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Futures Slide, Global Chip Stocks Tumble On Hard-Landing Fears, Latest China Tech Curbs

Futures Slide, Global Chip Stocks Tumble On Hard-Landing Fears, Latest China Tech Curbs

US equity futures extended last week’s post-payrolls…



Futures Slide, Global Chip Stocks Tumble On Hard-Landing Fears, Latest China Tech Curbs

US equity futures extended last week's post-payrolls slump, and as of 730am ET traded -0.2% at 3,646, having bounced off the session's worst levels down as much as -1%, while European stocks fell for the fourth straight day as concerns mounted that central bank policy-tightening would send the global economy into a hard landing (as Michael Hartnett warned) taking a heavy toll on the global economy and company earnings. The dollar extended its gains while bonds were closed for trading on the Columbus Day bond market holiday; cryptos were flat.

The semiconductor sector saw an across-the-board hit from Washington’s decision to further restrict exports of cutting-edge chips and chipmaking tools to China, adding to the headaches for an industry already hit by a slump in demand.  Europe-listed Infineon, STMicro and OSRAM dropped, while in premarket New York trade, chipmakers Nvidia and Advanced Micro Devices shed more than 1% each. Hong Kong Hang Seng Tech index plunged as much as 4.1% after fresh US tech curbs send Chinese semiconductor stocks tumbling. Mainland shares fall after a week-long break as Caixin services PMI returns to contraction territory and reports show sharp slide in holiday spending.

In premarket trading, Ford shares dropped 3.9% after a downgrade to sell at UBS due to weak profit margins. Meanwhile, General Motors (GM US) falls 3% after being cut to neutral from buy, with UBS seeing “demand destruction” for its EV segment after a strong start. Kraft shares rose 1.4% in premarket trading, as Goldman upgrades the stock to buy and downgrades home/personal care “bellwether” P&G to neutral, adding more food exposure within US consumer staples coverage. Here are other notable premarket movers:

  • Rivian (RIVN US) falls as much as 7.6% in premarket trading after the EV maker said it will recall about 13,000 vehicles it delivered to customers after discovering a minor structural defect.
  • Grab Holdings (GRAB US) falls as much as 2.9% in US premarket trading after Barclays initiates coverage of the ride-sharing and delivery provider at equal-weight, questioning whether the business can continue to thrive as lower income levels and saying car ownership in Southeast Asia may have implications for longer-term profitability.
  • US-listed Chinese stocks drop in premarket trading, with sentiment hurt by weak holiday spending data during the Golden Week and new Covid flareups across the country one week before the key Communist Party congress.
  • Alibaba (BABA US) -1.6%, Baidu (BIDU US) -1.5%, Pinduoduo (PDD US) -2.1%, (JD US) -1.9%, Bilibili (BILI US) -5.6%
  • US-listed Macau casino operators drop in New York premarket trading after Citigroup cut its estimate of Macau’s gross gaming revenue in October to 5.5 billion patacas from 7 billion patacas, citing disappointing revenue during the first nine days of this month.
  • Las Vegas Sands (LVS US) shares -3.1%, Melco Resorts (MLCO US) -1.7%, Wynn Resorts (WYNN US) -2.2%, MGM Resorts (MGM US) -1.2%
  • Keep an eye on Meta (META US) and Alphabet (GOOGL US), as Morgan Stanley trimmed its price targets on the stocks citing low visibility for the digital ads market. Even so, the brokerage expects October to be strong for the sector, given continued efforts to pull forward consumer holiday demand.

While the bond market is closed on Monday for the Columbus Day holiday and there is no macro on deck Monday, an action-packed week lies ahead, with inflation data due Thursday and the third-quarter earnings season kicking off in earnest. Hotter-than-expected CPI growth would heap pressure on policy makers to extend 75 basis-point rate hikes beyond this year. Minutes of the latest Fed policy meeting on Wednesday may provide insight into where the pain threshold lies for Fed officials, who are so far resolutely hawkish in their message that neither financial-market volatility nor the threat of an economic downturn will deter them from raising rates. Investors are also bracing for disappointment from the coming earnings season, with more than 60% of the 724 respondents to Bloomberg’s latest Pulse poll predicting the season would push the S&P 500 Index lower.

The poll underscored Wall Street’s fear that even after this year’s brutal selloff, stocks have not priced all the risks stemming from central banks’ aggressive tightening and stubbornly high inflation. Over the weekend, Goldman's David Kostin warned that the soaring dollar could hammer corporate earnings. While JPMorgan, Citigroup and other big banks report this week, iPhone maker Apple is in particular focus as its report is expected to offer insight into themes ranging from global consumer demand to the impact of dollar strength.

“The narrative will start changing from central banks and inflation, to one of weaker growth and downward earnings revisions that is going to weigh on risk sentiment over coming weeks,” Jefferies strategist Mohit Kumar wrote in a note.

Doubling down on his relentless pessimism, Morgan Stanley's Mike Wilson warned that the bear market in US stocks won’t be over until earnings forecasts are cut further or share valuations better reflect the risks.

