With futures flat for much of the overnight session, markets needed that extra oomph to start the week and push them above a key psychological level, and they got that after news that Pfizer and German biotech BioNTech SE were granted fast track designation by the FDA for two of the companies’ four vaccine candidates against the coronavirus. The news, which is purely procedural and was expected all along, was misinterpreted by the market as if the two companies have a promising virus vaccine, and sent Pfizer shares 2%, while BioNTech jumped 5%. More importantly, the news was enough to push Eminis up more than 21 point and above 3,200 which will surely help the market's mood ahead of tomorrow's official start of Q2 earnings which are expected to be the worst since the financial crisis.
In corporate news, Pepsi kicked off the second-quarter earnings season on a bright note, gaining over 2% as it benefited from a surge in at-home consumption of salty snacks such as Fritos and Cheetos during lockdowns, while a multi-billion dollar semiconductor deal also lifting the mood. Analog Devices rose 0.9% in premarket trading after it confirmed a Sunday report from the WSJ, offering to buy peer Maxim Integrated Products Inc for $20.91 billion in an all-stock deal. Maxim shares jumped 17%.
The renewed covid optimism and strong results offered some cheer as investors are bracing for what could be the sharpest drop in quarterly earnings for S&P 500 firms since the financial crisis, with Goldman expected a 60% drop in Q2 EPS.
Results from big banks will be in focus this week. The April-June reports will reveal the extent of the damage wreaked by the coronavirus-induced lockdowns on corporate profits. With a record jump in cases in the United States and some other hotspots around the world, analysts have predicted a return to S&P 500 earning s growth only by 2022. Recent economic data, however, has pointed to a revival in business activity, helping the Nasdaq clinch its sixth record close in seven weeks on Friday as broader markets rose on positive data from Gilead’s potential COVID-19 treatment.
Earlier in the session, Asian stocks gained, led by materials and industrials, after falling in the last session. Markets in the region were mixed, with Japan's Topix Index rising, and Singapore's Straits Times Index and Thailand's SET falling. Amusingly, Beijing appears to be losing control of its stock market bubble, as the Shanghai Composite brushes off another mainland media call for ‘rational’ behavior to gain 1.8%, Shenzhen 2.7% higher.
Trading volume for MSCI Asia Pacific Index members was 42% above the monthly average. The Topix gained 2.5%, with AIT and Nomura System Corp rising the most. The Shanghai Composite Index rose 1.8%, with Xinhu Zhongbao and Flying Technology posting the biggest advances
European markets initially failed to echo Asia’s optimism, with the majority of indexes trading well off opening levels. FTSE MIB underperformed, trading flat after opening ~1.5% higher. Banks, autos and travel names gave back ~1% of gains, having outperformed in early trading. However, as US traders walked in, European share rose alongside US bond yields.
And so, with global stocks trading near their highest since February, focus now turns to whether the profit outlook will back up bullishness fueled by central bank and fiscal policy support. Traders have largely shrugged off new coronavirus outbreaks in some parts of the world, with Florida on Sunday posting the biggest one-day rise in cases since the pandemic began in the U.S., reporting 15,300 new infections. As Bloomberg notes, "there’s reason for optimism even though earnings are estimated to have contracted by more than 40% in the worst quarter since the financial crisis, as analysts upgrade their forecasts for the rest of the year."
“We think earnings are likely to recover in the second half of the year and excess liquidity will continue to support risk assets,” said Julie Fox at UBS Private Wealth Management. “We see further potential in global equities and think there’s some upside in segments of the market that have underperformed during the crisis.”
In rates, Treasuries were unchanged after trading in a narrow range, the 10Y moving from 0.625% to 0.655% during the European session and within 2bps of Friday’s closing levels, having pared declines as U.S. equity index futures tracked European stocks higher, TSYs outperformed other developed market bonds which were pressured by supply; there’s no Treasury coupon supply this week. Yields so far remain inside Friday’s ranges, which featured multi-month lows for all tenors and a record low for the 5-year. The 10-year yield was little changed at 0.646%, traded at 0.5678% Friday, lowest yield since April 22. German and U.K. 10-year yields were 2bp-3bp cheaper vs U.S., while Japan’s and Australia’s bond markets were pressured by supply. Peripheral spreads traded off session wides as BTPs and PGBs put in a firm bounce off the lows.
