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Futures Rebound As Fed-Induced Rout Finally Eases

Futures Rebound As Fed-Induced Rout Finally Eases

After yesterday’s miraculous tech recovery which saw gigacaps drop as much as 4% before recovering all losses and closing green, Nasdaq futures led gains among U.S. stock-index futures, hintin

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Futures Rebound As Fed-Induced Rout Finally Eases

After yesterday's miraculous tech recovery which saw gigacaps drop as much as 4% before recovering all losses and closing green, Nasdaq futures led gains among U.S. stock-index futures, hinting at further relief for technology stocks as Treasury yields retreated in early trading but have since steadied around 1.75%, unchanged from Monday. Nasdaq futures rose as much as 0.7%, while S&P 500 and Dow Jones contracts were also higher by about 0.4% ahead of Powell’s Senate confirmation hearing for second term as Fed chair which begins at 10am and where the Fed chair is expected to put on a dovish mask and walk back some of the recent hawkish commentary.

Dip-buyers rescued the Nasdaq from a fifth session of declines on Monday after Marko Kolanovic urged JPM clients to buy the dip, writing that yields aren't too high and the Fed's won't derail the economy’s rebound. “We view the recent equity volatility as an adjustment to the Fed’s incrementally more hawkish stance, rather than a sign that the Fed is about to bring the recovery and the equity rally abruptly to an end,” Mark Haefele, chief investment officer at UBS Global Wealth Management, said in a note. “We now expect three Fed rate hikes this year, starting as soon as March.”

“We are looking for opportunities to raise our weighting in stocks in 2022,” according to Luca Paolini, chief strategist at Pictet Asset Management, whose firm has a neutral stance on equities. “The global recovery remains resilient, thanks to a strong labor market, pent-up demand for services and healthy corporate balance sheets.”  

In his second term confirmation hearing before the Senate Banking Committee at 10am ET today, Fed Chair Jerome Powell will say the central bank will keep inflation from becoming entrenched, but the post-pandemic economy may look different from previous expansions. Meanwhile, swaps indicate the Fed will implement as many as four interest-rate hikes this year, while the momentum is building for the first increase to take place as soon as March, although any economic slowdown will quickly crash these plans.

In U.S. premarket trading, technology stocks including Apple Inc. and Microsoft Corp. rose. Tesla Inc. gained following positive autos sales data from China and a price target hike at Morgan Stanley. Intel Corp. shares jumped after the chipmaker hired Micron Technology Inc.’s David Zinsner as chief financial officer. Here are some of the other big movers today:

  • Mega-cap U.S. technology stocks edged higher in premarket trading, hinting at a return of dip-buyers after last week’s selloff wiped $1.1 trillion from the value of the Nasdaq Composite Index. Tesla (TSLA US), Apple (AAPL US), Microsoft (MSFT US) are among the companies moving higher.
  • Tesla (TSLA US) shares gain 2% in U.S. premarket trading, following positive autos sales data from China and a PT hike at Morgan Stanley. Chinese EV peers also rally.
  • Intel (INTC US) shares gain 2.3% in U.S. premarket trading after the chipmaker hires Micron’s David Zinsner as CFO. Micron shares decline 1%.
  • TechnipFMC (FTI US) falls 6.6% in U.S. premarket trading after Technip Energies bought back 1.8m of its shares from TechnipFMC. TechnipFMC announced plan to delist from Euronext Paris and move to a single U.S. listing.
  • Rivian Automotive (RIVN US) dropped in post- market trading Monday after a Dow Jones report that its chief operating officer left the company last month as it ramped up production. Shares tumbled 5.6% in regular trading to close at a record low.
  • Wynn Resorts (WYNN US) fell in postmarket trading after Citi downgraded the stock to neutral from buy, citing valuation
  • Inari Medical Inc. jumped 10% in postmarket trading after the medical device company posted preliminary 4Q revenue that topped expectations.

Tech shares also led gains in Europe, where equities mostly reversed Monday’s sell off with the Euro Stoxx 50 rising ~1.25%. Technology, travel, consumer products and health-care stocks are among Europe’s top performing sectors Tuesday as investors rotate into sectors beaten down in recent sessions. BE Semi shares gain 4.3%, best performing tech stocks, while food delivery stocks gain on Delivery Hero’s outlook and HelloFresh introducing a new share buyback. Meanwhile banking and auto stocks -- this year’s top performing sectors - are at the bottom of the leaderboard, with banks falling for the first time this year: Deutsche Bank -1.6% and Commerzbank -2.9%, biggest decliners in Europe as Cerberus cuts stakes. Here are some of the biggest European movers today:

