped USD 70/bbl (vs low USD 68.73/bbl). Elsewhere, spot gold has eased further from the USD 1,800/oz after failing to sustain a break above the 50, 100 and 200 DMAs which have all converged to USD 1,791/oz today. LME copper is on the backfoot amid the cautious risk sentiment, with the red metal back under USD 9,500/t but off overnight lows. US Event Calendar 7:30am: Nov. Challenger Job Cuts -77.0% YoY, prior -71.7% 8:30am: Nov. Initial Jobless Claims, est. 240,000, prior 199,000; 8:30am: Nov. Continuing Claims, est. 2m, prior 2.05m 9:45am: Nov. Langer Consumer Comfort, prior 52.2 DB's Jim Reid concludes the overnight wrap With investors remaining on tenterhooks to find out some definitive information on the Omicron variant, yesterday saw markets continue to see-saw for a 4th day running. Following one of the biggest sell-offs of the year on Friday, we then had a partial bounceback on Monday, another bout of fears on Tuesday (not helped by the prospect of faster tapering), and yesterday saw another rally back before risk sentiment turned sharply later in the day as an initial case of the Omicron variant was discovered in the US. You can get some idea of this by the fact that Europe’s STOXX 600 (+1.71%) posted its best daily performance since May, whereas the S&P 500 moved from an intraday high where it had been up +1.88%, before shedding all those gains and more to close -1.18% lower. In fact, that decline means the S&P has now lost over -3% in the last two sessions, marking its worst 2-day performance in over a year, and this heightened volatility saw the VIX index close back above 30 for the first time since early February. In terms of developments about Omicron, we’re still in a waiting game for some concrete stats, but there was positive news early on from the World Health Organization’s chief scientist, who said that they think vaccines “will still protect against severe disease as they have against the other variants”. On the other hand, there was further negative news out of South Africa, as the country reported 8,561 infections over the previous day, with a positivity rate of 16.5%. That’s up from 4,373 cases the day before, and 2,273 the day before that, so all eyes will be on whether this trend continues, and also on what that means for hospitalisation and death rates over the days ahead. Against this backdrop, calls for fresh restrictions mounted across a range of countries, particularly on the travel side. In the US, it’s been reported already by the Washington Post that President Biden could today announce stricter testing requirements for arriving travellers. Meanwhile, France is moving to require non-EU arrivals to show a negative test before arrival, irrespective of their vaccination status. The EU Commission further said that member states should conduct daily reviews of essential travel restrictions, and Commission President von der Leyen also said that the EU should discuss the topic of mandatory vaccinations. There was also a Bloomberg report that German Chancellor Merkel would recommend mandatory vaccinations from February 2022, according to a Chancellery paper that they’d obtained. That came as Slovakia sought to incentivise vaccination uptake among older citizens, with the cabinet backing a €500 hospitality voucher for residents over 60 who’ve been vaccinated. As on Tuesday, the other main headlines yesterday were provided by Fed Chair Powell, who re-emphasised his more hawkish rhetoric around inflation before the House Financial Services Committee. Notably he said that “We’ve seen inflation be more persistent. We’ve seen the factors that are causing higher inflation to be more persistent”, though yields on 2yr Treasuries (-1.4bps) already had the shift in stance priced in. New York Fed President Williams echoed that view in an interview, noting it would be germane to discuss and decide whether it was appropriate to accelerate the pace of tapering at the December FOMC. 10yr yields (-4.1bps) continued their decline, predominantly driven by the turn in sentiment following the negative Omicron headlines. That latest round of curve flattening left the 2s10s slope at its flattest level since early January around the time of the Georgia Senate race that ushered in the prospect of much larger fiscal stimulus. In terms of markets elsewhere, strong data releases helped to support risk appetite earlier in yesterday’s session, with investors also looking forward to tomorrow’s US jobs report for November that will be an important one ahead of the Fed’s decision in less than a couple of weeks’ time. The ISM manufacturing release for November saw the headline number come in roughly as expected at 61.1 (vs. 61.2 expected), and also included a rise in both the new orders (61.5) and the employment (53.3) components relative to last month. Separately, the ADP’s report of private payrolls for November likewise came in around expectations, with a +534k gain (vs. +526k expected). Staying on the US, one thing to keep an eye out over the next 24 hours will be any news on a government shutdown, with funding currently set to run out by the weekend as it stands. The headlines yesterday weren’t promising for those hoping for an uneventful, tidy resolution, as Politico indicated that some Congressional Republicans would not agree to an expedited process to fund the government should certain vaccine mandates remain in place. An expedited process is necessary to avoid a government shutdown at the end of the week, so one to watch. After the incredibly divergent equity performances in the US and Europe, we’ve seen a much more mixed performance in Asia overnight, with the KOSPI (+1.09%), Hang Seng (+0.23%), and CSI (+0.23%) all advancing, whereas the Shanghai Composite (-0.05%) and the Nikkei (-0.60%) are trading lower. In terms of the latest on Omicron, authorities in South Korea confirmed five cases, which came as the country also reported that CPI in November rose to its fastest since December 2011, at +3.7% (vs +3.1% expected). Separately in China, 53 local Covid-19 cases were reported in Inner Mongolia, whilst Harbin province reported 3 local cases. Looking forward, futures are indicating a positive start in the US with those on the S&P 500 (+0.64%) pointing higher. Back in Europe, sovereign bonds lost ground yesterday, and yields on 10yr bunds (+0.5bps), OATs (+1.1bps) and BTPs (+4.2bps) continued to move higher. Interestingly, there was a continued widening in peripheral spreads, with the gap between both Italian and Spanish 10yr yields over bunds reaching their biggest level in over a year, at 135bps and 77bps, respectively. Another factor to keep an eye on in Europe is another round of increases in natural gas prices, with futures up +3.42% to their highest level since mid-October yesterday. Lastly on the data front, the main other story was the release of the manufacturing PMIs from around the world. We’d already had the flash readings from a number of the key economies, so they weren’t too surprising, but the Euro Area came in at 58.4 (vs. flash 58.6), Germany came in at 57.4 (vs. flash 57.6), and the UK came in at 58.1 (vs. flash 58.2). One country that saw a decent upward revision was France, with the final number at 55.9 (vs. flash 54.6), which marks an end to 5 successive monthly declines in the French manufacturing PMI. One other release were German retail sales for October, which unexpectedly fell -0.3% (vs. +0.9% expected). To the day ahead now, and central bank speakers include the Fed’s Quarles, Bostic, Daly and Barkin, as well as the ECB’s Panetta. Data releases include the Euro Area unemployment rate and PPI inflation for October, while there’s also the weekly initial jobless claims. Lastly, the OPEC+ group will be meeting. Tyler Durden Thu, 12/02/2021 - 07:57.....»»

Category: dealsSource: nytDec 2nd, 2021

Futures Surge After Powell-Driven Rout Proves To Be "Transitory"