In FX, the dollar traded mixed versus its Group-of-10 peers and hovered around 1.13 per euro; most currencies were confined to narrow moves as they consolidated recent trading ranges. The Bloomberg dollar index faded Asia’s losses to trade flat. Cable traded near 1.2600, having printed highs of 1.2666. The Australian dollar was on the top of the table while the New Zealand dollar slipped; asset managers last week increased Aussie long positions to the most since September 2017 and decreased kiwi longs for the first time in a month, Commitments of Traders (COT) reports showed. Norway’s krone fell versus all Group-of-10 peers as oil edged lower ahead of an OPEC+ meeting this week at which the group may announce plans to start tapering historic production cuts even as the coronavirus surges unabated in many parts of the world.
In commodities, crude futures drifted lower, front-month WTI dips below $40 ahead of an OPEC+ meeting at which the group may announce plans to start tapering historic production cuts.
- S&P 500 futures up 0.2% to 3,183.50
- STOXX Europe 600 up 0.3% to 367.88
- MXAP up 1.1% to 166.56
- MXAPJ up 0.7% to 551.10
- Nikkei up 2.2% to 22,784.74
- Topix up 2.5% to 1,573.02
- Hang Seng Index up 0.2% to 25,772.12
- Shanghai Composite up 1.8% to 3,443.29
- Sensex down 0.04% to 36,578.49
- Australia S&P/ASX 200 up 1% to 5,977.52
- Kospi up 1.7% to 2,186.06
- German 10Y yield rose 0.4 bps to -0.461%
- Euro up 0.06% to $1.1307
- Italian 10Y yield rose 0.2 bps to 1.099%
- Spanish 10Y yield rose 1.1 bps to 0.424%
- Brent futures down 1.4% to $42.65/bbl
- Gold spot up 0.5% to $1,808.06
- U.S. Dollar Index little changed at 96.61
Top Overnight News from Bloomberg
- When the ECB meets this week to review its radical suite of measures to revive the economy, there’s one tool it insists it’ll stay away from: yield curve control
- Faced with the prospect of restricted access to U.S. dollars, China’s answer is to get more people to use its own currency instead
- The dollar rallied during the March market turmoil due to its haven status, yet ongoing repricing in options may be challenging the idea that a second wave of the pandemic or another black swan event could see similar results
- China announced sanctions against U.S. officials including Senators Marco Rubio and Ted Cruz, in a largely symbolic retaliation over legislation intended to punish Beijing for its treatment of ethnic minorities in the Xinjiang region
- Boris Johnson’s government will launch a campaign Monday to urge businesses to prepare for the end of the Brexit transition period on Dec. 31, as a survey showed only a quarter of directors said their companies were fully ready
- France will unveil “massive” support for youth employment this week and a new broad stimulus plan including tax cuts for companies at the end of August, Finance Minister Bruno Le Maire said
Asian equity markets began the week mostly positive as the region benefitted from the recent tailwinds from Wall St. where encouraging Remdesivir data and outperformance in financials last Friday ahead of upcoming earnings, helped markets shrug off the rising COVID infection numbers to lift all major US indices and helped the Nasdaq to a fresh all-time high. ASX 200 (+1.0%) was led higher by outperformance in utilities and the top-weighted financials sector, as the latter took its cue from its counterpart stateside and as big 4 bank Westpac was buoyed by reports it is mulling divesting over AUD 4bln in non-core wealth assets, while Nikkei 225 (+2.2%) outperformed on a break above the 22,500 level with participants unfazed by the increasing risks associated with the outbreak flare-up in Tokyo. Hang Seng (+0.2%) and Shanghai Comp. (+1.8%) were also positive after the PBoC provided its first liquidity injection following a 2-week hiatus and amid recent better than expected lending data from China. This helped domestic markets shake off the initial tentativeness after local press continued to urge rationality regarding stocks and amid the continued US-China tensions with US President Trump suggesting a Phase 2 trade deal was unlikely at this point and the US State Department warned US citizens in China of increased arbitrary detention, while China had also threatened to impose reciprocal measures if the US insists on moving forward with sanctions. Finally, 10yr JGBs were weaker amid gains in stocks and spillover selling following Friday’s pullback in USTs, while the lack of BoJ presence in the market ahead of its 2-day policy meeting tomorrow, also contributed to the tame demand for bonds.