European stocks declined for the 4th day in a row; the Euro Stoxx 50 dropped 0.8%. DAX outperforms peers, dropping 0.2%, CAC 40 lags, retreating 0.9%. Consumer products, tech and utilities are the worst-performing sectors. Here are the biggest European movers:

  • Renault shares jump as much as 6.8% as analysts highlight press reports saying the French carmaker and Japanese partner Nissan are in talks to reshape their two decade-old alliance.
  • DS Smith jumps as much as 12% after its trading update noted strong revenue growth and “effective cost mitigation,” which analysts said is set to trigger consensus upgrades to FY23 Ebita. Its paper-packaging peers Mondi and Smurfit Kappa also advanced.
  • Unite Group’s shares rose as much as 4.2% after a trading update that Peel Hunt said shows robust demand, with a return of students en masse driving full occupancy and an uplift to 2023/24 rental growth guidance.
  • Deutsche Bank shares rise as much as 3.4%, the most in the Stoxx 600 Bank Index, after Kepler Cheuvreux says it expects 3Q earnings to beat consensus.
  • Credit Suisse shares gained as much as 3.7% after Bloomberg News reported that its SPG unit has drawn interest from bidders including Pimco and Centerbridge.
  • ASML shares drop 3.2% as European semiconductor stocks continue to slide on Monday, after the US announcement of more restrictions on exports of cutting- edge chips and chipmaking tools to China added to the headaches for an industry already hit by a slump in demand.
  • Stocks including SSE, Drax and Centrica post the biggest declines in the utilities sub-sector after the Financial Times reported the UK government is pushing ahead with plans to cap renewable electricity revenues with legislation that could be unveiled next week. Drax drop as much as -6.5%
  • Casino shares slumped as much as 13% to a fresh all-time low after S&P lowered its credit rating on the French grocer, saying the company faces added pressure on its ability to refinance its debts because of the tougher retail environment in France.

In Britain, the Bank of England stepped up its measures to support market functioning as its emergency gilt buying measures entered their final week. The UK central bank said it will increase the size of its buying operations for the next five days to a maximum of £10 billion ($10.8 billion), from £5 billion previously. However, UK long-dated bonds shrugged off the news, with 10-year yields rising 6 basis points.

Focus is also training on Italy where the yield premium demanded by investors to hold Italian debt compared to Germany has surged to the highest since 2020, after ratings agency Moody’s warned of the need to keep national debt on a sustainable path.

Earlier in the session, equities across Asia declined Monday as strong US jobs data quelled hopes for a less hawkish Fed, while China traders returning from holiday added to the selling pressure.  The MSCI Asia Pacific Index declined as much as 1.4%, falling to its lowest in a week. Consumer discretionary and financials were the biggest drag. China’s CSI 300 closed at its lowest since April 2020 as bleak consumption data and lockdown fears gripped traders as markets reopened after a week-long break. Benchmarks in Hong Kong and the Philippines were among the worst decliners in the region after the US unemployment rate unexpectedly returned to a historic low, bolstering the case for another 75 basis point hike by the Fed. Japan, South Korea, Malaysia and Taiwan markets were closed for a holiday. The data and comments from Fed officials recently are “throwing cold water on the idea of a Fed pivot,” Nomura strategists including Chetan Seth wrote in a note.

While a much-softer-than-expected US CPI reading this week may lead to a stock rally, “it will likely not last as the market -- and the Fed -- will want to see a series of low monthly inflation readings before expecting a definite pause,” they added. US consumer inflation data will be released Thursday, helping set the tone for the Fed’s decision early next month. Traders are also turning their attention to the latest earnings season and China’s Covid restrictions ahead of the much-awaited party congress in mid October

Australian stocks tumbled the most in two weeks as the S&P/ASX 200 index fell 1.4% to 6,667.80 after strong US jobs data bolstered bets for more aggressive Fed hikes. The Australian benchmark dropped the most since Sept. 26 as all sectors retreated. Banks and miners contributed the most to the gauge’s decline. In New Zealand, the S&P/NZX 50 index fell 1.7% to 10,918.48.

Stocks in India extended their decline to a second day as investors booked profits in some of the recent sectoral outperformers, including consumer goods firms. Software makers were the top performers ahead of the start of the sector’s quarterly results season. The S&P BSE Sensex fell 0.3% to 57,991.11, its biggest single-day drop since Oct. 3. The NSE Nifty 50 Index ended 0.4% lower after paring a plunge of as much as 1.4%. All but two of 19 sectoral indexes compiled by BSE Ltd. declined, led by consumer durables makers. Tata Consultancy Services will kick-start the earnings season for the September quarter later on Monday. The software exporter’s shares advanced 1.8%.  Reliance Industries contributed the most to the Sensex’s decline, decreasing 1.1%. Out of 30 shares in the index, 11 rose, while 19 fell.

In FX, the Bloomberg Dollar Spot Index rose as the greenback advanced versus all of its Group-of-10 peers.

  • The euro dropped below 0.97 per dollar. The BOE said it will increase the size of its buying operations for the next five days to a maximum of £10 billion from £5 billion previously. Officials will also launch a Temporary Expanded Collateral Repo Facility.
  • The pound fell against a broadly stronger dollar, edging lower to trade around 1.10 against the dollar,  but rallied against the euro. The BOE said it will increase the size of its buying operations for the next five days to a maximum of £10 billion from £5 billion previously. Officials will also launch a Temporary Expanded Collateral Repo Facility
  • The yen traded below 145 per dollar. One-week implied volatility in the dollar-yen has fallen to trade well below highs seen last month, even as the currency pair closes on 145.90 -- a level that triggered a near $20 billion intervention from Japan’s Ministry of Finance. The Japanese currency has fallen for eight weeks in a row, its longest-losing streak since May
  • The Aussie slid to the weakest level in more than two years after stronger-than-expected US payroll numbers on Friday boosted expectations for Federal Reserve interest-rate hikes

In rates, treasury futures drifted lower led by ultra-long contracts following a wider steepening move across the UK gilt curve with cash bond trading closed for Columbus Day in the US.   Futures are lower by up to 23 ticks in the ultra-long bond contracts which lead losses on the session; 10-year note futures are lower by 3 ticks trading around 111-12 and inside Friday session range. UK gilts are cheaper by up to 16.5bp across 30-year sector, while UK long-end real yields surge ahead of Tuesday’s 2051 linker sale. US auctions resume Tuesday with 3-year note sale, followed by 10- and 30-year auctions Wednesday and Thursday. UK bonds also declined, led by long-end; 30-year yield rises above 4.5%. Bunds 10-year yield rises ~3bps to 2.16%. UK bonds fell even after the Bank of England stepped up measures to support market functioning as its emergency gilt buying measures entered their final week.

