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Futures Extend Slide, European Markets Drop On Growth, Tapering Fears

Futures Extend Slide, European Markets Drop On Growth, Tapering Fears

World stocks receded from the previous session’s record highs, European stocks were headed for the biggest decline in almost three weeks and US futures were set for a…



Futures Extend Slide, European Markets Drop On Growth, Tapering Fears

World stocks receded from the previous session’s record highs, European stocks were headed for the biggest decline in almost three weeks and US futures were set for a third straight day of losses on Wednesday with the global growth outlook coming under increasing pressure while the dollar hit one-week highs and 10Y yields dipped as investors reduced exposure to riskier assets. S&P futures briefly fell 0.5%, tipping below 4,500 before, recovering losses after the S&P 500 fell 0.34% on Tuesday, while Dow futures were flat and Nasdaq emini futs were fractionally in the red as banks from Morgan Stanley to Citigroup turned cautious on US equities.

The S&P 500 and Dow Jones indexes closed lower on Tuesday, but the Nasdaq edged up to an all-time high after shares of Apple and Netflix hit record levels. US stocks have come under increasing pressure in recent days as investors have turned increasingly cautious following Friday’s weak August payrolls data and uncertainty over tapering. 

In the premarket, cryptocurrency-exposed stocks drop as Bitcoin falls along with other digital currencies after Coinbase said it received a warning from the Securities and Exchange Commission. Future Fintech (FTFT) falls 4.1% and Coinbase (COIN) declines 2.2%, while Marathon Digital (MARA) loses 1.3%. FAAMG gigatechs such as Microsoft, Amazon, Facebook and Alphabet Inc fell between 0.1% and 0.3% in premarket trading. PayPal rose 0.7% after it said it would acquire Japanese buy now, pay later (BNPL) firm Paidy in a $2.7 billion largely cash deal. Tesla edged 0.6% higher after the China Passenger Car Association (CPCA) said the electric vehicle maker sold 44,264 China-made vehicles in August and reported a jump on local deliveries.  Here are some of the other big movers today:

  • Coty (COTY) falls 6.8% after announcing the start to offer Class A stock by KKR Rainbow Aggregator LP.
  • India Globalization Capital (IGC) jumps 18% after the company says its cannabis-based drug for Alzheimer’s was safe and well tolerated in an early-stage clinical trial on 12 patients.
  • Kadmon (KDMN) surges 78% after Sanofi’s $1.9 billion cash acquisition of the U.S. biotech.
  • Nio Inc. (NIO) slides 3.1% after announcing a $2 billion at-the-market offering postmarket Tuesday. Its peers like Li Auto (LI) and Xpeng (XPEV) also declines by 0.5% and 0.8% respectively.
  • UiPath (PATH) slips 7% after sales forecast trails some estimates.

And then there is tapering: despite the weakest jobs report in seven months on Friday, St. Louis Fed President James Bullard said in an interview with the Financial Times on Wednesday that the Fed should move forward with a plan to taper QE despite the slowdown in job growth.

"Everything is tapering, tapering, tapering. We are looking at every single central bank - when is the next one?” said Eddie Cheng, head of international multi-asset portfolio management at Wells Fargo Asset Management, though he added: “The Delta variant impact is still running like a wild card”.

MSCI’s world equity index fell 0.17% after seven consecutive days of gains.

European equities slumped, with the Euro Stoxx 50 dropping as much as 1.5%, and the Stoxx 600 gauge headed for the biggest decline in almost three week; the DAX and SMI lag. Autos, industrial and media names are the weakest sectors with travel and retail the sole sectors in the green. Britain’s FTSE 100 struck two-week lows and were down 0.56%. European traders were focused on whether the European Central Bank will this week also begin to scale back its bond purchase program.

“What is likely ahead of us is a continued but temporary deceleration of economic activity of one to three months which likely started in August,” said Sebastien Galy, senior macro strategist at Nordea Asset Management.  "Fears that central banks might start to taper their asset purchases seems to have knocked away a little confidence, particularly given tomorrow’s ECB decision where many expect we’ll begin to see the start of that process, not least with inflation there running at its highest levels in almost a decade,” Deutsche Bank analysts said in a note. 

Here are some of the biggest European movers today:

  • B&M shares gain as much as 5.9% as it says revenue in the year to date has been broadly in line with market expectations, though gross margins have been stronger than originally anticipated in the B&M U.K. fascia business.
  • Dunelm rises as much as 11% after its FY profit topped estimates and it announced a special dividend, with analysts saying the payout points to a more confident outlook for the home furnishings retailer.
  • EasyJet shares rise as much as 3.8% and Ryanair shares up by as much as 2.3% after the Telegraph reported the U.K. may scrap its Green and Amber warning lists for foreign travel next month
  • Siemens Gamesa falls by as much as 7.5% and Siemens Energy drops by as much as 6.1% after JPMorgan downgrades both stocks. Other wind- energy stocks also fell including Orsted, down as much as 3.6%, after UBS cut its rating to neutral.
  • InPost falls as much as 4.2% despite its 2Q results getting a good reception from analysts, who noted its record margins and strong growth in parcel volumes.
  • Interparfums shares sink as much as 7.8% as its sales forecast disappointed and branded fragrances maker was downgraded by both Oddo and Midcap Partners.

