Futures Tumble After Powell Rugpull, BOE Hike On Deck
After Powell's exquisite rugpull, where the most dovish Fed statement in almost one year was followed by the most brutally hawkish press conference where the Fed chair basically told markets to eat shit and die when he said that interest rates could go higher than previously projected, leading to the worst final 90 minutes of trading on a Fed day in history...
... US index futures extended their plunge on Thursday, signaling more losses for equities ahead of another 75bps rate hike (give or take) by the Bank of England. As of 730 a.m. ET, contracts on the S&P 500 dropped 0.7%, while Nasdaq 100 futures were down 0.9%, extending earlier losses.
Both underlying equity indexes have fallen for three straight days, with the S&P 500 losing 2.5% on Wednesday. The dollar gained as investors looked toward US jobs data, which may help to determine the pace of upcoming rate hikes. The pound fell more than 1% as concern mounted that a smaller-than-expected BOE hike could compound sterling’s drop, while Norway’s krone fell after its central bank delivered the smallest increase in its benchmark rate since June. 10Y Treasury yields soared to 4.20% while the 2s10s curve inverted the most in 2022, tumbling to -0.53%.
“Every time the market gets a little bit of dovish hope, it gets smacked on the nose with a rolled up newspaper,” said Scott Rundell, chief investment officer at Mutual Ltd. “There’s a lot of volatility still ahead.”
“There was perhaps a hint that the ‘jumbo’ rates increases are coming to an end, and this was sufficient for bond, credit and equity markets to initially at least perform well. The reality that the hiking cycle isn’t over yet is likely to limit the upside,” said Sandra Holdsworth, head of rates UK at Aegon Asset Management.
The Fed’s 75 basis-point increase is likely to be followed by a similar-sized hike from the Bank of England later on Thursday, though rates there are potentially limited by the risk of a severe recession. Powell disappointed traders betting on a pivot as the US economy remains resilient to stubbornly high inflation.
While Powell did his best to guide to lower future rate hikes while tightening financial conditions, investors haven’t found much respite in earnings either, with the season so far proving a mixed bag: both Moderna and Peloton imploded in premarket trading on poor earnings and a catastrophic outlook: Moderna plunged as much as 16% in premarket trading after cutting its vaccines purchase agreements guidance for 2022, while Peloton cratered 21% on a revenue miss and slashing Q2 revenue guidance. In other premarket moves, Qualcomm fell after maker of smartphone processors issued a weaker-than-expected forecast, citing the slowdown in phone markets. Rok also sank after offering cautious commentary about the advertising market. Etsy, EBay and Booking Holdings rallied after robust results. Here are some other premarket movers:
Cognizant shares fell around 10% in premarket trading following its third-quarter report as analysts say that the results and guidance reflect ongoing challenges the consultancy and outsourcing firm faces, which are now being complemented by a weakening macro picture.
Robinhood shares climbed as much as 4.8% in premarket trading. The online brokerage reached profitability earlier than expected, which analysts said was a positive sign that should increase investor confidence in the company’s strategy.
Lumen Technologies shares plunged as much as 16% in premarket trading, after the phone company reported earnings that fell short of expectations and eliminated its dividend, a move that which Wells Fargo analysts said was a “difficult” though a correct decision, that would allow the company to invest for growth.
Altice slumps 23% in premarket trading after the cable television provider reported worse-than-expected earnings per share in the third quarter and analysts drew attention to the company’s high levels of leverage and continued subscriber losses.
CF Industries earnings missed expectations on lower ammonia pricing, though analysts say the outlook for the fertilizer firm remains solid and a new share buyback is likely to be welcomed. CF shares fell 5.1% in premarket trading on thin volumes.
Fortinet shares fell about 13% in premarket trading as softer billings growth guidance and the cybersecurity firm’s decision to stop providing its closely-watched backlog number are both likely to be taken negatively, analysts say.
Booking (BKNG US) reported third-quarter revenue that beat the average analyst estimate, as the online travel agency continues to see resiliency in demand despite macro headwinds. Shares were up 5.1% in US postmarket trading.
