While cash bonds may be closed today for Columbus Day, which may or may not be a holiday - it's difficult to know anymore with SJW snowflakes opinions changing by the day - US equity futures are open and they are sliding as soaring oil prices add to worries over growing stagflation (Goldman and Morgan Stanley both slashed their GDP estimates over the weekend even as they both see rising inflation), fueling concern that a spreading energy crisis could hamper economic recovery (as a reminder, yesterday we had one, two, three posts on stagflation, showing just how freaked out Wall Street suddenly is).
Rising raw material costs, labor shortages and other supply chain bottlenecks have raised concerns of elevated prices hammering corporate profits while rising rates are suggesting that a tidal wave of inflation is coming. And while cash bonds may be closed, one can easily extrapolate where they would be trading based on TSY futures which are currently trading at a 1.65% equivalent.
But while cash bonds may be closed, the big mover on Monday was oil, with WTI surging nearly 3% and touched a seven-year high as an energy crisis gripping the major economies showed no sign of easing. Meanwhile, Brent rose just shy of $85, rising to the highest since late 2018 when the Fed abruptly reversed tightening course. Over in China, coal futures reached a record as flooding shuttered mines.
The surge in oil lifted shares of Chevron Corp, Exxon Mobil Corp and APA Corp between 1.2% and 3% in premarket trading. At the same time, rising rates hit FAAMGs, with Apple, Microsoft and Amazon all falling between 0.6% and 0.8%. The surge above 1.6% for 10-year Treasury yields is intensifying debate among strategists over how to position investor portfolios amid anxiety over whether transitory inflation is transitioning into stagflation. Lucid Group rose 2.2% and Occidental Petroleum climbed 3.1%, leading gains in the U.S. premarket session. Here are some of the biggest movers and stocks to watch today:
- U.S.-listed Chinese tech stocks soar 2% to 5% in premarket trading, extending their recent rebound. Rally supported by Beijing slapping a smaller-than-expected fine on food delivery giant Meituan and last week’s news that U.S. President Joe Biden was planning to meet with Xi Jinping before the end of the year. Alibaba (BABA US +5%) leads gains, while JD.com (JD US) and Baidu (BIDU US) rise 2% apiece
- Watch U.S. energy stocks as oil surges past $80 a barrel as the global power crunch rattled a market in which OPEC+ has only been restoring output at a modest pace. Exxon Mobil (XOM US +1.1%), Chevron (CVX US +1%) and Occidental (OXY US +3.1%) among top risers in premarket trading.
- Robinhood (HOOD US) dropped 2%; the company was under pressure in U.S. premarket trading as a looming share sale by early investors and a toughening regulatory environment for cryptocurrencies are adding to the headwinds in the stock market for the darling of the U.S. retail trading mania.
- ChemoCentryx (CCXI US) up 2% in U.S. premarket trading, adding to Friday’s massive gains after the drug developer won U.S. approval for Tavneos as a treatment for a rare autoimmune disorder
- Cloudflare (NET US) slides 1.8% in U.S. premarket trading after Piper Sandler downgraded stock to neutral
- Akerna Corp. (KERN US) gained in Friday postmarket trading after Matthew Ryan Kane, a board member, bought $346,032 of shares, according to a filing with the U.S. Securities & Exchange Commission.
“We see rising risks to global growth and evidence of more persistent inflation, which makes us more cautious on the outlook for global markets overall,” Salman Ahmed, global head of macro and strategic asset allocation at Fidelity International, wrote in a note to clients.
In Europe, the Stoxx 600 Index fell 0.2%, led by declines in travel and property firms. Miners and energy stocks were the two strongest-performing sectors in Europe on Monday on rising prices for iron ore and oil. The Stoxx 600 Basic Resources Index climbed as much as 2.4%, while the Energy Index gains as much as 1.5% to the highest since Feb. 24, 2020. European banking stocks also advanced on Monday, following four weeks of gains, and traded about 1.3% below pre-pandemic high. The sector has gained 36% ytd, is the best performer among 20 European sectors in 2021. Up 0.7% today, outperforming a slightly weaker broader Stoxx 600 Index and as investors tilt toward cyclical sectors.
