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Futures Flat Ahead Of Closely Watched Jobs Report

Futures Flat Ahead Of Closely Watched Jobs Report

US equity futures struggled to maintain gains on Friday as traders awaited the December…



Futures Flat Ahead Of Closely Watched Jobs Report

US equity futures struggled to maintain gains on Friday as traders awaited the December jobs report that will help chart the path forward for Fed monetary tightening. Contracts on the Nasdaq 100 and the S&P 500 were unchanged at 7:15am ET, erasing earlier gains sparked by a report that China was planning to relax restrictions on developer borrowing, and dial its stringent “three red lines” policy that exacerbated one of the biggest real estate meltdowns in the country’s history. US equities dropped on Thursday as separate data showed the labor market remained strong. European markets were steady as data showed euro-area inflation returned to single digits for the first time since August. Treasury 10-year yields steadied after climbing for the first time this week on Thursday following comments from Fed officials, while a  measure of dollar strength climbed for a second day, as the yen fell to levels not seen in a week, after the Bank of Japan unveiled further unscheduled bond buying to control its yield curve.

Among notable movers in premarket trading, Tesla tumbled as the electric-car maker made another round of price cuts on its Model 3 and Y electric vehicles in China. Bed Bath & Beyond dropped after the home furnishings retailer began preparing for a bankruptcy filing, also weighing on shares of other retail trader favorites. Here are other notable premarket movers:

  • Apple is little changed as Morgan Stanley says the stock could fall further on worries over wilting demand and production snags.
  • Alvotech & Teva Pharmaceuticals say the U.S.  Food and Drug Administration has accepted for review a Biologics License Application for AVT04, Alvotech’s proposed biosimilar to Stelara, which is prescribed to treat a variety of inflammatory conditions. Alvo shares gain 6.4%, Teva rises 0.4% in light trading.
  • Atai Life Sciences (ATAI) says it may explore steps including strategic partnership options after its Phase 2a trial of PCN-101 (R-ketamine) for treatment-resistant depression missed its primary endpoint. Shares sink 45%.
  • Bed Bath & Beyond (BBBY) slumps 13% after the home furnishings retailer began preparing for a bankruptcy filing, also weighing on shares of other retail trader favorites.
  • CytomX (CTMX) surges 64% as analysts raised their price targets on the biotech after reporting a research collaboration agreement with Moderna, which brokers said demonstrated the strength of CytomX’s platform. Separately, CytomX gave an update on a phase 2 study for its CX-2029 treatment, which brokers said was mixed.
  • Fate Therapeutics (FATE) tumbles 53% after the biotech company terminated a collaboration deal with Janssen Biotech and said it would discontinue its FT596 product candidate. Several analysts slashed their share price targets, with Cantor Fitzgerald describing Fate’s moves as major setbacks.
  • Graphite Bio Inc. (GRPH) plunges 50% as it pauses a study of its experimental gene therapy for sickle cell disease after the first patient had a serious adverse event, prompting at least two analysts to downgrade the stock.
  • Molson Coors (TAP) upgraded to outperform at Cowen with the group seen on a strong footing for 2023, while peer Constellation Brands is cut to market perform on downtrading challenges. TAP gains 1.4% in light trading.
  • Novocure (NVCR) shares fall 6.4% as Wells Fargo cuts the stock to equal- weight from overweight with its positive thesis on the oncology firm now played out.
  • Sight Sciences Inc. (SGHT) shares are up 2.8% after Stifel upgraded the medical device company to buy from hold, seeing a positive near-term setup for the stock.
  • Tesla (TSLA) shares fall 6% as the electric-car maker makes another round of price cuts on its Model 3 and Y electric vehicles in China.
  • World Wrestling Entertainment (WWE) shares rise 10% after controlling shareholder and former CEO Vince McMahon sought to return to the company and is proposing a possible sale of the business.
  • Zynex (ZYXI) is upgraded to overweight from neutral at Piper Sandler, which notes strong execution from the medical device maker and sees room for possible multiple expansion. Shares gain 1.5%.

After their worst annual drop since 2008 and a record underperformance against European stocks in the fourth quarter, US equities began the new year with further declines amid signals from the Fed that it remains staunchly hawkish until inflation cools further. The next clue will in today's December jobs report, with Bloomberg Economics expecting a more subdued increase in employment. Estimates for US nonfarm payroll numbers peg a decline in new jobs added, indicating a cooling in the labor market that would in turn reduce the need for higher interest rates. Median estimate for December nonfarm payrolls change is 202k (vs crowd-sourced whisper number 243k), while average hourly earnings are expected to increase 0.4% vs 0.6% in November. However, private payrolls figures out on Thursday surpassed estimates and a surprise drop in new claims for unemployment benefits underscored a robust jobs market. Our full preview can be found here.

“Investors are still highly sensitive to the direction of monetary policy and this has potential to cause fresh headwinds for valuations,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown. Any indications of resilience in the labor market or stubborn inflation “are likely to send fresh jitters through stocks,” she said.

The Fed has remained “extremely hawkish” to avoid unintentionally easing financial conditions, said Craig Erlam, senior market analyst at Oanda. “But another strong jobs report today would further justify such a hawkish approach and perhaps send risk assets into a bit of a tailspin as the prospect of a higher terminal rate increases alongside recession risks,” he wrote in a note.