"Prospects for riskier asset classes look weaker as interest rate hikes continue to curtail economic growth worldwide,” Pictet chief strategist Luca Paolini said. “We therefore remain underweight on equities, whose valuations are even more difficult to justify after the recent market rally.”
European stocks fell as Fed Chair Powell’s warning of a higher peak rate continues to roil assets. Euro Stoxx 600 down 1.1%. FTSE 100 outperforms peers, while IBEX lags, dropping 1.4%. All major sectors were in the red, with real estate, travel, technology, construction and autos the main underperformers.
Earlier in the session, Asian stocks snapped a three-day advance, with Hong Kong and mainland China shares losing ground after the government affirmed its Covid-Zero stance. China’s Caixin services PMI contracted more than expected. The MSCI Asia Pacific ex-Japan Index fell as much as 2.1%, led by consumer discretionary and tech shares. Nearly all markets in the region were down, with Australia slumping almost 2% and tech-heavy market Taiwan dropping nearly 1%. Japan was closed for a holiday. Fed Chair Jerome Powell’s comments that tightening still has “some ways to go” were perceived to be more aggressive and hawkish than before, triggering a reversal in US shares that spilled over into Asia. The Fed raised interest rates by 75 basis points for the fourth time in a row.
“Investors may be disappointed that they did not get the pivot from the FOMC that they are wishing for, given the hawkish tone overnight,” Tai Hui, chief market strategist for APAC at JPMorgan Asset Management, wrote in a note. “This could keep some pressure on risk appetite in the coming weeks.” Declines in Chinese and Hong Kong stocks dragged the region lower after the nation’s top health body said the zero-tolerance approach remains the overall strategy to fight Covid-19. Shares in the market rallied earlier in the week as speculation grew over the nation’s reopening. “We expect the dynamic Zero-Covid strategy will stay, but there will be increasing flexibility of its implementation as authorities have now got more experience and confidence in quickly deploying control measures,” said Redmond Wong, a market strategist at Saxo Capital Markets
In fixed income, yields are higher across the board, led by Europe. US Treasuries hold losses as US trading day begins, extending the bear-flattening move unleashed by Wednesday’s Fed communications with Treasury yields adding 7bps to 11bps with the largest uptick seen in the short end of the curve. 2-year yield reached a new multiyear high, pushing 2s10s curve toward its YTD low. Yields across the curve higher by 7bp-10bp, 10-year around 4.18%; 2s10s little changed at -53bp after approaching -55bp, lowest since Oct. 14. US 2-year topped near 4.735%, fresh post-2007 high, 5-year at 4.423%, highest since Oct. 21, when YTD high 4.504% was reached. Dollar issuance slate empty so far after a quiet Wednesday; six issuers have sold $8 billion so far this week. Bunds and gilts trade broadly in line with Treasuries across the 10-year sector; money markets are pricing in around 72bp of rate hikes for the Bank of England meeting.
In FX, the Bloomberg Dollar Spot Index rose as much as 0.2% as the greenback advanced versus all of its Group-of-10 peers. JPY and CAD are the strongest performers in G-10 FX, while GBP tumbles ahead of the BOE. Crude futures decline.
The euro extended a decline to trade at an almost two-week low versus the greenback. Italian bonds lead euro-area peers lower as money markets raised ECB rate-hike bets in response to Wednesday’s hawkish Fed outcome.
The pound tumbled as much as 1.4% to 1.2337 per dollar before the Bank of England’s interest-rate meeting, as concern mounted that a smaller-than-expected hike could compound sterling’s drop. Gilt yields rose by around 8-10bps. The BOE is expected to raise interest rates 75bps to 3%. Options show that price action following the Bank of England decision has the potential to signal the pound’s direction into year-end
Norway’s krone pared losses after falling to a one-week low of 10.3710 per euro after Norges Bank raised its policy rate by 25bps to 2.50%, with estimates almost evenly distributed between a 25bps and a 50bps hike
Aussie yields climbed ~10bps across the curve. The Aussie fell more than 1% in European trading after earlier reversing an intraday loss as Australia’s trade surplus surged to A$12.4b in September from A$8.3b in August, exceeding economists’ forecast of A$8.8b
The yen held up best against the dollar among G-10 peers, with Japan on holiday
Commodities are under broad pressure given the continued post-FOMC advances in the USD, crude benchmarks lower by over USD 1.00/bbl. Metals are similar under USD-induced pressure, spot gold dropping further from the USD 1650/oz mark with LME copper below USD 7.5k/T once again. Spot gold falls roughly $14 to trade near $1,622/oz.