Futures Surge After Powell-Driven Rout Proves To Be "Transitory" Heading into yesterday's painful close to one of the ugliest months since March 2020, which saw a huge forced liquidation rebalance with more than $8 billion in Market on Close orders, we said that while we are seeing "forced selling dump into the close today" this would be followed by "forced Dec 1 buying frontrunning after the close." Forced selling dump into the close today. Forced Dec 1 buying frontrunning after the close — zerohedge (@zerohedge) November 30, 2021 And just as expected, despite yesterday's dramatic hawkish pivot by Powell, who said it was time to retire the word transitory in describing the inflation outlook (the same word the Fed used hundreds of times earlier in 2021 sparking relentless mockery from this website for being clueless as usual) while also saying the U.S. central bank would consider bringing forward plans for tapering its bond buying program at its next meeting in two weeks, the frontrunning of new monthly inflows is in full force with S&P futures rising over 1.2%, Nasdaq futures up 1.3%, and Dow futures up 0.9%, recovering almost all of Tuesday’s decline. The seemingly 'hawkish' comments served as a double whammy for markets, which were already nervous about the spread of the Omicron coronavirus variant and its potential to hinder a global economic recovery. "At this point, COVID does not appear to be the biggest long-term Street fear, although it could have the largest impact if the new (or next) variant turns out to be worse than expected," Howard Silverblatt, senior index analyst for S&P and Dow Jones indices, said in a note. "That honor goes to inflation, which continues to be fed by supply shortages, labor costs, worker shortages, as well as consumers, who have not pulled back." However, new month fund flows proved too powerful to sustain yesterday's month-end dump and with futures rising - and panic receding - safe havens were sold and the 10-year Treasury yield jumped almost 6bps, approaching 1.50%. The gap between yields on 5-year and 30-year Treasuries was around the narrowest since March last year. Crude oil and commodity-linked currencies rebounded. Gold remained just under $1,800 and bitcoin traded just over $57,000. There was more good news on the covid front with a WHO official saying some of the early indications are that most Omicron cases are mild with no severe cases. Separately Merck gained 3.8% in premarket trade after a panel of advisers to the U.S. Food and Drug Administration narrowly voted to recommend the agency authorize the drugmaker's antiviral pill to treat COVID-19. Travel and leisure stocks also rebounded, with cruiseliners Norwegian, Carnival, Royal Caribbean rising more than 2.5% each. Easing of covid fears also pushed airlines and travel stocks higher in premarket trading: Southwest +2.9%, Delta +2.5%, Spirit +2.3%, American +2.2%, United +1.9%, JetBlue +1.3%. Vaccine makers traded modestly lower in pre-market trading after soaring in recent days as Wall Street weighs the widening spread of the omicron variant. Merck & Co. bucked the trend after its Covid-19 pill narrowly gained a key recommendation from advisers to U.S. regulators. Moderna slips 2.1%, BioNTech dips 1.3% and Pfizer is down 0.2%. Elsewhere, Occidental Petroleum led gains among the energy stocks, up 3.2% as oil prices climbed over 4% ahead of OPEC's meeting. Shares of major Wall Street lenders also moved higher after steep falls on Tuesday. Here are some of the other biggest U.S. movers today: Salesforce (CRM US) drops 5.9% in premarket trading after results and guidance missed estimates, with analysts highlighting currency-related headwinds and plateauing growth at the MuleSoft integration software business. Hewlett Packard Enterprise (HPE US) falls 1.3% in premarket after the computer equipment maker’s quarterly results showed the impact of the global supply chain crunch. Analysts noted solid order trends. Merck (MRK US) shares rise 5.8% in premarket after the company’s Covid-19 pill narrowly wins backing from FDA advisers, which analysts say is a sign of progress despite lingering challenges. Chinese electric vehicle makers were higher in premarket, leading U.S. peers up, after Nio, Li and XPeng reported strong deliveries for November; Nio (NIO US) +4%, Li (LI US ) +6%, XPeng (XPEV US) +4.3%. Ardelyx (ARDX US) shares gain as much as 34% in premarket, extending the biotech’s bounce after announcing plans to launch its irritable bowel syndrome treatment Ibsrela in the second quarter. CTI BioPharma (CTIC US) shares sink 18% in premarket after the company said the FDA extended the review period for a new drug application for pacritinib. Allbirds (BIRD US) fell 7.5% postmarket after the low end of the shoe retailer’s 2021 revenue forecast missed the average analyst estimate. Zscaler (ZS US) posted “yet another impressive quarter,” according to BMO. Several analysts increased their price targets for the security software company. Shares rose 4.6% in postmarket. Ambarella (AMBA US) rose 14% in postmarket after forecasting revenue for the fourth quarter that beat the average analyst estimate. Emcore (EMKR US) fell 9% postmarket after the aerospace and communications supplier reported fiscal fourth-quarter Ebitda that missed the average analyst estimate. Box (BOX US) shares gained as much as 10% in postmarket trading after the cloud company raised its revenue forecast for the full year. Meanwhile, the omicron variant continues to spread around the globe, though symptoms so far appear to be relatively mild. The Biden administration plans to tighten rules on travel to the U.S., and Japan said it would bar foreign residents returning from 10 southern African nations. As Bloomberg notes, volatility is buffeting markets as investors scrutinize whether the pandemic recovery can weather diminishing monetary policy support and potential risks from the omicron virus variant. Global manufacturing activity stabilized last month, purchasing managers’ gauges showed Wednesday, and while central banks are scaling back ultra-loose settings, financial conditions remain favorable in key economies. “The reality is hotter inflation coupled with a strong economic backdrop could end the Fed’s bond buying program as early as the first quarter of next year,” Charlie Ripley, senior investment strategist at Allianz Investment Management, said in emailed comments. “With potential changes in policy on the horizon, market participants should expect additional market volatility in this uncharted territory.” Looking ahead, Powell is back on the Hill for day 2, and is due to testify before a House Financial Services Committee hybrid hearing at 10 a.m. ET. On the economic data front, November readings on U.S. private payrolls and manufacturing activity will be closely watched later in the day to gauge the health of the American economy. Investors are also awaiting the Fed's latest "Beige Book" due at 2:00 p.m. ET. On the economic data front, November readings on U.S. private payrolls and manufacturing activity will be closely watched later in the day to gauge the health of the American economy. European equities soared more than 1.2%, with travel stocks and carmakers leading broad-based gain in the Stoxx Europe 600 index, all but wiping out Tuesday’s decline that capped only the third monthly loss for the benchmark this year.  Travel, miners and autos are the strongest sectors. Here are some of the biggest European movers today: Proximus shares rise as much as 6.5% after the company said it’s started preliminary talks regarding a potential deal involving TeleSign, with a SPAC merger among options under consideration. Dr. Martens gains as much as 4.6% to the highest since Sept. 8 after being upgraded to overweight from equal- weight at Barclays, which says the stock’s de-rating is overdone. Husqvarna advances as much as 5.3% after the company upgraded financial targets ahead of its capital markets day, including raising the profit margin target to 13% from 10%. Wizz Air, Lufthansa and other travel shares were among the biggest gainers as the sector rebounded after Tuesday’s losses; at a conference Wizz Air’s CEO reiterated expansion plans. Wizz Air gains as much as 7.5%, Lufthansa as much as 6.8% Elis, Accor and other stocks in the French travel and hospitality sector also rise after the country’s government pledged to support an industry that’s starting to get hit by the latest Covid-19 wave. Pendragon climbs as much as 6.5% after the car dealer boosted its outlook after the company said a supply crunch in the new vehicle market wasn’t as bad as it had anticipated. UniCredit rises as much as 3.6%, outperforming the Stoxx 600 Banks Index, after Deutsche Bank added the stock to its “top picks” list alongside UBS, and Bank of Ireland, Erste, Lloyds and Societe Generale. Earlier in the session, Asian stocks also soared, snapping a three-day losing streak, led by energy and technology shares, as traders assessed the potential impact from the omicron coronavirus variant and U.S. Federal Reserve Chair Jerome Powell’s hawkish pivot. The MSCI Asia Pacific Index rose as much as 1.3% Wednesday. South Korea led regional gains after reporting strong export figures, which bolsters growth prospects despite record domestic Covid-19 cases. Hong Kong stocks also bounced back after falling Tuesday to their lowest level since September 2020. Asia’s stock benchmark rebounded from a one-year low, though sentiment remained clouded by lingering concerns on the omicron strain and Fed’s potentially faster tapering pace. Powell earlier hinted that the U.S. central bank will accelerate its asset purchases at its meeting later this month.  “A faster taper in the U.S. is still dependent on omicron not causing a big setback to the outlook in the next few weeks,” said Shane Oliver, head of investment strategy and chief economist at AMP Capital, adding that he expects the Fed’s policy rate “will still be low through next year, which should still enable good global growth which will benefit Asia.” Chinese equities edged up after the latest economic data showed manufacturing activity remained at relatively weak levels in November, missing economists’ expectations. Earlier, Chinese Vice Premier Liu He said he’s fully confident in the nation’s economic growth in 2022 Japanese stocks rose, overcoming early volatility as traders parsed hawkish comments from Federal Reserve Chair Jerome Powell. Electronics and auto makers were the biggest boosts to the Topix, which closed 0.4% higher after swinging between a gain of 0.9% and loss of 0.7% in the morning session. Daikin and Fanuc were the largest contributors to a 0.4% rise in the Nikkei 225, which similarly fluctuated. The Topix had dropped 4.8% over the previous three sessions due to concerns over the omicron virus variant. The benchmark fell 3.6% in November, its worst month since July 2020. “The market’s tolerance to risk is quite low at the moment, with people responding in a big way to the smallest bit of negative news,” said Tomo Kinoshita, a global market strategist at Invesco Asset Management in Tokyo. “But the decline in Japanese equities was far worse than those of other developed markets, so today’s market may find a bit of calm.” U.S. shares tumbled Tuesday after Powell said officials should weigh removing pandemic support at a faster pace and retired the word “transitory” to describe stubbornly high inflation In rates, bonds trade heavy, as yield curves bear-flatten. Treasuries extended declines with belly of the curve cheapening vs wings as traders continue to price in additional rate-hike premium over the next two years. Treasury yields were cheaper by up to 5bp across belly of the curve, cheapening 2s5s30s spread by ~5.5bp on the day; 10-year yields around 1.48%, cheaper by ~4bp, while