Earlier in the session, Asian stocks jumped, buoyed by Hong Kong-listed technology shares including Meituan, which was consigned a lower-than-expected regulatory fine. The MSCI Asia Pacific Index climbed as much as 0.9%, driven by the consumer-discretionary and communication sectors. Alibaba and Meituan were the top contributors to the gauge, each surging about 8% in the first trading in Hong Kong after the food-delivery giant was handed a $533 million fine for violating anti-monopolistic practices. The result of the investigation into Meituan is “a relief and likely to provide closure to the share price overhang,” Citigroup analysts wrote in a note Friday, when the penalty was announced. Hong Kong’s stock gauge was among the top performing in the region. Japan’s benchmarks also climbed as the yen weakened to an almost three-year low against the dollar and new Prime Minister Fumio Kishida said he’s not considering changes to the country’s capital-gains tax at present. Improved sentiment in China is providing much-needed support to Asian equities, which declined for four straight weeks amid uncertainty circling global markets. Power shortages in China and India, supply-chain woes, inflation risks and rising bond yields are all on the radar as the earnings season kicks off. “We are still in a market that is very, very concerned about the growth outlook,” said Kyle Rodda, market analyst at IG Markets. These sort of rallies that appear almost inexplicable are “symptomatic of the market still trying to piece together all pieces of the puzzle,” he added.
Australia The S&P/ASX 200 index fell 0.3% to close at 7,299.80, with most subgauges taking a hit. Miners advanced, posting gains for a third session, offsetting losses in healthcare and consumer discretionary stocks. Star Entertainment was the worst performer after a report saying the company had enabled suspected money laundering, organized crime and fraud at its Australian casinos for years. Fortescue surged after the company said it plans to build a green energy factory to rival China. In New Zealand, the S&P/NZX 50 index dropped 0.5% to 13,019.37.
In FX, the pound crept higher to touch an almost 2-week high versus the dollar and the Gilt curve shifted higher, led by the front-end, after the Bank of England’s Michael Saunders, one of the most hawkish members of the Monetary Policy Committee, suggested in remarks published Saturday that investors were right to bring forward bets on rate hikes. Hours earlier, Governor Andrew Bailey warned of a potentially “very damaging” period of inflation unless policy makers take action. Australia’s dollar led gains among G-10 currencies on the back of increases in oil, natural gas and iron ore prices and as Sydney emerges from a 15- week lockdown on Monday. Iron ore futures extended gains as improved rebar margins at Chinese steel mills buoyed demand prospects. The yen dropped against the dollar, with analysts forecasting more weakness ahead as the nation’s yield differentials widen.
As noted above, treasury futures slumped in U.S. trading Monday, with the cash market closed for Columbus Day; they implied a yield of 1.65% on the 10Y. 10-year note futures price is down 8+/32, a price change equivalent to a yield increase of about 3bp. Benchmark 10-year yield ended Friday at 1.615%, its highest closing level since June, as investors focused on the inflationary aspects in mixed September employment data. China's10-year government bond futures declined to a three-month low while the yuan advanced as the central bank’s latest liquidity draining weakened expectations of fresh monetary policy easing. Futures contracts on 10-year notes fall 0.4% to 99.14, the lowest level since July 12. It dropped 0.4% on Friday. 10-year sovereign bond yields rose 5bps, the biggest gains in two months, to 2.96%.
Looking ahead, upcoming reports on third-quarter company profits which start this week are seen as the next potential pressure point in a market already under siege from slowing global growth, sticky inflation and tighter monetary policies. Global earnings revisions are sliding - an omen for U.S. stocks that have taken their cue from rising earnings estimates all year.
“The coming earnings’ season in the U.S. will be heavily scrutinized for pricing power, margins and clues on the shortage situation, as well as wage pressures,” according to Geraldine Sundstrom, a portfolio manager at Pacific Investment Management Co. in London. “Already a number of large multinationals have issued warnings about production cuts and downgraded their Q3 outlook due to supply chain and labor shortages.”