Earlier in the session, the MSCI Asia Pacific Index slipped 0.1% while Japan’s Topix index closed 0.8% higher, with the rally driven by Japanese Prime Minister Yoshihide Suga’s decision to effectively step down. Asian stocks retreated, led by benchmarks in Korea and Taiwan, as investors awaited fresh catalysts following an eight-day rally. The MSCI Asia Pacific Index fell as much as 0.4%, before paring much of those losses. The regional benchmark is up by more than 8% from its lowest level for this year, marked on Aug. 20. A group of materials firms declined the most, offsetting gains in utilities. Regional equities have been in recovery since late August as concern over any abrupt tapering by the U.S. Federal Reserve abated and a selloff in Chinese equities eased. Still, stocks have been whipsawed by the rise and fall of daily virus cases in some countries and attempts by China to regulate a wide range of businesses.  Chinese blue chips dropped 0.41%, weighed down by recent soft data in the world’s second-biggest economy.

“A window remains for positive equity returns before the Fed raises rates in 2023 and a counter-trend dollar rally starts,” Jefferies strategist including Darby wrote in a note. “But a lot depends on further easing by China and better S.E. Asia vaccine roll-outs. The good news is that global trade is booming and an IT spending cycle is unfolding.” Singapore’s Straits Times Index fell more than 1% after local Covid-19 infections jumped to the highest in more than a year. South Korea’s Kospi was driven lower by a plunge in Kakao and Naver, after prominent lawmakers warned internet giants against pursuing profits and abusing their market dominance.

Japan outperformed as investors continued to be cheered by prospects for a new government and a recovery from the pandemic, with the Nikkei 225 Stock Average’s rally bolstered by gains in SoftBank. The Nikkei 225 Stock Average climbed 0.9% to 30,181.21, its highest closing level since March 18. The eight-day rise marks the blue-chip gauge’s longest win streak since November. SoftBank was the largest contributor to the Nikkei 225’s advance, rising for a second day on a deal that may set up a buyback for the Japanese tech giant.  Telecommunications providers and electronics makers were the biggest boosts to the Topix, which rose 0.8% to the highest level since August 1990. Trading volume on the first section of the Tokyo Stock Exchange was 3.7 trillion yen ($33.3 billion), the most since May 27. Friday marks the expiration of options and futures contracts in the so-called “special quotation” settlement. The event often leads to speculative trading in the run-up and heavy volumes on the day, especially in quarter-ending months like September. “Investors are eying positive change in Japanese politics, but they are also looking to the major SQ on Friday -- foreign investors that had sold futures are now trying to buy back positions as the cash market has jumped,” said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management Co. “Should the Nikkei 225 exceed the SQ price Friday morning, it would indicate that the market remains firm.”

Australian stocks declined as miners, consumer staples tumble. The S&P/ASX 200 index fell 0.2% to close at 7,512.00 as materials and consumer staples stocks weighed on the benchmark. Eagers was the worst performer, retreating from a record high set Tuesday. Macquarie was among the top performers after issuing positive 1H guidance. In New Zealand, the S&P/NZX 50 index fell 1% to 13,193.01.

In rates, 10Y Yields fell to 1.3512% compared to a U.S. close of 1.371% on Tuesday, retreating from this week’s eight-week highs in a quiet session. Germany’s 10-year Bund yield also hit eight-week highs before edging lower to -0.331%. Peripheral spreads widen a touch with the belly of the Italian curve widening ~1.5bps to Germany.

In FX, USD and haven currencies are modestly bid given the weakness in stocks. The dollar hit a one-week high against the single currency and was trading at $1.1819. It also reached a one-week peak against an index of currencies, recovering from recent five-week lows. It was trading at 92.67 on the index, up 0.15%. The Bloomberg dollar index trades near best levels for the week. CAD and SEK are the weakest in G-10. Turkish lira snaps through 8.40 to lag EMFX peers. The pound weakened for a third day, its longest losing streak in a month, ahead of a Parliament vote on a government tax package that seeks to trim a U.K. budget deficit swollen by pandemic spending; Bank of England Governor Andrew Bailey’s comments will also be in focus as he faces the Treasury Select Committee on Wednesday. The Australian dollar was the worst G-10 performer while Australia’s bonds opened lower following Treasuries and held losses through the day; New Zealand peers also declined following a solid milk auction. The yen touched its weakest level in almost a month before rebounding as risk sentiment soured.

Bitcoin paused for breath after plunging 17% on Monday to a low of around $43,000 before recovering. It was last at $46,552, down 0.7%.

