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Futures Rise On Black Friday As “MAssive” Month-End Pension Selling Fails To Appear

Futures Rise On Black Friday As "MAssive" Month-End Pension Selling Fails To Appear

Tyler Durden

Fri, 11/27/2020 – 08:14

According to Goldman and JPMorgan, markets were supposed to be hit with a near-record tidal wave of month-end..



Futures Rise On Black Friday As "MAssive" Month-End Pension Selling Fails To Appear Tyler Durden Fri, 11/27/2020 - 08:14

According to Goldman and JPMorgan, markets were supposed to be hit with a near-record tidal wave of month-end pension funds selling (up to $160BN according to JPM) after a month of record equity putperformance over bonds. However, any selling has yet to materialize, with futures now trading higher than where they closed on Wednesday ahead of the Thanksgiving holiday, and once again within points of the all time high. Don't expect fireworks in today's subdued session which sees equity trading end at 1:00 p.m. and the bond market closes at 2:00 p.m. ET

Reopening after the Thanksgiving holiday, Dow e-minis were up 0.18%, the S&P 500 e-minis were up 0.25% to 3,636, and the Nasdaq 100 e-minis were up 0.37% in early Friday trading. Trading was subdued despite a Thursday statement from AstraZeneca that it’s likely to conduct a further global trial of its vaccine after current studies raised questions.

Political clarity has also pushed risk assets this month, as President-elect Joe Biden continues his transition to power. President Donald Trump said he’ll relinquish power if the Electoral College affirms Biden’s win, but he signaled he may never formally concede defeat, and may skip the Democrat’s inauguration.

In what has been a record month for global stocks which are on track for the best month on record, up 13%, which has lifted valuations to near the highest in about 20 years...

... Wall Street’s main indexes gained more than 10% this month as investors bet on a sooner-than-expected COVID-19 vaccine and calmer global trade under President-elect Joe Biden, setting the S&P 500 for its best November ever. Still, sentiment remains fragile as the virus toll continues to rise in Europe and the U.S., while economic recoveries wobble. Investors are pinning their hopes on a swift rollout of vaccines, but the logistical challenges are considerable.

A rotation into sectors such as industrials and financials, deemed to benefit from an economic recovery, has also powered the Dow to record highs and put it on track for its biggest monthly gain since 1987. But both the indexes pulled back on Wednesday as data showed a stuttering recovery in the labor market, sending investors back to the perceived safety of technology heavyweights, including Apple Inc and Inc.

In Europe, the Stoxx 600 Index was up 0.1% after it fluctuated between gains and losses, with the index on track for its biggest ever monthly gain.  Stock markets in Europe were subdued by doubts around the effectiveness of AstraZeneca’s COVID-19 vaccine, potentially hindering chances of the shot getting speedy U.S. and EU regulatory approvals. Electricite de France SA surged as much as 7.7% following reports that France and the EU are close to reaching a deal on nuclear regulation, while Banco de Sabadell SA plunged after terminating talks with Banco Bilbao Vizcaya Argentaria SA. putting a premature end to hopes for a return of European bank M&A.

Earlier in the session, the MSCI Asia Pacific Index added 0.2% while Japan's Topix index closed 0.5% higher, with Nidec and SoftBank contributing the most to the move. Most markets in the region were up, with China's Shanghai Composite advancing 1.1% driven by ICBC and AgBank while Australia's S&P/ASX 200 slid 0.5%. In China, data showed profits at industrial enterprises surged at the fastest pace in a single month in almost nine years in October, a further sign the country’s economic recovery is gathering pace, even if well beyond the point of credibility.

“To see whether the market will continue to have legs we will have to have confirmation of those vaccine hopes,” Credit Suisse CIO Nannette Hechler-Fayd’Herbe said in an interview with Bloomberg TV. "So very quickly now we want to see approvals, we want to see production outlooks as far as the vaccines’ broader distribution is concerned."

In FX, the Bloomberg Dollar Spot Index inched lower again, nearing a two-and- a-half year low and the dollar fell versus most of its Group- of-10 peers, with the yen leading gains along with a group of risk-sensitive currencies. The pound swung to a loss as Brexit enters a crucial few days, with U.K. and EU leaders resuming talks this weekend in an attempt to break the deadlock between the two sides.

In rates, treasuries advanced as U.S. trading resumes following Thursday’s holiday, led by long end. The 10Y was last seen at 0.855%, with yields were lower by 0.5bp to 3bp across the curve with long-end-led gains flattening 2s10s and 5s30s by 1bp-1.5bp; 10-year yields around 0.86%, richer by 2bp on the day. Expectations of buying tied to Monday’s month-end index rebalancing also underpin the market; Sifma has recommended a 2pm ET close of trading Friday. The 10-year TSY remains 4bp higher on the week after climbing more than 5bp over Monday- Tuesday amid gains for risk assets driven by vaccine development and U.S. politicial clarity, and as Treasury auctioned 2-, 5- and 7-year notes.

WTI and Brent futures have climbed off pre-European cash open lows as prices gain ahead of the OPEC/OPEC+ showdown next week (full preview available in the Research Suite) whereby markets have largely priced in the rollover of the current 5.7mln BPD cuts through Q1 2021. That being said, the recent price rally has cast doubts over the eagerness of some members to agree to this. Analysts at ING see downside risk heading into the meeting as "it is unlikely that OPEC+ surprise with a six-month rollover given the latest move in prices, while the three-month rollover is already largely priced in. Bitcoin and other digital coins steadied after posting some of the biggest declines since the onset of the pandemic.

There is nothing on today's calendar.