Bitcoin is modestly firmer on the session but continues to trade within fairly narrow parameters above the USD 20k mark post-FOMC as participants look to upcoming risk events.
Looking the day ahead now, and the main highlight will be the BoE’s policy decision and Governor Bailey’s press conference. We’ll also separately hear from the BoE’s Mann and a range of ECB speakers including President Lagarde, and the ECB’s Kazaks, Panetta, Nagel, De Cos, Elderson, Villeroy, Visco, Makhlouf and Centeno. Data releases include the ISM services index from the US, the weekly initial jobless claims, and September data on the trade balance. Lastly, earnings releases include Starbucks, PayPal and Moderna.
S&P 500 futures down 0.2% to 3,761.00
STOXX Europe 600 down 1.1% to 408.90
MXAP down 1.6% to 137.74
MXAPJ down 2.1% to 438.83
Nikkei little changed at 27,663.39
Topix up 0.1% to 1,940.46
Hang Seng Index down 3.1% to 15,339.49
Shanghai Composite down 0.2% to 2,997.81
Sensex down 0.3% to 60,705.30
Australia S&P/ASX 200 down 1.8% to 6,857.88
Kospi down 0.3% to 2,329.17
German 10Y yield up 4.5% to 2.24%
Euro down 0.5% to $0.9767
Brent Futures down 1.3% to $94.92/bbl
Gold spot down 0.5% to $1,627.50
U.S. Dollar Index up 1.17% to 112.65
Top Overnight News from Bloomberg
ECB President Christine Lagarde warned that a “mild recession” is possible but that it wouldn’t be sufficient in itself to stem soaring prices
Wall Street money managers looking to pile back into Treasuries after months of losses will have to contend with a Federal Reserve that stands ready to raise the stakes every step of the way
Central banks bought 399 tons of bullion in the third quarter, almost double the previous record, according to the World Gold Council. Just under a quarter went to publicly identified institutions, stoking speculation about mystery buyers
Turkish annual inflation accelerated for the 17th month in a row in October to 85.5% y/y, driven by a surge in food prices and energy costs, to its likely peak during President Recep Tayyip Erdogan’s two decades in power
A more detailed look at global market courtesy of Newsquawk
APAC stocks were mostly lower with the global risk appetite subdued in the aftermath of the FOMC, while the risk tone was also not helped by a deterioration in Chinese Caixin PMI data and the absence of Japanese participants for Culture Day holiday. ASX 200 was pressured as underperformance in the mining-related sectors led the broad declines in the index and after the New South Wales Chief Health Officer warned of a looming wave of COVID infections. KOSPI was contained amid geopolitical concerns after North Korea's recent record number of missile launches, while it continued firing missiles again today. Hang Seng and Shanghai Comp were negative after Chinese Caixin Services and Composite PMI data worsened and with China’s National Health Commission reiterating adherence to zero-COVID policy, while the HKMA also raised rates by 75bps in lockstep with the Fed.
Top Asian News
Hong Kong Monetary Authority raised the base rate by 75bps to 4.25%, as expected, while the Macau Monetary Authority also raised its base rate for the discount window by 75bps to 4.25%.
RBNZ said there is high confidence that they can get inflation under control and that the labour shortage is the single most constraining factor for businesses in New Zealand, while Governor Orr also noted a laser-like focus on returning inflation to the 1%-3% target.
Earthquake shakes buildings within Tokyo, Japan, via Reuters citing witnesses; reports indicate an intensity of 4 and a magnitude of 5.2, epicentre in Chiba.