Top Asian News
- Tokyo Virus Numbers Fuel Concern of Spread Beyond Nightclubs
- After 133% Rally, SoftBank Investors Bet There’s More Ahead
- Netanyahu Ally Calls for Immediate Lockdown to Halt Virus Spread
European equities have kicked the week off on the front-foot (Eurostoxx 50 +0.8%) in an extension of the gains seen last week as markets thus far continue to shrug off the rising global COVID-19 case count whereby the WHO reported a record daily increase of over 230k cases in a 24 hour period over the weekend. From a European perspective, it is worth noting that the WHO stated that the largest increases in cases were seen in the US, Brazil, India and South Africa and therefore a bulk of the focus currently resides outside the continent. Furthermore, some desks have attributed the positive sentiment thus far to mounting hopes ahead of the upcoming EU summit as the bloc continues to negotiate its recovery fund. That said, work is still be done on appeasing the so-called “frugal four” and as such, some have cautioned that a deal might not come until later in the month. Gains in Europe are currently favouring cyclical names with autos, basic resources and travel & leisure names outperforming peers. However, as European indices pullback from earlier session highs, the composition of sector-wide performance could stage a rotation if sentiment deteriorates further. In terms of stock specifics, Akzo Nobel (+4.1%) trade higher after posting a Q2 update, whilst the same can also be said for the likes of DNB (+10.8%) and G4S (+8.7%). To the downside, the main outlier is Atlantia (-15.5%) after Italian PM Conte warned that proposals from the Co. are unsatisfactory thus far and the government will not sacrifice public interest over the Co. Additionally, Ubisoft (-9.0%) also trade lower on the session after undertaking multiple personal changes in response to allegations/accusations of misconduct.
Top European News
- EU Carbon Permits Climb to 14-Year High as Bloc Goes Green
- G4S Jumps Most Since May; Panmure Notes Security Unit Resilience
- Ubisoft Drops After Harassment Reports, Analysts Cut Stock
- Sweden’s Alfa Laval Agrees to Buy Neles in $2 Billion Deal
In FX, although the US Dollar has pared some losses and the DXY is holding above 96.500 within 96.387-685 parameters, the Aussie is still outpacing G10 counterparts in wake of a 2nd consecutive Usd/CNY midpoint fixing below the psychological 7.0000 level and a broad upturn in risk sentiment. Aud/Usd is hovering within a 0.6984-41 range ahead of NAB business conditions and confidence overnight, while the Aud/Nzd cross has rebounded through 1.0600 as the Kiwi lags vs its US peer around 0.6560 in advance of NZ CPI data on Wednesday. Note also, a dovish note from ANZ may be weighing on the Nzd as the bank believes that the RBNZ should carefully consider policies to weaken the exchange rate and is keeping all options on the agenda (ie NIRP).
- CAD/EUR - The Loonie is also benefiting from the positive risk tone with Usd/Cad meandering from 1.3602 to 1.3556 even though crude prices are softer, while the Euro is just keeping afloat of 1.1300 after topping out ahead of 1.1340 and decent option expiry interest extending to 1.1350 (1 bn).
- GBP/CHF/JPY - Sterling ran in to supply at 1.2660+ levels again and faded a fraction shy of Friday’s circa 1.2667 high to form a 2nd consecutive marginally lower peak having hit 1.2670 on July 9, and Cable is now striving to retain the 1.2600 handle as Eur/Gbp bounces from just under 0.8950 towards 0.8975 in the run up to the next round of Brexit talks. Also ahead and a potential Pound mover, 2 separate speeches by BoE Governor Bailey. Elsewhere, the Franc is pivoting 0.9400 against the Greenback and 1.0640 vs the Euro following another sizeable increase in Swiss domestic bank sight deposits on the eve of a speech by SNB chair Jordan. Similarly, the Yen is straddling 107.00 and 121.00 vs the single currency after a loss of safe haven premium, and now eyeing Japanese ip tomorrow for some independent impetus.
- SCANDI/EM - Some loss of bullish momentum for the Norwegian Krona as risk appetite wanes and oil drifts, while the Swedish Crown is also apprehensive awaiting CPI on Tuesday. However, the Turkish Lira has pared some declines in wake of better than expected, albeit still bleak ip and a narrower than forecast current account deficit.
