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Futures Slide After Fed “Not-Dovish-Enough”, Tech Tumbles On Reflation Rotation Fears

Futures Slide After Fed "Not-Dovish-Enough", Tech Tumbles On Reflation Rotation Fears



Futures Slide After Fed "Not-Dovish-Enough", Tech Tumbles On Reflation Rotation Fears Tyler Durden Thu, 09/17/2020 - 08:08

It all started just before 3pm on Wednesday, when during his press conference, Fed chair Jerome Powell said that "more fiscal support is likely to be needed", sparking concerns that the Fed's monetary toolkit is running dry and that the next move will be a massive $1.5+ trillion fiscal injection from Congress (not surprisingly, Trump also flipped yesterday and advised Senate republicans to agree with Democrat demands for "much higher numbers." It also launched a cascade of complaints that the Fed was "not dovish enough" (just as we warned would happen), and as JPM said "there may be increasing calls for the Fed to do more" as the stocks are now habituated to a Fed that constantly caters to their every whim.

What happened next was that stocks, which had just hit session highs just before Powell's statement, tumbled led by tech names on fears a "growth to value" reflation rotation was imminent should Congress kickstart inflation. Emini futures continued to selloff all night, and dropped as much as 100 points sliding as low as 3,310 before rebounding modestly once Europe reopened.

"The market was probably hoping for something more tangible on QE," said Chris Chapman, a portfolio manager at Manulife Investment. "But overall this should be supportive for risk assets longer term."

Jitters persisted on Thursday when investors braced for data expected to show persistently high levels of weekly jobless claims: the Labor Department’s weekly Initial Claims report, due at 8:30 a.m. ET, was expected to show about 850,000 Americans filing for unemployment benefits in the week ended Sept. 12, a touch lower than 884,000 in the previous week, but still suggesting the labor market’s recovery from the COVID-19 pandemic was stalling. On Wednesday, in justifying the need for trillions in fiscal stimulus, Powell also indicated a long road to "maximum employment" and said the central bank was limited in its capacity to address some of the gaps around wage growth and workforce participation.

As futures dropped, so did Treasury yields, which hammered the big U.S. banks including Goldman Sachs Group, Bank of America Corp, Citigroup and Wells Fargo all of which fell about 1% in thin premarket trading. Carnival dropped 3.8% after its British cruiseline P&O Cruises extended a cancellation in sailings until early 2021. Other cruise operators such as Royal Caribbean Cruises and Norwegian Cruise Line Holdings shed about 2%. On Wednesday, the Nasdaq 100 Index fell 1.7%; Facebook’s 3.3% drop was among the worst amid reports about a potential FTC antitrust lawsuit and more user boycotts; Apple closed down 3%.

It wasn't just US futures: global equities were in retreat after the Fed's last policy decision before the US presidential election on Nov. 3 (the next Fed meeting is on Nov 5). In Europe, the Stoxx 600 Technology index declined as much as 2%, among the worst-performing subgroups on the wider benchmark, after U.S. tech giants dropped late Wednesday amid regulatory scrutiny and after the abovementioned Fed disappointment. ASML, SAP and Infineon are the biggest contributors to the sector drop, all down more than 2%. Elsewhere, European automakers slumped after data showed European car sales plunged by nearly a fifth in August. U.K. retailers today warned of grim signs for the economy.

Earlier in the session, Asian stocks also fell, led by materials and IT. All markets in the region were down, with Hong Kong's Hang Seng Index dropping 1.6% and Australia's S&P/ASX 200 falling 1.2%. The Topix declined 0.4%, with Diamond Electric Holdings and Shin Nippon Bio falling the most. The Shanghai Composite Index retreated 0.4%, with KraussMaffei and Beijing Dahao Technology posting the biggest slides.

And so, in a world that is now centrally-planned by a handful of clueless technocrats, all eyes remain on central bankers and their role in propping up economies, pardon markets. Cable tumbled after the Bank of England surprised traders when it said they were exploring negative rates to counter ongoing risks to the labor market after voting unanimously to maintain their key interest rate at 0.1%. Earlier the Bank of Japan kept its asset-purchases and bond-yield targets in place.