gilts lag by additional 2bp in the sector. The short-end of the gilt curve markedly underperforms bunds and Treasuries with 2y yields rising ~11bps near 0.568%. Peripheral spreads widen with belly of the Italian curve lagging. The flattening Treasury yield curve “doesn’t suggest imminent doom for the equity market in and of itself,” Liz Ann Sonders, chief investment strategist at Charles Schwab & Co., said on Bloomberg Television. “Alarm bells go off in terms of recession” when the curve gets closer to inverting, she said. In FX, the Turkish lira had a wild session, offered in early London trade before fading. USD/TRY dropped sharply to lows of 12.4267 on reports of central bank FX intervention due to “unhealthy price formations” before, once again, fading TRY strength after comments from Erdogan. The rest of G-10 FX is choppy; commodity currencies retain Asia’s bid tone, havens are sold: the Bloomberg Dollar Spot Index inched lower, as the greenback traded mixed versus its Group-of-10 peers. The euro moved in a narrow range and Bund yields followed U.S. yields higher. The pound advanced as risk sentiment stabilized with focus still on news about the omicron variant. The U.K. 10-, 30-year curve flirted with inversion as gilts flattened, with money markets betting on 10bps of BOE tightening this month for the first time since Friday. The Australian and New Zealand dollars advanced as rising commodity prices fuel demand from exporters and leveraged funds. Better-than-expected growth data also aided the Aussie, with GDP expanding by 3.9% in the third quarter from a year earlier, beating the 3% estimated by economists. Austrian lawmakers extended a nationwide lockdown for a second 10-day period to suppress the latest wave of coronavirus infections before the Christmas holiday period.  The yen declined by the most among the Group-of-10 currencies as Powell’s comments renewed focus on yield differentials. 10-year yields rose ahead of Thursday’s debt auction In commodities, crude futures rally. WTI adds over 4% to trade on a $69-handle, Brent recovers near $72.40 after Goldman said overnight that oil had gotten extremely oversold. Spot gold fades a pop higher to trade near $1,785/oz. Base metals trade well with LME copper and nickel outperforming. Looking at the day ahead, once again we’ll have Fed Chair Powell and Treasury Secretary Yellen appearing, this time before the House Financial Services Committee. In addition to that, the Fed will be releasing their Beige Book, and BoE Governor Bailey is also speaking. On the data front, the main release will be the manufacturing PMIs from around the world, but there’s also the ADP’s report of private payrolls for November in the US, the ISM manufacturing reading in the US as well for November, and German retail sales for October. Market Snapshot S&P 500 futures up 1.2% to 4,620.75 STOXX Europe 600 up 1.0% to 467.58 MXAP up 0.9% to 191.52 MXAPJ up 1.1% to 626.09 Nikkei up 0.4% to 27,935.62 Topix up 0.4% to 1,936.74 Hang Seng Index up 0.8% to 23,658.92 Shanghai Composite up 0.4% to 3,576.89 Sensex up 1.0% to 57,656.51 Australia S&P/ASX 200 down 0.3% to 7,235.85 Kospi up 2.1% to 2,899.72 Brent Futures up 4.2% to $72.15/bbl Gold spot up 0.2% to $1,778.93 U.S. Dollar Index little changed at 95.98 German 10Y yield little changed at -0.31% Euro down 0.1% to $1.1326 Top Overnight News from Bloomberg U.S. Secretary of State Antony Blinken will meet Russian Foreign Minister Sergei Lavrov Thursday, the first direct contact between officials of the two countries in weeks as tensions grow amid western fears Russia may be planning to invade Ukraine Oil rebounded from a sharp drop on speculation that recent deep losses were excessive and OPEC+ may on Thursday decide to pause hikes in production, with the abrupt reversal fanning already- elevated volatility The EU is set to recommend that member states review essential travel restrictions on a daily basis in the wake of the omicron variant, according to a draft EU document seen by Bloomberg China is planning to ban companies from going public on foreign stock markets through variable interest entities, according to people familiar with the matter, closing a loophole long used by the country’s technology industry to raise capital from overseas investors Manufacturing activity in Asia outside China stabilized last month amid easing lockdown and border restrictions, setting the sector on course to face a possible new challenge from the omicron variant of the coronavirus Germany urgently needs stricter measures to check a surge in Covid-19 infections and protect hospitals from a “particularly dangerous situation,” according to the head of the country’s DIVI intensive-care medicine lobby. A more detailed breakdown of global markets courtesy of Newsquawk Asian equity markets traded mostly positive as regional bourses atoned for the prior day’s losses that were triggered by Omicron concerns, but with some of the momentum tempered by recent comments from Fed Chair Powell and mixed data releases including the miss on Chinese Caixin Manufacturing PMI. ASX 200 (-0.3%) was led lower by underperformance in consumer stocks and with utilities also pressured as reports noted that Shell and Telstra’s entrance in the domestic electricity market is set to ignite fierce competition and force existing players to overhaul their operations, although the losses in the index were cushioned following the latest GDP data which showed a narrower than feared quarterly contraction in Australia’s economy. Nikkei 225 (+0.4%) was on the mend after yesterday’s sell-off with the index helped by favourable currency flows and following a jump in company profits for Q3, while the KOSPI (+2.1%) was also boosted by strong trade data. Hang Seng (+0.8%) and Shanghai Comp. (+0.4%) were somewhat varied as a tech resurgence in Hong Kong overcompensated for the continued weakness in casinos stocks amid ongoing SunCity woes which closed all VIP gaming rooms in Macau after its Chairman's recent arrest, while the mood in the mainland was more reserved after a PBoC liquidity drain and disappointing Chinese Caixin Manufacturing PMI data which fell short of estimates and slipped back into contraction territory. Finally, 10yr JGBs were lower amid the gains in Japanese stocks and after the pullback in global fixed income peers in the aftermath of Fed Chair Powell’s hawkish comments, while a lack of BoJ purchases further contributed to the subdued demand for JGBs. Top Asian News Asia Stocks Bounce Back from One-Year Low Despite Looming Risks Gold Swings on Omicron’s Widening Spread, Inflation Worries Shell Sees Hedge Funds Moving to LNG, Supporting Higher Prices Abe Warns China Invading Taiwan Would Be ‘Economic Suicide’ Bourses in Europe are firmer across the board (Euro Stoxx 50 +1.6%; Stoxx 600 +1.1%) as the positive APAC sentiment reverberated into European markets. US equity futures are also on the front foot with the cyclical RTY (+2.0%) outpacing its peers: ES (+1.2%), NQ (+1.5%), YM (+0.8%). COVID remains a central theme for the time being as the Omicron variant is observed for any effects of concern – which thus far have not been reported. Analysts at UBS expect market focus to shift away from the variant and more towards growth and earnings. The analysts expect Omicron to fuse into the ongoing Delta outbreak that economies have already been tackling. Under this scenario, the desk expects some of the more cyclical markets and sectors to outperform. The desk also flags two tails risks, including an evasive variant and central bank tightening – particularly after Fed chair Powell’s commentary yesterday. Meanwhile, BofA looks for an over-10% fall in European stocks next year. Sticking with macro updates, the OECD, in their latest economic outlook, cut US, China, Eurozone growth forecasts for 2021 and 2022, with Omicron cited as a factor. Back to trade, broad-based gains are seen across European cash markets. Sectors hold a clear cyclical bias which consists of Travel & Leisure, Basic Resources, Autos, Retail and Oil & Gas as the top performers – with the former bolstered by the seemingly low appetite for coordination on restrictions and measures at an EU level – Deutsche Lufthansa (+6%) and IAG (+5.1%) now reside at the top of the Stoxx 600. The other side of the spectrum sees the defensive sectors – with Healthcare, Household Goods, Food & Beverages as the straddlers. In terms of induvial movers, German-listed Adler Group (+22%) following a divestment, whilst Blue Prism (+1.7%) is firmer after SS&C raised its offer for the Co. Top European News Wizz Says Travelers Are Booking at Shorter and Shorter Notice Turkey Central Bank Intervenes in FX Markets to Stabilize Lira Gold Swings on Omicron’s Widening Spread, Inflation Worries Former ABG Sundal Collier Partner Starts Advisory Firm In FX, the Dollar remains mixed against majors, but well off highs prompted by Fed chair Powell ditching transitory from the list of adjectives used to describe inflation and flagging that a faster pace of tapering will be on the agenda at December’s FOMC. However, the index is keeping tabs on the 96.000 handle and has retrenched into a tighter 95.774-96.138 range, for the time being, as trade remains very choppy and volatility elevated awaiting clearer medical data and analysis on Omicron to gauge its impact compared to the Delta strain and earlier COVID-19 variants. In the interim, US macro fundamentals might have some bearing, but the bar is high before NFP on Friday unless ADP or ISM really deviate from consensus or outside the forecast range. Instead, Fed chair Powell part II may be more pivotal if he opts to manage hawkish market expectations, while the Beige Book prepared for next month’s policy meeting could also add some additional insight. NZD/AUD/CAD/GBP - Broad risk sentiment continues to swing from side to side, and currently back in favour of the high beta, commodity and cyclical types, so the Kiwi has bounced firmly from worst levels on Tuesday ahead of NZ terms of trade, the Aussie has pared a chunk of its declines with some assistance from a smaller than anticipated GDP contraction and the Loonie is licking wounds alongside WTI in advance of Canadian building permits and Markit’s manufacturing PMI. Similarly, Sterling has regained some poise irrespective of relatively dovish remarks from BoE’s Mann and a slender downward revision to the final UK manufacturing PMI. Nzd/Usd is firmly back above 0.6800, Aud/Usd close to 0.7150 again, Usd/Cad straddling 1.2750 and Cable hovering on the 1.3300 handle compared to circa 0.6772, 0.7063, 1.2837 and 1.3195 respectively at various fairly adjacent stages yesterday. JPY/EUR/CHF - All undermined by the aforementioned latest upturn in risk appetite or less angst about coronavirus contagion, albeit to varying degrees, as the Yen retreats to retest support sub-113.50, Euro treads water above 1.1300 and Franc straddles 0.9200 after firmer than forecast Swiss CPI data vs a dip in the manufacturing PMI. In commodities, WTI and Brent front month futures are recovering following yesterday’s COVID and Powell-induced declines in the run-up to the OPEC meetings later today. The complex has also been underpinned by the reduced prospects of coordinated EU-wide restrictions, as per the abandonment of the COVID video conference between EU leaders. However, OPEC+ will take centre stage over the next couple of days, with a deluge of source reports likely as OPEC tests the waters. The case for OPEC+ to pause the planned monthly relaxation of output curbs by 400k BPD has been strengthening. There have been major supply and demand developments since the prior meeting. The recent emergence of the Omicron COVID variant and coordinated release of oil reserves have shifted the balance of expectations relative to earlier in the month (full Newsquawk preview available in the Research Suite). In terms of the schedule, the OPEC meeting is slated for 13:00GMT/08:00EST followed by the JTC meeting at 15:00GMT/10:00EST, whilst tomorrow sees the JMMC meeting at 12:00GMT/07:00EST; OPEC+ meeting at 13:00GMT/08:00EST. WTI Jan has reclaimed a USD 69/bbl handle (vs USD 66.20/bbl low) while Brent Feb hovers around USD 72.50/bbl (vs low USD 69.38/bbl) at the time of writing. Elsewhere, spot gold and silver trade with modest gains and largely in tandem with the Buck. Spot gold failed to sustain gains above the cluster of DMAs under USD 1,800/oz (100 DMA at USD 1,792/oz, 200 DMA at USD 1,791/oz, and 50 DMA at USD 1,790/oz) – trader should be aware of the potential for a technical Golden Cross (50 DMA > 200 DMA). Turning to base metals, copper is supported by the overall risk appetite, with the LME contract back above USD 9,500/t. Overnight, Chinese coking coal and coke futures rose over 5% apiece, with traders citing disrupted supply from Mongolia amid the COVID outbreak in the region. US Event Calendar 7am: Nov. MBA Mortgage Applications, prior 1.8% 8:15am: Nov. ADP Employment Change, est. 525,000, prior 571,000 9:45am: Nov. Markit US Manufacturing PMI, est. 59.1, prior 59.1 10am: Oct. Construction Spending MoM, est. 0.4%, prior -0.5% 10am: Nov. ISM Manufacturing, est. 61.2, prior 60.8 2pm: U.S. Federal Reserve Releases Beige Book Nov. Wards Total Vehicle Sales, est. 13.4m, prior 13m Central Banks 10am: Powell, Yellen Testify Before House Panel on CARES Act Relief DB's Jim Reid concludes the overnight wrap If you’re under 10 and reading this there’s a spoiler alert today in this first para so please skip beyond and onto the second. Yes my heart broke a little last night as my little 6-year old Maisie said to me at bedtime that “Santa isn’t real is he Daddy?”. I lied (I think it’s a lie) and said yes he was. I made up an elaborate story about how when we renovated our 100 year old house we deliberately kept the chimney purely to let Santa come down it once a year. Otherwise why would we have kept it? She then asked what about her friend who lives in a flat? I tried to bluff my way through it but maybe my answer sounded a bit like my answers as to what will happen with Omicron. I’ll test both out on clients later to see which is more convincing. Before we get to the latest on the virus, given it’s the start of the month, we’ll shortly be publishing our November performance review looking at how different assets fared over the month just gone and YTD. It arrived late on but Omicron was obviously the dominant story and led to some of the biggest swings of the year so far. It meant that oil (which is still the top performer on a YTD basis) was the worst performer in our monthly sample, with WTI and Brent seeing their worst monthly performances since the initial wave of market turmoil over Covid back in March 2020. And at the other end, sovereign bonds outperformed in November as Omicron’s emergence saw investors push back the likelihood of imminent rate hikes from central banks. So what was shaping up to be a good month for risk and a bad one for bonds flipped around in injury time. Watch out for the report soon from Henry. Back to yesterday now, and frankly the main takeaway was that markets were desperate for any piece of news they could get their hands on about the Omicron variant, particularly given the lack of proper hard data at the moment. The morning started with a sharp selloff as we discussed at the top yesterday, as some of the more optimistic noises from Monday were outweighed by that FT interview, whereby Moderna’s chief executive had said that the existing vaccines wouldn’t be as effective against the new variant. Then we had some further negative news from Regeneron, who said that analysis and modelling of the Omicron mutations indicated that its antibody drug may not be as effective, but that they were doing further analysis to confirm this. However, we later got some comments from a University of Oxford spokesperson, who said that there wasn’t any evidence so far that vaccinations wouldn’t provide high levels of protection against severe disease, which coincided with a shift in sentiment early in the European afternoon as equities begun to pare back their losses. The CEO of BioNTech and the Israeli health minister expressed similar sentiments, noting that vaccines were still likely to protect against severe disease even among those infected by Omicron, joining other officials encouraging people to get vaccinated or get booster shots. Another reassuring sign came in an update from the EU’s ECDC yesterday, who said that all of the 44 confirmed cases where information was available on severity “were either asymptomatic or had mild symptoms.” After the close, the FDA endorsed Merck’s antiviral Covid pill. While it’s not clear how the pill interacts with Omicron, the proliferation of more Covid treatments is still good news as we head into another winter. The other big piece of news came from Fed Chair Powell’s testimony to the Senate Banking Committee, where the main headline was his tapering comment that “It is appropriate to consider wrapping up a few months sooner.” So that would indicate an acceleration in the pace, which would be consistent with the view from our US economists that we’ll see a doubling in the pace of reductions at the December meeting that’s only two weeks from today. The Fed Chair made a forceful case for a faster taper despite lingering Omicron uncertainties, noting inflation is likely to stay elevated, the labour market has improved without a commensurate increase in labour supply (those sidelined because of Covid are likely to stay there), spending has remained strong, and that tapering was a removal of accommodation (which the economy doesn’t need more of given the first three points). Powell took pains to stress the risk of higher inflation, going so far as to ‘retire’ the use of the term ‘transitory’ when describing the current inflation outlook. So team transitory have seemingly had the pitch taken away from them mid match. The Chair left an exit clause that this outlook would be informed by incoming inflation, employment, and Omicron data before the December FOMC meeting. A faster taper ostensibly opens the door to earlier rate hikes and Powell’s comment led to a sharp move higher in shorter-dated Treasury yields, with the 2yr yield up +8.1bps on the day, having actually been more than -4bps lower when Powell began speaking. They were as low as 0.44% then and got as high as 0.57% before closing at 0.56%. 2yr yields have taken another leg higher overnight, increasing +2.5bps to 0.592%. Long-end yields moved lower though and failed to back up the early day moves even after Powell, leading to a major flattening in the yield curve on the back of those remarks, with the 2s10s down -13.7bps to 87.3bps, which is its flattest level since early January. Overnight 10yr yields are back up +3bps but the curve is only a touch steeper. My 2 cents on the yield curve are that the 2s10s continues to be my favourite US recession indicator. It’s worked over more cycles through history than any other. No recession since the early 1950s has occurred without the 2s10s inverting. But it takes on average 12-18 months from inversion to recession. The shortest was the covid recession at around 7 months which clearly doesn’t count but I think we were very late cycle in early 2020 and the probability of recession in the not too distant future was quite high but we will never know.The shortest outside of that was around 9 months. So with the curve still at c.+90bps we are moving in a more worrying direction but I would still say 2023-24 is the very earliest a recession is likely to occur (outside of a unexpected shock) and we’ll need a rapid flattening in 22 to encourage that. History also suggests markets tend to ignore the YC until it’s too late. So I wouldn’t base my market views in 22 on the yield curve and recession signal yet. However its something to look at as the Fed seemingly embarks on a tightening cycle in the months ahead. Onto markets and those remarks from Powell (along with the additional earlier pessimism about Omicron) proved incredibly unhelpful for equities yesterday, with the S&P 500 (-1.90%) giving up the previous day’s gains to close at its lowest level in over a month. It’s hard to overstate how broad-based this decline was, as just 7 companies in the entire S&P moved higher yesterday, which is the lowest number of the entire year so far and the lowest since June 11th, 2020, when 1 company ended in the green. Over in Europe it was much the same story, although they were relatively less affected by Powell’s remarks, and the STOXX 600 (-0.92%) moved lower on the day as well. Overnight in Asia, stocks are trading higher though with the KOSPI (+2.02%), Hang Seng (+1.40%), the Nikkei (+0.37%), Shanghai Composite (+0.11%) and CSI (+0.09%) all in the green. Australia’s Q3 GDP contracted (-1.9% qoq) less than -2.7% consensus while India’s Q3 GDP grew at a firm +8.4% year-on-year beating the +8.3% consensus. In China the Caixin Manufacturing PMI for November came in at 49.9 against a 50.6 consensus. Futures markets are indicating a positive start to markets in US & Europe with the S&P 500 (+0.73%) and DAX (+0.44%) trading higher again. Back in Europe, there was a significant inflation story amidst the other headlines above, since Euro Area inflation rose to its highest level since the creation of the single currency, with the flash estimate for November up to +4.9% (vs. +4.5% expected). That exceeded every economist’s estimate on Bloomberg, and core inflation also surpassed expectations at +2.6% (vs. +2.3% expected), again surpassing the all-time high since the single currency began. That’s only going to add to the pressure on the ECB, and yesterday saw Germany’s incoming Chancellor Scholz say that “we have to do something” if inflation doesn’t ease. European sovereign bonds rallied in spite of the inflation reading, with those on 10yr bunds (-3.1bps), OATs (-3.5bps) and BTPs (-0.9bps) all moving lower. Peripheral spreads widened once again though, and the gap between Italian and German 10yr yields closed at its highest level in just over a year. Meanwhile governments continued to move towards further action as the Omicron variant spreads, and Greece said that vaccinations would be mandatory for everyone over 60 soon, with those refusing having to pay a monthly €100 fine. Separately in Germany, incoming Chancellor Scholz said that there would be a parliamentary vote on the question of compulsory vaccinations, saying to the Bild newspaper in an interview that “My recommendation is that we don’t do this as a government, because it’s an issue of conscience”. In terms of other data yesterday, German unemployment fell by -34k in November (vs. -25k expected). Separately, the November CPI readings from France at +3.4% (vs. +3.2% expected) and Italy at +4.0% (vs. +3.3% expected) surprised to the upside as well. In the US, however, the Conference Board’s consumer confidence measure in November fell to its lowest since February at 109.5 (vs. 110.9 expected), and the MNI Chicago PMI for November fell to 61.8 9vs. 67.0 expected). To the day ahead now, and once again we’ll have Fed Chair Powell and Treasury Secretary Yellen appearing, this time before the House Financial Services Committee. In addition to that, the Fed will be releasing their Beige Book, and BoE Governor Bailey is also speaking. On the data front, the main release will be the manufacturing PMIs from around the world, but there’s also the ADP’s report of private payrolls for November in the US, the ISM manufacturing reading in the US as well for November, and German retail sales for October. Tyler Durden Wed, 12/01/2021 - 07:47.....»»