Malaysia Raises Key Rate by a Quarter Point Ahead of Vote
Kahoot Drops 17% After 3Q Revenue Misses Estimates
China’s Top PC Maker Boosts Profit After Lowering Costs
Latest Fed Hike Reverberates Through Asia as Policy Makers React
Sharp Yen Swing Has Traders on Watch for Post-Fed Japan Reaction
European bourses are subdued across the board, Euro Stoxx 50 -0.8%, as the post-Powell pressure reverberates across from APAC trade. Sectors are all in the red with the exception of banking names that are deriving some benefit from yields and conscious of numerous European earnings within the sector, including BNP and ING. Stateside, futures are lower across the board though only marginally so with a busy session ahead incl. BoE and ISM Services PMI; ES -0.3%, NQ -0.3%. Morgan Stanley (MS) reportedly plans to begin layoffs in the coming weeks as deal making slows, according to Reuters citing sources. Cigna Corp (CI) Q3 2022 (USD): EPS 6.04 (exp. 5.71), Revenue 45.3bln (exp. 44.76bln); raises FY22 outlook.
Top European News
Coal Gives Profit Boost to Offshore Wind Developer Orsted
BMW, Stellantis See Europe Demand Slowing as Inflation Bites
Rolls- Royce Falls as Engine Deliveries Hit Low End of Forecasts
Uniper Posts €40 Billion Loss as Russia Throttles Gas Supply
BNP Rides Rising Rates as Debt Trading Fuels Profit Beat
ING Plans €1.5 Billion Buyback as One-Off Charges Hit Profit
USD continues to rise to the detriment of peers across the board following the FOMC/Powell-presser; DXY to a 112.91 peak from a 111.81 base.
JPY is the relative outperformer amid holiday outages for the region, the ever present possibility of intervention and perhaps some haven allure given broader risk aversion; though, USD/JPY is back above 148.00.
GBP is the standout underperformer given the USD action but also vs EUR, with EUR/GBP lifting past 0.8650 pre-BoE with the Pound unable to derive any real respite from upward PMI revisions.
NOK has been impaired by an as-guided but sub-market pricing 25bp hike from the Norges Bank; interestingly, Governor Bache hasn't given much away on the likely December magnitude thus far.
Core benchmarks under pressure across the board as yields continue to extend, particularly at the short-end of the UST curve.
Gilts are the relative outperformers, though still lower by over 50 ticks pre-BoE, as while 75bp is expected a 'dovish' surprise/dissent cannot be ruled out entirely.
Bunds are in-fitting with their US peer and significantly lower though they have held onto support at the 137.00 mark; for reference, numerous ECB speakers haven't had much sway on EGB price action thus far.
Commodities are under broad pressure given the continued post-FOMC advances in the USD, crude benchmarks lower by over USD 1.00/bbl.
Though, desks are cognisant of the substantial drawdowns in crude stockpiles this week as a potential cushioning factor.
Metals are similar under USD-induced pressure, spot gold dropping further from the USD 1650/oz mark with LME copper below USD 7.5k/T once again.
Urals and Siberian Light oil loadings from Novorossiisk set at 2.47mln/T for November (2.84mln/T in October), via Reuters citing sources
Norges Bank hikes by 25bps to 2.50% (exp. evenly split between 25bp & 50bp); the policy rate will most likely be raised further in December.. Click here for full details, reaction and newsquawk analysis.
ECB's Kazaks says a EZ recession is already his baseline, but it should be shallow. Monetary policy must continue to tighten; rates need to go much higher, no need for a pause at turn of the year.
ECB's Panetta says the medium term inflation outlook presents clear upside risks, further policy adj. is warranted. Need to bring inflation back to target as soon as possible, but not sooner.
ECB's Lagarde says a recession is not sufficient to tame inflation.
ECB's Centeno says a good part of rate hikes should already have occurred, EZ inflation should peak this quarter, via Publico.
Ukrainian President Zelensky said a Russian plane fired cruise missiles on Wednesday which flew across the Black Sea corridor used to export grain, according to Reuters.
Russia's Kremlin says Russia's resumption of the grain agreement does not mean that it has been automatically extended and its results must be evaluated before a decision is made, via Al Jazeera.
South Korean military detected that North Korea fired one long-range and two short-range missiles, while it was reported that the North Korean missile went through a stage of separation but may have failed after the second stage separation, according to Yonhap.
US condemned North Korea's ICBM launch and called on North Korea to refrain from further provocations and engage in sustained and substantive dialogue, according to Reuters.