Overnight, Citi strategists led by Robert Buckland cut US shares to underweight on the grounds that earnings expectations are still too optimistic. Meanwhile, the latest EPFR fund flows data showed investors continued to flock to cash and out of equities in the week through Jan. 4. Inflows into money market funds were at $112 billion for the week - the most since April 2020, when the pandemic was spreading globally - as equity fund outflows continued.

Market pricing for US interest rates to peak in June rose to above 5% following comments from Atlanta Fed President Raphael Bostic, who said the central bank still has “much work to do” to tame inflation. St. Louis Fed President James Bullard, who is no longer a voting member of the Federal Open Market Committee, said rates were approaching a sufficiently restrictive zone and that inflation expectations had retreated, offering investors some optimism.

In Europe, energy and miners outperformed while financial services and autos lag. The Euro Stoxx 50 was steady with FTSE MIB outperforming peers, adding 0.4%. Here are some of the biggest European movers today:

  • Shell shares gain after the oil and gas group reported higher gas trading in 4Q, though analysts said its update looks “mixed.” Shares rise as much as 1.3%.
  • Nel shares gain as much as 5.9% in Oslo after agreeing with HH2E for FEED (Front End Engineering and Design) study and Letter of Intent for two 60 MW electrolyser plants.
  • Small-cap UK stock Nanoco rises a record 69% in London, after the company said it had settled its litigation with Samsung ahead of a trial that was due to start today.
  • Shares in British shipping company Clarkson rise as much as 9.2%, with Liberum anticipating “strong” 2022 results that will be ahead of current market expectations, including at least £98m profit before tax.
  • Standard Chartered shares fall as much as 2.8% after analysts said they consider a takeover of the London-listed lender as unlikely given the “deal complexity,” with JPMorgan analyst noting that such a transaction would require “a number of regulatory approvals.”
  • Sodexo shares lost as much as 3% after the French catering and services group reported fiscal first- quarter revenue that beat the average analyst estimate but left limited upside after the stock rallied close to 50% in 2H 2022.
  • Rentokil Initial shares drop as much as 5.2% after Exane BNP Paribas initiated coverage with a recommendation of underperform.
  • Danone shares fall as much as 2.8% after Morgan Stanley makes a number of changes to its order of preference within the sector, including a lower rating on Diageo to equal- weight, Danone to underweight.

Earlier in the session, Asia stocks rose in the first week of trading in 2023 amid optimism over China’s reopening and a potential bottoming out of earnings in the chip sector. The MSCI Asia Pacific Index advanced as much as 0.8% Friday before paring gains to 0.1%, led by South Korea. Samsung’s worst profit fall in more than a decade cemented expectations of capex cuts and a price boost from reduced chip supplies, supporting sentiment for the sector. China’s CSI 300 Index rose for a fifth day while Hong Kong stocks retreated after a recent rally. The nation is set to reopen its borders to international travelers on Sunday. It’s also planning to relax restrictions on developer borrowing, dialing back the stringent “three red lines” policy that exacerbated its real estate meltdown. China’s Consumer Sentiment Rebounds as Economy Reopens: Chart The Asian stock benchmark is on track for its longest winning streak since September 2021. The gains came ahead of the US nonfarm payroll report due later Friday. Private payrolls data released Thursday surpassed estimates, underscoring a robust jobs market. “Even though the US Fed is expected to remain hawkish, the US economy is most likely to be resilient on the back of strong consumption,” said Daniel Yoo, head of global asset allocation at Yuanta Securities Korea. “This is a positive for Asian exporters in the medium to long term.”

Japanese equities erased their morning losses to close higher, as the weakening yen boosted exporting companies.  The Topix Index rose 0.4% to 1,875.76 as of market close Tokyo time, while the Nikkei advanced 0.6% to 25,973.85. Sony Group Corp. contributed the most to the Topix Index gain, increasing 2.4% as analysts were positive on announcements at the Consumer Electronics Show on new products including its self-driving electric vehicle with Honda as well as PlayStation sales. Out of 2,162 stocks in the index, 1,273 rose and 768 fell, while 121 were unchanged. “The ADP jobs data exceeded market expectations, with investor worries that the Fed would continue to be hawkish, which strengthened the dollar and weakened the yen slightly in the foreign exchange market,” said Kiyoshi Ishigane chief fund manager at Mitsubishi UFJ Kokusai Asset Management. “The slightly weaker yen has softened the downside from the fall in US stocks.”

In FX, the dollar climbs 0.2% to session high ahead of the jobs report, pulling all G-10 FX lower. The yen was the biggest underperformer, falling to its lowest level against the dollar since Dec. 20, trading at ~134.26 per dollar. The Bloomberg Dollar Spot Index rose 0.2%; for the week, the gauge is up 1.2% in what’s set to be its biggest rally since the week ended Sept. 23.

