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Futures Flat As Yields Extend Gains After Brent Crude Hits $97 Overnight

Futures Flat As Yields Extend Gains After Brent Crude Hits $97 Overnight

US equity futures reversed initial gains following Wednesday’s surprise…

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Futures Flat As Yields Extend Gains After Brent Crude Hits $97 Overnight

US equity futures reversed initial gains following Wednesday's surprise reversal that helped US stocks close green, and were trading marginally lower as global bonds resumed their selloff, sending 10Y yields to a new 16-year peak as soaring Brent oil prices hit $97 overnight before reversing as the US Dollar dipped. At 7:45am ET, S&P futures traded down 0.1% and Nasdaq 100 futures were down -0.3%. As 10-year yields rose 4bps to 4.65% the yield curve flattened and the 2s10s was inverted by less than 50bp for first time since May. 1Y breakeven had its largest move since late July as oil surged on constrained supply. Commodities are mixed with metals and natgas leading with USD lower pre-mkt. Today’s macro focus is on GDP, Consumption, Jobless Claims, Pending Home Sales, Kansas Fed, and updates on economic revisions. We also get four Fed speakers, including Powell at 4pm. Financial conditions have tightened since the Fed meeting and mortgage rates are at multi-decade highs. Keep an eye on the 4200 level as we reach expiration on Friday and the JPM collar is rolled.

In premarket trading, Peloton rose 13% after the maker of the trademark exercise bikes agreed to a deal with Lululemon to tap its online workouts and team up on apparel. Micron Technology Inc. tumbled 5% as its mixed outlook for the November quarter weighed on investor sentiment. Analysts see near-term challenges but recovery in the longer term. Here are some other notable premarket movers:

  • Gritstone gained 39% after the biotechnology company said it will receive as much as $433 million from the US government to conduct a trial of its next-generation Covid-19 vaccine.
  • Workday shares fall 9.9% after the software company forecast annual subscription revenue growth of 17% to 19% over the next three years, which analysts say missed expectations.

Hawkish commentary from central banks has dashed hopes for a pivot toward lower rates any time soon, making September the worst month for global stocks in a year and the weakest for global bonds since February. Fund managers at T. Rowe Price are shorting 10- and 30-year Treasuries on a bet yields will keep rising as they catch up with the Federal Reserve’s rapid interest-rate hikes. And indeed, traders are pushing yields higher on speculation that US policymakers will keep policy tight as oil prices approach $100 and spark a new round of inflation. The benchmark 10-year yield rose four basis points to 4.647%.

"Markets are waking up to central banks are going to have to stay higher for longer in this world shaped by supply,” Wei Li, global chief investment strategist at BlackRock Investment Institute, said in an interview with Bloomberg TV. It's not just supply however: with oil soaring, the commodity inflation that many had left for dead, is back with a bang and overnight WTI briefly surpassed $95 for the first time in more than a year after the "tank bottoms" in Cushing stockpiles underscored a widening global deficit.

European stocks are on course for a sixth day of declines with the Stoxx 600 down 0.3% as gains in energy shares boosted by surging oil prices are countered by weakness in rate-sensitive sectors such as technology and real estate. AMS-Osram slumps after the Swiss chipmaker announced a rights issue and 888, the owner of the William Hill gambling chain, falls after cutting its earnings outlook on a spate of bettor-friendly sports results. Here are the biggest European movers:

  • Colruyt shares surge as much as 13% to the highest level in nearly two years on Thursday after the Belgian supermarket operator predicted a sharp increase in profitability. Degroof Petercam hailed the firm’s “major guidance uplift”.
  • Babcock shares rise as much as 11%, the most since July, after the defense outsourcing co. released a trading update that Jefferies sees as “helpful” and de-risking the FY23 outlook.
  • Deliveroo shares climb as much as 10%, the most in 11 months, after the food delivery company said it plans to return up to £250 million to shareholders via a tender offer between 115p-135p per share.
  • Allegro shares gain as much as 9.1% after the company’s CFO warned that robust 3Q guidance from Poland’s biggest e-commerce platform could be a one-off.
  • Europe’s Stoxx 600 energy index is the best-performing subsector in the benchmark on Thursday, as oil was propelled closer to the $100-a-barrel mark after stockpiles at a major US storage hub dropped to critical levels.
  • Bpost shares rise as much as 7.2% after KBC Securities upgrades the Belgian postal company, giving the stock its first buy rating in more than four months, saying visibility is now much improved.
  • Billerud shares gain as much as 4.7% to a more than four-month high after SEB upgrades the Swedish paper and packaging firm to buy on improved risk/reward following significant share price underperformance.
  • AMS-Osram shares tumble as much as 23%, falling to the lowest since 2011, after the Swiss chipmaker announced what Vontobel described as a “significantly larger than feared” rights offering.
  • 888 shares slump as much as 18% after the online betting firm trimmed its full-year Ebitda outlook in an update which Goodbody describes as “disappointing.”