In FX, the Bloomberg Dollar Spot Index steadied after giving back Asia session gains. The Aussie edged lower after earlier rallying following a strong jobs report. Scandinavian currencies slipped amid a declines in European equities and a dip in oil prices. The yen led G-10 gains against the dollar, with the USDJPY sluiding below 105 overnight.

Elsewhere, weakness spread to commodities as WTI crude oil slipped to around $40 a barrel. Gold declined.

Looking at today's session, South Africa is expected to cut rates while initial jobless claims in the US are forecast to decelerate. Other data include housing starts and the Philadelphia Fed business outlook. The U.S. sells 4-week and 8-week bills and a 10-year TIPS auction re-opens.

Market Snapshot

  • S&P 500 futures down 1.1% to 3,351.25
  • STOXX Europe 600 down 0.8% to 370.30
  • MXAP down 0.8% to 173.19
  • MXAPJ down 1% to 568.14
  • Nikkei down 0.7% to 23,319.37
  • Topix down 0.4% to 1,638.40
  • Hang Seng Index down 1.6% to 24,340.85
  • Shanghai Composite down 0.4% to 3,270.44
  • Sensex down 0.6% to 39,054.39
  • Australia S&P/ASX 200 down 1.2% to 5,883.22
  • Kospi down 1.2% to 2,406.17
  • Brent Futures down 0.6% to $41.98/bbl
  • Gold spot down 0.8% to $1,944.21
  • U.S. Dollar Index down 0.02% to 93.19
  • German 10Y yield rose 1.4 bps to -0.47%
  • Euro down 0.09% to $1.1805
  • Brent Futures down 0.6% to $41.98/bbl
  • Italian 10Y yield fell 3.0 bps to 0.763%
  • Spanish 10Y yield rose 3.0 bps to 0.291%

Top Overnight News from Bloomberg

  • The ECB offered lenders another round of capital relief to help them maintain the flow of credit to the virus-struck economy
  • Bank of England policy makers have the opportunity on Thursday to signal to investors and economists whether they’re right to predict more monetary stimulus this year
  • After meeting Conservative MPs who were threatening to rebel against him, Boris Johnson agreed to give the House of Commons a veto over whether the government can exercise its proposed powers to override parts of the Brexit divorce treaty
  • European car sales plunged by nearly a fifth in August, dashing hopes that the industry was starting to recover from the pandemic
  • The ECB has to continue providing “ample” stimulus to support the pandemic- scarred euro-area economy, Governing Council member Olli Rehn said

Asian equity markets traded subdued as the soured mood rolled over into the region following the uninspiring finish on Wall St where the major indices whipsawed post-FOMC. At the meeting, the Fed kept rates at 0.00%-0.25% as expected, left its asset purchase schedule and median FFR dot plot forecasts unchanged, while it guided that it expects to maintain an accommodative stance of monetary policy until its goals of maximum employment and inflation at the rate of 2% over the longer run are achieved, which initially boosted risk appetite on the prospects that rates are to remain low for the years ahead. However, stocks then faltered during Fed Chair Powell’s press conference, where despite there being no specific trigger headline, he did suggest the pace of the recovery would slow and that the lack of fiscal aid will eventually hurt the economy, while the dot plots had earlier showed that some policymakers viewed a lift off in 2022 and 2023. As such, ASX 200 (-1.2%) and Nikkei 225 (-0.7%) were weaker as tech stocks succumbed to the underperformance of the sector stateside and with Tokyo trade lacklustre due to adverse currency effects, as well as tentativeness amid the BoJ policy announcement which failed to spark off any major fireworks as the central bank kept policy settings unchanged and although it upped its assessment of the economy, exports and output, this was widely anticipated. Hang Seng (-1.6%) and Shanghai Comp. (-0.4%) were also negative after the PBoC drained liquidity from the interbank market and as participants await TikTok’s fate with President Trump to review the deal on Thursday morning but noted that he doesn't like that the US part of TikTok would not be sold to Oracle, while reports had also suggested that the proposal did not address US government security concerns. Finally, 10yr JGBs were flat with price action stuck once again at the 152.00 focal point and with a non-committal tone seen after the BoJ policy announcement proved to be a damp squib.