Market Snapshot

  • S&P 500 futures up 0.2% to 3,634.50
  • STOXX Europe 600 up 0.06% to 391.86
  • German 10Y yield unchanged at -0.588%
  • Euro up 0.04% to $1.1918
  • Italian 10Y yield fell 1.4 bps to 0.49%
  • Spanish 10Y yield fell 0.3 bps to 0.048%
  • MXAP up 0.3% to 192.96
  • MXAPJ up 0.02% to 634.40
  • Nikkei up 0.4% to 26,644.71
  • Topix up 0.5% to 1,786.52
  • Hang Seng Index up 0.3% to 26,894.68
  • Shanghai Composite up 1.1% to 3,408.31
  • Sensex down 0.2% to 44,154.98
  • Australia S&P/ASX 200 down 0.5% to 6,601.05
  • Kospi up 0.3% to 2,633.45
  • Brent futures up 0.4% to $47.97/bbl
  • Gold spot down 0.4% to $1,808.71
  • U.S. Dollar Index little changed at 91.93

Top Overnight News from Bloomberg

  • U.K. and European Union officials will resume face-to-face trade talks this weekend with Michel Barnier, the EU’s chief negotiator, warning that big disagreements between the two sides persist
  • The latest fund flow data underline how positive vaccine updates and ebbing political uncertainty in the U.S. spurred investors to pile into global equity funds. They injected more money into stock portfolios in the three weeks through Nov. 25 than in any comparable period on record, according to Jefferies Financial Group Inc. strategists, citing data from EPFR Global
  • ECB policy maker Francois Villeroy de Galhau says ECB recalibration of its tools at December meeting should pay particular attention to the “duration, flexibility, and effective targeting” of policy; says he has rejected suggestions that the institution should consider writing off the public debt it bought during the pandemic, saying to do so would backfire
  • France and Germany are leading efforts in Europe to make early contact with President-elect Joe Biden’s team, with the aim of accelerating talks to normalize trade relations between the U.S. and the European Union
  • Health Secretary Matt Hancock asked the U.K. medical regulator to potentially bypass its European Union counterpart and approve the supply of AstraZeneca Plc’s Covid vaccine to speed its deployment
  • Sweden’s economy grew 4.9% from the second quarter, Statistics Sweden said on Friday. That’s more than the 4.3% expected in a Bloomberg survey of economists, and follows an 8% contraction in the three months through June

A quick look at global markets courtesy of NewsSquawk

Asian equity markets were mixed as trade continued to lack firm direction following the holiday closure in US for Thanksgiving and lull seen across European counterparts. ASX 200 (-0.5%) was pressured amid further deterioration of Australia’s trade ties with China after the latter announced to collect anti-dumping deposits on Australia wine of around 107%-212% from Saturday which saw double-digit losses in Treasury Wine Estate before it was temporarily halted pending further announcement. The Australian coal blockage situation off Chinese ports also further deteriorated as 82 ships were now involved carrying a total value of AUD 1.1bln, with the ongoing spat overshadowing the encouraging COVID-19 development in which Victoria state reached the threshold for total elimination of the virus after 28 days of zero cases. Nikkei 225 (+0.4%) swung between gains and losses as hopes regarding an extension of COVID-19 relief measures were counterbalanced by the pressure from currency inflows, while there was plenty of attention on Tokyo Dome whose shares were untraded with a glut of buy orders at the daily upper limit after reports Mitsui Fudosan is planning to make a tender offer. Hang Seng (+0.3%) and Shanghai Comp. (+1.1%) conformed to indecision but with the mainland kept afloat after the PBoC’s tepid liquidity operations resulted to a net weekly injection of CNY 130bln and with Chinese Industrial Profits surging 28.2% Y/Y. Finally, 10yr JGBs were subdued amid the lack of firm direction across overnight markets and after mixed results at today’s 2yr JGB auction which showed a weaker b/c.

Top Asian News

  • Alibaba, Tencent Put Talks to Buy iQIYI Stake on Hold: Reuters
  • Covid Vaccine Delays Undermine Indonesia’s Path to Immunity
  • Kim Jong Un Likely to Let His Missiles Do the Talking With Biden
  • Australia’s Longest Lockdown Pays Off With No Cases for 28 Days

European majors have mostly drifted into positive territory (Euro Stoxx 50 +0.4%) following a lacklustre cash open, whilst the UK's FTSE 100 (-0.5%) remains the laggard as Brexit talks enter the final stretch, with EU's Chief Brexit negotiator Barnier out of isolation and headed to London for weekend talks; albeit, after giving EU27 a downbeat prognosis of the current state of talks. US futures have also been climbing off lows in tandem with EU futures on the holiday-shortened trading day with ES +0.2%, NQ +0.4% and RTY -0.2%. Sectors in Europe are mixed with no clear risk-profile - IT remains the top performer while Oil & Gas erased losses and now resides towards the top of the pile amid price action in the oil complex. Travel & Leisure fell and is now the laggard in what seems to be more of a retracement of the recent firm performance. In terms of individual movers, Banco Sabadell (-13%) plumbed the depths after the Co. terminated merger discussions with BBVA (+3%) as the parties did not achieve an agreement on the exchange ratio of both entities. AstraZeneca (-0.8%) is modestly softer as the AstraZeneca/Oxford University vaccine is set to undergo a new global trial to appease critics questioning the claim that the vaccine can protect up to 90% of people against COVID-19, however, this is not expected to impact regulatory approval in the UK. Finally, Indivior (-15%) shares slumped amid reports of a claim filed by Reckitt Benckiser (-0.9%) for GBP 1.07bln.

Top European News

  • ECB Signals Bank Dividend Ban Could Be Cautiously Lifted in 2021
  • VW CEO Says He Has ‘Old, Encrusted’ Structures Left to Break Up
  • BBVA, Sabadell End Takeover Talks in Disagreement Over Price
  • Danske Bank’s Watchdog Orders Fresh Probe Into Debt Errors

In FX, the Kiwi is just edging its Antipodean peer in first place among G10 majors, and fittingly perhaps with assistance from the NZ Treasury noting that the strong recovery in Q3 consumption will provide an upside skew to forecasts for overall growth in the quarter. Hence, Nzd/Usd is establishing a firmer base above 0.7000 and Aud/Nzd appears anchored to 1.0500 even though the Aussie is benefiting from ongoing Greenback weakness to inch closer to 0.7400 irrespective of yet more China trade angst as Beijing aims extortionate anti-dumping deposits on wine imports after finding fault with the environmental quality of coal. On a brighter note, Australia’s underlying cash deficit for the 4 months to October was narrower than expected.