Category: blogSource: zerohedgeDec 1st, 2021

Sail Through Omicron-Induced Market Volatility With These ETFs

Low-volatility products could be fascinating picks for those seeking steady investment in equities amid the current market volatility. Wall Street recovered from the omicron strain-related setback on Nov 29 to some extent. President Joe Biden’s assurances that if people undertake proper restrictions, new lockdown measures and travel-related restrictions might not have to be imposed, supported the market sentiments. The S&P 500 and the Nasdaq Composite indices were up 1.3% and 1.9%, respectively, on the day.Meanwhile, the omicron strain of coronavirus has brought about a slowdown in the market momentum. Dow Jones Industrial Average index witnessed its weakest performance since October 2020 on Nov 26. Going on, Moderna MRNA CEO Stephane Bancel’s comment to the Financial Times on Nov 29, claiming that he anticipates the existing COVID-19 vaccines to prove comparatively less effective against the new strain, has brought about a new wave of concerns (per a CNBC article).Investors willing to sail through the current market turbulences from the latest COVID-19-variant-related concerns can consider iShares MSCI USA Min Vol Factor ETF USMV, Invesco S&P 500 Low Volatility ETF SPLV, iShares MSCI Global Min Vol Factor ETF ACWV and Invesco S&P 500 High Dividend Low Volatility ETF SPHD.The variant was first detected in South Africa with numerous mutations (more than 30) to the spike protein (as stated in a CNBC article). The omicron variant has now been reported in the U.K., Israel, Belgium, the Netherlands, Germany, Italy, Australia and Hong Kong. Going on, the World Health Organization (WHO) has labeled the variant as a “variant of concern.” At least 70 countries and territories are believed to have put travel restrictions from several African countries to control the outbreak, per a CNN report.The coronavirus outbreak is aggravating in some parts of Europe, largely due to the cold weather conditions. Various measures are being taken to curtail the spread, which might again impact the economic recovery achieved so far from the pandemic-led slump. For instance, a 30-day state of emergency has been declared along with several new restrictions in the Czech Republic. In fact, Austria has imposed at least a 10-day-long national lockdown to fight the resurgence. Considering the current situation, the WHO has issued a warning that Europe and Central Asia could witness another 700,000 COVID-19 deaths by Mar 1, 2022, per a Euronews article.Weak U.S. consumer sentiment might also contribute to the market carnage. U.S. consumers have clearly remained worried about rising prices, as reflected by the surging inflation levels. The latest consumer sentiment readings for November look very disappointing as the metric has slipped to the lowest level in a decade compared to the previous month. The University of Michigan’s final consumer sentiment declined to 67.4 during November from 71.7 in October. Now, the rise in concerns related to the new variant can also dent consumer spending further and increase supply-chain disruptions.Low-Volatility ETFs to the RescueLow-volatility products could be intriguing choices for those who want to continue investing in equities in the turbulent market conditions. Consider the following exciting options:iShares MSCI USA Min Vol Factor ETF iShares MSCI USA Min Vol Factor ETF offers exposure to 184 U.S. stocks with lower volatility characteristics than the broader U.S. equity market by tracking the MSCI USA Minimum Volatility (USD) Index. With AUM of $29.29 billion, iShares MSCI USA Min Vol Factor ETF charges 0.15% in expense ratio.Invesco S&P 500 Low Volatility ETF Invesco S&P 500 Low Volatility ETF provides exposure to stocks with the lowest realized volatility over the past 12 months. The fund is based on the S&P 500 Low Volatility Index and holds 102 securities in its basket. Invesco S&P 500 Low Volatility ETF has AUM of $8.35 billion and charges an expense ratio of 25 basis points (bps) as stated in the prospectus (read: 5 ETFs That Gained Investors' Love Last Week).iShares MSCI Global Min Vol Factor ETF iShares MSCI Global Min Vol Factor ETF provides exposure to global stocks with potentially less risk. ACWV tracks the MSCI All Country World Minimum Volatility Index and holds 399 securities. iShares MSCI Global Min Vol Factor ETF has AUM of $5.38 billion and charges 20 bps in annual fees.Invesco S&P 500 High Dividend Low Volatility ETF Invesco S&P 500 High Dividend Low Volatility ETF seeks investment results that generally correspond (before fees and expenses) to the price and yield of the S&P 500 Low Volatility High Dividend Index. It holds 52 securities. Invesco S&P 500 High Dividend Low Volatility ETF has AUM of $2.95 billion and charges 30 bps in annual fees (read: ETF Strategies to Play Rising U.S. Treasury Yields). Want key ETF info delivered straight to your inbox? Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>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 Moderna, Inc. (MRNA): Free Stock Analysis Report iShares MSCI USA Min Vol Factor ETF (USMV): ETF Research Reports Invesco S&P 500 High Dividend Low Volatility ETF (SPHD): ETF Research Reports Invesco S&P 500 Low Volatility ETF (SPLV): ETF Research Reports iShares MSCI Global Min Vol Factor ETF (ACWV): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksDec 1st, 2021