In commodities, WTI and Brent front-month futures are modestly softer after settling higher by over USD 4.00/bbl and USD 3.50/bbl respectively on Friday. WTI dipped below $92, down 0.7% after last week’s 17% gain, while Brent traded just around $97. French petrol station woes reportedly deepened as strikes continued and the French Energy Ministry stated that 29.7% of service stations were experiencing supply difficulties with at least one fuel product as of 3pm on Sunday vs 21% of service stations on Saturday. Furthermore, TotalEnergies (TTE FP) called on the responsibility of workers to ensure that the country is well supplied with fuel and proposed to bring forward the compulsory annual negotiations to October subject to the end of blockades, according to Reuters. Spot gold fell roughly $14 to trade near $1,681/oz; it traded lower in tandem with strength in the DXY, with the yellow metal’s 21 DMA around 1,678/oz. Base metals are mixed but LME copper and Chinese iron ore futures buck the trend.

Bitcoin is on a softer footing and remains under the USD 19,500 mark whilst Ethereum holds onto 1,300 status.

There is nothing on today's US economic calendar; Fed speakers include Evans and Brainard.

Market Snapshot

  • S&P 500 futures down 0.8% to 3,625.50
  • STOXX Europe 600 down 0.8% to 388.37
  • MXAP down 1.4% to 140.77
  • MXAPJ down 1.9% to 454.16
  • Nikkei down 0.7% to 27,116.11
  • Topix down 0.8% to 1,906.80
  • Hang Seng Index down 3.0% to 17,216.66
  • Shanghai Composite down 1.7% to 2,974.15
  • Sensex down 0.8% to 57,712.89
  • Australia S&P/ASX 200 down 1.4% to 6,667.75
  • Kospi down 0.2% to 2,232.84
  • German 10Y yield little changed at 2.18%
  • Euro down 0.6% to $0.9688
  • Brent Futures down 0.8% to $97.11/bbl
  • Gold spot down 0.9% to $1,680.29
  • U.S. Dollar Index up 0.42% to 113.27

Top Overnight News from Bloomberg

  • The Biden administration’s new restrictions on technology exports to China could undercut the country’s ability to develop wide swaths of its economy, from semiconductors and supercomputers to surveillance systems and advanced weapons
  • Missiles struck Kyiv and other Ukrainian cities early Monday, two days after an attack on a key bridge to Crimea that Russian President Vladimir Putin blamed on Ukraine
  • Norway’s inflation hit a new 34-year high last month, in a development that may boost expectations of another half-point hike by Norges Bank in November. Headline inflation accelerated to 6.9% in September, above the median projection of 6.2% in Bloomberg analyst poll, and the central bank’s forecast of 6%
  • The Danish island of Bornholm, located in the Baltic Sea near the Nord Stream pipelines, was been hit by a complete power failure on Monday, broadcaster DR reported, citing the local energy company
  • Malaysian Prime Minister Ismail Sabri Yaakob announced the dissolution of parliament on Monday, paving the way for elections this year as his ruling party seeks to strengthen its position following a run of successful local polls

A more detailed look at global markets courtesy of Newsquawk

Asia-Pacific stocks were negative in a holiday-thinned start to the week with market closures in Japan, South Korea and Taiwan, while the region digested a contraction in Chinese Caixin PMI data and the recent stronger-than-expected US jobs data which paves the way for the Fed to continue with its hawkish normalisation. ASX 200 was led lower by gold miners and tech stocks after the post-NFP rise in yields and with risk appetite also not helped by a deterioration in the AIG Services Index. Hang Seng and Shanghai Comp. weakened with Hong Kong pressured by notable losses in the tech sector after the US recently announced new curbs on exports to China on certain tools essential for high-end chip production. Furthermore, sentiment was also dampened following the PBoC’s largest weekly net drain in eight months and after Chinese Caixin Services and Composite PMIs fell into contraction territory, although losses in the mainland are somewhat cushioned following the return of participants from a week-long holiday.

Top Asian News

  • PBoC injected CNY 17bln via 7-day reverse repos for CNY 594bln net daily drain on Saturday and injected CNY 2bln through 7-day reverse repos with the rate kept at 2.00% on Sunday which resulted in the largest net weekly drain in eight months. PBoC also injected CNY 2bln via 7-day reverse repos with the rate kept at 2.00% on Monday, according to Reuters.
  • PBoC noted that it issued CNY 400bln via MLF during September and outstanding MLF loans fell to CNY 4.55tln at end-September vs. CNY 4.75tln at end-August, while it issued a total of CNY 969mln via SLF in September and its outstanding PSL was at CNY 2.65tln at end-September vs CNY 2.54tln at end-August, according to Reuters.
  • PBoC survey found that 53% of bankers believe Q3 monetary policy is appropriate and 45.8% believe Q3 monetary policy is loose, according to Reuters.
  • China was placed on high alert amid increases in COVID cases ahead of the Communist Party Congress, according to FT.
  • Chinese Foreign Ministry said the US is abusing trade measures to maintain technological hegemony following the recent announcement of controls targeting Chinese chip manufacturers, according to Reuters.
  • China's Shanghai requires arrivals to take three COVID tests within three days, according to Bloomberg.

European bourses have kicked the week off on the backfoot as the negativity from last Friday has continued into this week. Sectors in Europe are predominantly softer with the exception of Retail and Telecoms. To the downside, Consumer Products, Tech and Utilities lag. Stateside, futures are softer across the board but to a lesser extent than European peers.

Top European News

  • UK Cabinet Office Minister Zahawi said it is extremely unlikely that Britain will have planned power cuts over the winter, according to Reuters.
  • UK PM Truss is prepared to listen to Conservative critics who oppose proposals to raise benefits by less than inflation, according to Telegraph sources.
  • Retailers in London’s West End warned that the capital faces a consumer growth slowdown with footfall in London’s main shopping area remaining about a fifth lower than pre-pandemic levels, according to research by New West End Company cited by FT.