In commodities, WTI and Brent have had a downbeat start to the week with both benchmarks posting losses in excess of 1% and WTI Aug’20 future having dropped back below the USD 40/bbl handle. The most recent declines have arisen as sentiment more broadly takes a slight leg lower; albeit, with European and US equity futures still very much in positive territory. Over the weekend there were a number of updates on the crude front firstly, and one of the likely drivers of the morning’s downside, Saudi Arabia and other producers are seen as likely to increase output in August. In light of the easing of COVID-19 lockdown restrictions but the ongoing spread of cases is weighing on these plans. Additionally, desks note that OPEC+ are to begin easing production cuts from August, a measure which would be in-fitting with the current deal. Further clarity on the plans for OPEC+ ahead will arise from Wednesday’s JMMC meeting; although, it is worth bearing in mind the JMMC do not have the power to set policy themselves, they can only make recommendations to the broader OPEC+ members. Elsewhere, a resumption of woes for Libya’s NOC as the force majeure on all oil exports has been reimplemented, after cargoes docked and loaded late last week at Es Sider, due to LNA saying the blockade is to continue. Turning to metals, spot gold is firmer by some USD 10/oz thus far for the session and resides towards the top end of a relatively confined range which has notable seen the lower end drop beneath USD 1800/oz. Price action for the metal has largely been dictated by the mild pullback in general sentiment and broader USD moves.
US Event Calendar
- 11:30am: Fed’s Williams Discusses Libor
- 1pm: Fed’s Kaplan Speaks in Webinar Hosted by National Press Club
- 2pm: Monthly Budget Statement, est. $863.0b deficit, prior $398.8b deficit
DB's Jim Reid concludes the overnight wrap
I hope you all had a good weekend. At the start of lockdown we decided to buy a swing, slide and climbing frame set for the garden. We thought the kids could make use of it after we’d had a go ourselves. Three and a half months later, and one week after playgrounds reopened here in the U.K., it arrived at the weekend. I’ve never seen the kids so excited. It made me feel less guilty about playing golf where I am pleased to announce that my comeback from the most dreadful run known to man (or woman) continued. In a field of 144 I was just inside the top 10 shooting my handicap and banishing the previous weekend’s third last (ahead of only two octogenarians) to the dustbin. Readers on Friday will now know I shout “back” and “hit” during my swing to maintain rhythm. Apart from confusing my playing partners it seems to be working for now.
In a week ahead as packed as my golf club is at the moment, the main highlight is the EU summit on Friday where leaders will gather to discuss the recovery fund. In addition to this, we’ll also see the ECB, the Bank of Japan and others make their latest monetary policy decisions. Meanwhile, earnings season kicks off, including a number of US financials reporting. Economic data includes China’s Q2 GDP reading along with a number of June releases out from the US.
More on this below but first the weekend news and Asian market developments. Risk has started the week on the front foot with the Nikkei (+1.89%), Hang Seng (+0.92%), Shanghai Comp (+1.27%) and Kospi (+1.52%) all up. Futures on the S&P 500 are up +0.46% and yields on 10y USTs are down -1.4bps. Spot gold and silver prices are up +0.25% and +0.86% respectively.
Coronavirus cases continued to accelerate over the weekend with the US registering average case growth of +1.95% on Saturday and Sunday combined. This is higher than the last 5 weekends average of +1.38%. In terms of states, Texas registered new case growth of +3.66% vs. the last 5 weekend average of 2.71% and in Florida this stood at +5.13% (vs. 4.45%) and California (+2.11%) in line with previous 5 weekends average. The growth rate of new deaths actually declined slightly for the US overall (+0.35% this weekend vs. +0.39% in the previous 5 weekends) but at state level, Texas (+2.16% vs. 0.80%), Florida (+1.69% vs. +0.80%) and Arizona (+3.66% vs. 1.39%) all saw higher death rates even if the pace of fatalities vs cases is still significantly behind that of the first wave.
Meanwhile, New York City, once the epicenter of the US coronavirus outbreak, reported its first day with zero confirmed or probable virus deaths on Sunday since the pandemic began. Elsewhere, Japan’s economy minister, Yasutoshi Nishimura, said that the country needs to remain on high alert for further coronavirus outbreaks as the number of cases with unclear contagion routes increases and added that testing should be strategically and greatly increased. Japan reported 681 new cases on Sunday with Tokyo reporting more than 200 cases for four straight days.
In terms of other weekend news, here in the UK, the Telegraph reported that Chancellor Sunak is planning sweeping Brexit tax cuts to protect the economy. The report added that the Chancellor is also considering an overhaul of planning laws in up to 10 new ‘freeports’ within a year of the UK becoming fully independent from the EU in December. Meanwhile, the FT has reported overnight that the UK is proposing to withhold power to control state aid from its devolved nations when the Brexit transition ends. This could lead to friction with Scotland and Wales. The report added that the proposal, which would give Westminster statutory powers to control policies for the entire UK, is expected to appear in a bill this autumn laying the legal foundations of a new internal market.