  • JPY/CAD/EUR/GBP - Also firmer vs the Buck as the Yen probes 104.00, Loonie 1.3000 regardless of a downturn in crude prices and dovish comments from BoC Governor Macklem, Euro retains grasp of the 1.1900 handle and Sterling straddles 1.3350. However, Eur/Usd remains capped ahead of 1.1950 amidst ongoing Polish and Hungarian objections to the EU Budget and Rescue Fund, while Cable is hampered and Eur/Gbp propped over 0.8900 on the back of Brexit uncertainty as UK-EU trade talks continue to draw a blank on the main outstanding irreconcilable issues. Indeed, Brussels is said to be growing exasperated and chief negotiator Barnier’s latest update to envoys was described as not that bright before he returns to London for further face-to-face discussions.
  • CHF/DXY - The Franc is lagging somewhat, albeit still firmly beyond 0.9100 as the Dollar underperforms more broadly and index struggles to keep sight of 92.000 within a 92.053-91.868 range. Month-end factors are stacked against the Greenback and the lack of US participation as many extend their Thanksgiving holiday into the weekend leaves the DXY prone and only just holding off its 2020 low (91.740).
  • SCANDI/EM - Mixed trade as the aforementioned retracement in oil offsets some positives for the Nok via firm retail sales and official labour data also eclipsing estimates for a more pronounced rise, while Swedish Q3 GDP also beat consensus, but largely irrelevant given yesterday’s Riksbank QE extension and expansion to leave the Sek lagging. Conversely, cheaper crude has helped the Try get over any concerns raised by the CBRT revising bank reserve ratio requirements and the regulator raising its FX and Gold holding estimates as a result, while the Cnh and Cny have been cushioned by a net weekly PBoC liquidity injection and Chinese industrial profits jumping 28.2% y/y. Elsewhere, the Brl will return to reflect and digest comments from Brazil’s Treasury Secretary stressing the need to tighten the fiscal reins and observe discipline in order to bring down long term rates.
  • BoC Governor Macklem said vaccine news has been encouraging but they still project the economy will be operating below potential into 2023 and the economy will still require extraordinary monetary policy support as it recuperates. Macklem stated that borrowing costs are to remain very low for a long time and the Bank has committed to stop buying government bonds when recovery is well underway and most likely before inflation reaches 2% target. However, he added that there is a lot more room to purchase more government debt and do have capacity to do more if required, while negative rates are in the toolkit but they would not be terribly helpful at this time. Furthermore, Macklem stated they could potentially reduce the effective lower bound without going negative which is at 25bps and that it could be a bit lower. (Newswires)

In commodities, WTI and Brent futures have clambered off pre-European cash open lows as prices coattail on gains seen across the equity-sphere, and ahead of the OPEC/OPEC+ showdown next week (full preview available in the Research Suite) whereby markets have largely priced in the rollover of the current 5.7mln BPD cuts through Q1 2021. That being said, the recent price rally has cast doubts over the eagerness of some members to agree to this. Analysts at ING see downside risk heading into the meeting as "it is unlikely that OPEC+ surprise with a six-month rollover given the latest move in prices, while the three-month rollover is already largely priced in. So anything less than a three-month extension will likely be seen as bearish." Further, OPEC and OPEC+ experts are poised to meet today in preparation for the main event, whilst Saudi Arabia and Russia have invited delegation heads of the JMMC to hold informal consultations on Saturday at 13:00GMT, EnergyIntel's Bakr citing sources, thus weekend reports can be expected. Nonetheless, WTI Jan has reclaimed USD 45/bbl-status (vs. low 44.55/bbl) whilst Brent Feb re-tests USD 48/bbl (vs. low 47.35/bbl). Elsewhere, spot gold and silver exhibit somewhat of a holding pattern which reverberated from the APAC session amid lower volumes and a lack of fresh catalysts. Spot gold sees itself meandering just north of USD 1800/oz with the 200DMA residing just below the figure at 1799/oz, while spot silver fails to make much headway above USD 23.00/oz. Elsewhere, LME copper approached seven-and-a-half-year highs in light of the vaccine updates this month raising demand hopes. Finally, Chinese ferrous futures traded firmer overnight, with iron ore futures notching its third week of gains whilst hot-rolled coal prints its sixth amid depleting stockpiles prompted by demand hopes.

US Event Calendar

  • Nothing major scheduled

DB's Jim Reid concludes the overnight wrap

Happy Black Friday. So far this week I’ve bought about 20 pairs of trousers from GAP in their sale. I only want about 4 pairs but as I can’t go to the shop at the moment I bought 10 in different fits last weekend in a Black Friday promotion only to find that on Monday they issued an even bigger sale. So I bought them all again with a view to sending the others back. Then I realised too late that customer service would have refunded me the difference. So I now have 20 pairs when I only need 4. Not for the first time this week my wife thinks I’ve gone mad. At least not being American I don’t have to try them on directly after Thanksgiving dinner or I may need to send them all back and get a bigger size.

With the US out on holiday, risk assets lost ground again yesterday as investors grappled with the likely spread in the pandemic over the colder winter months ahead as well as potential disruption with AstraZeneca’s vaccine rollout. Following the falls in US equities the previous day, futures there took a turn lower around the time of the European close, and the STOXX 600 itself saw a slight -0.12% fall as cyclicals including energy (-1.42%) and financials (-0.65%) led the moves lower. Other risk assets struggled too, with Brent crude oil prices shedding -1.67% as they came down from their post-pandemic high the previous day, though the traditional industrial bellwether of copper managed to advance another +1.40% to reach a 6-year high.

On the coronavirus, the main news yesterday was that increasing questions were being asked of the AstraZeneca/Oxford vaccine, with AstraZeneca’s CEO saying that the company was likely to conduct a further trial to test the vaccine’s efficacy. As you may recall, the average efficacy of the vaccine was found to be at 70% when the news came out on Monday, but this was an average of two different dose regimens, in which one had 90% efficacy where there was a halved first dose and a standard second dose, whereas the other had 62% efficacy. However, it’s since come out that the more effective dose came out because of an error in the amount of vaccine put into some vials, and the head of the US Operation Warp Speed has said that those who received this dose were limited to those aged 55 or below, and we know that lower age groups are at lower risk anyway.