  • The Yen extended losses after a Bloomberg report that Bank of Japan officials see little need to rush to make another adjustment to its yield-curve control policy. USD/JPY rose as much as 0.9% to 134.59; The move came as Japan reported that real earnings declined 3.8% in November from a year earlier, the most since May 2014. “Most significant and marginally yen-negative news out of Japan was the weaker-than-expected cash and real earnings data which serves to reinforce the notion that a formal YCC policy change is far from imminent,” said NAB’s Attrill. “We don’t expect one at least until 2H 2023.”
  • EUR/USD fell as much as 0.2% to 1.0497 before paring part of that drop; Data showed that euro-area inflation returned to single digits for the first time since August. While the headline inflation figure fell to 9.2%, below economists’ 9.5% forecast, a measure that strips out energy and food edged up to a record 5.2%
  • The Norwegian krone is set to be the biggest loser of the week vs. dollar, down 4.4%, its worst week since April

In rates, this week’s sharp flattening move extends into early US session with long-end yields slightly richer on the day and front-end lagging, guided by wider bull-flattening move seen in the German curve following euro-zone CPI data. US yields are cheaper by up to 2bp across front-end and belly of the curve with 10-year trading around 3.725%, cheaper by 0.5bp vs Thursday’s close and lagging bunds by 3bp in the sector; bunds and UST 10-year yields are little changed, trading within Thursday’s range; comparable gilts yields underperform by about a basis point.

In commodities, oil stabilized after a string of declines that wiped nearly 10% from the price of crude. WTI up 0.8% to below $75. Gold climbed after retreating Thursday from a six-month high reached earlier in the week. Spot gold rose ~$3 to near $1,836/oz. Most base metals trade in the green.

Looking to the day ahead now, and the main data highlight will be the US jobs report for December. Otherwise in the US we’ll get the ISM services index for December and factory orders for November, whilst in Europe there’s the flash Euro Area CPI reading for December, along with German factory orders and retail sales for November. Meanwhile from central banks, we’ll hear from the Fed’s Bostic, Cook, Barkin and George, as well as the ECB’s Centeno and Lane.

Market Snapshot

  • S&P 500 futures little changed at 3,825.75
  • STOXX Europe 600 little changed at 438.97
  • MXAP little changed at 157.70
  • MXAPJ little changed at 520.71
  • Nikkei up 0.6% to 25,973.85
  • Topix up 0.4% to 1,875.76
  • Hang Seng Index down 0.3% to 20,991.64
  • Shanghai Composite little changed at 3,157.64
  • Sensex down 0.8% to 59,867.28
  • Australia S&P/ASX 200 up 0.7% to 7,109.59
  • Kospi up 1.1% to 2,289.97
  • German 10Y yield little changed at 2.31%
  • Euro little changed at $1.0512
  • Brent Futures little changed at $78.70/bbl
  • Gold spot up 0.2% to $1,835.99
  • U.S. Dollar Index up 0.34% to 105.40

Top Overnight News from Bloomberg

  • China is planning to relax restrictions on developer borrowing, dialing back the stringent “three red lines” policy that exacerbated one of the biggest real-estate meltdowns in the country’s history
  • The European Central Bank should complete its interest-rate increases “by the summer” and then be prepared to hold for a potentially sustained period to tame inflation that remains too high, Governing Council member Francois Villeroy de Galhau said
  • Japanese workers’ real wages fell by the most in eight years, suggesting that there’s still some way to go before the central bank can achieve its wage-growth accompanied price goal. The Bank of Japan resumed additional bond buying operation after a new benchmark bond yield touched its 0.5% ceiling
  • Japan wants the Group of Seven advanced economies to take a coordinated approach this year aimed at preventing the “economic coercion” that China has applied to some of its trading partners
  • Mexico’s Finance Ministry nominated Banxico adviser Omar Mejia Castelazo to the central bank’s board, an unexpected choice to replace its most dovish member Gerardo Esquivel
  • China’s trade restrictions on Australian wine, lobsters and other commodities could be the next to ease amid a warming of diplomatic ties and expectations that Beijing will soon resume imports of coal
  • The US House adjourned as Kevin McCarthy’s allies tried to strike a deal with members of the group who’ve blocked the California Republican from being elected speaker in a historic 11 rounds of voting

A more detailed look at global markets courtesy of Newsquawk

Asia-Pac stocks traded mostly with cautious gains despite a negative lead from Wall Street, and ahead of the US labour market data. ASX 200 saw gains across the Metals, Mining and Resources names, but the upside was capped by the Healthcare and Tech sectors. Nikkei 225 briefly topped the 26k level whilst the banking sector underperformed after Thursday’s sectoral outperformance. Hang Seng and Shanghai Comp were firmer with the former initially bolstered by property names, with source reports from Bloomberg flagging further housing market easing measures, although the earlier gains faded throughout the session.