  • Technology, travel, consumer products and health-care stocks are among Europe’s top performing sectors Tuesday as investors rotate into sectors beaten down in recent sessions.
  • Delivery Hero +6.2% at noon CET, Sinch +8.6%, BE Semiconductor 7.2%, HelloFresh +4.2%
  • Pandora shares rise as much as 7.5% after publishing preliminary 4Q sales numbers, which Morgan Stanley says provide relief for investors and suggest “solid underlying momentum.”
  • Sika shares climb as much as 5.2%, the steepest intraday gain since November, after the Swiss construction- materials maker reported 4Q sales that beat expectations, Vontobel says.
  • Brunello Cucinelli shares jump as much as 8.4% after the Italian apparel maker reported 4Q sales that showed all channels and geographies accelerating from the previous quarter.
  • Shop Apotheke rise as much as 2.5% after reporting preliminary 4Q numbers. Citi notes sales are driven by “solid 4Q performance,” adding questions remain on e-prescriptions in Germany.
  • Darktrace soared the most since its trading debut after the cybersecurity company boosted its outlook, prompting an upgrade from the broker whose bearish note triggered a plunge last year.
  • JDE Peet’s, Reckitt fall, among the worst performers in Europe’s Stoxx 600 Index, after Exane BNP Paribas downgrades the stocks in a note that says it’s “not too enthused” about the 2022 outlook for consumer staples.
  • Castellum falls as much as its chief executive officer was ousted after only one month at the helm of one of Sweden’s biggest property companies, while DNB also downgraded the shares.
  • About You shares drop as much as 7.4% after the company reported 3Q21 sales below market consensus, in addition to higher-than-expected costs related to marketing and expansion.

Meanwhile, earlier in the session, Asian stocks were poised to halt a two-day gain as investors sold high-growth technology shares amid uncertainty over U.S. monetary policy. The MSCI Asia Pacific Index fell 0.1% after dropping as much as 0.7% as information-technology firms slid, while gains in financial shares helped limit the gauge’s loss. China’s CSI 300 and Japan’s Nikkei 225 Stock Average were among the worst performers in the region. Asia’s benchmark is struggling to pull itself from last year’s 3.4% slump amid lingering concerns over U.S. tightening, China’s weak technology shares and the possibility of new restrictions to contain the pandemic. 

“It’s a bit difficult to aggressively buy up stocks,” said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management. “People are wary over the possibility of a faster-than-expected rate hike cycle.”  Still, Pfizer’s remarks suggesting a vaccine for the omicron variant could be available as early as March “will somewhat alleviate concern over the virus,” Ichikawa added. Pfizer is developing a hybrid vaccine that combines its original shot with a formulation that shields against the highly transmissible omicron variant, CEO Albert Bourla said at a conference on Monday.

Japanese equities slid for a third day after the yen strengthened against the dollar and amid continued concerns over virus infections and U.S. monetary tightening. Electronics and chemical makers were the biggest drags on the Topix, which fell 0.4%. Keyence dropped 7.9% as investors sold growth stocks amid uncertainty over the Federal Reserve’s plan, Ichiyoshi Asset Management said.  Tokyo Electron and Fast Retailing were the largest contributors to a 0.9% loss in the Nikkei 225. The yen slightly weakened against the dollar after gaining 0.8% in the previous four sessions. Many now expect the Fed will implement four quarter-point interest-rate hikes this year. Meanwhile, Prime Minister Fumio Kishida said Japan will extend its tightened border measures until the end of February as virus cases surge in the country

India’s benchmark equity index ended higher, after swinging between gains and losses during the day, ahead of quarterly earnings for top companies. The S&P BSE Sensex climbed 0.4% to close at 60,616.89 in Mumbai, while the NSE Nifty 50 Index added 0.3% to complete a third session of gains. Housing Development Finance Corp gave the biggest boost to the Sensex, rising 1.9%. Of the 30 shares in the Sensex, 16 rose and 14 fell. Thirteen of the 19 sector indexes compiled by BSE Ltd. gained, led by a gauge of power stocks.  The S&P BSE Metal Index fell 2.8%, the most in three weeks, after Jefferies India Pvt. put out a cautious view on the metals sector in 2022. The brokerage downgraded Tata Steel Ltd. to hold and JSW Steel to underperform from buy.   Analysts expect a steady growth in sales for the nation’s top software exporters, Tata Consultancy Services, Infosys and Wipro, which are scheduled to release their Oct.-Dec. earnings reports on Wednesday.  “All eyes are on the earnings of the three IT majors. We reiterate our positive yet cautious view on markets and suggest focusing more on sector and stock selection,” Ajit Mishra, vice president research at Religare Broking Ltd. wrote in a note.  India is ramping up its vaccination drive for younger population and booster shots for senior citizens as Covid-19 cases climb.

Australian stocks extended losses as bank, consumer staples weighed. The S&P/ASX 200 index fell 0.8% to close at 7,390.10, down for a second straight day, with banks and consumer staples among sectors weighing most on the benchmark. Ten of the 11 industry sub-gauges closed lower, while materials stocks were little changed. Inghams was among the worst performers, tumbling after the company said the spread of omicron is having a significant impact on its supply chain, operations, logistics and sales performance. Polynovo soared after the company reported U.S. sales were up 58% year on year.  In New Zealand, the S&P/NZX 50 index fell 0.5% to 12,831.73.