Earlier in the session, Asian stocks fell as continued concerns over China’s property market coupled with fear of inflation stoked by oil’s rally toward $100 inhibited risk taking. The MSCI Asia Pacific Index declined 0.8%, with Toyota and Tencent among the biggest drags. Hong Kong stocks fell after Evergrande’s shares were suspended from trading, further weakening sentiment on China’s real estate sector ahead of upcoming holidays.  “Suspension of trading in China Evergrande’s shares and its chairman placed under police surveillance further reinforces the odds of liquidation, while a bailout from authorities remains unlikely,” Yeap Jun Rong, market strategist at IG Asia, wrote in a note. Yeap sees low appetite for risk-taking in Asia in light of the latest developments in China’s property market.

  • Hang Seng and Shanghai Comp diverged amid headwinds in the property sector after the suspension of shares in Evergrande and some of its units, while the mainland was kept afloat after the PBoC’s liquidity injections ahead of the holiday closures and following China’s latest support pledges.
  • Japan's Nikkei 225 underperformed after it slipped beneath the 32,000 level and amid mass ex-dividend day in Japan concerning over 1,400 companies. The Topix dropped amid rising interest rates and as more than 1,000 stocks traded without rights to the next dividend. Markets were closed for holidays in South Korea, Indonesia and Malaysia.
  • Australia's ASX 200 pared initial gains as strength in the commodity-related sectors was offset by the upside in yields and weakness in consumer stocks after retail sales missed forecasts.

In FX, the Bloomberg Dollar Spot Index is down 0.3%,ending its longest run of gains in a year. The yen rose for the first day in five as repeated verbal warnings by Japanese authorities over the currency’s weakness spurred intervention speculation. USD/JPY fell 0.3% to 149.28, retreating from Wednesday’s 11-month high of 149.71. EUR/USD up 0.3% to 1.0537; German CPI data in focus later Thursday. GBP/USD snapped six-day decline, climbed 0.5% to 1.22 amid higher gilt yields

In rates, treasuries are once again cheaper by up to 4bp across long-end of the curve as Wednesday’s bear-steepening move is extended into early US session. US 5-, 10- and 30-year yields reached new multiyear highs; 10-year TSY yields are more than 3bp cheaper on the day near 4.65%. The 2s10s curve inverted by less than 50bp for first time since May.  European government bonds are on the back foot as investors fret over the prospect of higher-for-longer interest rates. Gilts are faring worse than their German counterparts, with bunds falling less amid German state inflation numbers that point to a slowdown in the national reading later on Thursday. UK 10-year yields are up 11bps while the German equivalent adds 7bps. 

The treasury auction cycle concludes with $37b 7-year note; Wednesday’ 5-year note auction stopped 1.2bp through, indicating strong demand. WI 7-year yield at ~4.70% is almost 50bp cheaper than August’s, which stopped 2.1bp through, and higher than all previous 7Y stops since sales of the tenor began in 2009. Dollar IG issuance slate includes a couple of deals with more expected; four companies priced deals on Wednesday, bringing weekly volume to $18.4b vs $15b-$20b projection. US session includes jobless claims, GDP and 7-year note auction. Fed Chair Powell is scheduled to host a town hall event with educators speak at 4pm New York time.

In commodities, WTI crude futures are down slightly after touching a YTD high of $95/bbl during Asian trading hours, the highest level in over a year.

Looking to the day ahead, it’s fairly busy on the data side, with the US September Kansas City Fed manufacturing activity, August pending home sales and initial jobless claims. In Europe, we have the Eurozone September services, industrial and economic confidence, the German September CPI, the Italian September manufacturing confidence, economic sentiment and consumer confidence, and the August PPI. We will also be hearing from the Fed’s Powell, Cook and Goolsbee, as well as the ECB’s Holzmann. Lastly, we will have company earnings from Nike, Accenture, and Blackberry.