Top Asian News

  • ByteDance Rival Kuaishou Said to Mull $5 Billion Hong Kong IPO
  • Adelson Casino Hires Lawyer to Probe $1 Billion in Transfers
  • Australian Employment Rose 111,000 in Aug.; Est. 35,000 Decline
  • Virus Cases at Dorms Add to Singapore Construction Woes

Stocks in Europe remain in negative territory but have nursed some losses since the cash open (Euro Stoxx 50 -0.8%), in a continuation of the post-Fed global stocks slide. European bourses see broad-based losses with Italy’s FTSE MIB (-1.2%) modestly underperforming given its exposure to banks – with the sector weighed among the laggards, whilst Telecom Italia (-2.5%) resides at the foot of the Italian index after the EU regulator said it is likely to oppose Italy's plan to create a single national broadband network. Back to sectors, material names are also pressured amid the USD-induced slide in base metal prices, subsequently cushioning losses for the industrial sector. In terms of individual movers, LSE (-1%) shares trade lower as Deutsche Boerse (-0.6%) and Six gear up to submit their bids for LSE’s Borsa Italiana, with reports stating that the exchanges reportedly launched a charm offensive to win the backing of Italian officials. Richemont (-1.6%) and Swatch (-0.9%) are pressured amid another MM contraction in Swiss watch exports; separately, European auto names see broad losses after dismal EU new car registration figures. On the flip side, Next (+6.1%) is among the top gainers in the region post-earnings after raising guidance, after which the CEO suggested profit would be resilient in the event of another national lockdown.

Top European News

  • Europe Autos Index Declines After August Car-Market Setback
  • German Coal-Plant Profit Jumps as Hot Weather Boosts Demand
  • Unibail Raising $4 Billion as Covid Batters Mall Owners
  • Rehn Sees Consequences For ECB Policy From Fed’s Goal Change

In FX, the Yen is back in the ascendency after conceding ground to the Dollar in wake of Fed and BoJ policy meetings, with Usd/Jpy briefly back above 105.00 before reversing to fresh September lows around 104.70. In truth, there was little new or unexpected from either Central Bank, but the former did upgrade its 2020 outlook and another tech-related retreat in US stocks exacerbated the broad Buck bounce that boosted the index beyond 93.500 at one stage. However, the DXY is already fading fast within a 93.614-93.140 range and the Yen has reclaimed safe-haven status following the Nikkei’s overnight decline and a degree of re-flattening along the Treasury curve. At this stage, hefty option expiry interest at the 105.00 strike (1.9 bn) may be losing influence, but could yet come back into play pending US housing data, IJC and the Philly Fed survey.

  • CAD/NZD/GBP - All unwinding more of their pre-FOMC gains relative to the Greenback, as the Loonie extended its post-Canadian CPI downturn towards 1.3250, the Kiwi briefly relinquished 0.6700+ status in wake of Q2 NZ GDP confirming a technical recession, albeit not quite as contractionary as expected and Sterling failed to sustain momentum through 1.3000 in the run up to the BoE at midday (full preview of the event available via the Research Suite).
  • CHF/AUD/EUR - Not much to be gleaned from Swiss trade that revealed a moderately wider surplus, but the Franc is trying to pare losses below 0.9100 against US Dollar and the Aussie is revisiting 0.7300 after holding just above 0.7250 and 1 bn expiries between 0.7240-35, with some underlying support via a significantly better than forecast jobs report. Elsewhere, the Euro has retested 1.1800+ from sub-1.1750 lows, but looking hampered by decent expiry interest at the round number and from 1.1845 to 1.1855 in 1 bn and 1.5 bn respectively, with little independent impetus from final Eurozone inflation data or ECB commentary.
  • SCANDI/EM - Bearish risk sentiment and a pull-back in oil prices are weighing on the Sek and Nok, but the Try and Rub are also feeling increased investor angst over diplomatic issues as the Lira slides to new all time lows beneath 7.5000 and the Rouble is back under 75.0000. Similarly, the Zar is on the backfoot pre-SARB and Brl look set for corrective losses even though the BcB held the Selic rate at 2% as widely anticipated.