In other news, the New York Times reported that OPEC, Russia and other producers are expected to modestly ease the record production cuts in August as coronavirus lockdowns end and demand begins to rise again. A committee of key officials from OPEC and Russia will meet on Wednesday by video conference to discuss their approach to the market. Oil prices are trading c. -1% this morning.
More on this week now. The EU leaders summit in Brussels on Friday and into Saturday will discuss the recovery fund in response to the pandemic, as well as the EU’s new long-term budget. The baseline expectations from our economists (link here ) is that there will be a deal on the recovery fund at this meeting, but it remains a close call. If an agreement weren’t to be reached there, then they still expect one within weeks. It’s worth remembering that there are number of complex issues to be worked out, including the ratio of grants to loans, with the so-called “frugal four” of the Netherlands, Austria, Sweden and Denmark looking for there to be loans rather than grants. Their support for the fund will be necessary as it requires the unanimous approval of the member states.
The ECB a day earlier should be a non event (see DB’s preview here) with maybe some focus on any comments from President Lagarde on the German Constitutional Court, now that the German Bundestag has passed a motion on proportionality. The BoJ meeting on Wednesday should also be a relatively tame affair (see DB’s preview here ). Also in the world of central banks the Canadian, Korean and Indonesian policy makers meet and the Fed release their Beige Book on Wednesday.
Moving on to data releases, the main highlight is likely to be China’s Q2 GDP release on Thursday. Our economists are expecting a notable rebound in GDP growth to +3% year-on-year in Q2, following the -6.8% contraction in Q1. At the same time, there’ll also be the release of retail sales and industrial production for June, with our economists expecting an expansion in retail sales of +0.7% yoy in June (vs. -2.8% in May), and IP growth of +4.5% (vs. +4.4% in May).
Turning elsewhere, the US also has a number of data releases out next week, including an increasing amount of hard data for June. The highlights include the June CPI reading on Tuesday, before the industrial production number on Wednesday, retail sales on Thursday, and housing starts and building permits data on Friday, which should give us a clearer indication of how the economy has performed into the end of the quarter. Meanwhile the U.K. sees a number of data releases, including GDP for May, CPI for June, and unemployment in the three months to May. Another thing to look out for in the UK will be the release of the Office for Budget Responsibility’s Fiscal sustainability Report tomorrow, which will present alternative scenarios for the economy and public finances.
Earnings season kicks slowly into gear as 32 S&P 500 companies report along with a further 57 from the STOXX 600. The highlights include PepsiCo today, JPMorgan, Citigroup and Wells Fargo tomorrow, UnitedHealth Group, ASML, Goldman Sachs, US Bancorp, BNY Mellon on Wednesday, Johnson & Johnson, Netflix, Bank of America, Abbott Laboratories and Morgan Stanley on Thursday and on Friday, there’s Danaher, Honeywell International and BlackRock.
Back to last week, where markets were generally constructive even as the outlook for the virus has continued to worsen in recent weeks, especially in the US and Emerging Markets. The S&P 500 gained +1.76% (+1.05% Friday) on the week, and now sits just under 1.5% away from being flat on the year just as earning season is about to begin. The tech-focused Nasdaq greatly outperformed last week, rallying +4.01% (+0.66% Friday) led primarily by the index’s most heavily weighted stocks. European equities generally underperformed the S&P with the Stoxx 600 gaining a lesser +0.38% (+0.88% Friday) over the five days. Overall European bourses were mixed with the DAX (+0.84%), and FTSE MIB (+0.21%) up on the week, while indices such as the IBEX (-1.11%) and CAC (-0.73%) pulled back. Asian indices were even more disparate as Chinese stocks saw a large rise with the CSI 300 gaining +7.55% but with the Nikkei (-0.07%) and Kospi (-0.10%) largely unchanged over the week.
Core sovereign bonds rose as US 10yr Treasury yields fell -2.5bps (+3.1bps Friday) to finish at 0.645%, while 10yr Bund yields fell -3.3bps (-0.2bps Friday) to -0.47%. In other fixed income, HY cash spreads tightened on both sides of the Atlantic as US HY spreads tightened -4bps (-1bps Friday) and Europe HY tightened -1bps (+2bps Friday).