- S&P 500 futures down 0.3% to 4,371.25
- STOXX Europe 600 down 0.2% to 456.41
- German 10Y yield up 1.5 bps to -0.135%
- Euro little changed at $1.1568
- MXAP up 0.8% to 196.45
- MXAPJ up 0.7% to 642.13
- Nikkei up 1.6% to 28,498.20
- Topix up 1.8% to 1,996.58
- Hang Seng Index up 2.0% to 25,325.09
- Shanghai Composite little changed at 3,591.71
- Sensex up 0.5% to 60,358.30
- Australia S&P/ASX 200 down 0.3% to 7,299.79
- Kospi down 0.1% to 2,956.30
- Brent Futures up 1.9% to $83.98/bbl
- Gold spot down 0.1% to $1,755.02
- U.S. Dollar Index up 0.11% to 94.17
Top Overnight News from Bloomberg
- The U.S. labor market will see “ups and downs” as the pandemic lingers, but it’s premature to judge that the recovery is in peril, said San Francisco Federal Reserve President Mary Daly
- Treasury Secretary Janet Yellen said she expects Congress to take action soon to bring the U.S. into line with a global minimum tax agreed on last week by 136 countries
- Chinese builders are looking to payment extensions or debt exchanges to avoid default on imminent bond obligations as liquidity conditions tighten for the real estate sector
- Austria will get a new chancellor, though the career diplomat stepping into Sebastian Kurz’s shoes is a close ally of the departing conservative leader who resigned over a corruption scandal
- Just because pandemic inflation is transitory doesn’t mean it’s going away anytime soon. That’s the awkward conclusion that policy makers and investors are arriving at, as prices accelerate all over the world. European natural gas has climbed 25% in two weeks, and oil topped $80 for the first time since 2014. Fertilizers hit a record on Friday, which means food prices -- already at a 10- year peak -- will likely rise even higher
A more detailed summary of overnight news from Newsquawk
Asia-Pac stocks traded mostly positive but ended the day somewhat mixed after having shrugged off the early weakness stemming from last Friday’s lacklustre performance stateside and disappointing NFP jobs data. Note, markets in Taiwan and South Korea were closed. ASX 200 (-0.3%) was the laggard with underperformance in tech, consumer stocks and defensives overshadowing the gains in commodities and with Star Entertainment the worst hit with losses of more than 20% after media outlets alleged that it enabled suspected money laundering, organised crime, fraud and foreign interference which the Co. said were misleading reports. However, downside for the index was limited as New South Wales businesses reopened from the lockdown that lasted for over three months. Nikkei 225 (+1.6%) reversed opening losses as exporters cheered a weaker currency and with the government mulling over JPY 100bln financial support for chip factory construction. Hang Seng (+2.0%) and Shanghai Comp. (Unch) were both positive following talks between China's Vice Premier Liu He and USTR Tai on Saturday in which China was said to be negotiating for a cancellation of tariffs and sanctions. The advances in Hong Kong were led by tech stocks including Meituan despite the Co. being fined CNY 3.4bln by China’s market regulator for monopolistic behaviour, as the amount was seen to be a slap on the wrist, while the gains in the mainland were only mild as participants also reflected on the substantial liquidity drains by the PBoC totalling a net CNY 510bln since Saturday. Finally, 10yr JGBs were pressured amid the gains in Japanese stocks and lack of BoJ purchases in the market, while price action was also not helped by the continued weakness in T-note futures amid the semi-holiday conditions in US for Columbus Day in which the NYSE and the Nasdaq will open but bonds trading will remain shut.
Top Asian News
- Australian IPOs Heading for Biggest Haul Since 2014: ECM Watch
- Syngenta’s Shanghai IPO Proposal Suspended For Earnings Update
- China Junk-Rated Dollar Bond Rout Deepens Amid Builder Worries
- China’s 10-Year Bond Yield Jumps By The Most Since August
Bourses in Europe are mostly but modestly lower (Euro Stoxx 50 -0.1%, Stoxx 600 -0.2%) whilst the FTSE 100 (+0.2%) bucks the trend, owing to firm performances in its heavyweight sectors. US equity futures meanwhile trade within tight ranges with broad-based losses of some 0.3-0.4%. Fresh fundamental catalysts have remained light, although inflation and stagflation remain on traders' minds heading into this week's US and Chinese inflation metrics and against the backdrop of rising energy prices. Thus, the sector configuration sees Basic Resources, Oil & Gas and Banks at the top of the bunch, whilst the downside sees Travel & Leisure, Real Estate and Retail, with no overarching theme to be derived. Basic Resources is the marked outperformer as base metals are bolstered in what seems to be a function of the coal shortage in Asia, with iron ore contracts also surging overnight and copper following suit, in turn boosting the likes of Rio Tino (+3.2%), Antofagasta (+3.1%), Glencore (+3.1%), BHP (+2.8%). The top of the Stoxx 600 is dominated by metal names. In terms of individual movers, Carrefour (-2.2%) is softer after sources stated that exploratory talks over a Carrefour-Auchan tie-up ended due to the complexity of the deal. Evotec (+0.7%) holds onto gains as it seeks a Nasdaq listing. Roche (+0.6%) and Morphosys (+3.7%) underpin the health sector after the Cos received Breakthrough Therapy Designation from the US FDA for gantenerumab for the treatment of Alzheimer's disease.