In commodities, crude futures pushed higher, returning toward Asia’s best levels. WTI jumped 1.38% to $69.30 a barrel and Brent crude rose 1.14% to $72.50 per barrel, with prices supported by a slow restart to production in the Gulf of Mexico after Hurricane Ida hit the region. Base metals were mixed: LME copper underperforms, snapping through $9,300/MT to trade down as much as 1.5%.  Gold gained 0.17% to $1796.90 per ounce in line with the risk-averse mood and just below the psychologically key $1,800 level which it fell through in the previous session.

Looking at the day ahead now, and data releases include US job openings and consumer credit for July, alongside Italian retail sales for July as well. From central banks, we’ll get the Bank of Canada’s latest rate decision, the Federal Reserve will be releasing their Beige Book, and speakers include the BoE’s Bailey, Broadbent, Ramsden and Tenreyro, and the Fed’s Williams and Kaplan.

Market Wrap

  • S&P 500 futures down 0.4% to 4,499.75
  • STOXX Europe 600 down 1.2% to 467.39
  • MXAP down 0.2% to 206.88
  • MXAPJ down 0.6% to 671.33
  • Nikkei up 0.9% to 30,181.21
  • Topix up 0.8% to 2,079.61
  • Hang Seng Index down 0.1% to 26,320.93
  • Shanghai Composite little changed at 3,675.19
  • Sensex down 0.3% to 58,082.81
  • Australia S&P/ASX 200 down 0.2% to 7,512.00
  • Kospi down 0.8% to 3,162.99
  • Brent Futures up 0.2% to $71.83/bbl
  • Gold spot up 0.2% to $1,798.76
  • U.S. Dollar Index up 0.20% to 92.70
  • German 10Y yield fell 1.0 bps to -0.332%
  • Euro down 0.2% to $1.1820
  • Brent Futures up 0.2% to $71.83/bbl

Top Overnight News courtesy of Bloomberg

  • “There is the possibility that we may be able to normalize monetary policy sooner than most financial market experts expect,” European Central Bank Governing Council member Robert Holzmann says in Eurofi Magazine
  • “Pandemic measures, temporary in their nature, will be phased out eventually, but the current situation still calls for monetary policy to remain highly accommodative,” European Central Bank Governing Council member Bostjan Vasle says in Eurofi Magazine
  • The Federal Reserve should press ahead with a plan to taper its massive pandemic stimulus program despite weak U.S. jobs growth last month, the Financial Times reports St. Louis Fed President James Bullard as saying in an interview
  • Jitters in the Chinese high-yield dollar bond market are prompting investors to chase quality debt in Asia, pushing down spreads on investment-grade notes to pre-pandemic levels

A more detailed look at global markets courtesy of Newsquawk

Asia-Pac equity markets followed suit from the lacklustre performance in the US where sentiment was subdued on return from the Labor Day weekend with weakness seen in cyclicals. ASX 200 (-0.2%) traded negative as the ongoing COVID-19 disruptions continued to take their toll on the nation’s stock markets and with gold miners frontrunning the declines after the precious metal recently slipped beneath the 1800/oz level, although losses for the index were stemmed with the top-weighted financial sector underpinned by the higher yield environment. Nikkei 225 (+0.9%) recovered from opening losses, helped by stronger than expected GDP revisions for Q2 and although the government is likely to extend COVID emergency measures to the end of this month, reports added that it will gradually ease COVID-19 restrictions beginning in October. Furthermore, SoftBank was the biggest gainer in the Japanese benchmark with its shares briefly higher by double-digit percentages after the recent share-swap agreement with Deutsche Telekom fuelled speculation it could lead to a share buyback. Hang Seng (-0.1%) and Shanghai Comp. (Unch) traded indecisively amid ongoing regulatory and debt concerns with reports noting that China will increase transparency of policies and will crackdown to better support companies in competition, while Evergrande shares were choppy after Fitch downgraded its credit rating from CCC+ to CC which reflects the view that a default of some type seems probable. Finally, 10yr JGBs declined following the bear steepening in US where bonds were also pressured by increased issuer activity and with demand dented by the GDP-uplifted mood in Japanese stocks, although the pressure in JGBs was cushioned by the BoJ's presence in the market for more than JPY 1tln of government bonds.

Top Asian News

  • Gold Edges Up as Bond Yields Fall After Biggest Drop in a Month
  • Tesla Delivers 44,264 China-Made Cars in Aug., up 34.3% M/m
  • China Aug. Retail Passenger Vehicle Sales Fall 14.7% Y/y: PCA
  • China Praises Hong Kong Arrests of Tiananmen Vigil Organizers