In commodities, WTI and Brent front month futures are attempting to nurse overnight losses which were induced by the sentiment deterioration post-Fed, alongside a firmer Dollar heading into today’s JMMC meeting due to commence at 1300BST/0800ET. In terms of the findings from yesterday’s JTC meeting, the OPEC+ panel sees initial signs of a decline in oil inventories and noted that the increase in COVID-19 cases may weigh on economic recovery and oil demand – comments that are in-line with the OPEC MOMR which stated that risks remain elevated and skewed to the downside, particularly in relation to the development of COVID-19 infection cases and potential vaccines. JMMC focus will fall on any commentary surrounding the recent oil price decline and demand outlook alongside compliance. Separately, in the Gulf of Mexico, Sally has weakened to a tropical storm but is still producing torrential rains, according to the NHC WTI Oct meanders around USD 40/bbl (vs. low 39.42/bbl) while its Brent counterpart hovers around USD 42.00/bbl (vs. low 41.50/bbl). Elsewhere, precious metals remain subdued by the USD in the aftermath of the FOMC, with spot gold flatlined throughout the European morning sub-USD 1950/oz (vs. overnight high 1960/oz), whilst spot silver surrendered its USD 27/oz status. In terms of base metals, LME copper also succumbs to the Dollar strength and broader losses in the stock markets, whilst Dalian iron ore futures dipped to the lowest level in over six weeks amid the USD’s movements and the growing prospect for further supply improvements, whilst steel demand in China was not as strong as some had expected.

US Event Calendar

  • 8:30am: Initial Jobless Claims, est. 850,000, prior 884,000; Continuing Claims, est. 13m, prior 13.4m
  • 8:30am: Housing Starts, est. 1.48m, prior 1.5m; Housing Starts MoM, est. -0.91%, prior 22.6%
  • 8:30am: Building Permits, est. 1.51m, prior 1.5m; Building Permits MoM, est. 1.96%, prior 18.8%
  • 8:30am: Philadelphia Fed Business Outlook, est. 15, prior 17.2

DB's Jim Reid concludes the overnight wrap

Did the Fed glow last night? Well the initial market reaction was positive as the Fed verbally formalised their extended accommodation. However markets turned during Powell’s press conference. More on that later. As was universally expected, the committee signalled rates would remain near zero through 2023 while keeping QE, through Treasury and MBS purchases, at its current rate. In a slightly dovish development there were only two dissents and only one Fed official supporting rates rising before 2023. As was signalled at Jackson Hole the committee “expects to maintain an accommodative stance of monetary policy” until it achieves inflation averaging 2% over time and longer-term inflation expectations remain anchored at 2%. Therefore, it is noteworthy that in the Summary of Economic Projections inflation is only anticipated to reach 2.0% in 2023, indicating that even with average inflation targeting the committee is not expecting inflation to overshoot until sometime after that date. For more, please see our US economics team’s full review here.

In terms of the overall economy, Chair Powell acknowledged that “the recovery has progressed more quickly than generally expected,” but did caution that the recent pace may slow as “the path ahead remains highly uncertain.” Within their SEP forecasts, they are essentially projecting the economy to reach Q4 2019 pre-covid levels by the end of 2021. The Chair once again stated that further fiscal stimulus would be needed to further support the recovery.

Prior to the FOMC, we got another flurry of fiscal news out of the White House, with the President’s Chief-of-Staff Meadows saying the administration was open to the $1.5 trillion bi-partisan compromise proposed by moderates in the House. This deal is far higher than what Senate Republican leaders have said they would support, with second-ranking GOP senator Thune saying that stimulus of that size would cause “a lot of heartburn” in his caucus. Speaker Pelosi and Senate Minority Leader Schumer were said to be “encouraged” by Trump’s endorsement of higher spending, though the negotiating window gets tighter the closer this drifts into the heart of election season for the President and lawmakers alike.