08:30: 3Q Unit Labor Costs, est. 4.0%, prior 10.2%
08:30: 3Q Nonfarm Productivity, est. 0.5%, prior -4.1%
08:30: Initial Jobless Claims, est. 220,000, prior 217,000
08:30: Continuing Claims, est. 1.45m, prior 1.44m
08:30: Sept. Trade Balance, est. -$72.2b, prior -$67.4b
09:45: Oct. S&P Global US Services PMI, est. 46.6, prior 46.6
10:00: Oct. ISM Services Index, est. 55.2, prior 56.7
10:00: Sept. Durable Goods Orders, est. 0.4%, prior 0.4%
10:00: Sept. -Less Transportation, est. -0.5%, prior -0.5%
10:00: Sept. Cap Goods Ship Nondef Ex Air, prior -0.5%
10:00: Sept. Cap Goods Orders Nondef Ex Air, est. -0.6%, prior -0.7%
10:00: Sept. Factory Orders Ex Trans, est. 0%, prior 0.2%
10:00: Sept. Factory Orders, est. 0.3%, prior 0%
DB's Jim Reid concludes the overnight wrap
Markets could have saved themselves a lot of heartache and debate over the last 13 days as the WSJ article from Nick Timiraos was ultimately fairly accurate. However, the problem was that the market has been paying more attention the step-down debate Mr Timiraos hinted at rather than the rest of the article saying that the terminal rate may need to go higher. Even after the initial statement last night, the market focused on the former (with good reason). However, by the end of the press conference it was clear that this was a hawkish dovish pivot! If that makes any sense!
Let’s try to make sense of things. Firstly, the Fed of course hiked 75bps as virtually everyone expected. See our full US economics team’s wrap here.
Upon the release of the statement, markets quickly latched on to the inserted phrase that the “Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation” when assessing the path of future tightening. Market pricing assumed that this meant the Fed was teeing up a pivot, leading to a strong rally in yields and risk. The pivot/pause rally was short-lived, however, as Chair Powell stepped up to the mic and quickly disabused any interpretation that suggests a pause was forthcoming. He did so directly, saying that it was very premature to be thinking about a pause, and also by contextualising the new Statement language, highlighting that the hiking cycle had three important components: 1) the pace the Fed gets to terminal, 2) how high terminal needs to get, and 3) how long policy needs to stay restrictive. The new statement language only pertains to ‘1)’, and the Chair emphasized that the pace is not nearly as important anymore given how much tightening the Fed has done to date. Indeed, the Chair sounded more hawkish on the latter two points, noting that the data since September’s dots call for an even higher terminal rate, and that the Fed had a ways to go until achieving an appropriately restrictive stance. The tighter for longer restrictive policy stance also had the Chair bring his economic outlook closer to DB’s, as he downgraded the Fed’s prospects of achieving a soft landing, upgrading the probability he placed on a recession.
Powell was hawkish elsewhere in the presser, noting that it was still riskier to under- rather than over-tighten, given how precariously balanced inflation expectations are as core inflation continues to stay elevated. Over a longer time horizon, Powell noted that the historical record argued against prematurely loosening policy when inflation was this high. While some asked about greenshoots in the battle against inflation, Powell was much more focused on a labour market which remained historically tight and showing no signs of letting up.
The slower pace but higher terminal message (one that was reflected in that aforementioned WSJ article) was eventually well-understood by the market. Pricing for the December FOMC moved down -2.0bps to 56.5bps, while terminal pricing for May moved up +5.0bps to 5.10%, a new cycle high. Meanwhile, the rest of the Treasury yield curve and the S&P 500 fully retraced the post-statement pre-press conference rally, leaving 2yr yields +7.5bps higher and 10yr yields up +5.9bps, having climbed +18.7bps and +13.3bps, respectively, from the post statement lows. There is no cash trading of Treasuries in Asia this morning with Japan on holiday. (Meanwhile, the S&P 500 finished the day -2.50% having been +0.98% after the statement, making it the worst Fed day for the S&P 500 since January 2021. Likewise, the NASDAQ rallied into positive territory after the statement (+0.93%), only to take a sharp turn lower to end the day down -3.36%. In overnight trading, US futures are showing a small rebound with contracts tied to the S&P 500 (+0.25%) and NASDAQ 100 (+0.32%) both trading in positive territory. Qualcomm's shares fell -7.10% after hours though following earnings where they lowered revenue guidance for the upcoming quarter on the back of slowing phone demand as well as continued Covid lockdowns in China.