Bourses in Europe saw losses intensify shortly after the cash open and have since trickled lower and stabilised near lows. (Euro Stoxx 50 -0.7%; Stoxx 600 -0.8%). The downside across Europe also reverberated across the pond but to a lesser extent and with the effects fleeting. The ES (-0.1%) briefly dipped below 4,500, the YM (-0.1%) fell below 35k, whilst the RTY (-0.1%) initially narrowly underperformed, and the NQ (-0.1%) is cushioned by yields. There is no discernible catalyst behind the losses across equities, and as to why sentiment deteriorated from the lacklustre APAC handover. That being said, the rest of the week is packed with central bank updates, including tomorrow’s ECB (full previous in the Newsquawk Research Suite), but before that, several Fed speakers. On that note, Fed’s Bullard (2022 voter) was the first official to speak post-NFP and held onto his hawkish stance by stating the Fed should proceed with tapering despite the weak US jobs data, while he also dismissed concerns about the rebound in the labour market was faltering and said there is plenty of demand for workers – it will be interesting to see how aligned other Fed officials are to this view. Back to Europe, the majors see broad-based losses with no standout performer. Sectors are all in the red and do not portray a clear theme nor bias. Travel & Leisure is among one of the better performers, with some downside potentially alleviated by reports that the UK travel traffic light system could be tweaked under plans drawn up by ministers, which could mean the red category will still require hotel quarantine, but amber and green categories will disappear, and travel will be determined by vaccination status as opposed to country, according to the Telegraph. Further for travel, Ryanair (+1.7%) CEO noted the Co. will be operating at 90% of pre-covid volumes by the Christmas period but will have lower pricing, whilst summer 2022 is expected to be “very strong”. Ryanair also guided 90-100mln passengers for FY 2022, and added that the trend is moving towards to upper end of that range. Moving on, Auto & Parts, alongside Banks, reside at the foot of the bunch, the former weighed on by the ongoing chip shortage and Stellantis’ (-2.3%) losses after Dongfeng filed to sell a 1.15% stake in the Franco-Italian carmaker. Autos may also feel headwinds from the Chinese retail passenger vehicle sales declining almost 15% Y/Y, although Tesla (Unch pre-market) Chinese-made cars sales rose 34.3% in the period. In terms of individual movers and shakers, Smiths Group (+2.1%) resides as one of the winners after divesting Smiths Medical for USD 2.7bln.

Top European News

  • Morrison Seeks Auction to Decide Between Fortress, CD&R Bids
  • Smiths Group to Sell Medical Unit to ICU for $2.35 Billion (1)
  • Deutsche Bank Chief Blames Europe for Keeping Banks Small
  • Gold Edges Up as Bond Yields Fall After Biggest Drop in a Month

In FX, the Dollar index has extended its recovery from post-NFP lows after a shallower a brief retreat to 92.472 and is now targeting loftier upside chart levels ahead of last Wednesday’s 92.790 peak from a 92.732 high, thus far. Latest gains are broad based, but not universal as the Greenback’s main safe-haven rivals are in demand against the backdrop of deteriorating risk sentiment in equities especially. However, the Buck is also up independently or with some fundamental impetus following comments from Fed’s Bullard as the first official to respond to the disappointing headline payrolls number, and discounting the big miss on grounds that there is ample demand for staff, so tapering should go ahead. The impending JOLTS data may well back him up, while Williams and Kaplan are scheduled either side of the Beige Book.

  • JPY/CHF - As noted above, the Yen and Franc are ‘benefiting’ from risk-off positioning to a degree, as Usd/Jpy eases back towards the low 110.00 area from around 110.45 and Usd/Chf from just over 0.9200, while Eur/Jpy and Eur/Chf retreat from overnight peaks as well in classic safety flight fashion, albeit not extreme.
  • CAD/AUD - The major casualties amidst aversion and relative strength in their US peer, but the Loonie also looking increasingly nervous ahead of the BoC policy meeting that might err on the side of caution given the spread of the Delta variant. Usd/Cad is hovering near the top of a 1.2707-1.2626 range as implied volatility picks up to price in a 68 pip break-even for the event that coincides with August’s Ivey Canadian PMIs - full BoC preview available via the Research Suite and to be posted on the Headline Feed before 15.00BST. Elsewhere, the Aussie is now more than a full big figure under Tuesday's post-RBA apex against the backdrop of weak underlying commodities, but keeping its head just over 0.7350.
  • EUR/GBP/NZD - All conceding more ground as the Greenback revival gathers momentum, with the Euro currently in the bottom half of approximate 1.1800-1.1900 m-t-d extremes and looking for fresh guidance from the ECB on Thursday, while the Pound remains depressed close to 1.3750 having lost 1.3800+ status yesterday following confirmation of higher taxes to fund NHS spending from UK PM Johnson and now awaiting BoE speakers at the TSC for any fresh policy insight. Back down under, the Kiwi has Q2 NZ manufacturing sales on the radar as its pivots 0.7100 and 1.0400 vs its US and Antipodean counterparts respectively.
  • SCANDI/EM - The Nok and Sek are both softer as the general market tone sours, but the latter is holding above 10.2000 and does not seem likely to trigger decent option expiry interest at the 10.2500 strike (1 bn) against the Eur at this stage. Conversely, the Try appears in danger of further depreciation and a test of 8.5000 vs the increasingly buoyant Usd after candid remarks from the CBRT Governor who conceded that there is room for improvement in terms of Turkey’s inflation rate, reserves situation and overall risk premium, rather than his contention that policy is tight enough to reduce inflation in Q4. On that note, CPI is now 25 bp higher than the benchmark rate, at 19.25%.