Top Asian News

  • BoJ reportedly sees little need to rush major yield adjustments, according to Bloomberg sources
  • BoJ to conduct emergency bond buying for 5yr and 10yr maturities, according to Reuters.
  • China could ease "three red lines" property rules in a major shift, according to Bloomberg sources. It will allow some property firms to add more leverage, and it pushes back the grace period for meeting debt targets, whilst deadlines may be extended by at least six months.
  • PBoC drained a net CNY 1.6tln for the week via OMO - the largest weekly net cash withdrawal on record, according to Reuters.
  • PBoC injected CNY 2bln via 7-day reverse repos with the rate maintained at 2.00%; daily net drain CNY 384bln
  • Samsung Electronics (005930 KS) Prelim Q4 (KRW): Revenue 70tln (exp. 71tln), Operating Profit 4.3tln (exp. 5.9tln, BBG exp. 6.65tln); Memory chip demand fell more than expected in Q4 amid clients' concerns on consumer sentiment. Smartphone sales fell in Q4 due to demand weakness from macro issues. Price of memory chips fell continuously in Q4 due to chipmakers' increased inventory, according to Reuters.
  • China has released the 10th edition of COVID prevention and control protocols, will further optimise clinical catergorisation and treatment method. Adds positive antigen tests as a diagnostic standard.
  • Evergrande (3333 HK) to hold a meeting with offshore bondholders on Wednesday, to discuss debt restructuring proposals, via Reuters citing sources.

European bourses are little changed overall but do feature a slim positive skew, Euro Stoxx 50 +0.1%, pre-NFP. US futures are similarly contained with modest divergence around the unchanged mark, ES +0.1%, with attention on the NFP print, subsequent ISM Services PMI and Fed speak thereafter. Tesla (TSLA) to cut Model 3 & Y prices in China, Japan and South Korea according to reports. Subsequent Reuters sources state price cuts outside of China are being done with a view to support plant output. Citi (C) equity updates: cuts US to Underweight, raises continental-Europe to Overweight, raises Australia to Neutral.

Top European News

  • German Chancellor Scholz to invite the auto industry for talks on Tuesday, to discuss supply chains, mobility and climate.
  • Lufthansa to Revive Aging A340s Amid Dearth of First Class Seats
  • UK House Prices May Decline by 8% This Year, Halifax Says
  • German Factory Orders Plummet as Manufacturers Under Siege
  • Stellantis May Shut More Plants as Electrification Costs Bite


  • DXY maintains its recovery momentum ahead of the US agenda with the index up to a 105.52 peak at best.
  • Though, it has slipped a touch from this in wake of hotter-than-expected core EZ inflation, sending EUR/USD more comfortably above 1.05, though shy of initial best levels.
  • JPY has taken the brunt of the USD's resurgence amid reports that the BoJ sees little need for further hasty YCC tweaks, with USD/JPY surpassing 134.50.
  • More broadly, peers are down across the board vs the USD, though to varying degrees with the overall tone somewhat tentative pre-NFP.
  • PBoC set USD/CNY mid-point at 6.8912 vs exp. 6.8914 (prev. 6.8926)

Fixed Income

  • Bunds experienced modest but ultimately fleeting downside in wake of the hot core/super-core EZ inflation print, sending the German benchmark to a 135.74 low.
  • Albeit, the move pared back in short order with EGBs and USTs lower to the tune of around 10/15 and 5 ticks respectively ahead of the PM agenda.
  • Australian government cuts FY22/23 bond issuance by AUD 10bln vs original plans, according to reports.


  • Crude benchmarks are firmer, but have been subject to two-way price action throughout the morning which has been directionally in-fitting with but slightly more pronounced than equity action.
  • Currently, WTI Feb’23 and Brent Mar’23 are posting gains just shy of 1.0% as the upside stalled a touch around USD 0.30/bbl shy of the USD 75/bbl and USD 80/bbl handles respectively.
  • China Energy has reportedly placed an order for Australian coal - among the first deals since the 2020 unofficial ban, according to Reuters sources.
  • Spot gold is modestly firmer though is yet to recoup all of the marked downside seen in yesterday’s session, which saw the yellow metal surrender the USD 1850/oz handle.


  • US and Japan to hold security talks in Washington on January 11th, according to Bloomberg.
  • Russian State TV says the ceasefire has come into force along the entire front in Ukraine; in-fitting with the order from President Putin.
  • Turkish Defence Minister says Greece is carrying out acts of incitement against us, and we did not get a positive response from them regarding the establishment of a dialogue, via AJ Breaking.

US Event Calendar

  • 08:30: Dec. Change in Nonfarm Payrolls, est. 202,000, prior 263,000
    • Change in Private Payrolls, est. 182,000, prior 221,000
    • Change in Manufact. Payrolls, est. 8,000, prior 14,000
    • Unemployment Rate, est. 3.7%, prior 3.7%
    • Labor Force Participation Rate, est. 62.2%, prior 62.1%
    • Underemployment Rate, prior 6.7%
    • Average Weekly Hours All Emplo, est. 34.4, prior 34.4
    • Average Hourly Earnings MoM, est. 0.4%, prior 0.6%
    • Average Hourly Earnings YoY, est. 5.0%, prior 5.1%
  • 10:00: Nov. Factory Orders, est. -1.0%, prior 1.0%
  • 10:00: Nov. Durable Goods Orders, est. -2.1%, prior -2.1%;
    • Less Transportation, prior 0.2%
    • Nov. Cap Goods Ship Nondef Ex Air, prior -0.1%
    • Nov. Cap Goods Orders Nondef Ex Air, prior 0.2%
    • Nov. Factory Orders Ex Trans, prior 0.8%
  • 10:00: Dec. ISM Services Index, est. 55.0, prior 56.5