Moderna ETFs Rallying on COVID-19 Vaccine News to Combat Omicron

Moderna has been rallying amid concerns surrounding the omicron variant, which has led to possibilities of a rise in demand for COVID-19 vaccines and boosters. Moderna MRNA, a formidable name among the vaccine developers, has been impressing investors with the stupendous rally since Nov 26. The stock gained about 20% on Nov 26, followed by an 11.8% rise on Nov 29. It is not a mystery that the ace COVID-19 vaccine developer has been witnessing its stock rallying on the fears surrounding the new coronavirus variant, omicron. The new variant is feared to be carrying the combined features of previous variants and can have high transmissibility and lower vaccine potency.The new omicron strain of coronavirus was first detected in South Africa with numerous mutations (more than 30) to the spike protein (as stated in a CNBC article). The omicron variant has now been reported in the U.K., Israel, Belgium, the Netherlands, Germany, Italy, Australia and Hong Kong. Going on, the World Health Organization (WHO) has labeled the variant as a “variant of concern.”Investors willing to ride Moderna’s gains amid concerns surrounding the omicron variant can consider ETFs like ETFMG Treatments Testing and Advancements ETF GERM, VanEck Biotech ETF BBH, iShares Biotechnology ETF IBB and iShares Genomics Immunology and Healthcare ETF IDNA.Moderna’s Chief Medical Officer Paul Burton recently commented that “We should know about the ability of the current vaccine to provide protection in the next couple of weeks, but the remarkable thing about the MRNA vaccines, Moderna platform is that we can move very fast,” as mentioned in a CNBC article.The biotechnology company is also developing a 100-microgram booster dose compared to its authorized booster dose of 50-microgram of its COVID-19 vaccine. Moderna has informed that the higher dose of its booster shot has resulted in the highest neutralizing titers against the previous SARS-CoV-2 strains in an ongoing study conducted by the National Institutes of Health in the United States. In the company’s fight against the new COVID-19 variant, Paul Burton has said that “If we have to make a brand new vaccine I think that’s going to be early 2022 before that’s really going to be available in large quantities,” per a CNBC article.Notably, the FDA has recently broadened the emergency use authorization (EUA) approval of Moderna’s COVID-19 vaccine booster shot at the 50 µg dose level to all adults aged 18 and above. The U.S. Centers for Disease Control and Prevention’s Advisory Committee on Immunization Practices (ACIP) has also issued a recommendation suggesting a booster dose. In fact, all the 11 ACIP members unanimously recommended the booster dose.The authorization has come at a time when travel restrictions are easing and the outbreak is spreading alarmingly in Europe. Thus, the approval can be further helpful in containing the coronavirus outbreak in the United States. Moderna’s sales figures are also expected to get the boost with the latest approval.It is important to note that the booster shot can be administered to all individuals aged 18 years and above and have completed the primary vaccination with any of the authorized or approved COVID-19 vaccines. At least six months post-completion of the second dose of the primary series, one can opt for the booster shot.Moderna ETFs to GainConsidering the important role played by the coronavirus vaccines in Moderna’s recent earnings results, the latest developments can be a positive for the stock. Interestingly, Moderna reported revenues of $4.8 billion in the third quarter.The company projects product sales between $15 billion and $18 billion for 2021. Moderna had previously stated that it has advance purchase agreements for its COVID-19 vaccine worth $20 billion in place. However, the supply of some doses scheduled for 2021 is being postponed to 2022 on several factors, including longer delivery lead times for international shipments.The major increase in revenues was driven by sales of its coronavirus vaccine, which is now approved for temporary/emergency use in several countries. Moreover, grants from an agreement with the Biomedical Advanced Research and Development Authority related to the development of the COVID-19 vaccine drove revenues. Therefore, we discuss a few ETFs that provide exposure to Moderna:ETFMG Treatments Testing and Advancements ETF — up 6.5% since Nov 24ETFMG Treatments Testing and Advancements ETF is designed to give direct exposure to biotech companies directly engaged in the testing and treatment of infectious diseases.ETFMG Treatments Testing and Advancements ETF holds 78 stocks in its basket, with Moderna occupying the third spot at 6.39% share. The fund has amassed $52 million in its asset base. ETFMG Treatments Testing and Advancements ETF charges 68 basis points (bps) in annual fees (read: Bet On COVID-Themed ETFs as New Cases Rise Globally).VanEck Biotech ETF  — up 3.2%The underlying MVIS US Listed Biotech 25 Index tracks the overall performance of companies involved in the development, production, marketing and sales of drugs based on genetic analysis and diagnostic equipment.VanEck Biotech ETF holds about 25 securities in its basket, with 10.41% exposure to Moderna. Its AUM is $567.4 million and VanEck Biotech ETF has an expense ratio of 0.35% (read: ETF Areas to Gain/Lose on Fear of Omicron Strain of Coronavirus).iShares Biotechnology ETF  — up 1.7%iShares Biotechnology ETF seeks to track the investment results of an index composed of U.S.-listed equities in the biotechnology sector.iShares Biotechnology ETF holds about 265 securities in its basket, with 7.88% exposure to Moderna. IBB has an AUM of $9.85 billion, with an expense ratio of 0.45%.iShares Genomics Immunology and Healthcare ETF  — up 1.9%iShares Genomics Immunology and Healthcare ETF seeks to track the investment results of an index composed of developed and emerging market companies that could benefit from the long-term growth and innovation in genomics, immunology and bioengineering.iShares Genomics Immunology and Healthcare ETF holds about 49 securities in its basket, with 6.36% exposure to Moderna. IDNA has an AUM of $341.6 million. iShares Genomics Immunology and Healthcare ETF has an expense ratio of 0.47%. Want key ETF info delivered straight to your inbox? Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>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 Moderna, Inc. (MRNA): Free Stock Analysis Report iShares Biotechnology ETF (IBB): ETF Research Reports VanEck Biotech ETF (BBH): ETF Research Reports iShares Genomics Immunology and Healthcare ETF (IDNA): ETF Research Reports ETFMG Treatments, Testing and Advancements ETF (GERM): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksNov 30th, 2021

Cryptocurrencies recover from last week"s sell-off as traders mull the impact of a new variant, while little-known "omicron" coin soars

Bitcoin recovered from Friday's steep sell-off, rising around 5% and lifting other cryptocurrencies, including the little-known token 'omicron'. BitcoinFrancesco Carta fotografo Bitcoin and ether bounced back on Monday, recovering somewhat after Friday's steep sell-off.  A small decentralized reserve token known as "omicron" surged as focus on the new COVID-19 intensified.  South Africa detected the "omicron" variant of Covid-19 last week, initially sparking a sell-off in crypto. Sign up here for our daily newsletter, 10 Things Before the Opening Bell. Cryptocurrencies staged a sharp recovery on Monday, bouncing back from the steep sell-off late last week, when the "Omicron" variant of COVID-19 emerged, spooking investors and pummelling financial markets. Meanwhile, a mysterious token with the same name as the new variant surged in value.Bitcoin rose 4.8% in 24 hours to stand at $57,136.17 by 07:52 a.m. ET Monday, having fallen by as much as 8% at one point on Friday, according to CoinGecko. Ether rose 5% in 24 hours to stand at $4,313.26, recovering from Friday's 11% drop. The Omicron variant was first detected in South Africa last week. Since then, cases have begun to emerge in a number of countries outside the region and a number of governments including the UK and Israel have scrambled to restrict certain travel. News of the variant on Friday hit risk assets including crypto, as investors rushed for the safety of the likes of gold. News that the Omicron variant was more transmissible sparked concerns last week. The South African doctor who first spotted the new covid variant, told the BBC Sunday patients who had caught it had "extremely mild symptoms" but more time would need to pass until it is clear how the disease will impact vulnerable people. By Monday, with still little in the way of hard evidence as to how easily transmissible the variant was, investors reassessed the threat omicron may pose to the economy and edged back into cryptocurrencies and stocks."Like gold, Bitcoin is being used as a hedge against global uncertainty in the world," Adrian Pollard, ​​Chief Product Officer to HollaEx, a crypto exchange software company, told Insider.In the meantime, a little-known decentralized reserve currency named omicron surged by almost 70% on the day and by 900% on the week, as trader focus on the new COVID-19 intensified. According to the developers' website, the token is backed by a basket of assets that includes stablecoin USDC and is only listed on SushiSwap."Omicron is a clear sign of a bubble, and while it might be a good way to make a quick return, it is not a good buying option for the long term investors," Freddie Evans, Sales Trader at UK based digital asset broker GlobalBlock told insider. "With the founders of the coin being unknown, it is also at risk of a rug pull, the likes of which we saw with Squid Game coin last month," he said. In a rug pull, the developers abandon a project and take the proceeds. The most recent example was the Squid Game token, whose creators ran away with an estimated $3.38 million after having pumped the token up. "We have a list of criteria that we check against for all cryptocurrencies that request for listings. We don't publish the exact criteria otherwise it will be gamed. Omicron passes the criteria and hence it is listed," Bobby Ong co-founder of CoinGecko said. According to its website the omic token already existed before the emergence of the omicron variant last week. CoinGecko has been tracking it since November 11. The coin has a website, twitter account and discord account. But little else is known about it."Another risk is associated with the fact that such coins are traded on decentralized exchanges, where no one checks the source of their origin, which means that they can vanish as quickly as they appear,"  Lei Wang, Co-founder & CEO of Kine Protocol, decentralized derivatives trading platform, told Insider. Other more popular altcoins like solana's sol rose by 7.6%, while cardano's ada climbed by 3.5%. Metaverse tokens such as Decentraland's mana rose 5% and Sandbox's sand jumped 8% Monday. Read the original article on Business Insider.....»»