In rates, Treasuries were cheaper across front-end of the curve while long-end outperforms with 10-year Treasury yields on either side of 1.75% giving the curve a small bull flattening bias as participants set up for first of this week’s auctions, in the form of a 3-year note sale at 1pm ET.  Treasury yields are cheaper by 2.4bp in 2-year sector, flattening 2s10s spread as 10s are little changed at 1.76%; long-end yields are ~1bp richer on the day, flattening 5s30s spread by ~3bp toward last year’s low. Gilts outperformed by 1.7bp in 10-year sector, bunds by ~0.5bp. The US coupon auction cycle includes $52b 3-year new issue, $36b 10-year reopening Wednesday and $22b 30-year reopening Thursday; the WI 3-year yield at around 1.240% exceeds auction stops since February 2020; last month’s drew 1%, 0.3bp below the WI yield at the bidding deadline. IG dollar issuance slate includes five deals announced overnight; ten borrowers priced $12.2b Monday. Peripheral spreads widen slightly, books on Spain’s 10y syndication top EU58b.

In FX, Bloomberg Dollar Spot returns to flat on the session after a choppy morning, with the Bloomberg Dollar Index drifting with EUR/USD little changed at around $1.33; the 10-year Treasury yield is steady at 1.75%. Commodity currencies lead in G-10, JPY lags, fading roughly half of Monday’s strength: the Norwegian krone outperforms G-10 peers alongside the Canadian dollar as oil snaps a two-day run of declines. The Japanese yen lags, halting a four-day rally as an easing of concern over the omicron outbreak damped demand for haven assets. Australia’s dollar strengthens after retail sales beat forecasts. “The Aussie has received a bit of a boost from the strong retail-sales data, but also some bargain hunting in equities with S&P 500 futures trading a little higher,” said David Forrester, a senior foreign-exchange strategist at Credit Agricole CIB in Hong Kong.

In commodities, crude futures rise over 1%. WTI regains a $79-handle, pushing through Monday’s highs. Brent rises through $82. Spot gold adds ~$4 but struggles to make headway through $1,810/oz. Base metals are in the green after a prolonged exchange outage, with LME nickel up over 3%.

Looking at the day ahead, the main highlight will be Fed Chair Powell’s nomination hearing for a second term at the Senate Banking Committee. We’ll also hear from the Fed’s Mester, George and Bullard, along with the ECB’s Kazaks. Data releases include Italian retail sales for November, and in the US there’s the NFIB small business optimism index for December.

Market Snapshot

  • S&P 500 futures up 0.4% to 4,681.75
  • STOXX Europe 600 up 1.1% to 484.28
  • MXAP little changed at 193.02
  • MXAPJ up 0.2% to 630.48
  • Nikkei down 0.9% to 28,222.48
  • Topix down 0.4% to 1,986.82
  • Hang Seng Index little changed at 23,739.06
  • Shanghai Composite down 0.7% to 3,567.44
  • Sensex up 0.3% to 60,584.58
  • Australia S&P/ASX 200 down 0.8% to 7,390.12
  • Kospi little changed at 2,927.38
  • Brent Futures up 1.5% to $82.08/bbl
  • Gold spot up 0.4% to $1,809.09
  • U.S. Dollar Index down 0.17% to 95.83
  • German 10Y yield little changed at -0.06%
  • Euro up 0.1% to $1.1342

Top Overnight News from Bloomberg

  • Federal Reserve Chair Jerome Powell said the central bank will prevent higher inflation from becoming entrenched while cautioning that the post-pandemic economy might look different than the previous expansion
  • Asian stocks and U.S. futures fluctuated Tuesday ahead of a key American inflation reading that’s expected to strengthen the case for tighter monetary policy
  • Boris Johnson is facing opposition calls for his resignation over an alleged drinks party in his Downing Street office while pandemic curbs were in place, renewing a sense of crisis around the U.K. premier
  • President Kassym-Jomart Tokayev said Russian-led troops that helped him crush an uprising would begin to leave in two days as he denounced “oligarchic groups” that dominate Kazakhstan’s economy

A more detailed look at global markets courtesy of Newsquawk

Asian equities were subdued following on from the mostly negative lead from Wall St where stocks declined at the open, but then finished off their lows and the Nasdaq fully recovered from a near-3% drop as yields wavered. ASX 200 (-0.8%) was pressured with the index dragged lower by underperformance in the top-weighted financials and consumer staples sectors amid expectations that the ongoing Omicron wave is to slow the economic recovery, with better-than-expected Retail Sales data doing little to lift sentiment. Nikkei 225 (-0.9%) underperformed on return from the holiday closure amid confirmation that border restrictions will be extended until end-February and after some prefectures recently entered into COVID-19 pre-emergency status, while KOSPI (+0.1%) was also cautious following a second suspected ballistic missile launch by North Korea in less than a week. Hang Seng (Unch.) and Shanghai Comp. (-0.7%) were choppy with price action rangebound amid a neutral PBoC liquidity operation and after China’s Cabinet reiterated to refrain from flood-like stimulus but will expand financial consumption. Furthermore, COVID-19 concerns persisted with Tianjin imposing a partial lockdown and Hong Kong suspending in-person kindergarten and primary school lessons, although Hong Kong Chief Executive Carrie Lam also announced to launch a new anti-epidemic relief fund. Finally, 10yr JGBs were initially flat as the risk averse mood in Tokyo stocks and presence of the BoJ in the market for over JPY 1tln of JGBs failed to spur demand, while prices were later pressured on return from the lunch break in a retreat beneath the 151.00 level.