In commodities, WTI and Brent front-month futures have been consolidating throughout most of the European morning following the prior session’s losses, and on balance, the benchmarks did not see much follow-through from this morning’s losses across stocks, although WTI Oct and Brent Nov have subsequently been gaining heading into the US open, with the former back above USD 69/bbl and the later inching closer towards USD 72.50/bbl. News flow for the complex has been light, but over in the Gulf of Mexico, participants are cognizant of a potential cyclone formation in the next 48 hours for a system located over the south-central GoM, just as the BSEE reports the slow resumption of oil and gas operations, with the latest metrics suggesting 79% of offshore production still shuttered (vs 84% D/D). Over to the demand side, Qatar narrowed its price differentials to Oman/Dubai for Marine Crude and Land Crude in lockstep with Saudi’s lowering of its Asia OSPs. Elsewhere, the Ryanair CEO hit the wires today and suggested its volumes will be around 90% of pre-pandemic levels around Christmas, whilst holding a robust outlook for next year, and separate reports also stated that the UK traffic light system would be tweaked whereby the “amber” and “green” categories will shift to a vaccination-based system – which in turn feeds into jet fuel demand. Ahead, the weekly Private Inventories will be released alter today on account of Monday's US Labor Day Holiday, with the DoEs released tomorrow. Over to metals, spot gold and silver trade flat and remain contained to APAC ranges in the absence of a fresh macro catalyst and ahead of a slew of central bank updates. Spot gold, during European trade, remained under USD 1,800/oz and sandwiched between its 50 and 21 DMAs at USD 1,797.70/oz and USD 1,1795/oz. Meanwhile, LME copper has remained subdued around the USD 9,250/t mark, with China’s economic slowdown and base metal crackdown cited by traders. Elsewhere, China’s coke futures and coking coal swung between gains and losses after the market regulators announced an increase in transaction fees for actively -traded contracts.

US Event Calendar

  • 1:10pm: Fed’s Williams Discusses Economic Outlook
  • 2pm: U.S. Federal Reserve Releases Beige Book
  • 6pm: Fed’s Kaplan Holds Virtual Townhall

DB's Jim Reid concludes the overnight wrap

Today the tears will be flowing at home as the kids all go back to school. Actually the twins start school officially today (Reception) after a year in the nursery. How time flies. It will be hard to judge how many of my wife’s tears will be emotional due to them starting school and how much will be an immense release of joy to be able to pass them onto someone else for a few hours a day as all three have been a big handful of late. Constantly fighting, shouting and screaming. She said she is going to get home from dropping them off today and she’s going to sit in a quiet dark room for 2 hours and close her eyes and do absolutely nothing.

As US markets got back to school themselves after Monday’s holiday, yesterday witnessed a selloff across multiple asset classes as markets took a break from record highs. In some ways the moves were surprising, since yesterday’s data releases actually surpassed expectations, whilst the global picture on the pandemic is continuing to brighten for now. However, fears that central banks might start to taper their asset purchases seems to have knocked away a little confidence, particularly given tomorrow’s ECB decision where many expect we’ll begin to see the start of that process, not least with inflation there running at its highest levels in almost a decade.

Those tapering fears were evident in sovereign bond markets, which sold off strongly on both sides of the Atlantic. Yields on 10yr Treasuries ended the session up +5.1bps at 1.37%, their highest closing level in nearly 2 months. Yields were propelled by both higher inflation expectations (+2.4bps) and real rates (+2.6), as the latter closed above -1% for the first time since mid-July. There was also a noticeable curve steepening, with the 2s10s slope up +3.7bps. Over in Europe there were similarly noticeable rises, with yields on 10yr bunds up +4.5bps to their highest levels in almost 2 months as well, whilst other 10yr yields including gilts (+4.3bps), OATs (+5.1bps) and BTPs (+6.3bps) followed suit.

Staying with yields, I did a CoTD (helped by Craig Nicol) yesterday showing that 85% of US HY now has a yield below CPI. It’s never been above 10% prior to this year. To outstrip inflation you now have to own weak single-Bs or below. Clearly inflation will likely dip from here but even at 3%, 35% of US HY will yield below inflation. See the CoTD here and if you want to be added to the daily list please email

Much like bond markets, equities fell back yesterday, with the S&P 500 (-0.34%) seeing a small but broad-based decline that saw 411 of its members lose ground on the day, whilst the Dow Jones (-0.76%) and Europe’s STOXX 600 (-0.49%) also dipped. Tech stocks were a relative outperformer, with the NASDAQ (+0.07%) managing to eke out a modest gain, though megacap tech stocks put in a strong performance, as the FANG+ index rose +1.40% to another all-time high, aided by sizeable gains for Netflix (+2.74%) and Tesla (+2.64%). On the other hand, bond proxy sectors such as utilities (-1.37%) and real estate (-1.13%) were among the worst performers in the US. Utility companies (-0.90%) also lagged in Europe, with chemical (-1.16%) and healthcare (-1.02%) stocks the other main underperformers. Meanwhile, the souring risk sentiment sent the US dollar higher for the first time in 6 sessions as the greenback added +0.52% - its largest one day gain in 3 weeks.