Category: topSource: businessinsiderNov 29th, 2021

Beijing Initiates "Olympic Bubble" Measures For Pandemic Control

Beijing Initiates "Olympic Bubble" Measures For Pandemic Control Authored by Jenny Li via The Epoch Times, A coronavirus outbreak in Beijing’s neighboring city of Tianjin comes just four weeks before the start of the Winter Olympics in the Chinese capital. This means all 15 million Tianjin residents are barred from entering Beijing which is 100 kilometers away. Meanwhile, Beijing’s so-called “Closed Loop” or “Bubble” measures for the Winter Olympics are now in full swing. The Olympics begin Feb. 4. On Jan. 9, the Jinnan District Center for Disease Control and Prevention in Tianjin reported that 20 more people tested positive through COVID-19 PCR testing, a day after 20 others were found to have the virus. Those infected are linked to educational facilities, and the outbreak has spread to at least three schools. The Tianjin Center for Disease Control and Prevention conducted genetic sequencing of the virus in two of the cases and identified the virus at the new Omicron variant. On Jan. 9, the Tianjin municipal government decided to carry out nucleic acid testing on all its staff. Other testing measures for the public are likewise taking place. “People in four districts, Jinan, Dongli, Xiqing, and Nankai are taking nucleic acid testing today,” Mr. Zhang from Nankai District, Tianjin told The Epoch Times on Jan. 9. “The rest will take them tomorrow. Nankai District has notified the closure of the district. People in Jinan District have basically all done nucleic acid yesterday,” he said. “People were still lining up at 3:00 am. At four o’clock in the morning, the inspectors started going door to door to administer nucleic acid [testing] to elderly people who had not taken it.” Meanwhile, the Tianjin Municipal Examination Institute announced that all interviews for a teacher qualification examination scheduled for Jan. 9 had been canceled. “There is a teacher qualification exam these two days,” Zhang said. “I learned online that those who finished the exam on the 8th were required to quarantine, but it was announced at 11.30 p.m. yesterday that the test on the 9th was canceled,” he said. “A lot of people came to Tianjin [for the exam] and live in a hotel. Now they just can’t go back. They may need to quarantine at their own expense. I saw someone saying online that he had no money, no food, and couldn’t go out.” On Jan. 9, Beijing Center for Disease Control and Prevention issued a notice urging “Beijing residents not to go to Tianjin unless it is necessary, and Tianjin residents do not come to Beijing unless it is necessary.” Officials at the Yingsi checkpoint on the Beijing-Shanghai Expressway told the state-run Beijing News that they had turned back many people and vehicles entering Beijing over the past two days. The official request is understood not to be a “travel advisory” but an executive order. In October 2021, Beijing issued a clear order banning entry into Beijing of the so-called “four categories of people,” including “people in the county with one or more local COVID infection(s) and those with travel history in that county within 14 days”. In other words, as long as there is a confirmed positive case of COVID-19 in a county, everyone from that county is not allowed to enter Beijing, including Beijing residents who stayed there within 14 days. Zhang said the authorities are not concerned about the treatment of those who are ill from the virus. “The media and the government have always focused on how many people have been tested positive,” he said. “But how many have been infected, and how many have been isolated, but how are these patients doing? How long does it take to recover? How effective is the treatment? Almost nothing is seen. Why is there no follow-up on concerns about lasting adverse effects from vaccines?” Other than being nervous about the outbreak in Tianjin, Chinese Communist Party (CCP) authorities are further worried that the virus could spread from Xi’an in Shaanxi Province, through similarly named Shanxi Province, plus Henan, and Hebei provinces, and then on to Beijing. The cities of Zhengzhou and Xuchang in Henan Province, south of Beijing, have been hit by the virus. Henan is a major transportation route into Beijing and currently all passengers traveling by train through the province will not be allowed to enter Beijing. Another province joining Shaanxi and Hebei provinces is Shanxi. On Jan. 6, the Shanxi Provincial Office of Epidemic Prevention and Control issued a notice requiring people not to go out of the province unless necessary. The notice also requires people entering or returning to Shanxi to immediately report to their workplaces, communities, or hotels and take nucleic acid tests. On Jan. 9, the Epidemic Prevention and Control Office in Jincheng City, Shanxi Province said that because “the epidemic situation around our city is becoming increasingly severe,” it will be “strictly” tightening controls. Among such measures are prohibiting access to county and village roads in Henan Province to Jincheng and discouraging the return of foreign vehicles and people with a history of travel to Henan Province via high-speed, national, and provincial roads and high-speed trains. With the 2022 Winter Olympics set to kick off in Beijing on Feb. 4, the CCP hopes to demonstrate its “institutional confidence” to the world with its anti-epidemic measures. Beijing has also carried out its “bubble management” in the lead-up to the event to ensure that people associated with the Games, including members of foreign sports teams and Chinese participants, do not come into contact with other “ordinary Chinese.” Given that pandemic data released by the CCP is largely regarded as illogical, it is generally not recognized by the international community. It is incomprehensible for the international community that the city of Xi’an with a population of some 12 million people has been sealed off after less than 100 officially positive infections have been found. Tyler Durden Fri, 01/14/2022 - 19:40.....»»