Prior to the policy decision and Chair Powell’s news conference, risk assets were trading slightly higher with the S&P 500 up +0.5%, climbing to +0.8% in the first few moments of the press conference before dropping around 1% as the chair spoke. Following the whipsaw, the index finished the session -0.46%. Tech in particular drove much of the selling, with the NASDAQ falling -1.25% on the day. While the broad index lagged there was a clear move into cyclical sectors as Financials (+1.01%), Energy (+4.04%) and Industrials (+0.99%) stocks finished higher – though energy was helped by rising crude prices as well. The dollar was flat when the committee decision was announced and rose moderately through the rest of the session to finish up +0.18%, but still below last Friday’s closing levels. On the other hand US 10yr Treasury yields rose +3.5bps after the decision to finish +1.8bps higher on the day at 0.697%.

Overnight in Asia, the Bank of Japan decided to maintain its current policy stance as expected, with the statement saying that “Japan’s economy has started to pick up with economic activity resuming gradually”. We should hear more this morning from Governor Kuroda, who’ll be holding a media briefing at 7:30 UK time. Meanwhile Asian equity markets followed the US lower, with the Nikkei (-0.71%), the Hang Seng (-1.59%), the Shanghai Comp (-0.99%) and the KOSPI (-1.30%) all losing ground. S&P 500 futures are also pointing to a weak session, and are currently -1.07% lower.

Attention will remain on central banks following the Fed and the BoJ, with the Bank of England announcing their latest decision at noon UK time. In terms of what to expect, our UK economist expects both rates and QE will remain on hold at this meeting, but there’s a big chance that today’s decision won’t be unanimous. Our base case is that there’ll be a further £60bn top-up to the QE program in December, though risks are rising that this might be announced slightly earlier at the November meeting. The meeting comes against the backdrop of rising Brexit uncertainty, which will only serve to heighten uncertainty and weaken confidence. Brexit wasn’t mentioned once in the minutes of the August meeting, but it’ll be interesting to see if this changes. Yesterday also saw a notable fall in CPI inflation to +0.2% in August (from +1.0% in July), which was its lowest level since December 2015, though it was a bit higher than the consensus expectation for a 0.0% reading. That fall was supported by the government’s Eat Out to Help Out Scheme, which offered a discount when eating out, along with a fall in air fares.

On the coronavirus, it was a mixed bag of news yesterday. On the positive side, it was reported that the illness which caused the pause in the Oxford vaccine trial was unlikely to be linked to the shot, according to documents that were sent to participants. Nevertheless, we got conflicting timetables as to when a vaccine might be available in the US. The director of the CDC, Robert Redfield, suggesting that “we’re probably looking at late second quarter, third quarter 2021” in terms of availability to the public, though the deputy chief of staff for policy at the Department of Health and Human Services said every American should be able to get one by the end of March. Dr Fauci then later said it was possible but tough to vaccinate everyone by April, and it was more likely there’d be broad access by the middle or end of 2021. This was all before President Trump then said a vaccine could be distributed as early as October, well ahead any of the previous timelines. Vice President Pence then said the administration’s goal is to have 100 million vaccine doses available by year-end.

Meanwhile the number of cases in Western Europe continued to rise, with the UK reporting a further 3,991 cases yesterday, which was the highest number of confirmed cases since May 8. And over in France, weekly cases have now exceeded 60,000 for the first time, compared to the April peak of just over 40,000 cases per week, albeit on lower testing levels. Optically new cases are likely to rival the first wave in many places over the next few weeks but it’s not really a fair comparison. It won’t stop it being made though. Weekly cases in the US have ticked higher over the past few days as well, with over 277,000 newly confirmed cases since last Wednesday compared to 242,000 weekly cases for the period prior. One place to keep an eye on is Wisconsin, a swing state that was very close in 2016 and in which both Mr Trump and Mr Biden are spending quite a lot of resources. The state has seen new cases double in the last week and are currently seeing their highest absolute levels since the start of the pandemic.