Market Snapshot

  • S&P 500 futures little changed at 4,312.00
  • MXAP down 0.9% to 156.51
  • MXAPJ down 0.6% to 486.36
  • Nikkei down 1.5% to 31,872.52
  • Topix down 1.4% to 2,345.51
  • Hang Seng Index down 1.4% to 17,373.03
  • Shanghai Composite up 0.1% to 3,110.48
  • Sensex down 0.8% to 65,580.52
  • Australia S&P/ASX 200 little changed at 7,024.76
  • Kospi little changed at 2,465.07
  • STOXX Europe 600 down 0.4% to 445.12
  • German 10Y yield little changed at 2.89%
  • Euro up 0.1% to $1.0518
  • Brent Futures down 0.1% to $96.43/bbl
  • Gold spot down 0.0% to $1,874.88
  • U.S. Dollar Index down 0.11% to 106.55

Top Overnight News

  • China appointed Lan Fo’an as the Communist Party chief at the Ministry of Finance, a move that will pave the way for him to become finance minister at a time when the government is seeking to bolster the economy. BBG
  • OpenAI is in advanced talks with former Apple designer Sir Jony Ive and SoftBank’s Masayoshi Son to launch a venture to build the “iPhone of artificial intelligence”, fueled by more than $1bn in funding from the Japanese conglomerate. FT
  • France is exploring ways to cap national electricity prices without falling foul of EU subsidy rules, including a possible windfall levy to deliver President Emmanuel Macron’s pledge to “take back control” of prices. FT
  • Spain’s CPI for Sept came in at +3.2% Y/Y on the headline, up from +2.4% in Aug but below the Street’s +3.3% forecast (while core was +5.8%, down from +6.1% in Aug and below the Street’s +6% forecast). BBG
  • Saudi Arabia and Russia have raked in billions of dollars in extra oil revenues in recent months, despite pumping fewer barrels, after their production cuts sent crude prices soaring. The cutbacks were a risky strategy, both financially and politically. But they appear to be paying off for the two most important members of the Organization of the Petroleum Exporting Countries and its Russia-led allies, or the OPEC+ cartel. WSJ
  • WTI briefly hit $95, the highest in more than a year, after a drop in Cushing stockpiles to critical levels highlighted a widening global deficit. The jump heightened inflation concerns and raised expectations rates will stay higher for a protracted period. BBG
  • There are few signs of a late deal to avert US government shutdown — with Kevin McCarthy making big demands of President Biden and bringing little leverage to the clash. McCarthy counts the long-term spending cuts he extracted from Biden last spring as one of his proudest achievements and is now looking for more concessions. BBG
  • The second GOP presidential debate was full of arguments, one-liners and strained attempts for attention, but none of the candidates articulated a clear case why they should be the front-runner instead of Donald Trump. WSJ
  • Trading in the shares of China Evergrande Group   and two of its publicly listed units was suspended on Thursday, after reports that the beleaguered property developer’s founder and chairman had been placed under police surveillance. WSJ
  • All eyes on S&P 500 200dma of 4195. If level is tested and doesn’t provide support history suggests S&P 500 forward 1-/3-/6-/12-month returns are significantly below-average following a break in its 200dma.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded mixed following the indecisive performance in the US heading into month and quarter-end amid further upside in global yields and higher oil prices. ASX 200 pared initial gains as strength in the commodity-related sectors was offset by the upside in yields and weakness in consumer stocks after retail sales missed forecasts. Nikkei 225 underperformed after it slipped beneath the 32,000 level and amid mass ex-dividend day in Japan concerning over 1,400 companies. Hang Seng and Shanghai Comp diverged amid headwinds in the property sector after the suspension of shares in Evergrande and some of its units, while the mainland was kept afloat after the PBoC’s liquidity injections ahead of the holiday closures and following China’s latest support pledges.

Top Asian News

  • PBoC set USD/CNY mid-point at 7.1798 vs exp. 7.3239 (prev. 7.1717)
  • HKEX announced shares of Evergrande (3333 HK), Evergrande Property Services (6666 HK) and Evergrande New Energy Vehicle (708 HK) have been suspended.
  • China's cyberspace regulator has issued draft rules on promoting draft riles on promoting and regulating the cross-border flow of data; companies providing more than 1mln people's personal information outside the country should safety assessment of data. Where data does not contain personal information or important data, there is no need to declare a security review assessment, according to Reuters.
  • Chinese FX Regulator expects the current account surplus to remain basically stable in H2 and said the cross-border two-way investment is expected to further stabilise and improve. The scale of FX reserves will remain basically stable. Will actively fend off and resolve external shock risks. Will strive to maintain the stability of FX markets and balance of payments.
  • Chinese Finance Ministry will exempt urban land use tax on land used for construction of affordable housing projects. Stamp duty for affordable housing management firms and buyers are exempted. Tax exemptions and cuts effective from October 1st, according to Reuters.