Top Asian News

  • Asia Stocks Set to Snap 2-Day Gain as Fed Outlook Hits Tech
  • Japan’s Household Inflation Expectations Jump to Most Since 2008
  • Mizuho Set to Appoint New CEO as Technical Glitches Persist
  • Shimao Downgraded to B- by Fitch on Liquidity Concerns

European equities (Stoxx 600 +1.0%) are attempting to claw back some of yesterday’s losses and catch up with the late rally seen on Wall St. yesterday. Fresh fundamental/macro drivers for the region are lacking, however, from a technical standpoint, the Stoxx 600 (currently 484) still has some ground to cover before it reaches yesterday’s opening level of 487.58 and last week’s record high (4th Jan) at 495.46. The handover from the APAC region was a downbeat one as Japanese participants returned to the fray (Nikkei 225 -0.9%), with the ASX 200 (-0.8%) hampered by losses in financial and consumer discretionary names, whilst Chinese bourses (Hang Seng flat, Shanghai Comp. -0.7%) were subdued by ongoing COVID angst and further reiterations from China’s cabinet that it will avoid flood-like stimulus. Stateside, US futures have picked up throughout the European session with gains of a similar magnitude across the majors (ES +0.4%, NQ +0.4%, RTY +0.4%). Focus for the US will fall on Fed Chair Powell’s renomination hearing at the Senate Banking Committee which will see the policymaker grilled on how he is going to attempt to combat the current inflationary pressures in the US economy. In terms of desk views, analysts at BNP Paribas suggest that European equities could stage a rally over the coming months amid bearish positioning and attractive valuations. BNP forecasts the Eurostoxx 50 gaining 10% to 4,700 by the end of June before drifting lower to 4,500 by the end of the year. Preferred sectors include miners, oil & gas, banks, autos and healthcare. Sectors in Europe are mostly firmer with tech top of the pile in the wake of the rally staged after the European close in the Nasdaq. Retail names are also on a firmer footing with Kering (+3.4%) top of the CAC after RBC named the Co. among its preferred stocks in the region and cited it as a “more likely candidate for M&A”. RBC also listed Adidas (+4.1%), Puma (+2.3%), Richemont (+2.1%) and LVMH (+1.5%) as “outperform rated stocks” under its “Key Stock Ideas for 2022”. The travel & leisure sector has been lifted by performance in Flutter Entertainment (+4.1%) and Evolution Gaming (+4.9%) after both companies were upgraded at Citi. Performance in banking names has been subdued by losses in Deutsche Bank (-1.5%) and Commerzbank (-3.3%) after Cerberus sold around 21mln and 25.3mln of shares in both companies respectively.

Top European News

  • Boris Johnson Urged to Quit Over Latest Pandemic Party Claim
  • Putin’s Troops Prepare to Exit as Kazakh Leader Blasts Oligarchs
  • Spain Calls for Debate to Consider Covid as Endemic, Like Flu
  • Cerberus Scales Back Losing Deutsche Bank, Commerzbank Bet

In FX, the Dollar has lost more of Monday’s recovery momentum as US Treasuries rebound from their fresh lows, risk appetite improves and some technical or psychological levels push the Buck back down towards recent lows. Using the index as a proxy, 96.000 is now capping the upside and support is seen at yesterday’s low (96.754) ahead of last Friday’s base (95.710) and the prior weekly trough (96.653) as the DXY drifts within a 95.947-765 band awaiting tomorrow’s CPI data that could well be pivotal, if not Fed commentary later today via George and chair Powell at this renomination testimony. Note, however, a prepared text for the latter has already been released so it will be the Q&A section of the Senate Banking Committee hearing that will likely be more informative/insightful.