In our view the US can afford to be more strict with this vaccine as they have more adequate near term supplies of Pfizer/BioNTech and Moderna. For Europe, and specifically the U.K., they may place more reliance on the data seen so far in their local jurisdiction and the regulatory approval process seems to be already in full flow. Indeed Bloomberg reported overnight that UK Health Secretary Matt Hancock has asked the UK medical regulator to potentially bypass its EU counterpart and approve the supply of AstraZeneca’s vaccine to speed its deployment. In addition and highlighting the importance of AstraZeneca’s vaccine for EM, Indian officials have said this morning that they will consider the dosing regimen with lower efficacy of 62% for granting regulatory approval adding that the efficacy of 62% is good enough for approval and use if it clears regulatory hurdles.

Overnight we got further signs from President Trump that the US presidential transition will be smooth as he said that he will relinquish power if the Electoral College affirms Democrat Joe Biden’s win. However, he added that he may never formally concede, and may not attend the Democrat’s inauguration.

Asian markets are a little up and down this morning with the Nikkei (+0.44%) and Kospi (+0.13%) higher while the Shanghai Comp (-0.08%), Hang Seng (-0.21%) and ASX (-0.53%) are all down. Futures on the S&P 500 are down -0.11% while European futures are also pointing to a weaker open. Yields on 10y USTs are down -2.6bps to 0.856%. Elsewhere, Bitcoin is up +1.29% this morning after being down -9.67% yesterday, the largest one day move lower since May 10, 2020. In terms of overnight data, China’s October industrial profits came in at +28.2% yoy (vs. +10.1% yoy last month). It is worth noting that the series is fairly volatile.

Even with a vaccine likely ahead, the continued high number of cases has been a cause for concern, not least with Thanksgiving/Christmas holidays occurring in which people are expected to mix increasingly anyway. Here in the UK, the government confirmed which regional restrictions would apply to different areas in England when the current lockdown ends, with the country grouped into three different tiers of restrictions. London evaded the toughest tier 3 measures, which include the closure of hospitality, and ended up in tier 2, though even then households are still banned from mixing with one another indoors. Large parts of England were placed in tier 3 however, including the other major cities of Birmingham, Manchester, Leeds and Bristol. And even in the lightest tier 1 restrictions, people are still unable to gather in groups larger than 6.

Elsewhere, New York reported that the number of Covid-19 hospitalisations had risen above 3,000, though in better news, Italy reported that the number of Covid-19 ICU patients fell for the first time in 7 weeks, and the 7-day average of cases in the UK fell to 17,329, which was its lowest in nearly 6 weeks. However, in Germany the number of ICU patients rose to record levels and Chancellor Merkel urged the country’s residents to do more to rein in the pandemic. We also saw a poll yesterday in Sweden that showed 82% of Swedes are either “somewhat” or “very worried” as to whether their health-care system can meet the challenge facing it thereby indicating that the country’s residents might be losing confidence in the nation’s less severe strategy to fight the pandemic. Sweden reported 5,841 new cases in the past 24 hours and now is the second most impacted country in our table below on the measure of 7-day rolling cases per 10k of population. Meanwhile in Asia, South Korea said that the country will decide soon on whether to further tighten social restrictions after the country reported another 569 cases after reporting 583 infections a day prior.

In other news, the ECB’s minutes from their late October meeting showed that there was growing concern about the outlook. The account said that views were exchanged on “whether revisions in the upcoming December Eurosystem staff projections were likely to result in the baseline being closer to the severe scenario included in the September projections.” Furthermore, it said “members widely agreed that … it would be warranted to recalibrate the monetary policy instruments in December”, so clearly setting the stage for some form of easing at the next meeting on December 10.

With the ECB pointing to yet more stimulus ahead, European sovereign bonds rallied further yesterday, and yields on Italian 10yr debt fell -1.3bps to a fresh all-time low of 0.60%, which just demonstrates the power that the ECB’s asset purchases have had in suppressing sovereign risk over recent months. Portugal was another country that saw yields at all-time lows yesterday, with their 10yr yields closing just clear of negative territory at 0.003%. The move was pretty uniform across the continent however, and yields on 10yr bunds (-2.0bps) and OATs (-1.8bps) also fell back.

Staying on Europe, the latest on the EU budget saw the Hungarian and Polish Prime Ministers refuse to back down on the dispute over the rule of law, where the EU is seeking to make budget funding conditional on countries obeying certain rule of law commitments. This is a problem for the EU since the long-term budget and the recovery fund need unanimous support from the 27 EU member states, so a compromise will need to be forged for this to go through, since others are strongly in favour of the provisions.

Meanwhile on Brexit, it was reported by RTE’s Europe editor that the EU’s chief negotiator Michel Barnier has called an “urgent” meeting of fisheries ministers for today. Arguably this is a positive development since fishing is one of the biggest sticking points in the talks, with the UK wanting to take back control of its coastal waters at the end of the year, while the EU want guarantees that their fishing industries will still have access to UK waters as they do at the moment. Face to face negotiations are set to restart this weekend according to Bloomberg after a period of isolation for Barnier. He had said earlier in the week there was little point in him coming if the U.K. wasn’t prepared to give ground so if talks do re-start tomorrow that will be encouraging. However Bloomberg is also reporting that Barnier will today update diplomats from the bloc’s 27 governments and will warn that discussions about the competitive playing field are still bogged down. So expect some headlines ahead of the EU negotiators’ trip.

To the day ahead now, and data releases include the French preliminary CPI reading for November, along with the Euro Area’s final consumer confidence reading for November. Central bank speakers include the ECB’s Panetta and Schnabel.

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MIPIM 2024 Reflects Mixed Feelings on CRE Recovery

Reportedly, concerns at the forefront include the plunging commercial real estate market (CRE). During the pandemic, many offices were vacated by staff,…



Reportedly, concerns at the forefront include the plunging commercial real estate market (CRE). During the pandemic, many offices were vacated by staff, and businesses established remote work practices. Since then, the market never fully recovered.