European bourses trade softer following a predominantly negative close yesterday as a lack of positive catalysts keeps sentiment suppressed. Sectors in Europe have a mostly negative tilt with Travel & Leisure at the bottom of the pile after feeling the pressure from higher energy prices. On the upside, Energy and Basic Resources outperform. US futures are trading modestly weaker, paring back gains seen in yesterday's session. The docket for today picks up, with US Core PCE Prices (Final), GDP (Final) and weekly IJC’s all due at the busy 13:30 BST / 08:30 ET slot.

Top European News

  • France is exploring a windfall levy to take back control of energy prices, according to FT.
  • European Commission VP says the exact scope of the probe into Chinese EV imports has not been decided yet, when asked if Tesla (TSLA) will be impacted by the probe, via CNBC.

FX

  • The T-note managed to tread water for the most part within a 107-27/15+ range and perhaps with some leverage from blocked curve flatteners.
  • Bunds and Gilts have been in freefall alongside Eurozone periphery debt. The 10 year German and UK benchmarks breached deeper chart and psychological supports on the way down to 127.60 and 93.43 respectively.
  • Angst in BTPs was prompted by Italy’s budget and exacerbated by month-end supply, but the latest collapse elsewhere looks more momentum-based and technically driven given no obvious fresh fundamental catalyst.
  • Italy sold EUR 8bln vs exp. EUR 7-8bln 4.10% 2029, 4.20% 2034 BTP Auction & EUR 1.5bln vs exp. 1-1.5bln 2026, 2030 CCTeu Auction.

Fixed Income

  • The T-note managed to tread water for the most part within a 107-27/15+ range and perhaps with some leverage from blocked curve flatteners.
  • Bunds and Gilts have been in freefall alongside Eurozone periphery debt. The 10 year German and UK benchmarks breached deeper chart and psychological supports on the way down to 127.60 and 93.43 respectively.
  • Angst in BTPs was prompted by Italy’s budget and exacerbated by month-end supply, but the latest collapse elsewhere looks more momentum-based and technically driven given no obvious fresh fundamental catalyst.
  • Italy sold EUR 8bln vs exp. EUR 7-8bln 4.10% 2029, 4.20% 2034 BTP Auction & EUR 1.5bln vs exp. 1-1.5bln 2026, 2030 CCTeu Auction.

Commodities

  • France is exploring a windfall levy to take back control of energy prices, according to FT.
  • European Commission VP says the exact scope of the probe into Chinese EV imports has not been decided yet, when asked if Tesla (TSLA) will be impacted by the probe, via CNBC.

Geopolitics

  • PBoC set USD/CNY mid-point at 7.1798 vs exp. 7.3239 (prev. 7.1717)
  • HKEX announced shares of Evergrande (3333 HK), Evergrande Property Services (6666 HK) and Evergrande New Energy Vehicle (708 HK) have been suspended.
  • China's cyberspace regulator has issued draft rules on promoting draft riles on promoting and regulating the cross-border flow of data; companies providing more than 1mln people's personal information outside the country should safety assessment of data. Where data does not contain personal information or important data, there is no need to declare a security review assessment, according to Reuters.
  • Chinese FX Regulator expects the current account surplus to remain basically stable in H2 and said the cross-border two-way investment is expected to further stabilise and improve. The scale of FX reserves will remain basically stable. Will actively fend off and resolve external shock risks. Will strive to maintain the stability of FX markets and balance of payments.
  • Chinese Finance Ministry will exempt urban land use tax on land used for construction of affordable housing projects. Stamp duty for affordable housing management firms and buyers are exempted. Tax exemptions and cuts effective from October 1st, according to Reuters.

US Event Calendar

  • 08:30: Sept. Initial Jobless Claims, est. 215,000, prior 201,000
    • Sept. Continuing Claims, est. 1.68m, prior 1.66m
  • 08:30: Revisions: GDP/National Economic Accounts
  • 08:30: 2Q GDP Annualized QoQ, est. 2.2%, prior 2.1%
    • 2Q Core PCE Price Index QoQ, est. 3.7%, prior 3.7%
    • 2Q GDP Price Index, est. 2.0%, prior 2.0%
    • 2Q Personal Consumption, est. 1.7%, prior 1.7%
  • 10:00: Aug. Pending Home Sales (MoM), est. -1.0%, prior 0.9%
  • Pending Home Sales YoY, est. -13.0%, prior -13.8%
  • 11:00: Sept. Kansas City Fed Manf. Activity, est. -2, prior 0