Ahead of the Fed, European markets put in a pretty downbeat performance, with the major equity indices including the STOXX 600 (-0.29%) moving lower. That followed the release of the final manufacturing PMIs for October in Europe, which saw downward revisions relative to the flash readings and cemented the sense that Q4 had got off to a pretty weak start for the continent. For example, the manufacturing PMI for the Euro Area as a whole was revised down to 46.4 (vs. flash 46.6), with downward revisions in France and Germany too.
Looking forward, central banks will stay in the spotlight today as the BoE announce their latest decision, with a 75bps hike widely expected that would take Bank Rate up to 3% and its highest level since 2008. Since the BoE’s last meeting in September, an awful lot has happened in the UK, including a mini-budget that triggered market turmoil, a temporary BoE intervention to buy longer-dated gilts, a policy reversal on most of that mini-budget, and then Liz Truss’ replacement as PM by Rishi Sunak. That volatility has been reflected in market pricing for today’s decision as well. Straight after the last meeting, overnight index swaps were pricing in a 75bps hike, but at the height of the mini-budget turmoil they went as far as pricing in more than 200bps worth by today, including a decent chance of an intermeeting hike. However, as the situation has calmed down, pricing has returned to its original starting point of a 75bps hike again, which is what our UK economist is forecasting for today as well (link here).
Gilts strongly outperformed ahead of the BoE’s decision today, with the 2yr yield seeing a sizeable move lower of -17.3bps, whilst the 10yr yield was down -7.1bps. That contrasted with the rest of Europe, where yields on 10yr bunds (+0.4bps), OATs (flat) and BTPs (+2.9bps) were all little changed.
The overnight sharp losses on Wall Street are echoing in Asia this morning with the Hang Seng (-2.82%) leading losses followed by the CSI (-1.23%), the Shanghai Composite (-0.63%) and the KOSPI (-0.31%). Additionally, China’s top health body, the National Health Commission reaffirming the government’s Zero-Covid stance is also weighing on sentiment after excitement earlier in the week that China was set to loosen restrictions. Elsewhere, markets in Japan are closed for a holiday.
Data coming out of China showed that the Caixin services PMI for October further contracted to 48.4, the lowest reading since May after deteriorating to 49.3 in September thus underscoring the impact of strict COVID-19 restrictions sweeping the country. Elsewhere, Australia’s trade surplus in September (A$12.4 bn) widened substantially from A$8.7 bn in August (v/s A$8.8 bn expected) led by a big surge in exports (+7.0% m/m) with little change in imports. Staying on Australia, bonds have tumbled with yields on the 3yr bond (+10.7 bps) climbing upwards, trading at 3.46% after the Fed.
Looking at yesterday’s other data, the ADP’s report of private payrolls from the US showed growth of +239k in October (vs. 185k expected). That comes ahead of tomorrow’s jobs report, where our US economists expect nonfarm payrolls to have grown by +225k. Otherwise, German unemployment rose by +8k in October (vs. +12.5k expected), leaving the unemployment rate at 5.5% as expected.
To the day ahead now, and the main highlight will be the BoE’s policy decision and Governor Bailey’s press conference. We’ll also separately hear from the BoE’s Mann and a range of ECB speakers including President Lagarde, and the ECB’s Kazaks, Panetta, Nagel, De Cos, Elderson, Villeroy, Visco, Makhlouf and Centeno. Data releases include the ISM services index from the US, the weekly initial jobless claims, and September data on the trade balance and from the Euro Area we’ll also get the unemployment rate for September. Lastly, earnings releases include Starbucks, PayPal and Moderna.
“[…] we set out to explore the effects of removing p16Ink4a+ senescent cells on the proliferative capacity and mass of β-cells […].”
Credit: 2023 Bahour et al.
“[…] we set out to explore the effects of removing p16Ink4a+ senescent cells on the proliferative capacity and mass of β-cells […].”