Based on Reuters information, the 20,000 attendees include property giants such as LaSalle, Greystar, AEW, Patrizia and Federated Hermes (FHI.N). Some representatives were cautiously optimistic and said there are tentative indications of CRE recovery.

Others, such as the head of Europe at LaSalle Investment Management, Philip La Pierre, could have been more positive. He reportedly said:

There’s a lot of hot air being pushed through the Croisette. So you’ve got to navigate that quite carefully.

Rising borrowing costs and post-pandemic open offices cast a shadow on property investments. Reuters reported that year-on-year European commercial capital values dropped by 13.9% in the last quarter of 2023. La Pierre opined that about 30% of European office space is a waste.

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The US commercial property sector mirrored the European situation. An 11 March 2024 MSCI report indicated that deteriorating office prices placed a yoke on the performance of the entire property market. This report did, however, note the uptick in the European hotel market.

The post MIPIM 2024 Reflects Mixed Feelings on CRE Recovery appeared first on LeapRate.

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Net Zero, The Digital Panopticon, & The Future Of Food

Net Zero, The Digital Panopticon, & The Future Of Food

Authored by Colin Todhunter via,

The food transition, the energy…



Net Zero, The Digital Panopticon, & The Future Of Food

Authored by Colin Todhunter via,

The food transition, the energy transition, net-zero ideology, programmable central bank digital currencies, the censorship of free speech and clampdowns on protest. What’s it all about? To understand these processes, we need to first locate what is essentially a social and economic reset within the context of a collapsing financial system.

Writer Ted Reece notes that the general rate of profit has trended downwards from an estimated 43% in the 1870s to 17% in the 2000s. By late 2019, many companies could not generate enough profit. Falling turnover, squeezed margins, limited cashflows and highly leveraged balance sheets were prevalent.

Professor Fabio Vighi of Cardiff University has described how closing down the global economy in early 2020 under the guise of fighting a supposedly new and novel pathogen allowed the US Federal Reserve to flood collapsing financial markets (COVID relief) with freshly printed money without causing hyperinflation. Lockdowns curtailed economic activity, thereby removing demand for the newly printed money (credit) in the physical economy and preventing ‘contagion’.

According to investigative journalist Michael Byrant, €1.5 trillion was needed to deal with the crisis in Europe alone. The financial collapse staring European central bankers in the face came to a head in 2019. The appearance of a ‘novel virus’ provided a convenient cover story.

The European Central Bank agreed to a €1.31 trillion bailout of banks followed by the EU agreeing to a €750 billion recovery fund for European states and corporations. This package of long-term, ultra-cheap credit to hundreds of banks was sold to the public as a necessary programme to cushion the impact of the pandemic on businesses and workers.

In response to a collapsing neoliberalism, we are now seeing the rollout of an authoritarian great reset — an agenda that intends to reshape the economy and change how we live.


The new economy is to be dominated by a handful of tech giants, global conglomerates and e-commerce platforms, and new markets will also be created through the financialisation of nature, which is to be colonised, commodified and traded under the notion of protecting the environment.

In recent years, we have witnessed an overaccumulation of capital, and the creation of such markets will provide fresh investment opportunities (including dodgy carbon offsetting Ponzi schemes)  for the super-rich to park their wealth and prosper.

This great reset envisages a transformation of Western societies, resulting in permanent restrictions on fundamental liberties and mass surveillance. Being rolled out under the benign term of a ‘Fourth Industrial Revolution’, the World Economic Forum (WEF) says the public will eventually ‘rent’ everything they require (remember the WEF video ‘you will own nothing and be happy’?): stripping the right of ownership under the guise of a ‘green economy’ and underpinned by the rhetoric of ‘sustainable consumption’ and ‘climate emergency’.

Climate alarmism and the mantra of sustainability are about promoting money-making schemes. But they also serve another purpose: social control.

Neoliberalism has run its course, resulting in the impoverishment of large sections of the population. But to dampen dissent and lower expectations, the levels of personal freedom we have been used to will not be tolerated. This means that the wider population will be subjected to the discipline of an emerging surveillance state.

To push back against any dissent, ordinary people are being told that they must sacrifice personal liberty in order to protect public health, societal security (those terrible Russians, Islamic extremists or that Sunak-designated bogeyman George Galloway) or the climate. Unlike in the old normal of neoliberalism, an ideological shift is occurring whereby personal freedoms are increasingly depicted as being dangerous because they run counter to the collective good.

The real reason for this ideological shift is to ensure that the masses get used to lower living standards and accept them. Consider, for instance, the Bank of England’s chief economist Huw Pill saying that people should ‘accept’ being poorer. And then there is Rob Kapito of the world’s biggest asset management firm BlackRock, who says that a “very entitled” generation must deal with scarcity for the first time in their lives.

At the same time, to muddy the waters, the message is that lower living standards are the result of the conflict in Ukraine and supply shocks that both the war and ‘the virus’ have caused.

The net-zero carbon emissions agenda will help legitimise lower living standards (reducing your carbon footprint) while reinforcing the notion that our rights must be sacrificed for the greater good. You will own nothing, not because the rich and their neoliberal agenda made you poor but because you will be instructed to stop being irresponsible and must act to protect the planet.


But what of this shift towards net-zero greenhouse gas emissions and the plan to slash our carbon footprints? Is it even feasible or necessary?

Gordon Hughes, a former World Bank economist and current professor of economics at the University of Edinburgh, says in a new report that current UK and European net-zero policies will likely lead to further economic ruin.

Apparently, the only viable way to raise the cash for sufficient new capital expenditure (on wind and solar infrastructure) would be a two decades-long reduction in private consumption of up to 10 per cent. Such a shock has never occurred in the last century outside war; even then, never for more than a decade.

But this agenda will also cause serious environmental degradation. So says Andrew Nikiforuk in the article The Rising Chorus of Renewable Energy Skeptics, which outlines how the green techno-dream is vastly destructive.