DB's Jim Reid concludes the overnight wrap

The storm that’s been sweeping through New York while I've been here this week has stayed a bit longer in fixed income markets, with the 10yr Treasury yield (+7.2bps) climbing to a new cycle high of 4.61%. In part, that’s been driven by a fresh spike in oil prices, with Brent Crude currently at $97.41/bbl this morning for the first time since November. And as US rates turned higher, so too did the dollar index, which is also at its highest level since November as we go to press. Yet despite the latest sell-off in bond markets, US equities were relatively calm with the S&P 500 (+0.02%) regaining its composure after a mid-session sell-off, even as yields went from below 4.50% to above 4.60% in a few hours. That said, this respite might prove brief, as US futures are pointing lower again this morning, and there’ve been sharp losses for several Asian indices overnight. Meanwhile, there’s still no sign of the US House and Senate being able to agree on a funding extension ahead of a potential US government shutdown at the end of the week. Today we’ve got important US GDP benchmark revisions as well, which happen every 5 years and have the potential to rewrite history one way or the other, whilst informing economists of any change in recent data momentum. See Brett Ryan’s preview in his week ahead here.

Once again, the big story yesterday was that bond sell-off, which sent Bloomberg’s aggregate global bond index down to its lowest level of 2023 so far. But it wasn’t just the 10yr that lost ground, as 3 0yr Treasury yields also moved up +4.4bps to a new cycle high of their own at 4.72%, which is their highest level since 2011. We can see how that’s increasingly being passed through to the real economy as well, since the MBA’s weekly update of 30yr mortgage rates climbed another 10bps to 7.41%. That’s their highest level since December 2000, and one that’s likely to go higher still given the recent move in rates.

Real yields again drove much of the increase, with the 10yr real yield up +4.1bps to a post-GFC high of 2.26%. But we also saw a f resh rise in inflation breakevens, with the 30yr up +1.4bps to a 6-month high of 2.39%, not least as the upward march in oil prices regained steam. That came as Brent crude broke through the $95/bbl level all the way to $96.55/bbl, its highest level since November, after gaining +2.76% on the day, and this morning it’s since gone above $97/bbl. WTI crude saw an even more dramatic increase, up +3.64% in its largest rise since May, to close at a new one-year high of $93.68/bl, with further gains above $94/bbl this morning. The oil price spike occurred as the latest US weekly crude inventory data showed a -4.1% decline in oil stocks at the key hub in Cushing, Oklahoma to its lowest level since last summer.

This sovereign bond sell-off was evident in Europe too, where the 10yr bund yield (+3.5bps) closed at a new post-2011 high of 2.84%, along with the 10yr French OAT (+3.8bps) at 3.40%. Italian BTPs underperformed once again, however, with the spread of 10yr Italian yields over bunds widening to 195bps, its highest closing level since the banking stress in March. That spread widening came ahead of the Italian government unveiling its 2024 budget yesterday evening, which foresees a 4.3% deficit next year as a share of GDP. That’s largely in line with earlier reports and a touch above the level that our economists see as consistent with EU recommendations – see their note earlier this week.

For equities, there was a brief stabilisation yesterday that’s since turned more negative overnight again. For instance, the S&P 500 traded largely flat (+0.02%) while the NASDAQ saw a slight outperformance (+0.22%). The performance was varied across sectors, with energy stocks (+2.51%) seeing the strongest performance amidst to the surge in oil prices. Otherwise, industrials advanced (+0.76%) following stronger capital goods orders data (more on this below). Meanwhile, several of the more defensive sectors underperformed, including utilities (-1.93%) and consumer staples (-0.77%). Also notable is the near 10% decline of the consumer discretionary sector in the past two weeks (-0.38% yesterday), which comes as the latest weekly BEA card spending data saw the 4-week moving average fall to its lowest since early 2021. So a potential area of concern for the soft landing camp. Looking forward, futures on the S&P 500 have posted a modest -0.04% decline this morning.

Overnight in Asia, the major indices have mostly lost ground this morning, with a sharp decline for the Nikkei (-1.96%) and the Hang Seng (-1.04%) overnight. That currently leaves the Hang Seng on course for its lowest close so far of 2023, which comes as trading in Evergrande has been suspended in Hong Kong . Otherwise, there’ve been smaller declines for stocks in mainland China, with the CSI 300 down -0.28%, whilst the Shanghai Comp (+0.13%) has seen a modest increase.

Back in Europe, several data releases added to the downbeat tone yesterday. Among others, Germany’s Gfk consumer confidence index fell once again, from -25.5 to -26.5 (vs -26.0 expected). Similarly, the French INSEE household confidence survey for September fell from 85 to 83 (vs 84 expected). This was mostly driven by fears of unemployment and was the third month in a row that the indicator weakened. Alongside the other macro headwinds, this proved to be a challenging backdrop for European equity markets, with the STOXX 600 down by -0.18% to its lowest level in nearly six months .