Top European News
- BOE Officials Double Down on Signals of Imminent Rate Hike
- Brexit Clash on Northern Ireland Means Headaches for Johnson
- Asos CEO Beighton Steps Down as Sales Growth Slows
- Adler Shares Flounder After Asset Disposal Plan, Past M&A Report
In FX, the Aussie has secured a considerably firmer grip of the 0.7300 handle vs its US rival as COVID-19 restrictions are relaxed in NSW and base metals tread water after a mostly positive APAC equity session overnight. However, Aud/Usd is also firmer on the back of ongoing Greenback weakness and long liquidation from what some are calling ‘stretched’ levels of IMM positioning going in to Friday’s NFP release, while the Aud/Nzd cross has rebounded further above 1.0550 in wake of a rise in NZ virus cases that has prompted the PM to keep Auckland on level 3 alert for another week pending review. Hence, Nzd/Usd is capped around 0.6950 and continues to lag on the unwinding of Kiwi longs built up in advance of last week’s universally anticipated 25 bp RBNZ hike. Back to the Buck, but looking at the index in relation to where it was before and after the latest BLS report, 94.000 is providing some underlying support on Columbus Day that is not a full US market holiday, but will see cash Treasuries remain closed. Moreover, the DXY is gleaning momentum within a narrow 94.028-214 range via marked Yen underperformance amidst the latest rout in bonds and more pronounced technical impulses as Usd/Jpy extends beyond 112.50 and sets yet another 2021 peak around 112.95.
- GBP - Sterling is taking up post-payrolls Dollar slack as well, but firmer in its own right too as comments from BoE Governor Bailey and MPC member Saunders add to the growing expectation that rate hikes may be delivered sooner than had been expected before the former revealed that policy-setters were evenly divided at 4-4 in August on the subject of minimum criteria being achieved for tightening. Cable is hovering under 1.3650 and Eur/Gbp is sub-0.8500 in response, with the latter not really fazed by the UK-EU rift on NI protocol.
- CAD/NOK - The Loonie remains firm against its US peer after the stellar Canadian jobs data and Usd/Cad continues to probe support/bids at 1.2450 against the backdrop of strength in oil prices that is also keeping the Norwegian Krona afloat and Eur/Nok eyeing deeper sub-10.0000 lows irrespective of marginally mixed vs consensus inflation metrics.
- CHF/EUR/SEK - All rather rangy, aimless and looking for inspiration or clearer direction as the Franc straddles 0.9275 vs the Greenback, but remains firmer against the Euro above 1.0750 following only a faint rise in Swiss domestic bank sight deposits. Meanwhile, the Euro is pivoting 1.1575 vs the Buck and looks hemmed in by decent option expiry interest just outside the range given.1 bn rolling off between 1.1540-50 and 1.6 bn from 1.1590-1.1600 at the NY cut. Elsewhere, the Swedish Crown is slipping on risk-off grounds towards 10.1250 having tested resistance circa 10.1000.
In commodities, WTI and Brent front-month futures continue the upward trajectory seen during the APAC session, with the complex underpinned heading into the winter period and against the backdrop of higher gas prices. The gains have been more pronounced in the US counterpart vs the global benchmark with no clear catalysts behind the outperformance, although this may be a continuation of the unwind seen after reports suggested a release of the US SPR (Strategic Petroleum Reserve) is unlikely. For context, reports of such a release last week took the WTI-Brent arb to almost USD 4.2/bbl vs USD 2.7/bbl at the time of writing. Furthermore, there have also been reports of lower US production under President Biden's "build back better" initiative, which puts more weight on renewable energy, with some energy analysts also suggesting that OPEC+ sees less of a threat from a "shale boom" as a result. Back to price action, WTI has been in the limelight after topping the USD 80/bbl overnight and extending gains to levels north of USD 81.50/bbl (vs low 79.55/bbl), whilst the Brent Dec contract topped USD 84.00/bbl (vs low USD 82.50/bbl). In terms of other news flow, sources suggested the fire at Lebanon's Zahrani fuel tank has been put out after the energy minister suggested the fire was contained – the cause of the fire is not yet known. Gas prices also remain elevated with UK nat gas futures relatively flat on the day but still north of GBP 2/Thm vs GBP 1/Thm mid-August and vs GBP 4/Thm last week, whilst the Qatari Energy Minister said he is unhappy about gas prices being high amid negative follow-through to customers. Over to metals, spot gold and silver are somewhat lacklustre, but with magnitudes of price action contained, with the former meandering just north of USD 1,750/oz and the latter above USD 22.50/oz heading into this week's key risk events. Overnight, iron ore futures were bolstered some 10% in Dalian and Singapore Exchanges amid fears of coking coal supply shortages - coking coal is an essential input to produce iron and steel. Traders should also be cognizant of the Chinese metrics released this week as another elevated PPI metric could see the release of more state reserves, as had been the case over the recent months. Using the Caixin PMIs as a proxy for the release, the PMI suggested sharp increases in both input costs and output prices – largely owed to supply chain delays, with the "rate of inflation was the quickest seen for four months, amid reports of greater energy and raw material costs. This, in turn, led to a solid increase in prices charged". The measure for output prices its highest in three months, whilst "the pressure of rising costs was partly transmitted downstream to consumers, as the demand was not weak."