Category: blogSource: zerohedgeJan 14th, 2022

Delta Air Lines (DAL) Beats on Q4 Earnings, Warns of Q1 Loss

Cargo revenues at Delta (DAL) increase 63% in fourth-quarter 2021 from fourth-quarter 2019 levels. Delta Air Lines’ DAL fourth-quarter 2021 earnings (excluding 86 cents from non-recurring items) of 22 cents per share outpaced the Zacks Consensus Estimate of 15 cents. Results came against the year-ago quarter’s loss of $2.53 per share. Strong holiday travel demand and favorable pricing aided the December quarter’s results.Delta’s revenues came in at $9,470 million, which not only beat the Zacks Consensus Estimate of $9,232.1 million but also soared in excess of 100% from the year-ago figure as people resorted to air travel during the holidays.Despite the year-over-year improvement in air-travel demand (particularly for leisure) in the United States as more and more Americans get vaccinated, the overall picture remains bleak when compared to the fourth-quarter 2019 scenario, mainly due to the softness in business and international travel. Consequently, passenger revenues plunged 29% from the levels recorded in the comparable quarter of 2019 to $7,241 million.The uptick in air-travel demand in the United States can be gauged from the fact that 82.2% of fourth-quarter 2021 passenger revenues came from the domestic markets.Cargo revenues surged 63% to $304 million. This was the fifth consecutive quarter when cargo revenues increased from the comparable periods’ levels in 2019. Cargo revenues in the reported quarter were boosted by strong demand during the holidays and favorable yields. Revenues from other sources climbed 91% to $1,925 million. Total revenues in the December quarter declined 17% from the fourth-quarter 2019 level.Adjusted operating revenues (which exclude third-party refinery sales) came in at $8.4 billion. This reflected a 74% recovery from the fourth-quarter 2019 level. Fourth-quarter 2021 capacity was 79% restored compared with the fourth-quarter 2019 level.Other Financial Details of Q4Below we present all comparisons (in % terms) with fourth-quarter 2019 (pre-coronavirus levels).Revenue passenger miles (a measure of air traffic) tumbled 28% to 40,402 million. Capacity (measured in available seat miles) contracted 21% to 51,744 million. With the fall in traffic outpacing the capacity reduction, load factor (percentage of seats filled by passengers) was down to 78% from 86% in the comparable quarter of 2019.Passenger revenue per available seat mile (PRASM) declined 11% to 13.99 cents. Passenger mile yield decreased to 17.92 cents from 18.29 cents in the fourth quarter of 2019. On an adjusted basis, total revenue per available seat mile (TRASM) deteriorated 6% to 16.29 cents in the December quarter.Total operating expenses including special items declined 8% to $9,207 million. Aircraft fuel expenses and related taxes slumped 22% in the reported quarter. Fuel gallons consumed decreased 24% to $755 million. Average fuel price per gallon (adjusted) increased 6% to $2.10. Non-fuel unit cost increased 8% in the reported quarter.The airline had liquidity worth $14.2 billion at the end of the December quarter (including cash and cash equivalents, short-term investments and undrawn revolving credit facilities). Delta, currently carrying a Zacks Rank #3 (Hold), had total debt and finance lease obligations of $26.9 billion with adjusted net debt of $20.6 billion. Operating cash flow during the quarter was $555 million. Free cash flow for the reported quarter was a negative $441 million.Update on Omicron ImpactDue to the highly transmissible omicron variant of COVID-19, Delta like other U.S. carriers was forced to cancel multiple flights with many crew members falling ill. This, in turn, impacted air travel. Due to the operational disruptions, DAL expects to incur loss in first-quarter 2022.  Per Delta president Glen Hauenstein, "The recent rise in COVID cases associated with the omicron variant is expected to impact the pace of demand recovery early in the quarter, with recovery momentum resuming from President's Day weekend forward.  Factoring this in to our outlook, we expect total March quarter revenue to recover to 72 to 76% of 2019 levels, compared to 74% in the December quarter."Delta’s CEO Ed Bastian sounded hopeful when he said that “Omicron is expected to temporarily delay the demand recovery 60 days, but as we look past the peak, we are confident in a strong spring and summer travel season with significant pent-up demand for consumer and business travel." Dan Janki, Delta's chief financial officer sounded confident of the carrier posting profit in the other three quarters of 2022, “resulting in a meaningful profit in 2022”.Other Aspects of Q1 OutlookAll comparisons in percentage are made with first-quarter 2019. For the first quarter of 2022, the carrier expects to operate at a capacity that is in the 83-85% range of first-quarter 2019 levels. Non-fuel unit costs are expected to increase roughly 15% from the first-quarter 2019 actuals. Fuel price per gallon is expected in the $2.35-$2.50 range. Capital expenditures and adjusted net debt are likely to be $1.6 billion and $22 billion, respectively, in the March quarter.Stocks to ConsiderBelow we present some better-ranked stocks in the broader Transportation sector:Expeditors International of Washington EXPD currently sports a Zacks Rank #1 (Strong Buy). EXPD is being bolstered by upbeat airfreight revenues. Like the first three quarters of 2021, we expect airfreight revenues to aid Expeditors’ fourth-quarter 2021 results (scheduled to be out on Feb 22, 2022) as well.Shares of Expeditors have surged 32.2% in a year’s time. In May 2021, EXPD announced an 11.5% hike in its semi-annual cash dividend, taking the total to 58 cents per share. EXPD has an impressive record with respect to utilizing its shareholders’ money. The optimism surrounding the stock is evident from the 7.3% northbound revision of the Zacks Consensus Estimate for current-year earnings over the past 60 days.You can see the complete list of today’s Zacks #1 Rank stocks here.ArcBest Corporation ARCB currently carries a Zacks Rank #2 (Buy). ARCB has a stellar surprise history. Its earnings outperformed the Zacks Consensus Estimate in each of the preceding four quarters, the average being 27.4%.Shares of ArcBest have surged 99.2% in a year’s time. Improving freight conditions in the United States bode well for ARCB. Solid customer demand and higher market rates are supporting growth at ARCB. 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 Delta Air Lines, Inc. (DAL): Free Stock Analysis Report Expeditors International of Washington, Inc. (EXPD): Free Stock Analysis Report ArcBest Corporation (ARCB): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJan 14th, 2022

Airline Stock Roundup: AAL"s Bullish Q4 Revenue View, ALK, GOL, AZUL in Focus

American Airlines (AAL) provides an improved revenue outlook for Q4. Gol Linhas' (GOL) Q4 outlook also impresses. In the past week,American Airlines’ AAL management provided an improved guidance for fourth-quarter 2021 revenues despite multiple flight cancellations.  Alaska Airlines, the wholly-owned subsidiary of Alaska Air Group ALK, trimmed its schedule for the current month following the omicron-induced staff crunch.Air-travel demand is improving in Latin America with increased vaccinations. Reflecting this buoyant scenario, Gol Linhas Aereas Inteligentes GOL provided an upbeat view for the final quarter of 2021. Owing to the healthy air-travel demand scene, Gol Linhas’ traffic for December improved significantly year over year, as reported in last week’s write up.Another Brazilian carrier Azul AZUL was also in news in the past week, courtesy of its December traffic report. Like Gol, Azul is benefiting from improved air-travel demand on the domestic front.Recap of the Latest Top Stories1 Per an SEC filing, American Airlines now expects total revenues to decline approximately 17% in the fourth quarter of 2021 from the comparable period’s figure in 2019. Previously, the airline estimated the same to decrease around 20%. However, due to mass-scale flight cancellations during the Christmas travel period through the end of the year, American Airlines now predicts capacity to decline 13% in the fourth quarter from the 2019 level compared with the previous expectation of a decrease of 11-13%. Due to reduced capacity, AAL, currently carrying a Zacks Rank #3 (Hold), incurred higher costs. It now expects cost per available seat mile to increase 13-14% in the fourth quarter from the 2019 level. Previously, the carrier estimated the same to increase 8-10%. American Airlines expects total liquidity of approximately $15.8 billion at the end of the fourth quarter.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.2. For the fourth quarter of 2021 (detailed results of which will be out on Feb 17), Gol anticipates EBITDA margin to be approximately 35% while it expects EBIT margin to be around 28%. GOL estimates average fuel price per liter to be R$4.11. Gol predicts passenger revenue per available seat kilometers to increase 35% year over year in the fourth quarter. It expects cost per available seat kilometers, excluding fuel, to decrease 12% from the fourth-quarter 2020 level. Total demand, measured in revenue passenger kilometers, is forecast to increase 15.4% year over year. Total capacity, measured in available seat kilometers, is expected to climb 13.2% year over year.3. Per a Reuters report, Alaska Airlines reduced its flight schedule nearly 10% through January 2022 to combat the omicron-induced staffing shortage. With employees falling sick due to this highly transmissible COVID-19 variant, Alaska Airlines’ operations took a massive hit and the airline was compelled to slash flight schedule. Citing its concerns, management said, "As we have entered 2022, the continued impacts of Omicron have been disruptive in all our lives and unprecedented employee sick calls have impacted our ability to operate our airline reliably".4. Azul reported a 1.9% decline in traffic (on a consolidated basis) for December 2021 from the levels achieved in December 2019 (pre-coronavirus). The decline was mainly due to weakness on the international front. Consolidated load factor (% of seats filled by passengers) dipped 0.6 percentage points (p.p) to 82.9% last month with the capacity contraction (1.2%) being less than the reduction in traffic. International traffic in December declined a massive 60.9% from the comparable period’s level in 2019. However, the scenario was much brighter on the domestic front with traffic increasing 20.9% from the December 2019 levels.PerformanceThe following table shows the price movement of major airline players over the past week and during the last six months.Image Source: Zacks Investment ResearchThe table above shows that most airline stocks have traded in the green over the past week. As a result, the NYSE ARCA Airline Index has increased 2.5% to $84.68. Over the past six months, the NYSE ARCA Airline Index has depreciated 10.9%.What's Next in the Airline Space?Fourth-quarter earnings reports from United Airlines UAL and American Airlines are scheduled to be out on Jan 19 and Jan 20, respectively.  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 United Airlines Holdings Inc (UAL): Free Stock Analysis Report Gol Linhas Aereas Inteligentes S.A. (GOL): Free Stock Analysis Report American Airlines Group Inc. (AAL): Free Stock Analysis Report Alaska Air Group, Inc. (ALK): Free Stock Analysis Report AZUL (AZUL): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJan 14th, 2022