  • DXY extends on Friday's gains with the index back above the 113.00 mark with a current intraday peak of 113.31, with G10s softer vs the USD to varying degrees.
  • EUR/USD tested 0.9700 to the downside from a high just over 0.9750 and retreated further from decent option expiry interest spanning 0.9800-55 (around EUR 2.8bln).
  • AUD sits as the current laggard with China's sub-50 PMIs overnight adding to the pressure, whilst USD/CNH topped 7.1500.
  • PBoC set USD/CNY mid-point at 7.0992 vs exp. 7.1215 (prev. 7.0998).
  • Turkish President Erdogan said the CBRT will keep cutting rates every month for as long as he is in power, according to Reuters.

Fixed Income

  • Bunds and US Treasuries are off best levels amidst hawkish ECB rhetoric and an upturn in overall risk sentiment that has perked up hitherto weak Italian bonds.
  • Gilts are still deeply underwater with the BoE remaining on course to end its temporary buy-back auctions at the end of the week and is switching to liquidity support via expanded collateral repos.


  • WTI and Brent front-month futures are modestly softer after settling higher by over USD 4.00/bbl and USD 3.50/bbl respectively on Friday.
  • French petrol station woes reportedly deepened as strikes continued and the French Energy Ministry stated that 29.7% of service stations were experiencing supply difficulties with at least one fuel product as of 3pm on Sunday vs 21% of service stations on Saturday. Furthermore, TotalEnergies (TTE FP) called on the responsibility of workers to ensure that the country is well supplied with fuel and proposed to bring forward the compulsory annual negotiations to October subject to the end of blockades, according to Reuters.
  • Spot gold has been ebbing lower in tandem with strength in the DXY, with the yellow metal’s 21 DMA around 1,678/oz.
  • Base metals are mixed but LME copper and Chinese iron ore futures buck the trend.
  • Kumba Iron Ore declared a force majeure due to strike action; export sales will be impacted by around 120k tonnes per day.

Geopolitics: Russia/Ukraine

  • Ukrainian media reported a large explosion at the Kerch bridge in Crimea where a fuel tank was on fire at one of the sections of the bridge, while there were comments from a Ukrainian presidential adviser who called the bridge explosion ‘the beginning’ and said ‘everything illegal must be destroyed’ but did not directly claim responsibility, according to Reuters.
  • Russian President Putin described the Crimea bridge explosion as an act of terrorism which Ukraine is responsible for and he ordered tighter security for the Crimea bridge, as well as the infrastructure supplying electricity and natural gas to Crimea, according to Reuters and Interfax.
  • Russian investigative committee head said the blast on the Crimea bridge was prepared by Ukrainian special services, according to Reuters. It was also reported that Russian government spokesperson Peskov said it is wrong to consider the terrorist attack on the Crimean bridge as a reason for the possible use of nuclear weapons, according to Ria Novosti.
  • White House national security spokesman Kirby said US President Biden’s “Armageddon” warning was not based on any new intelligence and reflects the very high stakes that are currently in play. Kirby also stated that Russian President Putin started the war and could end it simply by moving troops out of Ukraine, while he added the US will continue offering security assistance to Ukraine, according to The Guardian and Reuters.
  • Explosions were reported across several Ukrainian cities on Monday morning including Kyiv, Lviv, Dnipro and Ternopil. Explosions were also reported near Ukrainian President Zelensky's office in Kiev, according to Al Arabiya citing Russian press.
  • Ukrainian President Zelensky says Russia used Iranian drones in Monday's attacks on Ukraine, according to AFP.
  • Belarus and Russia to form a joint regional grouping of troops, according to Belta citing Belarussian President Lukashenko.

Geopolitics: China/Taiwan

  • Taiwan President Tsai said they must stand up for democracy and prepare prudently and sufficiently to respond to any possible contingency, while she added that they are sending a message to the international community that Taiwan will take responsibility for its self-defence. Tsai also stated that they want to make clear that armed confrontation is absolutely not an option for both sides and they look forward to the gradual resumption of the healthy and orderly cross-strait people-to-people exchanges, thereby easing tensions in the Taiwan Strait, according to Reuters.
  • China's Foreign Ministry, responding to Taiwan's President's national day speech, says Taiwan is an inseparable part of Chinese territory and China will never leave any space for separatists or independence.

US Event Calendar

  • Nothing Scheduled

Central Bank speakers

  • 09:00: Fed’s Evans Speaks at NABE Conference in Chicago
  • 13:00: Fed’s Brainard Speaks at NABE Conference in Chicago

DB's Jim Reid concludes the overnight wrap

For those remembering my pre-match nerves from Friday, I won my 36 hole matchplay final yesterday and was absolutely over the moon. There is a big cup and my name goes on the honours board for hopefully a few generations. The first name on the board won this cup in 1910! In the morning round I had 6 birdies, including 4 in a row. I’d never done either of those things before in probably somewhere around a thousand rounds since I started playing at about 11 years old. My whole body aches this morning though and my sciatica has flared up a little. However it was all worth it. Sorry, boast over now but outside of work this is all I have been thinking and stressing about for the last few weeks! I can now return to exclusively stress about which way markets are going.

After another volatile week, it’s a quieter week for data with one ginormous exception. Yes all roads to and from will all center around US CPI on Thursday. Over the last few months Fed expectations have generally risen with this number and markets have consistently sold off. However there have been a few strong counter-trend rallies on either the perception of a coming Fed pivot or on hopes of being near peak inflation. All have so far been ultimately reversed but the potential for Thursday to dominate the next few weeks of trading is high. Before we delve into some of the details, US PPI and the FOMC minutes (Wednesday), and the UoM inflation expectations and US retail sales (Friday) are the other key events Stateside. It’s Columbus Day in the US today with bond markets shut but equities open. It should be quiet but Fed VC Brainard is speaking later today to keep us on our toes. Finally in the US, results from key banks will kick off the earnings season later in the week before the deluge over the subsequent 2-3 weeks.