Central Bank Speakers

  • 11:15: Fed’s Cook Takes Part in Panel Discussion on Inflation
  • 11:15: Fed’s Bostic and ECB’s Lane Discuss the Global Economic...
  • 12:15: Fed’s Barkin Speaks on the Economic Outlook
  • 13:00: Fed’s George Discusses the Economic Outlook
  • 15:30: Fed’s Bostic Discusses Lessons From the Pandemic

DB's Jim Reid concludes the overnight wrap

Following a strong start to 2023, markets finally fell back yesterday after strong US data and hawkish remarks from Fed officials led investors to price in more rate hikes over the months ahead. The initial catalyst came from the ADP’s report of private payrolls, which showed an unexpectedly strong gain in December of +235k (vs. +150k expected), whilst the previous month was also revised up to +182k (vs. +127k previously). Treasury yields began to rise immediately after that release, which was then followed up by the jobless claims data, which showed that initial claims had fallen to a 3-month low of just 204k in the last week of 2022 (vs. 225k expected). So further evidence pointing to a tight labour market, particularly when you consider the JOLTS report for November from the previous day. Claims likely showed some seasonal distortion but there is little doubting the still strong labour market.

That focus on the labour market will continue today, since we’ll get the US jobs report for December at 13:30 London time. In terms of what to expect, our US economists are looking for nonfarm payrolls to have grown by +175k in December, which should keep the unemployment rate steady at 3.7%. Keep an eye on average hourly earnings growth as well, particularly given the Fed’s focus on wage inflation. Our economists are expecting that to step down to +0.3%, having come in at a 10-month high of +0.6% last month.

In the meantime, these signs of strength in the labour market data led investors to price in a more aggressive path of rate hikes from the Fed yesterday. For instance, the chances they’ll continue hiking by 50bps at the next meeting in February now stand at 44.2% according to futures, which is up from 32% the previous day. And looking further out, the terminal rate priced in for June hit a 6-week high of 5.03% (cycle high 5.146% - Nov 3rd), with the year-end rate for December also up +13.6 bps to 4.67%.

Those views on the future policy path were given added support by the latest speakers from the FOMC. For instance, Kansas City Fed President George said that the Fed should keep rates above 5% into 2024, and Atlanta Fed President Bostic said that inflation was still “way too high”. St. Louis Fed President Bullard last night spoke a little more dovishly when he said that “the policy rate is not yet in a zone that may be considered sufficiently restrictive, but it is getting closer.” In a presentation, Bullard cited the recent FOMC dot plot showing the median projection of 5.1% as being adequately restrictive.

Notwithstanding Bullard, the overall backdrop yesterday meant that the sovereign bond rally so far this year came to a halt, with yields on 10yr Treasuries up by +3.5bps to 3.718%. That was echoed in Europe, where yields on 10yr bunds (+4.4bps), OATs (+4.5bps) and BTPs (+5.4bps) all moved higher on the day as well. The moves were driven by higher real yields, with the US 10yr real yield up +1.0bps to 1.49%, whilst the German 10yr real yield was up +10.4bps. Yields on 10yr USTs are fairly stable in the Asian session as we go to press.

For equities it was a similarly downbeat picture, with the S&P 500 (-1.16%) moving back into negative territory for 2023, with losses for both the NASDAQ (-1.47%) and the Dow Jones (-1.02%) as well. The main exception to that pattern were energy stocks (+1.99%), which were aided by the rebound in oil prices yesterday that saw WTI (+1.14%) back at $73.67/bbl. This morning, oil prices continue to build on their previous gains with Brent futures (+1.02%) trading just below $80/bbl and WTI (+1.06%) at $74.45/bbl. Otherwise it was a poor performance across the board however, and Europe’s STOXX 600 (-0.20%) lost ground for the first time this year, even as it continued its relative outperformance against the US indices with a c.5pp gap opening up in the first few days of the year.

Asian stock markets are generally trading higher this morning, but Chinese related equities have gone from positive to slightly negative as I finish this off. Elsewhere, the Nikkei (+0.42%) and the KOSPI (+0.66%) are losing a bit of momentum after a much more positive first half of the session. Outside of Asia, US stock futures are indicating a positive start with contracts on the S&P 500 (+0.31%) and the NASDAQ 100 (+0.27%) edging higher ahead of the December jobs report, but again off their highs.

Early morning data showed that real wages in Japan (-3.8% y/y) fell by the most in eight years and declined for the eighth consecutive month in November (v/s -2.8% expected). It followed the prior month’s revised drop of -2.9%. At the same time, cash earnings (+0.5% y/y) were also disappointing in November (v/s +1.7% expected) against a downwardly revised +1.4% rise in October. In addition, Japan’s services sector activity remained in expansion territory as the final au Jibun Bank services PMI advanced to 51.1 in December following a reading of 50.3 in November.

For a third straight day, the US House of Representatives was not able to vote in a new speaker. GOP leader Kevin McCarthy was not able to get Republicans to coalesce around him through another 5 ballots yesterday, taking the overall failed ballot count to 11. This is now the most ballots it has taken in order to elect a new Speaker since 1860. McCarthy had reportedly offered the holdouts one of their bigger demands – allowing any single member to bring forward a motion to vote on ousting the speaker, currently it takes half of the chamber. It would still take 50% of the chamber to remove the speaker, but it raises the risks of disorder around important votes. There continues to be a group of 6 or so Republicans who have declared themselves “Never-Kevin”, which complicates matters as the Republican leader can only afford 5 defections. Some McCarthy supporters have acknowledged that this process could extend into the weekend or longer if the party must find a new consensus candidate.