He lists the devastating environmental impacts of an even more mineral-intensive system based on renewables and warns:

“The whole process of replacing a declining system with a more complex mining-based enterprise is now supposed to take place with a fragile banking system, dysfunctional democracies, broken supply chains, critical mineral shortages and hostile geopolitics.”

All of this assumes that global warming is real and anthropogenic. Not everyone agrees. In the article Global warming and the confrontation between the West and the rest of the world, journalist Thierry Meyssan argues that net zero is based on political ideology rather than science. But to state such things has become heresy in the Western countries and shouted down with accusations of ‘climate science denial’.

Regardless of such concerns, the march towards net zero continues, and key to this is the United Nations Agenda 2030 for Sustainable Development Goals.

Today, almost every business or corporate report, website or brochure includes a multitude of references to ‘carbon footprints’, ‘sustainability’, ‘net zero’ or ‘climate neutrality’ and how a company or organisation intends to achieve its sustainability targets. Green profiling, green bonds and green investments go hand in hand with displaying ‘green’ credentials and ambitions wherever and whenever possible.

It seems anyone and everyone in business is planting their corporate flag on the summit of sustainability. Take Sainsbury’s, for instance. It is one of the ‘big six’ food retail supermarkets in the UK and has a vision for the future of food that it published in 2019.

Here’s a quote from it:

“Personalised Optimisation is a trend that could see people chipped and connected like never before. A significant step on from wearable tech used today, the advent of personal microchips and neural laces has the potential to see all of our genetic, health and situational data recorded, stored and analysed by algorithms which could work out exactly what we need to support us at a particular time in our life. Retailers, such as Sainsbury’s could play a critical role to support this, arranging delivery of the needed food within thirty minutes — perhaps by drone.”

Tracked, traced and chipped — for your own benefit. Corporations accessing all of our personal data, right down to our DNA. The report is littered with references to sustainability and the climate or environment, and it is difficult not to get the impression that it is written so as to leave the reader awestruck by the technological possibilities.

However, the promotion of a brave new world of technological innovation that has nothing to say about power — who determines policies that have led to massive inequalities, poverty, malnutrition, food insecurity and hunger and who is responsible for the degradation of the environment in the first place — is nothing new.

The essence of power is conveniently glossed over, not least because those behind the prevailing food regime are also shaping the techno-utopian fairytale where everyone lives happily ever after eating bugs and synthetic food while living in a digital panopticon.


The type of ‘green’ agenda being pushed is a multi-trillion market opportunity for lining the pockets of rich investors and subsidy-sucking green infrastructure firms and also part of a strategy required to secure compliance required for the ‘new normal’.

It is, furthermore, a type of green that plans to cover much of the countryside with wind farms and solar panels with most farmers no longer farming. A recipe for food insecurity.

Those investing in the ‘green’ agenda care first and foremost about profit. The supremely influential BlackRock invests in the current food system that is responsible for polluted waterways, degraded soils, the displacement of smallholder farmers, a spiralling public health crisis, malnutrition and much more.

It also invests in healthcare — an industry that thrives on the illnesses and conditions created by eating the substandard food that the current system produces. Did Larry Fink, the top man at BlackRock, suddenly develop a conscience and become an environmentalist who cares about the planet and ordinary people? Of course not.

Any serious deliberations on the future of food would surely consider issues like food sovereignty, the role of agroecology and the strengthening of family farms — the backbone of current global food production.

The aforementioned article by Andrew Nikiforuk concludes that, if we are really serious about our impacts on the environment, we must scale back our needs and simplify society.

In terms of food, the solution rests on a low-input approach that strengthens rural communities and local markets and prioritises smallholder farms and small independent enterprises and retailers, localised democratic food systems and a concept of food sovereignty based on self-sufficiency, agroecological principles and regenerative agriculture.

It would involve facilitating the right to culturally appropriate food that is nutritionally dense due to diverse cropping patterns and free from toxic chemicals while ensuring local ownership and stewardship of common resources like land, water, soil and seeds.

That’s where genuine environmentalism and the future of food begins.

Tyler Durden Thu, 03/14/2024 - 02:00

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Five Aerospace Investments to Buy as Wars Worsen Copy

Five aerospace investments to buy as wars worsen give investors a chance to acquire shares of companies focused on fortifying national defense. The five…



Five aerospace investments to buy as wars worsen give investors a chance to acquire shares of companies focused on fortifying national defense.

The five aerospace investments to buy provide military products to help protect freedom amid Russia’s ongoing onslaught against Ukraine that began in February 2022, as well as supply arms in the Middle East used after Hamas militants attacked and murdered civilians in Israel on Oct. 7. Even though the S&P 500 recently reached all-time highs, these five aerospace investments have remained reasonably priced and rated as recommendations by seasoned analysts and a pension fund chairman.

State television broadcasts in Russia show the country’s soldiers advancing further into Ukrainian territory, but protests have occurred involving family members of those serving in perilous conditions in the invasion of their neighboring nation to be brought home. Even though hundreds of thousands of Russians also have fled to other countries to avoid compulsory military service, the aggressor’s President Vladimir Putin has vowed to continue to send additional soldiers into the fierce fighting.

While Russia’s land-grab of Crimea and other parts of Ukraine show no end in sight, Israel’s war with Hamas likely will last for at least additional months, according to the latest reports. United Nations’ leaders expressed alarm on Dec. 26 about intensifying Israeli attacks that killed more than 100 Palestinians over two days in part of the Gaza Strip, when 15 members of the Israel Defense Force (IDF) also lost their lives.

Five Aerospace Investments to Buy as Wars Worsen: General Dynamics

One of the five aerospace investments to buy as wars worsen is General Dynamics (NYSE: GD), a Reston, Virginia-based aerospace company with more than 100,000 employees in 70-plus countries. A key business unit of General Dynamics is Gulfstream Aerospace Corporation, a manufacturer of business aircraft. Other segments of General Dynamics focus on making military products such as Abrams tanks, Stryker fighting vehicles, ASCOD fighting vehicles like the Spanish PIZARRO and British AJAX, LAV-25 Light Armored Vehicles and Flyer-60 lightweight tactical vehicles.