US Event Calendar
- Nothing major scheduled
DB's Jim Reid concludes the overnight wrap
A reminder that it’s Columbus Day today where US bond markets are closed. Equity markets are open but expect it to be quiet. Ahead of this, this morning we have published our latest monthly survey results covering over 600 global market participants. See here for more. For the first time since June, the biggest perceived risk to markets is now higher yields and inflation, whilst direct Covid-19 risks are out of the top 3 for the first time. A further equity correction before YE remains the consensus now. 71% expect at least another 5% off equities at some point before YE (68% correctly suggested that last month). A very overwhelming 84% thought the next 25bps move in 10yr US Treasury yields would be up. Of some additional interest is that the definition of stagflation is varied but that the majority think it’s a high or very high risk for the next 12 months. The extreme of this view surprised me. While I’ve long thought the market has underestimated the inflation risks I would still say there is enough of a growth cushion for 2022. However it’s clear the risks have built. Anyway, lots more in the survey. Thanks for filling it in and see the results for details.
The week ahead will centre around the US CPI release on Wednesday but it might be a touch backward looking given that energy has spiked more recently and that used car prices are again on the march after a late summer fall that will likely be captured in this week’s release. Elsewhere, we’ve got a potentially more challenging US earnings season than that seen over the last year will commence with the big financials from Wednesday. In addition minutes from the last FOMC will give clues to the latest taper thinking on Wednesday as well. The IMF/World Bank meetings will generate plenty of headlines this week with their latest world outlook update tomorrow the highlight. The best of the rest data wise consists of JOLTS (Tuesday),which we think is a better labour market indicator than payrolls albeit a month behind, US PPI (Thursday) which will give a scale of building pipeline price pressures, US retail sales and UoM consumer sentiment (Friday), and China’s CPI and PPI (Thursday).
With all that to look forward to, markets have started the week on a strong note, with equity indices including the Hang Seng (+2.02%), Nikkei (+1.57%), CSI (+0.32%) and Shanghai Composite (+0.32%) all moving higher, whilst the Kospi (-0.11%) has seen a slight decline. Japanese stocks have been buoyed by comments from new PM Kishida over the weekend that he isn’t currently considering changes to the country’s capital-gains tax. That comes with just 20 days remaining until the country’s general election. Separately in China, the country’s energy woes continue with 60 of 682 coal mines closed in the Shanxi province due to heavy floods, with Chinese coal futures up +8.00% this morning. And the property market issues are continuing to persist, with a new Chinese developer Modern Land seeking a 3 month extension to a $250 million dollar bond due to mature on October 25. By the end of last week, a Bloomberg index of Chinese junk-rated dollar bonds had seen yields climb to a decade-high above 17%, so clearly one to still look out for. Unlike in Asia, equity futures are pointing lower in the US and Europe this morning, with those on the S&P 500 down -0.21%.
In terms of the main highlight it’s clearly US CPI mid-week. Given my views that inflation risks have been massively understated this year I’ve been saying for months that these reports have potentially been the most important monthly data we have seen for years. But since they mostly come and go with a “meh… mostly transitory” and a relative whimper, I’ve clearly been wrong to over hype them. So ignore me when I say that this month’s report might not be that interesting. With energy soaring over the last month and signs of inflation pressures continuing to build elsewhere then I’m not sure we can read too much into this month’s figures. Take used cars. Given the 2-3 month lag between actual prices and their CPI impact, this month will more than likely reflect a softening of prices in the summer. However September saw prices rise +5.4% so this will probably show up towards the end of the year along with the recent rise in energy costs. Our economists expect a +0.41% headline (vs. +0.27% previously) and +0.27% core (vs. +0.10%) mom rate. This is a bit above consensus and would take the yoy rate to 5.4% (up a tenth) and 4.1% (unch) respectively.