Ahead of the Fed’s decision, European markets saw a variable performance yesterday. While the STOXX 600 climbed +0.58% to reach a 3-week high, that was in spite of declines in the UK, where the FTSE 100 (-0.44%) moved lower after paring back its gains from the start of the session. Oil continued its recovery however, with Brent crude up +4.17% to $42.22/bbl, while WTI also rose +4.91%. Finally in the fixed income space, sovereign bonds also performed positively, with yields on 10yr bunds (-0.5bps), OATs (-1.2bps) and BTPs (-2.9bps) all fell.

Looking at yesterday’s other data, the main highlight came from the US retail sales figures. They underperformed expectations, with a +0.6% rise in August (vs. +1.0% expected), as the previous month was revised down three-tenths to +0.9%. Otherwise, the NAHB housing market index rose to a record 83 (vs. 78 expected). Finally, the OECD upgraded their global growth projection for this year, now seeing a smaller contraction in the global economy of -4.5%.

To the day ahead now, and the highlights will include the aforementioned Bank of England decision, as well as monetary policy decisions from the South African Reserve Bank and Bank Indonesia. In terms of central bank speakers, we’ll also hear from the ECB’s de Guindos, Rehn and Muller. On the data front, today’s releases from the US include August’s housing starts and building permits, the weekly initial jobless claims, along with the Philadelphia Fed’s business outlook for September. Meanwhile in Europe, there’s the EU27 new car registrations for August and the Euro Area’s final CPI reading for August.

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Tesla rival Stellantis unveils its lowest price electric vehicles

The Big Three automaker unveils details on its low-priced electric vehicles that will be delivered over the next two years.



Electric vehicle manufacturers have realized that the prices of their cars are making it more difficult for many of them to compete against makers of lower-priced internal combustion engine vehicles.

Tesla saw its third quarter deliveries fall below market estimates, prompting Elon Musk's company in early October to lower the list price of the Model 3 from $40,240 to $38,990 and its industry leading seller Model Y has recently fallen from $47,740 to $43,990.

Related: Tesla Japanese rivals debut concept vehicles in latest challenge

Tesla top rival Ford already cut the price of its all-electric Mustang Mach-E by up to $4,000 in May and its F-150 Lightning by about $10,000 in July.

Stellantis revealing entry-level electric cars

Stellantis  (STLA) - Get Free Report has been busy revealing low-priced entry-level electric vehicles that it plans to begin selling in 2024 to compete with French automaker Renault in Europe as well as Chinese EV companies. The company in August said it would unveil a second new entry-level Fiat-branded electric vehicle in July 2024 that will be priced less than €25,000 or about $27,390. The company, however, didn't say when the vehicle might be sold in the U.S.

The company said in June that it will deliver the new Citroën e-C3 electric car to Europe in early 2024. The Citroën e-C3 was expected to have a range of 186 miles on a charge and would be among lowest priced EVs on the market. Stellantis had already said it would bring Fiat's best-selling EV, the Fiat 500e, to the U.S. market in 2024 to compete against Tesla and the growing U.S. EV market.

Citroën e-C3 all-electric subcompact hatchback.


Big Three automaker unveils its low-priced electric vehicles

Stellantis on Oct. 17 revealed its updated all-new, all-electric Citroën e-C3, which is its first European-designed, European-built B-segment, or subcompact, EV hatchback. The new vehicle is now estimated to have a 199-mile range, charging 20% to 80% of capacity in as little as 26 minutes. The EV accelerates 0 to 62 mph in 11 seconds with a provisional top speed of 84 mph for everyday driving and traffic in urban and suburban areas.

The company estimates that the vehicle will be priced below £23,000 ($27,900) in the UK. No word yet if the Citroën e-C3 will roll out in the U.S.

In 2025, Stellantis will offer a Citroën e-C3 with a 200 km- or 124-mile range and priced at €19,990 or $21,068, the company said. That price would be lower than any new EV sold in the U.S. today. General Motors  (GM) - Get Free Report Chevy Bolt's lowest manufacturer suggest retail price is $26,500, while the 2024 Nissan  (NSANY) - Get Free Report Leaf has a starting price of $28,140.