Turning to the remaining data yesterday, US durable goods orders came in above expectations at +0.2% (vs -0.5% expected) and core capital goods orders surprised strongly to the upside at 0.9% (vs +0.1% expected). That suggests some upside for US Q3 GDP trackers, though a modest one when accounting for downward revisions for the previous month (-0.5pp for capital goods orders).

Looking to the day ahead, it’s fairly busy on the data side, with the US September Kansas City Fed manufacturing activity, August pending home sales and initial jobless claims. In Europe, we have the Eurozone September services, industrial and economic confidence, the German September CPI, the Italian September manufacturing confidence, economic sentiment and consumer confidence, and the August PPI. We will also be hearing from the Fed’s Powell, Cook and Goolsbee, as well as the ECB’s Holzmann. Lastly, we will have company earnings from Nike, Accenture, and Blackberry.

Tyler Durden Thu, 09/28/2023 - 08:20

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Delivering aid during war is tricky − here’s what to know about what Gaza relief operations may face

The politics of delivering aid in war zones are messy, the ethics fraught and the logistics daunting. But getting everything right is essential − and…

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3 days ago

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October 20, 2023

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Palestinians on the outskirts of Gaza City walk by buildings destroyed by Israeli bombardment on Oct. 20, 2023. AP Photo/Ali Mahmoud

The 2.2 million people who live in Gaza are facing economic isolation and experiencing incessant bombardment. Their supplies of essential resources, including food and water, are quickly dwindling.

In response, U.S. President Joe Biden has pledged US$100 million in humanitarian assistance for the citizens of Gaza.

As a scholar of peace and conflict economics who served as a World Bank consultant during the 2014 war between Hamas and Israel, I believe that Biden’s promise raises fundamental questions regarding the delivery of humanitarian aid in a war zone. Political constraints, ethical quandaries and the need to protect the security of aid workers and local communities always make it a logistical nightmare.

In this specific predicament, U.S. officials have to choose a strategy to deliver the aid without the perception of benefiting Hamas, a group the U.S. and Israel both classify as a terrorist organization.

Logistics

When aiding people in war zones, you can’t just send money, a development strategy called “cash transfers” that has become increasingly popular due to its efficiency. Sending money can boost the supply of locally produced goods and services and help people on the ground pay for what they need most. But injecting cash into an economy so completely cut off from the world would only stoke inflation.

So the aid must consist of goods that have to be brought into Gaza, and services provided by people working as part of an aid mission. Humanitarian aid can include food and water; health, sanitation and hygiene supplies and services; and tents and other materials for shelter and settlement.

Due to the closure of the border with Israel, aid can arrive in Gaza only via the Rafah crossing on the Egyptian border.

The U.S. Agency for International Development, or USAID, will likely turn to its longtime partner on the ground, the United Nations Relief and Works Agency, or UNRWA, to serve as supply depots and distribute goods. That agency, originally founded in 1949 as a temporary measure until a two-state solution could be found, serves in effect as a parallel yet unelected government for Palestinian refugees.

USAID will likely want to tap into UNRWA’s network of 284 schools – many of which are now transformed into humanitarian shelters housing two-thirds of the estimated 1 million people displaced by Israeli airstrikes – and 22 hospitals to expedite distribution.

Map of Gaza and its neighbors
Gaza is a self-governing Palestinian territory. The narrow piece of land is located on the coast of the Mediterranean Sea, bordered by Israel and Egypt. PeterHermesFurian/iStock via Getty Images Plus

Politics

Prior to the Trump administration, the U.S. was typically the largest single provider of aid to the West Bank and Gaza. USAID administers the lion’s share of it.

Since Biden took office, total yearly U.S. assistance for the Palestinian territories has totaled around $150 million, restored from just $8 million in 2020 under the Trump administration. During the Obama administration, however, the U.S. was providing more aid to the territories than it is now, with $1 billion disbursed in the 2013 fiscal year.

But the White House needs Congress to approve this assistance – a process that requires the House of Representatives to elect a new speaker and then for lawmakers to approve aid to Gaza once that happens.

Ethics

The United Nations Relief and Works Agency is a U.N. organization. It’s not run by Hamas, unlike, for instance, the Gaza Ministry of Health. However, Hamas has frequently undermined UNRWA’s efforts and diverted international aid for military purposes.

Hamas has repeatedly used UNRWA schools as rocket depots. They have repeatedly tunneled beneath UNRWA schools. They have dismantled European Union-funded water pipes to use as rocket fuselages. And even since the most recent violence broke out, the UNRWA has accused Hamas of stealing fuel and food from its Gaza premises.

Humanitarian aid professionals regularly have to contend with these trade-offs when deciding to what extent they can work with governments and local authorities that commit violent acts. They need to do so in exchange for the access required to help civilians under their control.