Otherwise on the geopolitical side, yesterday brought an announcement from Russia that there would be an unexpected ceasefire in Ukraine for 36 hours over today and tomorrow. The move coincides with Russian Orthodox Christmas and Putin asked Ukraine to reciprocate, but the request was rejected and Ukrainian presidential aide Mikhailo Podolyak said that Russia “must leave the occupied territories – only then will it have a “temporary truce”.”

Finally on the data side, Italian CPI fell to +12.3% in December on the EU-harmonised measure, which was in line with expectations but down from +12.6% in November. That comes ahead of the flash CPI release for the entire Euro Area today, where economists are widely expecting the year-on-year measure will decline for a second consecutive month.

To the day ahead now, and the main data highlight will be the US jobs report for December. Otherwise in the US we’ll get the ISM services index for December and factory orders for November, whilst in Europe there’s the flash Euro Area CPI reading for December, along with German factory orders and retail sales for November. Meanwhile from central banks, we’ll hear from the Fed’s Bostic, Cook, Barkin and George, as well as the ECB’s Centeno and Lane.

Tyler Durden Fri, 01/06/2023 - 08:02

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Victor Davis Hanson’s Annotated Guide To American Middle East Madness

Victor Davis Hanson’s Annotated Guide To American Middle East Madness

Authored by Victor Davis Hanson via X (@VDHanson),

Take note that a…



Victor Davis Hanson's Annotated Guide To American Middle East Madness

Authored by Victor Davis Hanson via X (@VDHanson),

Take note that a trapped Hamas in extremis will go to desperate lengths to survive, from trying to prompt lone-wolf killings in Western cities to drawing in Arab nations to share in their jihad to enlisting Western elites and expatriate Muslims both to deny Hamas is a murderous organization and simultaneously to cheer on its macabre killing.

In this regard, the anti-Jewish nature of Iran and Hamas (read its 1988 Covenant of the Islamic Resistance Movement) should have been obvious, but Westerners suffered from a pathological desire to be deluded.

But to aid Israel in overcoming the current genocidal agendas of its enemies, we should remember first how we in the past have unfortunately contributed to this nightmare.

What follows are some brief annotated quotes of American Middle East insanity [with my annotations in brackets].

Consider our late point man in Iran, and supposed Obama-era expert on Hamas and ISIS, Robert Malley (2008):

It is "a mistake to only think of them [Hamas] in terms of their terrorist violence dimension.”

[Was it a mistake to envision the Third Reich also in terms only of its “terrorist violence,” given that it also promoted a green agenda?]

Malley also included Hamas in his groups of terrorist organizations that "are social and political movements, probably the most rooted movements in their respective societies.” …

[I agree that Hamas is certainly the “most rooted” of the movements in Gaza and perhaps the West Bank as well. And I concur that it is not a mere aberration in Palestinian society but reflects its collective “rooted” values.]

“There is so much misinformation about them …

[Please elaborate: does your “so much information” include things like our ignorance of the fact that Hamas likes to rape Jewish women and desecrate the dead bodies of Jews?]

“I speak to them and my colleagues speak to them [Hamas], and now we may disagree with them, but they have their own rationality … none of them are crazies,”

[Can you please provide transcripts of those occasions when you and your colleagues (also then in the Obama administration?) spoke to Hamas? That was also quite big of you, Mr. Malley, to note that you “may” disagree with Hamas. Was it over which of their killing methods is the most effective? I also agree that Hamas certainly has its own “rationality”. Its recent murder of 1200 Jews—the vast majority civilians—during a religious holiday, which followed a year-long carefully-planned blueprint for mass death and counted on the near-criminal naivete of Western diplomats, might rival the “rational” genocidal agendas of, say, the SS. As for “crazies”—do you mean that Hamas does not crazily fantasize about extermination, but carefully and rationally carries it out? If so, I concur.]

"It has a charity organization, a social branch; it’s not something you can defeat militarily either, and people need to understand that."

[Everything you have stated could have equally applied to the murderous Nazi party: it too was a “political movement” (which did not preclude its use of systematic murder). It too had its own “rationality” (kill Jews and destroy elected governments). It too had “a social branch” and “even charities” (all the better to disguise its murderous agendas). And, yes, one can defeat Hamas “militarily,” as the Allies did Nazi ideology. And yes, “people need to understand that” it is quite possible to ensure that Hamas murders no more.]

John Kerry at Davos in 2016:

“I think that some of it [the millions released to Iran by the Obama administration] will end up in the hands of the IRGC [Islamic Revolutionary Guard Corps—the terrorism specialists of the Iranian armed forces] or other entities, some of which are labeled terrorists.”

[As for “Are labeled terrorists?”—Mr. Kerry, does your use of “labeled” mean that Iranian terrorists are terrorists in name only?]

“You know, to some degree, I’m not going to sit here and tell you that every component of that can be prevented.”

[“To some degree” ? If American money cannot be prevented from being used by Iranians for terrorism, then does “some degree” mean only 50,000 missiles sent to Hezbollah and Hamas rather than 100,000? Or does “some degree’ perhaps mean,someday, 1200 Jews murdered—rather than, say, 120?]