  • GBP/CHF/EUR/AUD/CAD/NZD - It has turned into a relatively tight race to reap the most from the Greenback’s retreat and top the G10 ranks as Sterling tests major trendline resistance seen around 1.3610-15 to post highs not seen since late 2021, while Eur/Gbp continues to hammer on the door aligning with 1.2000 in Euros per Pound, but looks thwarted indirectly by activity designed at curbing Franc strength via various Eur crosses. Indeed, the Franc is back above 0.9250, but well off best levels against the Euro as the pair pivots 1.0500 where 1.44 bn or so option expiries roll off. Eur/Usd is eyeing 1.1350 again, partly as a result, while the Aussie is approaching 0.7200 with impetus from much stronger than expected final retail sales and internals within a narrower than forecast trade surplus, the Loonie is latching on to a firm bounce in WTI either side of 1.2650 and the Kiwi is hovering above 0.6750 with tailwinds from Aud/Nzd easing back towards 1.0600.
  • JPY - The Yen looks somewhat caught between stalls following Japan’s long holiday weekend as the risk backdrop is negative for the safe-haven currency, but yields are more supportive along with the technical landscape assuming Usd/Jpy remains below a Fib retracement level at 115.45. From a fundamental perspective, the domestic COVID situation has worsened and data looms in the guise of current accounts and trade balances.
  • SCANDI/EM - Brent’s revival to circa Usd 82/brl or just above at best is keeping the Nok underpinned after yesterday’s strong Norwegian inflation readings, while the Zar is elevated alongside Gold that is holding comfortably on the Usd 1800/oz handle and over the 200 DMA. Conversely, the Rub appears to be cautious amidst reports from the Russian side that grounds for optimism from talks with the US are few and far between, while the Try has hardly been helped a slightly wider than consensus Turkish current account deficit or the higher price of crude oil.

In commodities, crude prices mounted a recovery in APAC hours that has continued into and exacerbated during the European session taking WTI modestly past yesterday’s peak of USD 79.45/bbl and Brent to almost match its equivalent at USD 82.30/bbl. Fundamentals remain focused on USD/inflation implications, Fed Chair Powell – among other speakers – will be eyed closely for further insight into this; elsewhere, we remain attentive to supply updates and geopolitics. On the supply side, following yesterday’s reports that Libya’s El Sharara has resumed production at 998k BPD the El Feel field (90k BPD) is also reported to be back in action. However, since then the NOC has suspended exports from the Es Sider port, due to bad weather and a lack of storage; typically, loading 300k BPD of crude. While the duration and knock on impact of this suspension is unclear, it is worth noting the NOC says domestic oil output stands at 896k BPD – a figure that is below the resumed output of the El Sharara field. Separately, Reuters sources report that Saudi Aramco has informed multiple APAC purchasers that it will be supplying the entirety of its contractual volumes in February, following Aramco cutting February OSPs to the region to a three-month low in recent sessions. On geopolitics, the morning's press rounds from the Russian Foreign Ministry have not been particularly constructive after the first day of discussions, but nonetheless they to acknowledge that there are many more rounds to go – since then, sources via Ria indicate that the US has agreed to respond in writing to security proposals from Russia next week. Turning to metals, spot gold and silver are contained with the yellow metal continuing to pivot the USD 1800/oz mark and therefore remains in reach of the 21-, 50 & 200-DMAs. Base metals are more inspiring though LME copper lies in familiar parameters and directionally is in-tune with the broader risk tone.

US Event Calendar

  • 6am: Dec. SMALL BUSINESS OPTIMISM, est. 98.7, prior 98.4

Central Banks

  • 9:12am: Fed’s Mester speaks on Bloomberg Television
  • 9:30am: Fed’s George Discusses the Economic and Policy Outlook
  • 10am: Senate Banking Cmte Holds Hearing on Powell Nomination
  • 4pm: POSTPONED - Fed’s Bullard Discusses Economy and Monetary...

DB's Jim Reid concludes the overnight wrap

We managed to throw a wrench (albeit a small one) into the 2022 script late in the New York session last night. After an early sharp yield selloff continued to put pressure on tech stocks, 10yr yields finished the day ever-so-slightly lower for the first time in 2022, declining -0.2bps, ending a run of 7 straight increases. Despite the late rally, yesterday was the first time since January 2020 that 10yr yields had at one point traded above the 1.8% mark and markets acknowledged the prospects of multiple rate hikes this year. We’ll likely get some more headlines on monetary policy today, given Fed Chair Powell’s nomination hearing for a second term is taking place before the Senate Banking Committee, but ahead of that Fed funds futures were last night pricing in an 89% chance of an initial rate hike as soon as March, the highest probability to date and up from 63% just 10 days’ earlier on New Year’s Eve and 0% in the first half of October.

Looking elsewhere on the Treasury curve, tighter anticipated policy helped yields trade at post-pandemic highs on the shorter part of the curve, with 2yr and 5yr yields both hitting their highest levels in almost 2 years. And in keeping with the déjà vu theme of the year so far, it won’t surprise you to find out that real yields were once again the driver behind higher nominal yields, with the 5yr real yield up +1.9bps, while 10yr real yields hit -0.72% intraday, the highest level since April before falling back to -0.77% as the turnaround occurred. Meanwhile in Europe the 10yr bund yield (+0.9bps) ended the session (before the late US bond rally) at -0.038%, as it kept edging closer to positive territory for the first time since May 2019.