Elsewhere across the globe, we will also get inflation and trade data from China (Friday) and the PPI for Japan (Thursday). In Europe, the UK will be in the spotlight with an array of economic indicators due, including labour market data (tomorrow) and monthly GDP (Wednesday). After the dramatic aftermath of the UK mini-budget, there will also be some focus on Italy’s draft budget that is supposed to be submitted to the EC by Saturday. Clearly any signs of it being too expansionary could be a red rag to markets increasingly concerned about debt sustainability in pockets of the DM world with yields this high.

A quick early preview of the US CPI number now. Our economists highlight that with gas prices down another near 7% from August to September, energy will again drag on the headline CPI print (+0.28% forecast vs. +0.12% previously). However, core CPI (+0.44% vs. +0.57%) will draw the most focus especially given last month’s upside surprise. Assuming their forecasts are correct, year-over-year headline CPI should continue to decline, falling two-tenths to 8.1%, while core should tick up two-tenth to peak at 6.5%. This is in line with consensus. Whether one number should be the basis for huge swings in markets, it seems inevitable that a notable miss on core on either side could bring about big moves in trading over the coming weeks so stand by.

As mentioned at the top, US Q3 earnings season will kick off with results from major US banks on Friday, including JPMorgan, Citi and Morgan Stanley. Consumer-focused companies like PepsiCo (Thursday), Domino's Pizza and Delta (both Friday) will also be in focus. TSMC reports on Thursday amid concerns of oversupply in some pockets of the semiconductor industry. The full day by day week ahead is at the end as usual.

Over the weekend, the war in Ukraine saw another landmark event after the Kerch Strait Bridge in Crimea was partially destroyed by an explosion, disrupting the most crucial supply line for Russian troops fighting in southern Ukraine. In a video address, President Putin on Sunday accused Ukrainian special services of being behind the attack on the bridge, calling it a “terrorist attack”. Meanwhile, President Putin has tightened security for the bridge and for energy infrastructure between Russia and Crimea and will Chair a meeting with his national security council today. We will have to carefully watch Putin’s and Russia’s response in a conflict where the risks of a major escalation are increasing.

Overnight in Asia equity markets are slipping and further extending a global equity sell-off in thin trading this morning. The Hang Seng (-2.44%) is leading losses with the CSI (-1.02%) and the Shanghai Composite (-0.34%) also trading in negative territory on their return after the Golden Week holiday. Chinese semiconductor equities slumped after the US announced fresh export controls on semiconductors to Chinese companies, limiting the nation’s ability to buy and manufacture high-end chips used in AI and supercomputing. In addition, the Caixin Chinese services PMI for September contracted for the first time in four months, falling to 49.3 from 55.0 in August as Covid-19 containment measures disrupted supply and demand while dimming business confidence. Elsewhere, markets in Japan and South Korea are closed for holiday.

In overnight trading, the risk-off mood has persisted in US equities with futures on the S&P 500 (-0.48%) and the NASDAQ 100 (-0.51%) both moving lower after a tumultuous week. European futures are also down.

Looking back at last week, it was a tale of two halves. The first half of the week saw yet another attempt at the Fed (and other CB) pivot narrative and a huge risk on alongside an initial sharp rates rally. By the second half of the week global central bank officials said ‘not so fast’, holding their line and leading to a drift tighter in financial conditions via higher yields and lower equities. The back and forth led to another volatile week in global markets.

Diving into the specific numbers. 10yr Treasury and Bund yields increased +5.3bps (+5.8bps Friday) and +8.6bps (+10.9bps Friday), respectively, after hitting intraday levels of -27.1bps and -33.7bps for the week on Tuesday.

Major equity indices danced to the same tune. The S&P 500 finished +1.51% higher, but that marked a steep fall (-2.80% on Friday alone) from its intraweek heights of +6.15% on the week when it appeared the Fed policy pivot was in full play. Fed speakers in the back half of the week had plenty to say about that, with New York Fed President invoking the current SEP median showing policy rates at 4.6% by the end of next year as a reasonable base case, with some of the more typically dovish members of the Committee considering even higher policy rates. Likewise, the STOXX 600 finished the week +0.98% (-1.18% Friday), having pulled back -2.82% from its intraday week peak.

10yr gilts exhibited a similar pattern, after the government retreated from the higher income tax cuts, with 10yr gilts +14.5bps higher on the week (+6.9bps Friday), having been -35.5bps lower as of Tuesday. 30yr gilts marched steadily higher over the week despite the broader pattern in sovereign yields, as BoE purchases of the sector slowed dramatically, with yields climbing +56.8bps (+8.5bps Friday) to 4.39%. Still below the dizzying heights reached following the initial release of the fiscal plan but otherwise the highest since 2011.

In data Friday, nonfarm payrolls increased +263k in the US in September, close to +255k consensus, while the unemployment rate fell to 3.5% from 3.7% with a decline in labour force participation to 62.3% from 62.4%. The move tighter along with the contraction in supply fed the building end of week narrative against any Fed policy pivot. Underscoring the point, the Atlanta Fed’s GDPNow index rose to 2.89% to end the week. Not the sort of numbers that will get the Fed to ease anytime soon.

Tyler Durden Mon, 10/10/2022 - 08:06

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Vaccine-skeptical mothers say bad health care experiences made them distrust the medical system

Vaccine skepticism, and the broader medical mistrust and far-reaching anxieties it reflects, is not just a fringe position in the 21st century.