Overnight in Asia, the Nikkei is on course of its longest winning streak since November 2020 as it is up +0.49% marking the eighth consecutive gain. Other regional indices are generally trading weaker though with the Hang Seng -0.52%, CSI (-0.25%), Kospi (-0.86%) and Asx (-0.37%) all down. The Shanghai Comp (+0.07%) is trading broadly flat. In terms of overnight data releases, Japan’s final 2Q annualised GDP printed at +1.9% qoq vs. +1.6% qoq expected.

In other overnight news, Bloomberg reported that the Biden Administration is planning to distribute one-time $600 pandemic relief payments to US meatpacking and farm workers. The move expands an agriculture aid program which sets aside as much as $700 mn of aid, to be distributed through state agencies, tribal entities and non-profit groups. Elsewhere, yields on 10y USTs are down -1.2bps to 1.362%. Futures on the S&P 500 (-0.02%) are flattish while those on the Stoxx 50 are down -0.25%.

Turning to the German election, our colleagues in Germany put out a comprehensive slide pack yesterday (link here) looking at the election and its implications ahead of polling day on September 26. Importantly, it looks at the most likely coalition options and the policy proposals of the various parties,as well as the mechanics of the German election process. Speaking of that election, the latest Forsa poll created some fresh headlines yesterday by showing Chancellor Merkel’s CDU/CSU bloc falling to an all-time record low of 19%. Obviously it’s just one poll, but it put the SPD on 25%, ahead of the CDU/CSU on 19% and the Greens on 17%. Interestingly, given the margin of error in this specific poll is +/- 2.5%, this means the SPD’s 6-point lead exceeds the normal margin of error, and fits into the pattern of other polls over the last week putting them consistently ahead of the CDU/CSU.

Meanwhile in the UK, there were some important policy announcements, with the government announcing an increase in National Insurance (similar to a payrolls tax) by 1.25 per cent, as well as a rise in the rates of dividend tax by 1.25 per cent, in order to fund higher spending on health and social care. Furthermore, it was confirmed that the pension “triple lock” would be suspended for a year, which sees the state pension rise by whichever is the biggest of inflation, average wage increases or 2.5%. This is because the statistical bounceback in earnings following the pandemic could have led to a massive increase in the state pension, even though underlying earnings have not risen by as much. Finally on UK economic policy, it was announced that a Spending Review would take place alongside an Autumn Budget on October 27 this year. I can’t help thinking the decision on tax is the beginning of a long road ahead of global tax rises given both debt and demographics. The pandemic has likely accelerated such a move given what it’s done to public finances.

Speaking of taxes, those in El Salvador can now use Bitcoin to pay their tax bill as the cryptocurrency became legal tender in the Central American nation yesterday – the first country to make such a move. It was a volatile start, with Bitcoin selling off -17.1% at one point as the government announced it had to disconnect its Bitcoin wallet to solve glitches. President Bukele later said the nation was “buying the dip” and had added roughly $26 million of the cryptocurrency yesterday. While Bitcoin did recover off the lows, it was still down -9.85% yesterday with other major coins such as Ether (-13.58%), XRP (-21.33%), and Litecoin (-20.28%) seeing much larger drops. Bitcoin is pretty stable overnight after all the fun and games yesterday. Overall this remains an experiment that bears watching as the use of bitcoin as true legal tender is probably the largest change to the cryptocurrency market since bitcoin futures were listed in 2017.

Turning to the pandemic, it was confirmed by a White House official that President Biden will outline a plan tomorrow to boost vaccinations and stop the spread of the delta variant. Meanwhile there were also a number of vaccine milestones reached yesterday, with the US reporting that 75% of adults had now received at least a first dose, while the UK reported that 80% of the over-16 population are now fully vaccinated. Elsewhere, the Asahi newspaper reported that the Japanese government is planning to extend the state of emergency in areas including Tokyo to the end of September. The state of emergency was originally scheduled to expire on September 12.

There was some positive data from the Euro Area, where the Q2 GDP reading was revised up to show growth of +2.2% (vs. +2.0% in the flash reading), whilst German industrial production in July grew by a stronger-than-expected +1.0% (vs. +0.8% expected). That said the German ZEW survey for September saw the expectations reading fall to 26.5 (vs. 30.3 expected), which marks the lowest figure for the expectations measure since March 2020.

To the day ahead now, and data releases include US job openings and consumer credit for July, alongside Italian retail sales for July as well. From central banks, we’ll get the Bank of Canada’s latest rate decision, the Federal Reserve will be releasing their Beige Book, and speakers include the BoE’s Bailey, Broadbent, Ramsden and Tenreyro, and the Fed’s Williams and Kaplan.

Tyler Durden Wed, 09/08/2021 - 08:02

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Part 1: Current State of the Housing Market; Overview for mid-March 2024

Today, in the Calculated Risk Real Estate Newsletter: Part 1: Current State of the Housing Market; Overview for mid-March 2024
A brief excerpt: This 2-part overview for mid-March provides a snapshot of the current housing market.