The late rally in longer-term yields was an immediate boon to equities. The S&P 500 finished the day down -0.15%, after being more than -2.0% lower intraday. The reversal in equity fortunes clearly hinged on the tech sector performance; the Nasdaq finished +0.05% higher, basically unchanged, after being -2.78% lower intraday, which was more than -10% off the all-time highs. In line, the Vix index of volatility rose to a year-to-date high of 23.33pts intraday, before retracing and finishing a mere +0.64pts higher at 19.4pts.

As has been the case on a number of days to start the year, the European equity session missed the intraday turn that happened during New York trading. The STOXX 600 (-1.48%) experienced its worst daily performance since the initial Omicron selloff in November. As with last week, banks were relatively well-insulated from the broader selloff in light of the higher yields, with the STOXX Banks only down -0.28%, but tech stocks bore the brunt of the decline in Europe, with the STOXX Technology index shedding -3.97%. The losses yesterday for the DAX (-1.13%) and the CAC 40 (-1.44%) meant that both moved into negative territory on a YTD basis as well, though the FTSE 100 (-0.53%) has been more resilient, and is still up +0.82% since the start of the year, making it one of the top-performing major indices in the US and Europe.

Asian markets are struggling to find direction this morning. The Nikkei (-0.93%) is trading significantly lower after yesterday's holiday while the Shanghai Composite (-0.08%), CSI (-0.29%), Kospi (-0.06%) are slightly lower. Elsewhere, the Hang Seng (+0.29%) is modestly higher. In Covid news, China locked down its central Henan province as the city has registered the most covid cases nationwide. Elsewhere, in Japan, Prime Minister Fumio Kishida announced that the nation will extend its strict border restrictions until late February to prevent the spread of the Omicron variant. Looking forward, US equity futures are flattish with the S&P (-0.04%), Nasdaq (-0.06%) and Dow Jones (-0.07%) hardly moving. Treasury yields are also flat after yesterday’s turnaround. China's consumer and producer prices data tomorrow is the next big Asian highlight.

A separate ongoing story this week will be the various talks between the US, Russia and allies over Russia’s various security demands, including that Ukraine would not be allowed to join NATO, and a Russian veto over military deployments in nearby states. Yesterday, the US and Russian deputy foreign ministers held discussions in Geneva, which come ahead of broader talks at a meeting of the NATO-Russia Council tomorrow. The readouts from yesterday’s bilateral talks proved constructive. The senior American diplomat leading the talks noted that the US and Russia have a better understanding of each other’s concerns and priorities following the conversation, and added that “If Russia stays at the table and takes concrete steps to deescalate tensions, we believe we can achieve progress.” At the same time, she noted the US stood ready to impose sanctions, among other measures, if need be. So this week’s ongoing negotiations will be important for the current flashpoint along the Ukrainian border.

Elsewhere, the broader risk-off moves meant that at one point Bitcoin was trading beneath $40,000 for the first time since September, although it pared back some of those losses to only close down -1.38%. It’s been a bad start to the year for the cryptocurrency, having shed around -10% over the first 10 days of the year.

In Fed leadership composition news, Vice Chair Clarida announced his resignation would be effective at the end of this week. It was scheduled for the end of the month so the practical implications are essentially nil. There were more headlines that President Biden was set to nominate new personnel to Fed leadership positions shortly, though headlines of that ilk have been commonplace for a few months now. Perhaps with Vice Chair Clarida stepping aside, there’s more urgency behind appointments, we will see.

There were headlines from Moderna and Pfizer that development of Omicron-specific vaccines were proceeding along. While Moderna is set to begin human trials in a few weeks, Pfizer reported they should be able to launch a hybrid vaccine that offers Omicron-specific protection by March. Given the rate it has spread across the world we may have all been exposed by then!

There wasn’t much at all in the way of data yesterday, though the Euro Area unemployment rate fell to 7.2% in November as expected, its lowest level since March 2020, and the Italian unemployment rate fell to 9.2% that month (vs. 9.3% expected).

To the day ahead now, and the main highlight will probably be Fed Chair Powell’s nomination hearing for a second term at the Senate Banking Committee. We’ll also hear from the Fed’s Mester, George and Bullard, along with the ECB’s Kazaks. Data releases include Italian retail sales for November, and in the US there’s the NFIB small business optimism index for December.

Tyler Durden Tue, 01/11/2022 - 08:07

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Simple blood test could predict risk of long-term COVID-19 lung problems

UVA Health researchers have discovered a potential way to predict which patients with severe COVID-19 are likely to recover well and which are likely to…

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UVA Health researchers have discovered a potential way to predict which patients with severe COVID-19 are likely to recover well and which are likely to suffer “long-haul” lung problems. That finding could help doctors better personalize treatments for individual patients.

Credit: UVA Health

UVA Health researchers have discovered a potential way to predict which patients with severe COVID-19 are likely to recover well and which are likely to suffer “long-haul” lung problems. That finding could help doctors better personalize treatments for individual patients.