Similarly, Biden has had to make concessions to Israel while brokering for the freedom to send humanitarian aid to Gaza. For example, he has assured Israel that if any of the aid is diverted by Hamas, the operation will cease.

This promise may have been politically necessary. But if Biden already believes Hamas to be uncaring about civilian welfare, he may not expect the group to refrain from taking what they can.

Security best practices

What can be done to protect the security of humanitarian aid operations that take place in the midst of dangerous conflicts?

Under International Humanitarian Law, local authorities have the primary responsibility for ensuring the delivery of aid – even when they aren’t carrying out that task. To increase the chances that the local authorities will not attack them, aid groups can give “humanitarian notification” and voluntarily alert the local government as to where they will be operating.

Hamas has repeatedly flouted international norms and laws. So the question of if and how the aid convoy will be protected looms large.

Under the current agreement between the U.S., Israel and Egypt, the convoy will raise the U.N. flag. International inspectors will make sure no weapons are on board the vehicles before crossing over from Arish, Egypt, to Rafah, a city located on the Gaza Strip’s border with Egypt.

The aid convoy will likely cross without militarized security. This puts it at some danger of diversion once inside Gaza. But whether the aid convoy is attacked, seized or left alone, the Biden administration will have demonstrated its willingness to attempt a humanitarian relief operation. In this sense, a relatively small first convoy bearing water, medical supplies and food, among other items, serves as a test balloon for a sustained operation to follow soon after.

If the U.S. were to provide the humanitarian convoy a military escort, by contrast, Hamas could see its presence as a provocation. Washington’s support for Israel is so strong that the U.S. could potentially be judged as a party in the conflict between Israel and Hamas.

In that case, the presence of U.S. armed forces might provoke attacks on Gaza-bound aid convoys by Hamas and Islamic jihad fighters that otherwise would not have occurred. Combined with the mobilization of two U.S. Navy carrier groups in the eastern Mediterranean Sea, I’d be concerned that such a move might also stoke regional anger. It would undermine the Biden administration’s attempts to cool the situation.

On U.N.-approved missions, aid delivery may be secured by third-party peacekeepers – meaning, in this case, personnel who are neither Israeli nor Palestinian – with the U.N. Security Council’s blessing. In this case, tragically, it’s unlikely that such a resolution could conceivably pass such a vote, much less quickly enough to make a difference.

Topher L. McDougal does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

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Diagnosis and management of postoperative wound infections in the head and neck region

“The majority of wound infections often manifest themselves immediately postoperatively, so close followup should take place […]” Credit: 2023 Barbarewicz…

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October 20, 2023

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“The majority of wound infections often manifest themselves immediately postoperatively, so close followup should take place […]”

Credit: 2023 Barbarewicz et al.

“The majority of wound infections often manifest themselves immediately postoperatively, so close followup should take place […]”

BUFFALO, NY- October 20, 2023 – A new research perspective was published in Oncoscience (Volume 10) on October 4, 2023, entitled, “Diagnosis and management of postoperative wound infections in the head and neck region.”

In everyday clinical practice at a department for oral and maxillofacial surgery, a large number of surgical procedures in the head and neck region take place under both outpatient and inpatient conditions. The basis of every surgical intervention is the patient’s consent to the respective procedure. Particular attention is drawn to the general and operation-specific risks. 

Particularly in the case of soft tissue procedures in the facial region, bleeding, secondary bleeding, scarring and infection of the surgical area are among the most common complications/risks, depending on the respective procedure. In their new perspective, researchers Filip Barbarewicz, Kai-Olaf Henkel and Florian Dudde from Army Hospital Hamburg in Germany discuss the diagnosis and management of postoperative infections in the head and neck region.

“In order to minimize the wound infections/surgical site infections, aseptic operating conditions with maximum sterility are required.”

Furthermore, depending on the extent of the surgical procedure and the patient‘s previous illnesses, peri- and/or postoperative antibiotics should be considered in order to avoid postoperative surgical site infection. Abscesses, cellulitis, phlegmone and (depending on the location of the procedure) empyema are among the most common postoperative infections in the respective surgical area. The main pathogens of these infections are staphylococci, although mixed (germ) patterns are also possible. 

“Risk factors for the development of a postoperative surgical site infection include, in particular, increased age, smoking, multiple comorbidities and/or systemic diseases (e.g., diabetes mellitus type II) as well as congenital and/ or acquired immune deficiency [10, 11].”