The dollar fell -0.54% on the week to its lowest weekly close since the first week of March. Against this backdrop and with global yields continuing to fall, gold gained +1.28% (-0.27% Friday). It was the 5th straight weekly gain for the yellow metal and took it to its highest weekly close since 2011. In other metals, copper rose +5.62% on the week to levels last seen in April of last year, while silver gained +3.88% to its highest value since September 2019.
Ahead of this Friday’s summit of EU leaders on the bloc’s long-term budget and the recovery fund, European Council President Michel issued new proposals on Friday that sought to achieve agreement between the member states. These maintained the existing plan to distribute €500bn in grants and €250bn in loans to member states. However, budget rebates would continue for fiscally conservative states such as the Netherlands, and repayments would be brought forward. He also proposed a Brexit reserve of €5bn that would support against “unforeseen consequences” in the member states and sectors most affected.
On the data front, we got French and Italian industrial production for May, both came ahead of forecasts. Italian industrial output rose +42.1% (vs. +24.0% expected) after falling by -20.5% in April. France saw a similar rebound, jumping up +19.6% (vs. +15.4% expected) after falling a nearly identical -20.6% the month prior. We also saw the June PPI reading from the US, where prices fell unexpectedly. PPI fell -0.2% (vs. +0.4% expected) after the month prior saw them rise +0.4%. It was the fourth monthly decline out of the last five.
CDC Now Recommends COVID Testing For All Domestic Air Travel, Including The Vaccinated
CDC Now Recommends COVID Testing For All Domestic Air Travel, Including The Vaccinated
Authored by Jack Phillips via The Epoch Times,
In an update on the agency’s website, anyone traveling within the United States may want to consider “getting tested as close to the time of departure as possible,” and no more than three days before a flight. It previously only recommended testing for people who have not received COVID-19 vaccines or up-to-date booster shots.
The CDC update is also recommending that people take a test before or after a trip if they went to crowded spaces “while not wearing a well-fitting mask or respirator.”
In April, a Florida federal judge struck down the CDC mandate that required people to wear masks inside airports or on airplanes. Justice Department officials have signaled they will challenge the rule, implemented after President Joe Biden took office in early 2021, in court.
A spokesperson for the agency told AFAR Magazine on May 19 that “COVID-19 vaccines are effective at preventing severe disease and death,” but added, “since vaccines are not 100 percent effective at preventing infection, some people who are up to date can still get COVID-19.”
“People who are up to date with their COVID-19 vaccines may feel well and not have symptoms but still can be infected and spread the virus to others,” the spokesperson said.
In January of this year, the CDC also implemented a change to its international travel rule, requiring plane passengers aged 2 and older to show a negative COVID-19 test from no more than a day before boarding a flight or proof of recovery from COVID-19 within the previous 90 days. Foreign nationals have to show proof of COVID-19 vaccination as well.
Neither the CDC nor the White House has given any public indication of when the mandatory testing rule for international travelers will be relaxed. Travel groups have pushed for that rule to be removed for months now.
In a letter to the White House, a group representing more than 250 organizations called for an end to the rule, saying it’s only caused “slow economic recovery of the business and international travel sectors.”
After the federal judge’s order was handed down last month, the CDC issued a new recommendation that people inside airports and airplanes wear masks, despite nearly all major airliners having scrapped enforcement.
And during a news briefing last week, CDC Director Rochelle Walensky, who has been criticized for her agency’s messaging during the COVID-19 pandemic, said that people living in counties that the agency deems to have high COVID-19 transmission should wear masks in indoor settings.
How many bots are on Twitter? The question is difficult to answer and misses the point
Elon Musk’s focus on the number of bots on Twitter, whether genuine or a distraction, does little to address the problems of misinformation and spam….
Twitter reports that fewer than 5% of accounts are fakes or spammers, commonly referred to as “bots.” Since his offer to buy Twitter was accepted, Elon Musk has repeatedly questioned these estimates, even dismissing Chief Executive Officer Parag Agrawal’s public response.
Later, Musk put the deal on hold and demanded more proof.
So why are people arguing about the percentage of bot accounts on Twitter?
As the creators of Botometer, a widely used bot detection tool, our group at the Indiana University Observatory on Social Media has been studying inauthentic accounts and manipulation on social media for over a decade. We brought the concept of the “social bot” to the foreground and first estimated their prevalence on Twitter in 2017.
Based on our knowledge and experience, we believe that estimating the percentage of bots on Twitter has become a very difficult task, and debating the accuracy of the estimate might be missing the point. Here is why.
What, exactly, is a bot?