I always like to star…



Today, in the Calculated Risk Real Estate Newsletter: Part 1: Current State of the Housing Market; Overview for mid-March 2024

A brief excerpt:
This 2-part overview for mid-March provides a snapshot of the current housing market.

I always like to start with inventory, since inventory usually tells the tale!
Here is a graph of new listing from’s February 2024 Monthly Housing Market Trends Report showing new listings were up 11.3% year-over-year in February. This is still well below pre-pandemic levels. From

However, providing a boost to overall inventory, sellers turned out in higher numbers this February as newly listed homes were 11.3% above last year’s levels. This marked the fourth month of increasing listing activity after a 17-month streak of decline.
Note the seasonality for new listings. December and January are seasonally the weakest months of the year for new listings, followed by February and November. New listings will be up year-over-year in 2024, but we will have to wait for the March and April data to see how close new listings are to normal levels.

There are always people that need to sell due to the so-called 3 D’s: Death, Divorce, and Disease. Also, in certain times, some homeowners will need to sell due to unemployment or excessive debt (neither is much of an issue right now).

And there are homeowners who want to sell for a number of reasons: upsizing (more babies), downsizing, moving for a new job, or moving to a nicer home or location (move-up buyers). It is some of the “want to sell” group that has been locked in with the golden handcuffs over the last couple of years, since it is financially difficult to move when your current mortgage rate is around 3%, and your new mortgage rate will be in the 6 1/2% to 7% range.

But time is a factor for this “want to sell” group, and eventually some of them will take the plunge. That is probably why we are seeing more new listings now.
There is much more in the article.

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RFK Jr. Reveals Vice President Contenders

RFK Jr. Reveals Vice President Contenders

Authored by Jeff Louderback via The Epoch Times,

New York Jets quarterback Aaron Rodgers and former…



RFK Jr. Reveals Vice President Contenders

Authored by Jeff Louderback via The Epoch Times,

New York Jets quarterback Aaron Rodgers and former Minnesota governor and professional wrestler Jesse Ventura are among the potential running mates for independent presidential candidate Robert F. Kennedy Jr., the New York Times reported on March 12.

Citing “two people familiar with the discussions,” the New York Times wrote that Mr. Kennedy “recently approached” Mr. Rodgers and Mr. Ventura about the vice president’s role, “and both have welcomed the overtures.”

Mr. Kennedy has talked to Mr. Rodgers “pretty continuously” over the last month, according to the story. The candidate has kept in touch with Mr. Ventura since the former governor introduced him at a February voter rally in Tucson, Arizona.

Stefanie Spear, who is the campaign press secretary, told The Epoch Times on March 12 that “Mr. Kennedy did share with the New York Times that he’s considering Aaron Rodgers and Jesse Ventura as running mates along with others on a short list.”

Ms. Spear added that Mr. Kennedy will name his running mate in the upcoming weeks.

Former Democrat presidential candidates Andrew Yang and Tulsi Gabbard declined the opportunity to join Mr. Kennedy’s ticket, according to the New York Times.

Mr. Kennedy has also reportedly talked to Sen. Rand Paul (R-Ky.) about becoming his running mate.

Last week, Mr. Kennedy endorsed Mr. Paul to replace Sen. Mitch McConnell (R-Ky.) as the Senate Minority Leader after Mr. McConnell announced he would step down from the post at the end of the year.

CNN reported early on March 13 that Mr. Kennedy’s shortlist also includes motivational speaker Tony Robbins, Discovery Channel Host Mike Rowe, and civil rights attorney Tricia Lindsay. The Washington Post included the aforementioned names plus former Republican Massachusetts senator and U.S. Ambassador to New Zealand and Samoa, Scott Brown.

In April 2023, Mr. Kennedy entered the Democrat presidential primary to challenge President Joe Biden for the party’s 2024 nomination. Claiming that the Democrat National Committee was “rigging the primary” to stop candidates from opposing President Biden, Mr. Kennedy said last October that he would run as an independent.

This year, Mr. Kennedy’s campaign has shifted its focus to ballot access. He currently has qualified for the ballot as an independent in New Hampshire, Utah, and Nevada.

Mr. Kennedy also qualified for the ballot in Hawaii under the “We the People” party.

In January, Mr. Kennedy’s campaign said it had filed paperwork in six states to create a political party. The move was made to get his name on the ballots with fewer voter signatures than those states require for candidates not affiliated with a party.

The “We the People” party was established in five states: California, Delaware, Hawaii, Mississippi, and North Carolina. The “Texas Independent Party” was also formed.

A statement by Mr. Kennedy’s campaign reported that filing for political party status in the six states reduced the number of signatures required for him to gain ballot access by about 330,000.

Ballot access guidelines have created a sense of urgency to name a running mate. More than 20 states require independent and third-party candidates to have a vice presidential pick before collecting and submitting signatures.

Like Mr. Kennedy, Mr. Ventura is an outspoken critic of COVID-19 vaccine mandates and safety.