Speaking of inflationary pressures, this morning has seen energy prices take a further leg higher, with WTI oil (+1.90%) moving back above $80/bbl for the first time since late 2014, whilst Brent crude (+1.42%) has moved above $83/bbl. European natural gas prices will continue to be an important one to follow amidst the astonishing price surge there, but the declines at the end of last week mean prices finished the week down by more than -45% since their intraday peak on Wednesday, before the comments from Russian President Putin that brought down prices.
The rest of the day-by-day calendar is at the end as usual but although it’s a second tier release normally, tomorrow’s JOLTS will be interesting in as far as it might confirm that the main labour problems in August were a lack of supply rather than demand. The report’s full value is reduced by it being a number of weeks out of date but there’s a reasonable argument for saying that this is a better gauge of the state of the labour market than the payroll release. We go through Friday’s mixed report at the end when looking back at last week.
Outside of data, it’s that time again as earnings season gets going, with a number of US financials kicking things off from mid-week. In terms of the highlights, we’ll hear from JPMorgan Chase, BlackRock and Delta Air Lines on Wednesday. Then on Thursday, we’ll get UnitedHealth, Bank of America, Wells Fargo, Morgan Stanley, Citigroup, US Bancorp and Walgreens Boots Alliance. Finally on Friday, we’ll hear from Charles Schwab and Goldman Sachs. For more info on the upcoming earnings season, you can read DB’s equity strategists Q3 S&P 500 preview here.
Back to markets, it was interesting over the weekend that the BoE’s Saunders chose to endorse market expectation of an earlier start to the hiking cycle in the UK rather than push back against it. He is on the more hawkish end of the spectrum but it was an important statement. Earlier, Governor Bailey suggested that there could potentially be a very damaging period of higher inflation ahead if policy makers didn’t react. Interestingly our survey showed that the market thinks the BoE is likely to make a policy error by being too hawkish so a battle seems likely to commence over policy here in the UK over the coming weeks and months. The November meeting appears live. Those comments have helped to support the pound this morning, which is up by +0.16% against the US Dollar.
Looking back to last week now, risk sentiment was supported in the first full week of Q4 by easing European energy prices and a cease fire on the debt ceiling that avoided disaster and bought Washington lawmakers 8 weeks to find a more permanent solution. Global equity indices thus gained on the week: the S&P 500 picked up +0.79%, with a slight -0.19% pullback on Friday, and European equities kept pace with the STOXX 600 rallying +0.97% (-0.28% on Friday). Cyclical stocks led the way on both sides of the Atlantic; energy stocks were among the best performers whist financials benefitted from higher yields and a steeper curve.
Speaking of which, US 10yr Treasury yields gained a punchy +14.1bps to close the week at 1.603%, their highest levels since early June. The benchmark gradually increased 3.0bps after Friday’s employment data. Inflation compensation continued to drive rate increases, as US 10yr breakevens gained +13.5 bps to finish the week at 2.515%. We need to go back to May to find higher levels. The sovereign yield increases were global in nature, with German bunds gaining +7.3bps and UK gilts +15.6bps higher. German 10yr breakevens gained +3.9bps while UK breakevens were +12.0bps higher.
US nonfarm payrolls increased +194k in September, well below consensus expectations of a +500k gain, though private payrolls increased +317k and net two month revisions were up +169k. The unemployment rate ticked down to a post-pandemic low of 4.8% on the back of a declining labour force participation rate. Average hourly earnings were robust, increasing +0.6% mom (+0.4% expected). Taken in concert, the print likely cleared the (admittedly low) bar to enable the FOMC to announce tapering at the November meeting, whilst also feeding the creeping stagflation narrative (see survey results).
Elsewhere, building on a preliminary July deal, the OECD said 136 nations have signed up to implement a 15% minimum global tax rate to address adequate taxation of multinational tech firms. As part of the deal, countries agreed not to impose any additional digital services taxes.
Doomscrolling COVID news takes an emotional toll – here’s how to make your social media a happier place
Do you regularly find yourself scrolling through COVID news stories on social media, and can’t tear yourself away? You’re not alone.