To measure the prevalence of problematic accounts on Twitter, a clear definition of the targets is necessary. Common terms such as “fake accounts,” “spam accounts” and “bots” are used interchangeably, but they have different meanings. Fake or false accounts are those that impersonate people. Accounts that mass-produce unsolicited promotional content are defined as spammers. Bots, on the other hand, are accounts controlled in part by software; they may post content or carry out simple interactions, like retweeting, automatically.
These types of accounts often overlap. For instance, you can create a bot that impersonates a human to post spam automatically. Such an account is simultaneously a bot, a spammer and a fake. But not every fake account is a bot or a spammer, and vice versa. Coming up with an estimate without a clear definition only yields misleading results.
Defining and distinguishing account types can also inform proper interventions. Fake and spam accounts degrade the online environment and violate platform policy. Malicious bots are used to spread misinformation, inflate popularity, exacerbate conflict through negative and inflammatory content, manipulate opinions, influence elections, conduct financial fraud and disrupt communication. However, some bots can be harmless or even useful, for example by helping disseminate news, delivering disaster alerts and conducting research.
Simply banning all bots is not in the best interest of social media users.
For simplicity, researchers use the term “inauthentic accounts” to refer to the collection of fake accounts, spammers and malicious bots. This is also the definition Twitter appears to be using. However, it is unclear what Musk has in mind.
Hard to count
Even when a consensus is reached on a definition, there are still technical challenges to estimating prevalence.
External researchers do not have access to the same data as Twitter, such as IP addresses and phone numbers. This hinders the public’s ability to identify inauthentic accounts. But even Twitter acknowledges that the actual number of inauthentic accounts could be higher than it has estimated, because detection is challenging.
Inauthentic accounts evolve and develop new tactics to evade detection. For example, some fake accounts use AI-generated faces as their profiles. These faces can be indistinguishable from real ones, even to humans. Identifying such accounts is hard and requires new technologies.
Another difficulty is posed by coordinated accounts that appear to be normal individually but act so similarly to each other that they are almost certainly controlled by a single entity. Yet they are like needles in the haystack of hundreds of millions of daily tweets.
The distinction between inauthentic and genuine accounts gets more and more blurry. Accounts can be hacked, bought or rented, and some users “donate” their credentials to organizations who post on their behalf. As a result, so-called “cyborg” accounts are controlled by both algorithms and humans. Similarly, spammers sometimes post legitimate content to obscure their activity.
We have observed a broad spectrum of behaviors mixing the characteristics of bots and people. Estimating the prevalence of inauthentic accounts requires applying a simplistic binary classification: authentic or inauthentic account. No matter where the line is drawn, mistakes are inevitable.
Missing the big picture
The focus of the recent debate on estimating the number of Twitter bots oversimplifies the issue and misses the point of quantifying the harm of online abuse and manipulation by inauthentic accounts.
Through BotAmp, a new tool from the Botometer family that anyone with a Twitter account can use, we have found that the presence of automated activity is not evenly distributed. For instance, the discussion about cryptocurrencies tends to show more bot activity than the discussion about cats. Therefore, whether the overall prevalence is 5% or 20% makes little difference to individual users; their experiences with these accounts depend on whom they follow and the topics they care about.
Recent evidence suggests that inauthentic accounts might not be the only culprits responsible for the spread of misinformation, hate speech, polarization and radicalization. These issues typically involve many human users. For instance, our analysis shows that misinformation about COVID-19 was disseminated overtly on both Twitter and Facebook by verified, high-profile accounts.
Even if it were possible to precisely estimate the prevalence of inauthentic accounts, this would do little to solve these problems. A meaningful first step would be to acknowledge the complex nature of these issues. This will help social media platforms and policymakers develop meaningful responses.
Filippo Menczer receives funding from Knight Foundation, Craig Newmark Philanthropies, Open Technology Fund, and DoD. He owns a Tesla.
Kai-Cheng Yang 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.spread covid-19
Monkeypox Outbreak Primarily Spreading Via Sexual Contact: WHO Officials
Monkeypox Outbreak Primarily Spreading Via Sexual Contact: WHO Officials
Authored by Jack Phillips via The Epoch Times (emphasis ours),
Authored by Jack Phillips via The Epoch Times (emphasis ours),
The recent outbreak of the monkeypox virus in North America and Europe is primarily spreading through sex, according to World Health Organization (WHO) officials on Monday, while confirming about 200 cases so far.
The virus itself is not a sexually transmitted infection, but WHO officials said the recent surge in cases is linked to homosexual men. However, they said that anyone can contract monkeypox, which is generally confined to Central and West Africa.