“There is no way they [the Iranian theocracy] can succeed in what they want to do if they are very busy funding a lot of terrorism.”

[But, Mr. Kerry, what do you think Iran really “want[s] to do”? Isn’t Iran “busy” building nuclear bombs, not subways and hospitals? And their nuke program is complementary to, rather in place of, Tehran’s vast terrorism budget. Or do you mean that if Iran spends the money on terrorism, they won’t have enough funds to complete building their nuclear-tipped missiles?]

Antony Blinken in 2023:

“We have not yet seen evidence that Iran directed or was behind this particular attack, but there is certainly a long relationship.”

[At what upcoming date do you think you will need to amend this ridiculous declaration—in the same fashion you just deleted your recent tweet calling for a ceasefire the moment Israel was posed to strike back?]

State Department spokesman Ned Price (2023):

“Since April of 2021, we have demonstrated in very real and significant terms our commitment to the humanitarian needs of the Palestinian people. We’ve provided over $890 million for Palestinians, including over $680 in humanitarian assistance for refugees in the region through UNRWA … When Secretary Blinken was in Ramallah, he announced another $50 million in funding for UNRWA.”

[You certainly did show your commitment to the “needs” of the Palestinian people, which in the case of Gaza resulted in the most sophisticated, reinforced-concrete labyrinth of military tunnels in history, given the plethora of imported building materials purchased with fungible Western dollars to prepare for the mass murder that we just saw in Southern Israel.]

Ambassador Nicholas Burns:

“The Trump Administration’s decision to end U.S. assistance to Palestinian refugees is wrong on every level… heartless and unwise.”

[What was wrong on every level and certainly heartless and unwise was the Biden State Department’s nihilist decision in the very moments of taking power to resume hundreds of millions of fungible dollars to the Palestinians, much of which no doubt ended up in increased spending for  rockets and tunnels. Note that in 2021 the Biden Administration was warned of just that danger by its own state department—and was ignored by diplomats such as yourself: “We assess there is a high risk Hamas could potentially derive indirect, unintentional benefit from U.S. assistance to Gaza.”]

Tyler Durden Sun, 10/15/2023 - 19:50

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NFT market slump shows it’s maturing toward ‘genuine utility,’ execs argue

Decentraland Foundation executive director Yemel Jardis believes as people become more educated about NFTs, the focus will shift from speculative trading…



Decentraland Foundation executive director Yemel Jardis believes as people become more educated about NFTs, the focus will shift from speculative trading to genuine utility.

A steep collapse in the price of nonfungible tokens (NFTs) shouldn’t be seen as a sign of distress but rather a signal the technology is maturing, according to Web3 executives.

“I wouldn’t say the NFT market has regressed,“ Decentraland Foundation executive director Yemel Jardi told Cointelegraph. “Rather, it’s maturing."

Jardi’s comments come after a September report from dappGambl that analyzed over 73,000 NFT collections and concluded that as much as 95% of the NFTs studied had no value, as prices, sales volume and transactions have slid over the past year.

Jardi stressed that markets are cyclic and it is natural for there to be periods of adjustment.

He attributed sliding NFT floor prices partly to “speculative trading” and said the value of NFTs should instead be anchored to their utility.

“As people become more educated about NFTs, their use cases and their utilities, the market will stabilize and the focus will shift from speculative trading to genuine utility and innovation.”

Anjali Young, co-founder of the tokenized community-management platform Collab.Land, isn’t surprised about the anti-NFT sentiment either.

“Any innovation — especially this one with financial impact, cultural value and status — will attract questioning during its downs,” she said.

Young believes many projects have stumbled since marketplaces such as OpenSea removed mandated royalty fees in late August.

Despite this, Young claimed that NFTs are “here to stay” and expects they will be more frequently used for loyalty programs, rewards, advertising and proof of authenticity in the coming months.

Tama Churchouse, chief operating officer of Cumberland Labs, recently opined that NFTs aren’t “dead,” arguing that recent developments in the space show there are still signs of life.

While the NFT market has primarily been dominated by digital art, Jardi said that nonfungible tokens remain an important tool for the broader digital landscape, as ownership of tangible assets can be denoted to users in novel ways.

Jardi believes governments and institutions will leverage NFTs in the future for various use cases. On Oct. 9, the Chinese-state-owned newspaper China Daily announced plans to launch a platform for trading digital collectibles.

Related: Mainstream NFT adoption will be driven mostly by their utility

The entertainment sector is another huge market for the NFT industry to capture, according to Scott Lawin, CEO of sports token platform Candy Digital.

Lawin told Cointelegraph that 24% of Major League Baseball fans who entered stadiums with mobile tickets in 2022 redeemed their complimentary commemorative digital ticket provided by Candy as a form of memorabilia.

“Those are all utilities of NFTs in real time,” Lawin added.

On the brand side, Adidas, Bud Light, Gucci, Prada and other companies dipping into the NFT space have seen a recent uptick in the number of active users on their Discord channels, Young said.

The NFT market capitalization currently stands at $5 billion, according to data from Forbes Digital Assets. The Yuga Labs-owned CryptoPunks and Bored Ape Yacht Club collections are the two largest, with market caps of $710 million and $400 million, respectively.