UVA’s new research also alleviates concerns that severe COVID-19 could trigger relentless, ongoing lung scarring akin to the chronic lung disease known as idiopathic pulmonary fibrosis, the researchers report. That type of continuing lung damage would mean that patients’ ability to breathe would continue to worsen over time.

“We are excited to find that people with long-haul COVID have an immune system that is totally different from people who have lung scarring that doesn’t stop,” said researcher Catherine A. Bonham, MD, a pulmonary and critical care expert who serves as scientific director of UVA Health’s Interstitial Lung Disease Program. “This offers hope that even patients with the worst COVID do not have progressive scarring of the lung that leads to death.”

Long-Haul COVID-19

Up to 30% of patients hospitalized with severe COVID-19 continue to suffer persistent symptoms months after recovering from the virus. Many of these patients develop lung scarring – some early on in their hospitalization, and others within six months of their initial illness, prior research has found. Bonham and her collaborators wanted to better understand why this scarring occurs, to determine if it is similar to progressive pulmonary fibrosis and to see if there is a way to identify patients at risk.

To do this, the researchers followed 16 UVA Health patients who had survived severe COVID-19. Fourteen had been hospitalized and placed on a ventilator. All continued to have trouble breathing and suffered fatigue and abnormal lung function at their first outpatient checkup.

After six months, the researchers found that the patients could be divided into two groups: One group’s lung health improved, prompting the researchers to label them “early resolvers,” while the other group, dubbed “late resolvers,” continued to suffer lung problems and pulmonary fibrosis. 

Looking at blood samples taken before the patients’ recovery began to diverge, the UVA team found that the late resolvers had significantly fewer immune cells known as monocytes circulating in their blood. These white blood cells play a critical role in our ability to fend off disease, and the cells were abnormally depleted in patients who continued to suffer lung problems compared both to those who recovered and healthy control subjects. 

Further, the decrease in monocytes correlated with the severity of the patients’ ongoing symptoms. That suggests that doctors may be able to use a simple blood test to identify patients likely to become long-haulers — and to improve their care.

“About half of the patients we examined still had lingering, bothersome symptoms and abnormal tests after six months,” Bonham said. “We were able to detect differences in their blood from the first visit, with fewer blood monocytes mapping to lower lung function.”

The researchers also wanted to determine if severe COVID-19 could cause progressive lung scarring as in idiopathic pulmonary fibrosis. They found that the two conditions had very different effects on immune cells, suggesting that even when the symptoms were similar, the underlying causes were very different. This held true even in patients with the most persistent long-haul COVID-19 symptoms. “Idiopathic pulmonary fibrosis is progressive and kills patients within three to five years,” Bonham said. “It was a relief to see that all our COVID patients, even those with long-haul symptoms, were not similar.”

Because of the small numbers of participants in UVA’s study, and because they were mostly male (for easier comparison with IPF, a disease that strikes mostly men), the researchers say larger, multi-center studies are needed to bear out the findings. But they are hopeful that their new discovery will provide doctors a useful tool to identify COVID-19 patients at risk for long-haul lung problems and help guide them to recovery.

“We are only beginning to understand the biology of how the immune system impacts pulmonary fibrosis,” Bonham said. “My team and I were humbled and grateful to work with the outstanding patients who made this study possible.” 

Findings Published

The researchers have published their findings in the scientific journal Frontiers in Immunology. The research team consisted of Grace C. Bingham, Lyndsey M. Muehling, Chaofan Li, Yong Huang, Shwu-Fan Ma, Daniel Abebayehu, Imre Noth, Jie Sun, Judith A. Woodfolk, Thomas H. Barker and Bonham. Noth disclosed that he has received personal fees from Boehringer Ingelheim, Genentech and Confo unrelated to the research project. In addition, he has a patent pending related to idiopathic pulmonary fibrosis. Bonham and all other members of the research team had no financial conflicts to disclose.

The UVA research was supported by the National Institutes of Health, grants R21 AI160334 and U01 AI125056; NIH’s National Heart, Lung and Blood Institute, grants 5K23HL143135-04 and UG3HL145266; UVA’s Engineering in Medicine Seed Fund; the UVA Global Infectious Diseases Institute’s COVID-19 Rapid Response; a UVA Robert R. Wagner Fellowship; and a Sture G. Olsson Fellowship in Engineering.

  

To keep up with the latest medical research news from UVA, subscribe to the Making of Medicine blog at http://makingofmedicine.virginia.edu.


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Looking Back At COVID’s Authoritarian Regimes

After having moved from Canada to the United States, partly to be wealthier and partly to be freer (those two are connected, by the way), I was shocked,…

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After having moved from Canada to the United States, partly to be wealthier and partly to be freer (those two are connected, by the way), I was shocked, in March 2020, when President Trump and most US governors imposed heavy restrictions on people’s freedom. The purpose, said Trump and his COVID-19 advisers, was to “flatten the curve”: shut down people’s mobility for two weeks so that hospitals could catch up with the expected demand from COVID patients. In her book Silent Invasion, Dr. Deborah Birx, the coordinator of the White House Coronavirus Task Force, admitted that she was scrambling during those two weeks to come up with a reason to extend the lockdowns for much longer. As she put it, “I didn’t have the numbers in front of me yet to make the case for extending it longer, but I had two weeks to get them.” In short, she chose the goal and then tried to find the data to justify the goal. This, by the way, was from someone who, along with her task force colleague Dr. Anthony Fauci, kept talking about the importance of the scientific method. By the end of April 2020, the term “flatten the curve” had all but disappeared from public discussion.