BUFFALO, NY- January 31, 2023 – A new research paper was published on the cover of Aging (listed as “Aging (Albany NY)” by Medline/PubMed and “Aging-US” by Web of Science) Volume 15, Issue 2, entitled, “Clearance of p16Ink4a-positive cells in a mouse transgenic model does not change β-cell mass and has limited effects on their proliferative capacity.”
Type 2 diabetes is partly characterized by decreased β-cell mass and function which have been linked to cellular senescence. Despite a low basal proliferative rate of adult β-cells, they can respond to growth stimuli, but this proliferative capacity decreases with age and correlates with increased expression of senescence effector, p16Ink4a.
In a new study, researchers Nadine Bahour, Lucia Bleichmar, Cristian Abarca, Emeline Wilmann, Stephanie Sanjines, and Cristina Aguayo-Mazzucato from the Joslin Diabetes Center at Harvard Medical School hypothesized that selective deletion of p16Ink4a-positive cells would enhance the proliferative capacity of the remaining β-cells due to the elimination of the local senescence-associated secretory phenotype (SASP).
“We aimed to investigate the effects of p16Ink4a-positive cell removal on the mass and proliferative capacity of remaining β-cells using INK-ATTAC mice as a transgenic model of senolysis.”
Clearance of p16Ink4a-positive subpopulation was tested in mice of different ages, males and females, and with two different insulin resistance models: high-fat diet (HFD) and insulin receptor antagonist (S961). Clearance of p16Ink4a-positive cells did not affect the overall β-cell mass. β-cell proliferative capacity negatively correlated with cellular senescence load and clearance of p16Ink4a positive cells in 1-year-old HFD mice improved β-cell function and increased proliferative capacity in a subset of animals. Single-cell sequencing revealed that the targeted p16Ink4a subpopulation of β-cells is non-proliferative and non-SASP producing whereas additional senescent subpopulations remained contributing to continued local SASP secretion.
“In conclusion, deletion of p16Ink4a cells did not negatively impact beta-cell mass and blood glucose under basal and HFD conditions and proliferation was restored in a subset of HFD mice opening further therapeutic targets in the treatment of diabetes.”
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Launched in 2009, Aging (Aging-US) publishes papers of general interest and biological significance in all fields of aging research and age-related diseases, including cancer—and now, with a special focus on COVID-19 vulnerability as an age-dependent syndrome. Topics in Aging go beyond traditional gerontology, including, but not limited to, cellular and molecular biology, human age-related diseases, pathology in model organisms, signal transduction pathways (e.g., p53, sirtuins, and PI-3K/AKT/mTOR, among others), and approaches to modulating these signaling pathways.
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Las Vegas December 2022: Visitor Traffic Down 4.6% Compared to 2019; Convention Traffic Down 38.2%
Note: I like using Las Vegas as a measure of recovery for both leisure (visitors) and business (conventions).From the Las Vegas Visitor Authority: December 2022 Las Vegas Visitor StatisticsFrom the initial shadow of the omicron variant to record‐shatte…
From the initial shadow of the omicron variant to record‐shattering room rates later in the year, Las Vegas enjoyed a robust recovery trajectory across core tourism indicators in 2022. With December 2022 visitation just 4.6% shy of December 2019, the year closed out with 38.8M annual visitors, 20.5% ahead of 2021 and ‐8.7% under 2019's tally.
Convention attendance for the year approached 5.0M attendees, dramatically ahead of pandemic‐suppressed volumes of 2021 and recovering to about three‐quarters of 2019's tally of 6.6M convention attendees.
Overall hotel occupancy reached 79.2% for the year , +12.4 pts YoY and down ‐9.7 pts vs. 2019. For the year, Weekend occupancy reached 89.3%, +8.0 pts over 2021 and ‐5.6 pts vs. 2019, while Midweek occupancy reached 74.7%, up 14.2 pts vs. 2021 but down ‐11.6 pts vs. 2019.
Strong room rates continued throughout 2022 as annual ADR reached $171, +24.5% higher than 2021 and +28.9% ahead of 2019 while RevPAR reached approx. $135 for the year, +47.6% YoY and +14.9% over 2019.