Women's own negative medical experiences influence their vaccine decisions for their kids. AP Photo/Ted S. Warren

Why would a mother reject safe, potentially lifesaving vaccines for her child?

Popular writing on vaccine skepticism often denigrates white and middle-class mothers who reject some or all recommended vaccines as hysterical, misinformed, zealous or ignorant. Mainstream media and medical providers increasingly dismiss vaccine refusal as a hallmark of American fringe ideology, far-right radicalization or anti-intellectualism.

But vaccine skepticism, and the broader medical mistrust and far-reaching anxieties it reflects, is not just a fringe position.

Pediatric vaccination rates had already fallen sharply before the COVID-19 pandemic, ushering in the return of measles, mumps and chickenpox to the U.S. in 2019. Four years after the pandemic’s onset, a growing number of Americans doubt the safety, efficacy and necessity of routine vaccines. Childhood vaccination rates have declined substantially across the U.S., which public health officials attribute to a “spillover” effect from pandemic-related vaccine skepticism and blame for the recent measles outbreak. Almost half of American mothers rated the risk of side effects from the MMR vaccine as medium or high in a 2023 survey by Pew Research.

Recommended vaccines go through rigorous testing and evaluation, and the most infamous charges of vaccine-induced injury have been thoroughly debunked. How do so many mothers – primary caregivers and health care decision-makers for their families – become wary of U.S. health care and one of its most proven preventive technologies?

I’m a cultural anthropologist who studies the ways feelings and beliefs circulate in American society. To investigate what’s behind mothers’ vaccine skepticism, I interviewed vaccine-skeptical mothers about their perceptions of existing and novel vaccines. What they told me complicates sweeping and overly simplified portrayals of their misgivings by pointing to the U.S. health care system itself. The medical system’s failures and harms against women gave rise to their pervasive vaccine skepticism and generalized medical mistrust.

The seeds of women’s skepticism

I conducted this ethnographic research in Oregon from 2020 to 2021 with predominantly white mothers between the ages of 25 and 60. My findings reveal new insights about the origins of vaccine skepticism among this demographic. These women traced their distrust of vaccines, and of U.S. health care more generally, to ongoing and repeated instances of medical harm they experienced from childhood through childbirth.

girl sitting on exam table faces a doctor viewer can see from behind
A woman’s own childhood mistreatment by a doctor can shape her health care decisions for the next generation. FatCamera/E+ via Getty Images

As young girls in medical offices, they were touched without consent, yelled at, disbelieved or threatened. One mother, Susan, recalled her pediatrician abruptly lying her down and performing a rectal exam without her consent at the age of 12. Another mother, Luna, shared how a pediatrician once threatened to have her institutionalized when she voiced anxiety at a routine physical.

As women giving birth, they often felt managed, pressured or discounted. One mother, Meryl, told me, “I felt like I was coerced under distress into Pitocin and induction” during labor. Another mother, Hallie, shared, “I really battled with my provider” throughout the childbirth experience.

Together with the convoluted bureaucracy of for-profit health care, experiences of medical harm contributed to “one million little touch points of information,” in one mother’s phrase, that underscored the untrustworthiness and harmful effects of U.S. health care writ large.

A system that doesn’t serve them

Many mothers I interviewed rejected the premise that public health entities such as the Centers for Disease Control and Prevention and the Food and Drug Administration had their children’s best interests at heart. Instead, they tied childhood vaccination and the more recent development of COVID-19 vaccines to a bloated pharmaceutical industry and for-profit health care model. As one mother explained, “The FDA is not looking out for our health. They’re looking out for their wealth.”

After ongoing negative medical encounters, the women I interviewed lost trust not only in providers but the medical system. Frustrating experiences prompted them to “do their own research” in the name of bodily autonomy. Such research often included books, articles and podcasts deeply critical of vaccines, public health care and drug companies.

These materials, which have proliferated since 2020, cast light on past vaccine trials gone awry, broader histories of medical harm and abuse, the rapid growth of the recommended vaccine schedule in the late 20th century and the massive profits reaped from drug development and for-profit health care. They confirmed and hardened women’s suspicions about U.S. health care.

hands point to a handwritten vaccination record
The number of recommended childhood vaccines has increased over time. Mike Adaskaveg/MediaNews Group/Boston Herald via Getty Images

The stories these women told me add nuance to existing academic research into vaccine skepticism. Most studies have considered vaccine skepticism among primarily white and middle-class parents to be an outgrowth of today’s neoliberal parenting and intensive mothering. Researchers have theorized vaccine skepticism among white and well-off mothers to be an outcome of consumer health care and its emphasis on individual choice and risk reduction. Other researchers highlight vaccine skepticism as a collective identity that can provide mothers with a sense of belonging.

Seeing medical care as a threat to health

The perceptions mothers shared are far from isolated or fringe, and they are not unreasonable. Rather, they represent a growing population of Americans who hold the pervasive belief that U.S. health care harms more than it helps.

Data suggests that the number of Americans harmed in the course of treatment remains high, with incidents of medical error in the U.S. outnumbering those in peer countries, despite more money being spent per capita on health care. One 2023 study found that diagnostic error, one kind of medical error, accounted for 371,000 deaths and 424,000 permanent disabilities among Americans every year.

Studies reveal particularly high rates of medical error in the treatment of vulnerable communities, including women, people of color, disabled, poor, LGBTQ+ and gender-nonconforming individuals and the elderly. The number of U.S. women who have died because of pregnancy-related causes has increased substantially in recent years, with maternal death rates doubling between 1999 and 2019.

The prevalence of medical harm points to the relevance of philosopher Ivan Illich’s manifesto against the “disease of medical progress.” In his 1982 book “Medical Nemesis,” he insisted that rather than being incidental, harm flows inevitably from the structure of institutionalized and for-profit health care itself. Illich wrote, “The medical establishment has become a major threat to health,” and has created its own “epidemic” of iatrogenic illness – that is, illness caused by a physician or the health care system itself.