Mr. Ventura, 72, gained acclaim in the 1970s and 1980s as a professional wrestler known as Jesse “the Body” Ventura. He appeared in movies and television shows before entering the Minnesota gubernatorial race as a Reform Party headliner. He was a longshot candidate but prevailed and served one term.

Former pro wrestler Jesse Ventura in Washington on Oct. 4, 2013. (Brendan Smialowski/AFP via Getty Images)

In an interview on a YouTube podcast last December, Mr. Ventura was asked if he would accept an offer to run on Mr. Kennedy’s ticket.

“I would give it serious consideration. I won’t tell you yes or no. It will depend on my personal life. Would I want to commit myself at 72 for one year of hell (campaigning) and then four years (in office)?” Mr. Ventura said with a grin.

Mr. Rodgers, who spent his entire career as a quarterback for the Green Bay Packers before joining the New York Jets last season, remains under contract with the Jets. He has not publicly commented about joining Mr. Kennedy’s ticket, but the four-time NFL MVP endorsed him earlier this year and has stumped for him on podcasts.

The 40-year-old Rodgers is still under contract with the Jets after tearing his Achilles tendon in the 2023 season opener and being sidelined the rest of the year. The Jets are owned by Woody Johnson, a prominent donor to former President Donald Trump who served as U.S. Ambassador to Britain under President Trump.

Since the COVID-19 vaccine was introduced, Mr. Rodgers has been outspoken about health issues that can result from taking the shot. He told podcaster Joe Rogan that he has lost friends and sponsorship deals because of his decision not to get vaccinated.

Quarterback Aaron Rodgers of the New York Jets talks to reporters after training camp at Atlantic Health Jets Training Center in Florham Park, N.J., on July 26, 2023. (Rich Schultz/Getty Images)

Earlier this year, Mr. Rodgers challenged Kansas City Chiefs tight end Travis Kelce and Dr. Anthony Fauci to a debate.

Mr. Rodgers referred to Mr. Kelce, who signed an endorsement deal with vaccine manufacturer Pfizer, as “Mr. Pfizer.”

Dr. Fauci served as director of the National Institute of Allergy and Infectious Diseases from 1984 to 2022 and was chief medical adviser to the president from 2021 to 2022.

When Mr. Kennedy announces his running mate, it will mark another challenge met to help gain ballot access.

“In some states, the signature gathering window is not open. New York is one of those and is one of the most difficult with ballot access requirements,” Ms. Spear told The Epoch Times.

“We need our VP pick and our electors, and we have to gather 45,000 valid signatures. That means we will collect 72,000 since we have a 60 percent buffer in every state,” she added.

The window for gathering signatures in New York opens on April 16 and closes on May 28, Ms. Spear noted.

“Mississippi, North Carolina, and Oklahoma are the next three states we will most likely check off our list,” Ms. Spear added. “We are confident that Mr. Kennedy will be on the ballot in all 50 states and the District of Columbia. We have a strategist, petitioners, attorneys, and the overall momentum of the campaign.”

Tyler Durden Wed, 03/13/2024 - 15:45

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Pharma industry reputation remains steady at a ‘new normal’ after Covid, Harris Poll finds

The pharma industry is hanging on to reputation gains notched during the Covid-19 pandemic. Positive perception of the pharma industry is steady at 45%…



The pharma industry is hanging on to reputation gains notched during the Covid-19 pandemic. Positive perception of the pharma industry is steady at 45% of US respondents in 2023, according to the latest Harris Poll data. That’s exactly the same as the previous year.

Pharma’s highest point was in February 2021 — as Covid vaccines began to roll out — with a 62% positive US perception, and helping the industry land at an average 55% positive sentiment at the end of the year in Harris’ 2021 annual assessment of industries. The pharma industry’s reputation hit its most recent low at 32% in 2019, but it had hovered around 30% for more than a decade prior.

Rob Jekielek

“Pharma has sustained a lot of the gains, now basically one and half times higher than pre-Covid,” said Harris Poll managing director Rob Jekielek. “There is a question mark around how sustained it will be, but right now it feels like a new normal.”

The Harris survey spans 11 global markets and covers 13 industries. Pharma perception is even better abroad, with an average 58% of respondents notching favorable sentiments in 2023, just a slight slip from 60% in each of the two previous years.

Pharma’s solid global reputation puts it in the middle of the pack among international industries, ranking higher than government at 37% positive, insurance at 48%, financial services at 51% and health insurance at 52%. Pharma ranks just behind automotive (62%), manufacturing (63%) and consumer products (63%), although it lags behind leading industries like tech at 75% positive in the first spot, followed by grocery at 67%.

The bright spotlight on the pharma industry during Covid vaccine and drug development boosted its reputation, but Jekielek said there’s maybe an argument to be made that pharma is continuing to develop innovative drugs outside that spotlight.

“When you look at pharma reputation during Covid, you have clear sense of a very dynamic industry working very quickly and getting therapies and products to market. If you’re looking at things happening now, you could argue that pharma still probably doesn’t get enough credit for its advances, for example, in oncology treatments,” he said.

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