For the U.S. Navy and other allied armed forces, General Dynamics builds Virginia-class attack submarines, Columbia-class ballistic missile submarines, Arleigh Burke-class guided missile destroyers, Expeditionary Sea Base ships, fleet logistics ships, commercial cargo ships, aircraft and naval gun systems, Hydra-70 rockets, military radios and command and control systems. In addition, the company provides radio and optical telescopes, secure mobile phones, PIRANHA and PANDUR wheeled armored vehicles and mobile bridge systems.

Chicago-based investment firm William Blair & Co. is among those recommending General Dynamics. The Chicago firm gave an “outperform” rating to General Dynamics in a Dec. 21 research note.

Gulfstream is seeking G700 FAA certification by the end of 2023, suggesting potentially positive news in the next 10 days, William Blair wrote in its recent research note. The investment firm projected that General Dynamics would trade upward upward upon the G700’s certification.

“General Dynamics’ 2023 aircraft delivery guidance of approximately 134 planes assumes that 19 G700s are delivered in the fourth quarter,” wrote William Blair’s aerospace and defense analyst Louie DiPalma. “Even if deliveries fall short of this target, we believe investors will take a glass-half-full approach upon receipt of the certification.”

Chart courtesy of

Five Aerospace Investments to Buy as Wars Worsen: GD Outlook

The G700 is a major focus area for investors because it is Gulfstream’s most significant aircraft introduction since the iconic G650 in 2012, DiPalma wrote. Gulfstream has the highest market share in the long-range jet segment of the private aircraft market, the highest profit margin of aircraft peers and the most premium business aviation brand, he added.

“The aircraft remains immensely popular today with corporations and high-net-worth individuals,” Di Palma wrote. “Elon Musk has reportedly placed an order for a G700 to go along with his existing G650. Qatar Airways announced at the Paris Air Show that 10 G700 aircraft will become part of its fleet.”

G700 deliveries and subsequent G800 deliveries are expected to be the cornerstone of Gulfstream’s growth and margin expansion for the next decade, DiPalma wrote. This should lead to a rebound in the stock price as the margins for the G700 and G800 are very attractive, he added.

Management’s guidance is for the aerospace operating margin to increase from about 13.2% in 2022 to roughly 14.0% in 2023 and 15.8% in 2024. Longer term, a high-teens profit margin appears within reach, DiPalma projected.

In other General Dynamics business segments, William Blair expects several yet-unannounced large contract awards for General Dynamics IT, to go along with C$1.7 billion, or US$1.29 billion, in General Dynamics Mission Systems contracts announced on Dec. 20 for the Canadian Army. General Dynamics shares are poised to have a strong 2024, William Blair wrote.

Five Aerospace Investments to Buy as Wars Worsen: VSE Corporation

Alexandria, Virginia-based VSE Corporation’s (NASDAQ: VSEC) price-to-earnings (P/E) valuation multiple of 22 received support when AAR Corp. (NYSE: AIR), a Wood Dale, Illinois, provider of aviation services, announced on Dec. 21 that it would acquire the product support business of Triumph Group (NYSE: TGI), a Berwyn, Pennsylvania, supplier of aerospace services, structures and systems. AAR’s purchase price of $725 million reflects confidence in a continued post-pandemic aerospace rebound.

VSE, a provider of aftermarket distribution and repair services for land, sea and air transportation assets used by government and commercial markets, is rated “outperform” by William Blair. The company’s core services include maintenance, repair and operations (MRO), parts distribution, supply chain management and logistics, engineering support, as well as consulting and training for global commercial, federal, military and defense customers.

“Robust consumer travel demand and aging aircraft fleets have driven elevated maintenance visits,” William Blair’s DiPalma wrote in a Dec. 21 research note. “The AAR–Triumph deal is valued at a premium 13-times 2024 EBITDA multiple, which was in line with the valuation multiple that Heico (NYSE: HEI) paid for Wencor over the summer.”

VSE currently trades at a discounted 9.5 times consensus 2024 earnings before interest, taxes, depreciation and amortization (EBITDA) estimates, as well as 11.6 times consensus 2023 EBITDA.

Five Aerospace Investments to Buy as Wars Worsen: VSE Undervalued?

“We expect that VSE shares will trend higher as investors process this deal,” DiPalma wrote. “VSE shares trade at 9.5 times consensus 2024 adjusted EBITDA, compared with peers and M&A comps in the 10-to-14-times range. We think that VSE’s multiple will expand as it closes the divestiture of its federal and defense business and makes strategic acquisitions. We see consistent 15% annual upside for shares as VSE continues to take share in the $110 billion aviation aftermarket industry.”

William Blair reaffirmed its “outperform” rating for VSE on Dec. 21. The main risk to VSE shares is lumpiness associated with its aviation services margins, Di Palma wrote. However, he raised 2024 estimates to further reflect commentary from VSE’s analysts’ day in November.

Chart courtesy of

Five Aerospace Investments to Buy as Wars Worsen: HEICO Corporation

HEICO Corporation (NYSEL: HEI), is a Hollywood, Florida-based technology-driven aerospace, industrial, defense and electronics company that also is ranked as an “outperform” investment by William Blair’s DiPalma. The aerospace aftermarket parts provider recently reported fourth-quarter financials above consensus analysts’ estimates, driven by 20% organic growth in HEICO’s flight support group.

HEICO’s management indicated that the performance of recently acquired Wencor is exceeding expectations. However, HEICO leaders offered color on 2024 organic growth and margin expectations that forecast reduced gains. Even though consensus estimates already assumed slowing growth, it is still not a positive for HEICO, DiPalma wrote.

William Blair forecasts 15% annual upside to HEICO’s shares, based on EBITDA growth. HEICO’s management cited a host of reasons for its quarterly outperformance, highlighted by the continued commercial air travel recovery. The company also referenced new product introductions and efficiency initiatives.

HEICO’s defense product sales increased by 26% sequentially, marking the third consecutive sequential increase in defense product revenue. The company’s leaders conveyed that defense in general is moving in the right direction to enhance financial performance.