Now that we are four years past that awful time, it makes sense to look back and see whether those heavy restrictions on the lives of people of all ages made sense. I’ll save you the suspense. They didn’t. The damage to the economy was huge. Remember that “the economy” is not a term used to describe a big machine; it’s a shorthand for the trillions of interactions among hundreds of millions of people. The lockdowns and the subsequent federal spending ballooned the budget deficit and consequent federal debt. The effect on children’s learning, not just in school but outside of school, was huge. These effects will be with us for a long time. It’s not as if there wasn’t another way to go. The people who came up with the idea of lockdowns did so on the basis of abstract models that had not been tested. They ignored a model of human behavior, which I’ll call Hayekian, that is tested every day.

These are the opening two paragraphs of my latest Defining Ideas article, “Looking Back at COVID’s Authoritarian Regimes,” Defining Ideas, March 14, 2024.

Another excerpt:

That wasn’t the only uncertainty. My daughter Karen lived in San Francisco and made her living teaching Pilates. San Francisco mayor London Breed shut down all the gyms, and so there went my daughter’s business. (The good news was that she quickly got online and shifted many of her clients to virtual Pilates. But that’s another story.) We tried to see her every six weeks or so, whether that meant our driving up to San Fran or her driving down to Monterey. But were we allowed to drive to see her? In that first month and a half, we simply didn’t know.

Read the whole thing, which is longer than usual.

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The hostility Black women face in higher education carries dire consequences

9 Black women who were working on or recently earned their PhDs told a researcher they felt isolated and shut out.

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Isolation can make opportunities elusive. fotostorm via Getty Images

Isolated. Abused. Overworked.

These are the themes that emerged when I invited nine Black women to chronicle their professional experiences and relationships with colleagues as they earned their Ph.D.s at a public university in the Midwest. I featured their writings in the dissertation I wrote to get my Ph.D. in curriculum and instruction.

The women spoke of being silenced.

“It’s not just the beating me down that is hard,” one participant told me about constantly having her intelligence questioned. “It is the fact that it feels like I’m villainized and made out to be the problem for trying to advocate for myself.”

The women told me they did not feel like they belonged. They spoke of routinely being isolated by peers and potential mentors.

One participant told me she felt that peer community, faculty mentorship and cultural affinity spaces were lacking.

Because of the isolation, participants often felt that they were missing out on various opportunities, such as funding and opportunities to get their work published.

Participants also discussed the ways they felt they were duped into taking on more than their fair share of work.

“I realized I had been tricked into handling a two- to four-person job entirely by myself,” one participant said of her paid graduate position. “This happened just about a month before the pandemic occurred so it very quickly got swept under the rug.”

Why it matters

The hostility that Black women face in higher education can be hazardous to their health. The women in my study told me they were struggling with depression, had thought about suicide and felt physically ill when they had to go to campus.

Other studies have found similar outcomes. For instance, a 2020 study of 220 U.S. Black college women ages 18-48 found that even though being seen as a strong Black woman came with its benefits – such as being thought of as resilient, hardworking, independent and nurturing – it also came at a cost to their mental and physical health.

These kinds of experiences can take a toll on women’s bodies and can result in poor maternal health, cancer, shorter life expectancy and other symptoms that impair their ability to be well.

I believe my research takes on greater urgency in light of the recent death of Antoinette “Bonnie” Candia-Bailey, who was vice president of student affairs at Lincoln University. Before she died by suicide, she reportedly wrote that she felt she was suffering abuse and that the university wasn’t taking her mental health concerns seriously.

What other research is being done

Several anthologies examine the negative experiences that Black women experience in academia. They include education scholars Venus Evans-Winters and Bettina Love’s edited volume, “Black Feminism in Education,” which examines how Black women navigate what it means to be a scholar in a “white supremacist patriarchal society.” Gender and sexuality studies scholar Stephanie Evans analyzes the barriers that Black women faced in accessing higher education from 1850 to 1954. In “Black Women, Ivory Tower,” African American studies professor Jasmine Harris recounts her own traumatic experiences in the world of higher education.

What’s next

In addition to publishing the findings of my research study, I plan to continue exploring the depths of Black women’s experiences in academia, expanding my research to include undergraduate students, as well as faculty and staff.

I believe this research will strengthen this field of study and enable people who work in higher education to develop and implement more comprehensive solutions.

The Research Brief is a short take on interesting academic work.

Ebony Aya received funding from the Black Collective Foundation in 2022 to support the work of the Aya Collective.

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