Picture this: it’s April 2020, you’re between Zoom meetings, and scrolling through your social media newsfeed. Headlines like “Death toll continues to rise”, “COVID-19 may cause long-term health implications” and “Health-care systems overwhelmed” flash across your screen. Your mood takes a dive, but you can’t stop scrolling.
If this scenario rings true for you, you’re not alone. Research shows people have a tendency to seek out information during uncertain times – it’s a natural coping mechanism. But is persistent information-seeking on social media, sometimes called doomscrolling, helpful during a pandemic, or any time?
Research on the effects of bad news on mood more generally suggest exposure to negative COVID news is likely to be detrimental to our emotional wellbeing. And indeed, early evidence on the effects of COVID news consumption on mental distress reflected this. For instance, one study conducted in March 2020 involving more than 6,000 Americans found that the more time participants spent consuming COVID news in a day, the unhappier they felt.
These findings are striking but leave a few key questions unanswered. Does doomscrolling make people unhappy, or are unhappy people just more likely to doomscroll? How much time spent doomscrolling is a problem? And what would happen if, instead of doomscrolling, we were “kindness scrolling” – reading about humanity’s positive responses to a global crisis?
To find out, we conducted a study where we showed hundreds of people real-world content on either Twitter or YouTube for two to four minutes. The Twitter feeds and YouTube videos featured either general news about COVID, or news about kindness during COVID. We then measured these participants’ moods using a questionnaire, and compared their moods with participants who did not engage with any content at all.
People who were shown general COVID-related news experienced lower moods than people who were shown nothing at all. Meanwhile, people who were shown COVID news stories involving acts of kindness didn’t experience the same decline in mood, but also didn’t gain the boost in mood we’d predicted.
These findings suggest that spending as little as two to four minutes consuming negative news about COVID-19 can have a detrimental impact on our mood.
Although we didn’t see an improvement in mood among participants who were shown positive news stories involving acts of kindness, this may be because the stories were still related to COVID. In other research, positive news stories have been associated with improvements in mood.
Making your social media a more positive place
Our research was published earlier this month. Ironically, news coverage of our findings, with headlines such as “Just five minutes spent on social media is enough to make you miserable, study finds”, could be part of a person’s doomscrolling content.
But we didn’t find that all social media use makes people miserable. Rather, we found that consuming negative content about COVID via Twitter or YouTube in the midst of a pandemic does.
So what can we do to look after ourselves, and make our time on social media more pleasurable?
But how realistic is it to distance ourselves from platforms that connect nearly half of the world’s population, particularly when these platforms offer social interactions at a time when face-to-face interactions can be risky, or impossible?
Given that avoidance might not be practical, here are some other ways to make your experience on social media more positive.
Be mindful of what you consume on social media. If you log on to connect with other people, focus on the personal news and photos shared instead of the latest headlines.
Seek out content that makes you happy to balance out your newsfeed. This may be images of cute kittens, beautiful landscapes, drool-worthy food videos or something else. You could even follow a social media account dedicated to sharing only happy and positive news.
Use social media to promote positivity and kindness. Sharing good things that are happening in your life can improve your mood, and your positive mood can spread to others. You may also like to compliment others on social media. While this might sound awkward, people will appreciate it more than you think.
Importantly, we’re not suggesting that you avoid all news and negative content. We need to know what’s happening in the world. However, we should also be mindful of our mental health.
As the pandemic continues to alter our lives and newsfeeds, our findings highlight the importance of being aware of the emotional toll negative news takes on us. But there are steps we can take to mitigate this toll and make our social media a happier place.
The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.spread pandemic covid-19 uk
Plastic waste is hurting women in developing countries – but there are ways to stop it
Women and girls in low-income countries are disproportionately likely to be affected by the plastic waste that’s flooding our planet.
If we are to build a greener, fairer and more equal society in the wake of COVID-19, it’s time for rich countries to end their practice of dumping plastic waste in developing countries. This not only harms the environment but disproportionately affects the women and girls who tend to clear it up.
The problem was made worse for many developing countries when China announced its refusal to accept other countries’ plastic waste in 2018. The result has been an increase in plastic waste exports to Africa, much of which is proving hard to recycle and is ending up in rivers and oceans.
On top of this, the pandemic is generating ever-increasing amounts of plastic waste, especially single-use items like medical gloves and disposable masks. In some areas of Africa – where around 411 million face masks are discarded every day – lack of plastic waste management infrastructure and weak regulations around dumping waste mean the situation is only getting worse.