“We’ve seen a few cases in Europe over the last five years, just in travelers, but this is the first time we’re seeing cases across many countries at the same time in people who have not traveled to the endemic regions in Africa,” Dr. Rosamund Lewis, who runs WHO’s smallpox research, said in a streaming event on social media.
So far, the United States has confirmed at least two cases and a third suspected case is being investigated by officials in Florida. The cases have been reported in New York City and Massachusetts.
“Many diseases can be spread through sexual contact. You could get a cough or a cold through sexual contact, but it doesn’t mean that it’s a sexually transmitted disease,” Andy Seale, who advises WHO on HIV, hepatitis, and other sexually transmitted diseases, or STDs. Seale said monkeypox isn’t considered an STD.
Meanwhile, Dr. David Heymann, who chaired a meeting of the World Health Organization’s advisory group on infectious disease, told The Associated Press that the leading theory to explain the spread of the disease was sexual transmission at events held in Spain and Belgium. Monkeypox has not previously triggered widespread outbreaks beyond Africa, where it is endemic in animals.
“We know monkeypox can spread when there is close contact with the lesions of someone who is infected, and it looks like sexual contact has now amplified that transmission,” said Heymann.
“It’s very possible there was somebody who got infected, developed lesions … and then spread it to others when there was sexual or close, physical contact,” Heymann said, adding that “these international events … seeded the outbreak around the world, into the U.S., and other European countries.”
* * *
[ZH: as Michael Snyder notes, however]
Of course sexual activity is not the only way that monkeypox can be spread.
Officials at the WHO need to make that very clear.
But so far authorities have identified two “superspreader events” which seem to have been catalysts for this global outbreak.
One was a pride festival in the Canary Islands…
The Canaria Pride festival, held in the town of Maspalomas between May 5 and 15, has become a hotspot for the monkeypox outbreak, reports El País.
The massive party was attended by over 80,000 people, including three Italian men who later tested positive for the virus.
A health source told the newspaper: “Among the 30 or so diagnosed in Madrid, there are several who attended the event, although it is not yet possible to know if one of them is patient zero of this outbreak or if they all got infected there.”
And the other was a fetish festival in Antwerp, Belgium…
Many of the patients who have come forward so far are gay men and Belgium’s three confirmed cases of monkeypox have been linked to a large-scale fetish festival in the port city of Antwerp. Kuipers said in his briefing that while a notable number of men who have sex with men are among the patients the virus is ‘not confined to them’. The virus can be spread via mucus membranes in the mouth, nose and eyes or via open wounds.
As we move into the summer months, the WHO is warning that similar events could cause the outbreak to accelerate even more…
Now the World Health Organization is warning that summer festivals and mass gatherings could accelerate the spread of monkeypox.
“As we enter the summer season in the European region, with mass gatherings, festivals and parties, I am concerned that transmission could accelerate, as the cases currently being detected are among those engaging in sexual activity, and the symptoms are unfamiliar to many,” said Dr Hans Kluge, WHO regional director for Europe.
But even if health authorities do a great job of explaining the dangers, will people avoid engaging in high risk activities?
Of course not.
Another very interesting thing that has come to light is the fact that an international biosecurity conference that was held in Munich in March 2021 actually simulated the type of scenario that we are facing now…
Elite media outlets around the world are on red alert over the world’s first-ever global outbreak of Monkeypox in mid-May 2022—just one year after an international biosecurity conference in Munich held a simulation of a “global pandemic involving an unusual strain of Monkeypox” beginning in mid-May 2022.
* * *
Last week, officials in Belgium said they would implement a mandatory, 21-day quarantine for individuals who contracted monkeypox. Germany has four confirmed cases linked to exposure at “party events … where sexual activity took place” in Spain’s Canary Islands and in Berlin, according to a government report to lawmakers obtained by the AP.
“This is not COVID,” Heymann told AP. “We need to slow it down, but it does not spread in the air and we have vaccines to protect against it.”
Heymann said studies should be conducted rapidly to determine if monkeypox could be spread by people without symptoms and that populations at risk of the disease should take precautions to protect themselves.
Symptoms include fever, body aches, and rashes. Though related to the smallpox virus, symptoms are typically less severe for monkeypox. The latter is notably distinguished from smallpox by the appearance of swollen lymph nodes during the symptomatic phase of the virus, immediately preceding a swollen rash that spreads to the inside of the mouth and the hands and feet.
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