 

Continue reading the paper: DOI: https://doi.org/10.18632/oncoscience.589 

Correspondence to: Florian Dudde

Email: floriandudde@gmx.de 

Keywords: surgical site infection, head and neck surgery

 

About Oncoscience: 

Oncoscience is a peer-reviewed, open-access, traditional journal covering the rapidly growing field of cancer research, especially emergent topics not currently covered by other journals. This journal has a special mission: Freeing oncology from publication cost. It is free for the readers and the authors.

To learn more about Oncoscience, visit Oncoscience.us and connect with us on social media:

For media inquiries, please contact media@impactjournals.com.

Oncoscience Journal Office

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Journal

Oncoscience

DOI

10.18632/oncoscience.589

Method of Research

Commentary/editorial

Subject of Research

People

Article Title

Diagnosis and management of postoperative wound infections in the head and neck region

Article Publication Date

4-Oct-2023

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Government

Biden’s Student Loan Forgiveness Plan Makes the Poor Pay for the Rich

A year after the Supreme Court struck down President Biden’s student loan forgiveness plan, he presented a new scheme to the Department of Education…

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October 20, 2023

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A year after the Supreme Court struck down President Biden’s student loan forgiveness plan, he presented a new scheme to the Department of Education on Tuesday. While it is less aggressive than the prior plan, this proposal would cost hundreds of billions of taxpayer dollars, doing more harm than good. 

As the legendary economist Milton Friedman noted, “One of the great mistakes is to judge policies and programs by their intentions rather than their results.” 

Higher education in America is costly, and this “forgiveness” would make it worse. 

Signing up for potentially life-long student loans at a young age is too normalized. At the same time, not enough borrowers can secure jobs that offer adequate financial support to pay off these massive loans upon graduation or leaving college. These issues demand serious attention. But “erasing” student loans, as well-intentioned as it may be, is not the panacea Americans have been led to believe.

Upon closer examination, the President’s forgiveness plan creates winners and losers, ultimately benefiting higher-income earners the most. In reality, this plan amounts to wealth redistribution. To quote another top economist, Thomas Sowell described this clearly: “There are no solutions, only trade-offs.” 

Forgiving student loans is not the end of the road but the beginning of a trade-off for a rising federal fiscal crisis and soaring college tuition. 

When the federal government uses taxpayer funds to give student loans, it charges an interest rate to account for the cost of the loan. To say that all borrowers no longer have to pay would mean taxpayers lose along with those who pay for it and those who have been paying or have paid off their student loans.

According to the Committee for a Responsible Federal Budget, student debt forgiveness could cost at least $360 billion. 

Let’s consider that there will be 168 million tax returns filed this year. A simple calculation suggests that student loan forgiveness could add around $2,000 yearly in taxes per taxpayer, based on the CRFB’s central estimate. 

Clearly, nothing is free, and the burden of student loan forgiveness will be shifted to taxpayers.

One notable feature of this plan is that forgiveness is unavailable to individuals earning over $125,000 annually. In practice, this means that six-figure earners could have their debts partially paid off by lower-income tax filers who might not have even pursued higher education. This skewed allocation of resources is a sharp departure from progressive policy.

Data show that half of Americans are already frustrated with “Bidenomics.” 

Inflation remains high, affordable housing is a distant dream, and wages fail to keep up with soaring inflation. Introducing the potential of an additional $2,000 annual tax burden at least for those already struggling, mainly to subsidize high-income earners, adds insult to injury.

Furthermore, it’s vital to recognize that the burden of unpaid student loans should not fall on low-income earners or Americans who did not attend college. Incentives play a crucial role in influencing markets. 

By removing the incentive for student loan borrowers to repay their debts, we may encourage more individuals to pursue higher education and accumulate debt without the intention of paying it back. After all, why would they when it can be written off through higher taxes for everyone?

The ripple effect of this plan could be far-reaching. 

It may make college more accessible for some, opening the floodgates for students and the need for universities to expand and hire more staff, leading to even higher college tuition. This perverse incentive will set a precedent that will create a cycle of soaring tuition, which would counteract the original goal of making higher education more affordable.

While the intention behind President Biden’s student loan forgiveness may appear noble (in likelihood, it is a rent-seeking move), the results may prove detrimental to our nation’s economic stability and fairness. And if the debt is monetized, more inflation will result.

Forgiving student loans will exacerbate existing problems, with the brunt of the burden falling on lower-income Americans. Instead of improving the situation, it will likely create an intricate web of financial consequences, indirectly affecting the very people it aims to help. But that is the result of most government programs with good intentions.

 

 

Vance Ginn, Ph.D., is president of Ginn Economic Consulting, chief economist or senior fellow at multiple state thinks across the country, host of the Let People Prosper Show, and previously the associate director for economic policy of the White House’s Office of Management and Budget, 2019-20. Follow him on X.com @VanceGinn.

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