Now, countries like Ghana, Uganda, Tanzania, Ethiopia, Senegal and Kenya are finding themselves flooded with plastic waste. This is overwhelmingly affecting poor, socially marginalised people, and women in particular.
Although plastic waste can be seen as a trade between developed and developing countries, which allows the latter to be paid in exchange for dealing with that waste, this trade isn’t an equal one.
Developing countries are likely to accept plastic waste from developed countries because it offers another potential source of income for their population living below the poverty line. It’s projected that 27 million to 40 million people in sub-Saharan Africa will fall into extreme poverty during 2021. It’s no wonder that such regions see plastic waste as a lucrative source of opportunity which can contribute to easing poverty.
However, the amounts paid to waste pickers – usually women – by private waste collecting companies barely make a dent in pickers’ financial needs. Payments of less than 4 pence a kilogram for collecting plastic bottles for recycling are normal.
And that waste sometimes ends up burned, rather than being recycled. In 2020, 40% of the UK’s plastic waste was sent to Turkey, where instead of being recycled some of it was illegally dumped and burned. Research in 2019 suggested that the equivalent of a double-decker bus full of plastic ends up dumped or burned every second.
Health and security
Picking plastic waste not only doesn’t pay well, it also comes at a price in terms of health and security. Dumped waste can contain hazardous materials like broken glass and syringes carrying infectious illnesses. Plus, women are often forced to collect plastic from the outskirts of cities: places likely to have higher rates of crime.
Most, however, don’t have a choice: they must risk their safety to make a living and provide for their families, due to widespread lack of education for women and girls. Across Africa, 3 million more girls than boys between six to 11 years of age will not be offered the opportunity to attend school. The impacts of this ripple into their future, making it far less likely for women to find well-paying jobs and forcing many to resort to low-paid, dangerous work.
Many poorer women in African countries also reside in informal settlements, where waste easily accumulates due to poor rubbish collection services. Accumulating plastic can damage inadequate water drainage systems, resulting in flourishing colonies of dangerous bacteria. For example, Zambia has experienced several cholera outbreaks due to poor drainage worsened in part by plastic-clogged systems.
It’s imperative to find ways of improving women’s situations in developing countries if we are to realise a truly greener, fairer and more equal world.
Some next steps to consider – if such a world is to become a reality – would include developing countries creating more stringent legislation against dumping plastic, increasing women’s education and involving more women in decision-making processes around how to deal with plastic waste.
What’s more, creating social incentives for reducing plastic waste – for example, by paying pickers more – is key in societies where social status is attached to those who can afford bottled plastic water and removed from those who then must pick up their litter.
Community-based awareness programmes promoting the importance of plastic waste management – run via community clubs, social platforms like Facebook and Instagram, or local radio stations – could help achieve this.
If picking plastic waste became better paid, this kind of cultural shift would not only help to empower women pickers economically but may be able to eliminate stigma attached to picking. With a resulting influx of formalised training courses, policies to keep pickers safe and opportunities for pickers to speak out about the issues attached to their work, many others will hopefully be attracted to help keep their local environments clean and safe.
Kutoma Wakunuma received funding as co-Principal Investigator from UKRI (UK Research and Innovation) and GCRF (Global Challenges Research Fund) under the Digital Innovations for Transitioning to a Circular Plastic Economy In Africa (DITCh Plastic) Project (www.ditch-plastic.org), which inspired this piece.pence pandemic covid-19 africa uk china
Britain investigating Delta subvariant as possibly more transmissible
The UK Health Security Agency designated a Delta coronavirus subvariant called AY.4.2 as a "Variant Under Investigation," saying there was some evidence that it could be more transmissible than Delta.
Britain says investigating Delta subvariant as possibly more transmissible
October 22, 2021; 9:17 AM EDT
LONDON, Oct 22 (Reuters) – The UK Health Security Agency on Friday said it designated a Delta coronavirus subvariant called AY.4.2 as a “Variant Under Investigation”, saying there was some evidence that it could be more transmissible than Delta.
“The designation was made on the basis that this sub-lineage has become increasingly common in the UK in recent months, and there is some early evidence that it may have an increased growth rate in the UK compared to Delta,” UKHSA said.
“While evidence is still emerging, so far it does not appear this variant causes more severe disease or renders the vaccines currently deployed any less effective.”
Our Standards: The Thomson Reuters Trust Principles.
uk coronavirus covid-19
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