Magazine: NFT Collector: William Mapan’s Distance sells out, NFT float in Macy’s Parade, Nouns DAO forks

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How About Hunter? Justice Department Adds FARA Charge To Menendez Prosecution

How About Hunter? Justice Department Adds FARA Charge To Menendez Prosecution

Authored by Jonathan Turley,

The Justice Department this week…



How About Hunter? Justice Department Adds FARA Charge To Menendez Prosecution

Authored by Jonathan Turley,

The Justice Department this week hit Sen. Bob Menendez (D-NJ) with a superseding indictment including a new but all-too-familiar charge: being an unregistered foreign agent under the Foreign Agents Registration Act (FARA).


I cannot recall another sitting member of Congress being criminally charged as a foreign agent.

Yet even if this is the first such case, the charge has been freely used by the Justice Department in all but one case: Hunter Biden.

The indictment accuses Menendez of being a foreign agent on behalf of Egypt.

Also charged under the law is Menendez’s wife, Nadine, and Egyptian American businessman Wael Hana.

After they discussed various foreign policy priorities at one dinner, Nadine is quoted as asking her Egyptian counterparts, “What else can the love of my life do for you?”

The government alleges that the couple agreed to have Menendez “use his power and authority to facilitate such sales and financing to Egypt.” In addition to other benefits, the government alleges that Hana promised to put Nadine on the payroll of his company in a “low-or-no-show job.”

The indictment further alleges that the senator disclosed “nonpublic information about the United States’s provision of military aid to Egypt” during a dinner with Hana in 2018.

It also claims that the senator “secretly edited and ghost-wrote” a letter “on behalf of Egypt” trying to convince other senators to release a hold on $300 million in aid to the country.

The inclusion of the FARA charge against Menendez, his wife and his associate only highlights the absence of any such charge against President Biden’s son Hunter.

For years, some of us have raised the glaring contradiction in how the Justice Department has approached the Hunter Biden case with its treatment of past defendants like Donald Trump associate Paul Manafort.

The Justice Department has been quick to indictment Manafort and others on FARA charges, but continues to prevaricate over such a charge for the president’s son.

Indeed, when Menendez was charged, I wrote about the striking similarities in the cases, including the gifts and benefits showered on both men.

They remain similar in every way except the charges.

FARA covers anyone acting as “agent of a foreign principal,” including but not limited to (1) attempting to influence federal officials or the public on domestic or foreign policy or the political or public interests in favor of a foreign country; (2) collecting or disbursing money and or other things of value within the United States; or (3) representing the interests of the foreign principal before U.S. Government officials or agencies.

It is sweeping.

So is the definition of what a “foreign principal” encompasses, including “a foreign government, a foreign political party, any person outside the United States (except U.S. citizens who are domiciled within the United States), and any entity organized under the laws of a foreign country or having its principal place of business in a foreign country.”

It is easy to see why FARA charges have been quickly brought in cases ranging from Manafort to Menendez. It is less clear why such charges remains strikingly absent from the Hunter case.

In Hunter’s case, he was selling what associate Devon Archer called the “Biden brand” and asking, to paraphrase Nadine Menendez,  “What else can [my dad] do for you?”

The House committees have confirmed not only millions transferred to Hunter and other Biden family members, but direct contacts made by Hunter with federal officials and agencies in relation to his foreign clients.

Archer described how Burisma executives told Hunter that they were worried about the anti-corruption investigation of Ukrainian Prosecutor-General Viktor Shokin.

Archer testified that Hunter immediately “called D.C.” in response to the plea.

Shokin was later fired at Vice President Joe Biden’s demand.

In shaking down a Chinese source for more money, Hunter reportedly sent a WhatsApp message that reminded him that “The Bidens are the best at doing exactly what Chairman wants.”

The message was to Gongwen (“Kevin”) Dong, a CEFC China Energy executive with close ties to the Chinese government, and included a threat that “I am sitting here with my father and we would like to understand why the commitment made has not been fulfilled … I will make certain that between the man sitting next to me and every person he knows and my ability to forever hold a grudge that you will regret not following my direction. I am sitting here waiting for the call with my father.”

Throughout his open influence-peddling, emails show Hunter was fully aware of the risk of being charged under FARA.

The problem with FARA is that it would require the Bidens to publicly acknowledge their work as foreign agents and, by extension, their massive influence-peddling operation.

In one message, Hunter addressed his work for the Chinese CEFC energy company and warned:

“No matter what it will need to be a US company at some level in order for us to make bids on federal and state funded projects. Also We [sic] don’t want to have to register as foreign agents under the FCPA which is much more expansive than people who should know choose not to know. James has very particular opinions about this so I would ask him about the foreign entity.”

“James” is his uncle Jim Biden, who has also been regularly accused of corrupt influence-peddling tied to Joe Biden.

In the message, Hunter gets it.

The law is indeed “expansive.”

His uncle clearly gets it.

The question is why the Justice Department gets it in every case except those with targets named Biden.

For many, the question is not whether Hunter has acted as an agent of foreign principals but whether the Justice Department is acting as an agent of the principal Biden.

Tyler Durden Sun, 10/15/2023 - 18:40

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