The new Citroën e-C3 will be available in three versions You, Plus and Max. The You version's standard equipment includes LED headlights, Citroën Advanced Comfort Suspension, Active Safety Brake, the new Citroën Head Up Display, ‘My Citroen Play with Smartphone Station’ for infotainment, electric door mirrors, auto lighting, rear parking radar, rear spoiler, cruise control, manual air conditioning, and six airbags.

Plus vehicles include 17-inch alloy wheels, Citroën’s two-tone paint with contrasting roof, decorative roof rails, front and rear skid plates, the 10.25-inch color touchscreen with smartphone mirroring, Citroën Advanced Comfort Seats, auto wipers, power-folding and heated door mirrors, leather-effect steering wheel, 60/40 folding second-row seat, and driver seat adjustment.

The premium Max version additionally has LED rear lights, rear privacy glass, enhanced seat textiles, automatic air conditioning, 3D navigation, wireless charging, rear camera, electrochrome rear-view mirror, and rear power windows.

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Putin, Xi In Beijing Pitch For ‘Alternative World Order’ As Biden Departs A Burning Middle East

Putin, Xi In Beijing Pitch For ‘Alternative World Order’ As Biden Departs A Burning Middle East

As a Rabobank note has highlighted, the main…



Putin, Xi In Beijing Pitch For 'Alternative World Order' As Biden Departs A Burning Middle East

As a Rabobank note has highlighted, the main theme on display during Xi Jinping and Vladimir Putin's Wednesday talks in Beijing was one of "common threats" bringing the two "dear friends" closer, according to a press readout. Observed Rabobank earlier in the day, "Meanwhile, as the Middle East rages and the West recoils, Xi Jinping welcomes Russia’s Putin and a host of Global South leaders, ex-India, to his Beijing Belt and Road Forum to talk about what an alternative world order might look like. The ‘global’ Western press mostly failed to even cover it."

Putin said at a media briefing following the meeting with his Chinese counterpart, "We discussed in detail the situation in the Middle East." He added: "I informed Chairman (Xi) about the situation that is developing on the Ukrainian track, also quite in detail." The Russian leader then emphasized: 

"All these external factors are common threats, and they strengthen Russian-Chinese interaction."

AFP/Getty Images

CNN subsequently called it a "pitch for a new world order" at a moment crisis has gripped the Middle East.

Yet, almost simultaneously, Bloomberg reported that Biden is overseeing a fast unfolding disaster in the Middle East:

President Joe Biden’s 7.5-hour trip to Tel Aviv signaled full US backing for Israel but fell short on another key goal: winning over Arab leaders.

Amid growing signs the conflict may be spinning out of control, Biden made plain that the US will protect its ally, sending a clear message to rivals in the region like Iran to stay out of the fight. With one US aircraft carrier in the area and another on the way, Biden promised a new package of “unprecedented support.”

The Bloomberg headline aptly reads, "Biden’s Whirlwind Israel Trip Fails to Calm Fears of Wider Middle East Conflict." At this time, Lebanon, Jordan, and Egypt are on edge - with Western and Saudi embassies reducing staff and issuing travel advisories. 

Meanwhile, related to Xi's Belt and Road (the purpose of the gathering in Beijing), Putin praised the potential for it to usher in a "fairer, multi-polar world" as Moscow and Beijing grow closer based on "deep friendship"

In his speech at the opening ceremony, Putin hailed Xi’s flagship foreign policy Belt and Road Initiative as “aiming to form a fairer, multi-polar world,” while touting his country’s deep alignment with China.

Russia and China share an “aspiration for equal and mutually beneficial cooperation,” which includes “respecting civilization diversity and the right of every state for their own development model” – he added, in an apparent push back against calls for authoritarian leaders to promote human rights and political freedoms at home.

This is at a moment Putin is "wanted" by the International Criminal Court (ICC) and shunned and sanctioned by the West, while at the same time Global South countries are expressing growing anger at Israel's unrelenting bombing of the Gaza Strip, as the Palestinian death toll soars into the thousands.

Directly related to this, a Thursday UN Security Council resolution brought by Brazil and seeking a ceasefire in Gaza was shot down, given the US was the only "no" vote.