Four decades later, medical mistrust among Americans remains alarmingly high. Only 23% of Americans express high confidence in the medical system. The United States ranks 24th out of 29 peer high-income countries for the level of public trust in medical providers.

For people like the mothers I interviewed, who have experienced real or perceived harm at the hands of medical providers; have felt belittled, dismissed or disbelieved in a doctor’s office; or spent countless hours fighting to pay for, understand or use health benefits, skepticism and distrust are rational responses to lived experience. These attitudes do not emerge solely from ignorance, conspiracy thinking, far-right extremism or hysteria, but rather the historical and ongoing harms endemic to the U.S. health care system itself.

Johanna Richlin does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

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Is the National Guard a solution to school violence?

School board members in one Massachusetts district have called for the National Guard to address student misbehavior. Does their request have merit? A…




Every now and then, an elected official will suggest bringing in the National Guard to deal with violence that seems out of control.

A city council member in Washington suggested doing so in 2023 to combat the city’s rising violence. So did a Pennsylvania representative concerned about violence in Philadelphia in 2022.

In February 2024, officials in Massachusetts requested the National Guard be deployed to a more unexpected location – to a high school.

Brockton High School has been struggling with student fights, drug use and disrespect toward staff. One school staffer said she was trampled by a crowd rushing to see a fight. Many teachers call in sick to work each day, leaving the school understaffed.

As a researcher who studies school discipline, I know Brockton’s situation is part of a national trend of principals and teachers who have been struggling to deal with perceived increases in student misbehavior since the pandemic.

A review of how the National Guard has been deployed to schools in the past shows the guard can provide service to schools in cases of exceptional need. Yet, doing so does not always end well.

How have schools used the National Guard before?

In 1957, the National Guard blocked nine Black students’ attempts to desegregate Central High School in Little Rock, Arkansas. While the governor claimed this was for safety, the National Guard effectively delayed desegregation of the school – as did the mobs of white individuals outside. Ironically, weeks later, the National Guard and the U.S. Army would enforce integration and the safety of the “Little Rock Nine” on orders from President Dwight Eisenhower.

Three men from the mob around Little Rock’s Central High School are driven from the area at bayonet-point by soldiers of the 101st Airborne Division on Sept. 25, 1957. The presence of the troops permitted the nine Black students to enter the school with only minor background incidents. Bettmann via Getty Images

One of the most tragic cases of the National Guard in an educational setting came in 1970 at Kent State University. The National Guard was brought to campus to respond to protests over American involvement in the Vietnam War. The guardsmen fatally shot four students.

In 2012, then-Sen. Barbara Boxer, a Democrat from California, proposed funding to use the National Guard to provide school security in the wake of the Sandy Hook school shooting. The bill was not passed.

More recently, the National Guard filled teacher shortages in New Mexico’s K-12 schools during the quarantines and sickness of the pandemic. While the idea did not catch on nationally, teachers and school personnel in New Mexico generally reported positive experiences.

Can the National Guard address school discipline?

The National Guard’s mission includes responding to domestic emergencies. Members of the guard are part-time service members who maintain civilian lives. Some are students themselves in colleges and universities. Does this mission and training position the National Guard to respond to incidents of student misbehavior and school violence?

On the one hand, New Mexico’s pandemic experience shows the National Guard could be a stopgap to staffing shortages in unusual circumstances. Similarly, the guards’ eventual role in ensuring student safety during school desegregation in Arkansas demonstrates their potential to address exceptional cases in schools, such as racially motivated mob violence. And, of course, many schools have had military personnel teaching and mentoring through Junior ROTC programs for years.

Those seeking to bring the National Guard to Brockton High School have made similar arguments. They note that staffing shortages have contributed to behavior problems.

One school board member stated: “I know that the first thought that comes to mind when you hear ‘National Guard’ is uniform and arms, and that’s not the case. They’re people like us. They’re educated. They’re trained, and we just need their assistance right now. … We need more staff to support our staff and help the students learn (and) have a safe environment.”

Yet, there are reasons to question whether calls for the National Guard are the best way to address school misconduct and behavior. First, the National Guard is a temporary measure that does little to address the underlying causes of student misbehavior and school violence.

Research has shown that students benefit from effective teaching, meaningful and sustained relationships with school personnel and positive school environments. Such educative and supportive environments have been linked to safer schools. National Guard members are not trained as educators or counselors and, as a temporary measure, would not remain in the school to establish durable relationships with students.

What is more, a military presence – particularly if uniformed or armed – may make students feel less welcome at school or escalate situations.

Schools have already seen an increase in militarization. For example, school police departments have gone so far as to acquire grenade launchers and mine-resistant armored vehicles.

Research has found that school police make students more likely to be suspended and to be arrested. Similarly, while a National Guard presence may address misbehavior temporarily, their presence could similarly result in students experiencing punitive or exclusionary responses to behavior.

Students deserve a solution other than the guard

School violence and disruptions are serious problems that can harm students. Unfortunately, schools and educators have increasingly viewed student misbehavior as a problem to be dealt with through suspensions and police involvement.

A number of people – from the NAACP to the local mayor and other members of the school board – have criticized Brockton’s request for the National Guard. Governor Maura Healey has said she will not deploy the guard to the school.

However, the case of Brockton High School points to real needs. Educators there, like in other schools nationally, are facing a tough situation and perceive a lack of support and resources.

Many schools need more teachers and staff. Students need access to mentors and counselors. With these resources, schools can better ensure educators are able to do their jobs without military intervention.

F. Chris Curran has received funding from the US Department of Justice, the Bureau of Justice Assistance, and the American Civil Liberties Union for work on school safety and discipline.

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Spread & Containment

Chinese migration to US is nothing new – but the reasons for recent surge at Southern border are

A gloomier economic outlook in China and tightening state control have combined with the influence of social media in encouraging migration.