Chart courtesy of

Five Dividend-paying Defense and Aerospace Investments to Purchase: XAR

A fourth way to obtain exposure to defense and aerospace investments is through SPDR S&P Aerospace and Defense ETF (XAR). That exchange-traded fund  tracks the S&P Aerospace & Defense Select Industry Index. The fund is overweight in industrials and underweight in technology and consumer cyclicals, said Bob Carlson, a pension fund chairman who heads the Retirement Watch investment newsletter.

Bob Carlson, who heads Retirement Watch, answers questions from Paul Dykewicz.

XAR has 34 securities, and 44.2% of the fund is in the 10 largest positions. The fund is up 25.82% in the last 12 months, 22.03% in the past three months and 7.92% for the last month. Its dividend yield recently measured 0.38%.

The largest positions in the fund recently were Axon Enterprise (NASDAQ: AXON), Boeing (NYSE: BA), L3Harris Technologies (NYSE: LHX), Spirit Aerosystems (NYSE: SPR) and Virgin Galactic (NYSE: SPCE).

Chart courtesy of

Five Dividend-paying Defense and Aerospace Investments to Purchase: PPA

The second fund recommended by Carlson is Invesco Aerospace & Defense ETF (PPA), which tracks the SPADE Defense Index. It has the same underweighting and overweighting as XAR, he said.

PPA recently held 52 securities and 53.2% of the fund was in its 10 largest positions. With so many holdings, the fund offers much reduced risk compared to buying individual stocks. The largest positions in the fund recently were Boeing (NYSE: BA), RTX Corp. (NYSE: RTX), Lockheed Martin (NYSE: LMT), Northrop Grumman (NYSE: NOC) and General Electric (NYSE:GE).

The fund is up 19.07% for the past year, 50.34% in the last three months and 5.30% during the past month. The dividend yield recently touched 0.69%.

Chart courtesy of

Other Fans of Aerospace

Two fans of aerospace stocks are Mark Skousen, PhD, and seasoned stock picker Jim Woods. The pair team up to head the Fast Money Alert advisory service They already are profitable in their recent recommendation of Lockheed Martin (NYSE: LMT) in Fast Money Alert.

Mark Skousen, a scion of Ben Franklin, meets with Paul Dykewicz.

Jim Woods, a former U.S. Army paratrooper, co-heads Fast Money Alert.

Bryan Perry, who heads the Cash Machine investment newsletter and the Micro-Cap Stock Trader advisory service, recommends satellite services provider Globalstar (NYSE American: GSAT), of Covington, Louisiana, that has jumped 50.00% since he advised buying it two months ago. Perry is averaging a dividend yield of 11.14% in his Cash Machine newsletter but is breaking out with the red-hot recommendation of Globalstar in his Micro-Cap Stock Trader advisory service.

Bryan Perry heads Cash Machine, averaging an 11.14% dividend yield.

Military Equipment Demand Soars amid Multiple Wars

The U.S. military faces an acute need to adopt innovation, to expedite implementation of technological gains, to tap into the talents of people in various industries and to step-up collaboration with private industry and international partners to enhance effectiveness, U.S. Joint Chiefs of Staff Gen. Charles Q. Brown Jr. told attendees on Nov 16 at a national security conference. Prime examples of the need are showed by multiple raging wars, including the Middle East and Ukraine. A cold war involves China and its increasingly strained relationships with Taiwan and other Asian nations.

The shocking Oct. 7 attack by Hamas on Israel touched off an ongoing war in the Middle East, coupled with Russia’s February 2022 invasion and continuing assault of neighboring Ukraine. Those brutal military conflicts show the fragility of peace when determined aggressors are willing to use any means necessary to achieve their goals. To fend off such attacks, rapid and effective response is required.

“The Department of Defense is doing more than ever before to deter, defend, and, if necessary, defeat aggression,” Gen. Brown said at the National Security Innovation Forum at the Johns Hopkins University Bloomberg Center in Washington, D.C.

One of Russia’s war ships, the 360-foot-long Novocherkassk, was damaged on Dec. 26 by a Ukrainian attack on the Black Sea port of Feodosia in Crimea. This video of an explosion at the port that reportedly shows a section of the ship hit by aircraft-guided missiles.

Chairman Joint Chiefs of Staff Gen. Charles Q. Brown, Jr.
Photo By: Benjamin Applebaum

National security threats can compel immediate action, Gen. Brown said he quickly learned since taking his post on Oct. 1.


“We may not have much warning when the next fight begins,” Gen. Brown said. “We need to be ready.”


In a pre-recorded speech at the national security conference, Michael R. Bloomberg, founder of Bloomberg LP, told the John Hopkins national security conference attendees about the critical need for collaboration between government and industry.


“Building enduring technological advances for the U.S. military will help our service members and allies defend freedom across the globe,” Bloomberg said.


The “horrific terrorist attacks” against Israel and civilians living there on Oct. 7 underscore the importance of that mission, Bloomberg added.

Paul Dykewicz,, is an accomplished, award-winning journalist who has written for Dow Jones, the Wall Street JournalInvestor’s Business DailyUSA Today, the Journal of Commerce, Seeking Alpha, Guru Focus and other publications and websites. Attention Holiday Gift Buyers! Consider purchasing Paul’s inspirational book, “Holy Smokes! Golden Guidance from Notre Dame’s Championship Chaplain,” with a foreword by former national championship-winning football coach Lou Holtz. The uplifting book is great gift and is endorsed by Joe Montana, Joe Theismann, Ara Parseghian, “Rocket” Ismail, Reggie Brooks, Dick Vitale and many othersCall 202-677-4457 for special pricing on multiple-book purchases or autographed copies! Follow Paul on Twitter @PaulDykewicz. He is the editor of and, a writer for both websites and a columnist. He further is editorial director of Eagle Financial Publications in Washington, D.C., where he edits monthly investment newsletters, time-sensitive trading alerts, free e-letters and other investment reports. Paul previously served as business editor of Baltimore’s Daily Record newspaper, after writing for the Baltimore Business Journal and Crain Communications.

The post Five Aerospace Investments to Buy as Wars Worsen Copy appeared first on Stock Investor.

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