Also missed by the mainstream media was the following pro-China sentiment expressed by a top Palestinian official over a week ago:

China will soon lead the world, and it supports the “Palestinian position, whatever it may be,” according to Fatah’s Central Committee member Abbas Zaki.

In a public address that aired on Palestine TV on Sept. 29, Abbas Zaki called on the United States to “reconsider its stance” with regard to Israel or risk becoming irrelevant. The Israelis, he said, were “sons of bitches,” “murderers” and agents of instability, while the Palestinians are “messengers of peace.”

“I know that there is serious change in Europe and even in the United States,” said Zaki.

But, he added, “do not forget the emerging camp, which is on your side—the Chinese camp. China is going to lead the world, and it proclaims: ‘There can be no stability and progress without the liberation of Palestine, with East Jerusalem as its capital.'”

Putin too, has expressed more sympathies with the Palestinian side, days ago warning Israel of the "catastrophic" death toll its attacks on Gaza will result in. He has also held calls with Arab leaders, seeking to mediate peace and a possible two-state solution.

Tyler Durden Wed, 10/18/2023 - 19:40

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Survey delivers bleak news for remote workers

Remote work is increasingly under fire.



Covid-era alternative work solutions have come under fire as businesses increasingly deploy a carrot-and-stick approach to convincing employees to return to offices.

Technology titan Meta Platforms  (META) - Get Free Report, which owns Facebook, threatened poor performance reviews if workers failed to attend offices three times weekly. JP Morgan Chase  (JPM) - Get Free Report CEO Jamie Dimon recently suggested workers uncomfortable with returning to offices should look for employment elsewhere.

Workers don’t like the idea of giving up the flexibility afforded by remote work, but a recent survey shows that these workers may face an uphill battle if they hope to continue working from home.

A woman working on a laptop in a cafe, on Sept. 14, in Edmonton, Alberta, Canada. (Photo by Artur Widak/NurPhoto via Getty Images)

NurPhoto/Getty Images

Remote work loses its luster

Companies big and small rushed to offer flexible alternative work schedules like remote and hybrid work during Covid. Remote work quickly became a key benefit used to fill jobs created by those who took early retirement and newly created positions in response to demand growth fueled by easy-money policies.

Related: Facebook issues more tough-luck news to workers

Remote work initially appeared to be a win/win for companies and employees. It allowed businesses to source job candidates nationally rather than locally and sometimes save money by closing expensive offices. Meanwhile, workers could live in the suburbs rather than crowded cities and save money by eliminating expensive childcare costs.

Unfortunately, the love affair with remote work has soured over the past year.

Businesses, from technology to financial services, have rolled back remote work, citing a need for increased collaboration and greater productivity. Many companies have likely sought to reduce the number of remote workers as part of layoff plans or to fill otherwise vacant office spaces.

Businesses are winning the return-to-office battle

Worker surveys suggest employees prefer remote work. However, they’re losing the battle with employers demanding more office face time.

The Census Bureau’s latest Household Pulse Survey shows remote work has reached a new post-pandemic low, with declines seen in all 50 states, reports Bloomberg.

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The survey showed that fewer than 26% of households include someone who works remotely at least one day weekly. That’s a significant drop-off from the high of 37% in 2021. A total of 31 states had remote work rates above 33% at the peak. Now, only seven states exceed that hurdle.

States with the highest percentages of remote workers are typically Democratic states, mainly on the east and west coasts. Middle America and the South boast some of the lowest rates of remote work.

There’s also a more significant push for a return to office (RTO) in major metro markets where office building valuations are tumbling because of empty offices. During its recent quarterly conference call, Goldman Sachs  (GS) - Get Free Report told investors that it reduced valuations on office properties in its portfolio by 50%.

The impact of lower valuations on financial companies could contribute to the stricter return to office demands. Big banks like JP Morgan have been among the most vocal in demanding RTO, and they’re also heavily exposed to commercial real estate.

For instance, in addition to loans held on commercial properties, JP Morgan is building a new multibillion-dollar headquarters in New York City.

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