Chinese migrants wait for a boat after having walked across the Darien Gap from Colombia to Panama. AP Photo/Natacha Pisarenko

The brief closure of the Darien Gap – a perilous 66-mile jungle journey linking South American and Central America – in February 2024 temporarily halted one of the Western Hemisphere’s busiest migration routes. It also highlighted its importance to a small but growing group of people that depend on that pass to make it to the U.S.: Chinese migrants.

While a record 2.5 million migrants were detained at the United States’ southwestern land border in 2023, only about 37,000 were from China.

I’m a scholar of migration and China. What I find most remarkable in these figures is the speed with which the number of Chinese migrants is growing. Nearly 10 times as many Chinese migrants crossed the southern border in 2023 as in 2022. In December 2023 alone, U.S. Border Patrol officials reported encounters with about 6,000 Chinese migrants, in contrast to the 900 they reported a year earlier in December 2022.

The dramatic uptick is the result of a confluence of factors that range from a slowing Chinese economy and tightening political control by President Xi Jinping to the easy access to online information on Chinese social media about how to make the trip.

Middle-class migrants

Journalists reporting from the border have generalized that Chinese migrants come largely from the self-employed middle class. They are not rich enough to use education or work opportunities as a means of entry, but they can afford to fly across the world.

According to a report from Reuters, in many cases those attempting to make the crossing are small-business owners who saw irreparable damage to their primary or sole source of income due to China’s “zero COVID” policies. The migrants are women, men and, in some cases, children accompanying parents from all over China.

Chinese nationals have long made the journey to the United States seeking economic opportunity or political freedom. Based on recent media interviews with migrants coming by way of South America and the U.S.’s southern border, the increase in numbers seems driven by two factors.

First, the most common path for immigration for Chinese nationals is through a student visa or H1-B visa for skilled workers. But travel restrictions during the early months of the pandemic temporarily stalled migration from China. Immigrant visas are out of reach for many Chinese nationals without family or vocation-based preferences, and tourist visas require a personal interview with a U.S. consulate to gauge the likelihood of the traveler returning to China.

Social media tutorials

Second, with the legal routes for immigration difficult to follow, social media accounts have outlined alternatives for Chinese who feel an urgent need to emigrate. Accounts on Douyin, the TikTok clone available in mainland China, document locations open for visa-free travel by Chinese passport holders. On TikTok itself, migrants could find information on where to cross the border, as well as information about transportation and smugglers, commonly known as “snakeheads,” who are experienced with bringing migrants on the journey north.

With virtual private networks, immigrants can also gather information from U.S. apps such as X, YouTube, Facebook and other sites that are otherwise blocked by Chinese censors.

Inspired by social media posts that both offer practical guides and celebrate the journey, thousands of Chinese migrants have been flying to Ecuador, which allows visa-free travel for Chinese citizens, and then making their way over land to the U.S.-Mexican border.

This journey involves trekking through the Darien Gap, which despite its notoriety as a dangerous crossing has become an increasingly common route for migrants from Venezuela, Colombia and all over the world.

In addition to information about crossing the Darien Gap, these social media posts highlight the best places to cross the border. This has led to a large share of Chinese asylum seekers following the same path to Mexico’s Baja California to cross the border near San Diego.

Chinese migration to US is nothing new

The rapid increase in numbers and the ease of accessing information via social media on their smartphones are new innovations. But there is a longer history of Chinese migration to the U.S. over the southern border – and at the hands of smugglers.

From 1882 to 1943, the United States banned all immigration by male Chinese laborers and most Chinese women. A combination of economic competition and racist concerns about Chinese culture and assimilability ensured that the Chinese would be the first ethnic group to enter the United States illegally.

With legal options for arrival eliminated, some Chinese migrants took advantage of the relative ease of movement between the U.S. and Mexico during those years. While some migrants adopted Mexican names and spoke enough Spanish to pass as migrant workers, others used borrowed identities or paperwork from Chinese people with a right of entry, like U.S.-born citizens. Similarly to what we are seeing today, it was middle- and working-class Chinese who more frequently turned to illegal means. Those with money and education were able to circumvent the law by arriving as students or members of the merchant class, both exceptions to the exclusion law.

Though these Chinese exclusion laws officially ended in 1943, restrictions on migration from Asia continued until Congress revised U.S. immigration law in the Hart-Celler Act in 1965. New priorities for immigrant visas that stressed vocational skills as well as family reunification, alongside then Chinese leader Deng Xiaoping’s policies of “reform and opening,” helped many Chinese migrants make their way legally to the U.S. in the 1980s and 1990s.

Even after the restrictive immigration laws ended, Chinese migrants without the education or family connections often needed for U.S. visas continued to take dangerous routes with the help of “snakeheads.”

One notorious incident occurred in 1993, when a ship called the Golden Venture ran aground near New York, resulting in the drowning deaths of 10 Chinese migrants and the arrest and conviction of the snakeheads attempting to smuggle hundreds of Chinese migrants into the United States.

Existing tensions

Though there is plenty of precedent for Chinese migrants arriving without documentation, Chinese asylum seekers have better odds of success than many of the other migrants making the dangerous journey north.

An estimated 55% of Chinese asylum seekers are successful in making their claims, often citing political oppression and lack of religious freedom in China as motivations. By contrast, only 29% of Venezuelans seeking asylum in the U.S. have their claim granted, and the number is even lower for Colombians, at 19%.

The new halt on the migratory highway from the south has affected thousands of new migrants seeking refuge in the U.S. But the mix of push factors from their home country and encouragement on social media means that Chinese migrants will continue to seek routes to America.

And with both migration and the perceived threat from China likely to be features of the upcoming U.S. election, there is a risk that increased Chinese migration could become politicized, leaning further into existing tensions between Washington and Beijing.

Meredith Oyen does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

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