Click on graph for larger image.
The first graph shows visitor traffic for 2019 (dark blue), 2020 (light blue), 2021 (yellow) and 2022 (red)
Visitor traffic was down 4.6% compared to the same month in 2019.
Visitor traffic was up 10.1% compared to last December.
The second graph shows convention traffic.
Convention traffic was down 38.2% compared to December 2019.
Note: There was almost no convention traffic from April 2020 through May 2021.
US Job Opening Far Lower Than Reported By Department Of Labor, UBS Finds
When it comes to labor market data (or rather "data"), Biden's labor department is a study in contrasts (and pats on shoulders). One day we get a contraction in PMI employment (both manufacturing and services), the other we get a major beat in employment. Then, one day the Household survey shows a plunge in employment (in fact, there has almost been no employment gain in the past 9 months) and a record in multiple jobholders and part-time workers, and the same day the Establishment Survey signals a spike in payrolls (mostly among waiters and bartenders). Or the day the JOLTS report shows an unexpected jump in job openings even as actual hiring slides to a two year low. Or the straw the breaks the latest trend in the labor market's back, is when the jobs report finally cracks and shows the fewest jobs added in over a year, and yet initial jobless claims tumble and reverse all recent increases despite daily news of mass layoffs across all tech companies, as the relentless barrage of conflicting data out of the Bureau of Labor Statistics (which is the principal "fact-finding" agency for the Biden Administration and a core pillar of the Dept of Labor) just won't stop, almost as if to make a very political point.
But while one can certainly appreciate Biden's desire to paint the glass of US jobs as always half full, reality is starting to make a mockery of the president's gaslighting ambitions, as one by one core pillars of the administration's "strong jobs" fabulation collapse. First it was the Philadelphia Fed shockingly stating that contrary to the BLS "goalseeking" of 1.1 million jobs in Q2 2022, the US actually only added a paltry 10,000 jobs (just as the Fed unleashed an unprecedented spree of 75bps rate hikes).
Then, it was Goldman's turn to make a mockery of the "curiously" low initial jobless claims, by comparing them to directly reported state-level WARN notices (mandatory under the Worker Adjustment and Retraining Notification (WARN) Act) which no low-level bureaucrat and Biden lackey can "seasonally adjust" because there they are: cold, hard, fact, immutable and truly representative of the underlying economic truth, and what they show is that - as the Goldman chart below confirms - layoffs are rising far faster than what the DOL's Initial Claims indicates.
More importantly, Goldman also found that WARN notices also track the JOLTS layoff rate: WARN notice counts remained elevated in late 2020 even as the layoff rate declined, but this likely reflects unusual reporting delays during the pandemic and the exclusion of layoffs at closing establishments in the JOLTS survey, which WARN notices capture provided firms remain in business. Not surprisingly, Goldman's tracking estimate based on December and January WARN notices for the large states covered not only shows that the recent drop in initial claims is unlikely, but that it is also consistent with a layoff rate of around 1.1%, higher than the 0.9% in the November JOLTS report.
And now, another core pillar of the US labor market is being dismantled, and it has to do with the Fed's favorite labor market indicator: the JOLTS report of job openings.
As UBS economist Pablo Villaneuva writes in a recent report by the bank's Evidence Lab group, Job openings in the JOLTS survey have not declined much since the March peak. Indeed, the BLS reports that openings were only 12% below the March 2022 peak in November and remain 48% above the pre-pandemic, 2019 average. This slight move downward has, as we noted recently, led to only a small decline in the vacancies-to-unemployment ratio, from 1.99 in March to 1.74 in November, still well above the 2019 average of 1.19.
Of course, such a high level of job openings is alarming to the Fed for the simple reason that it means Powell has failed at his mission at cooling off what appears to be a red hot jobs market; no wonder the Fed Chair has frequently flagged the high level of job openings as a sign of ongoing strength in the labor market. The bottom line, as UBS notes, is that "the BLS measure, although it has declined, remains historically high."
However, as in the abovementioned case of unexpectedly low jobless claims, there may be more here than meets the eye. According to Villanueva, "a range of other measures of job openings suggest normalization in the labor market—softening much more convincingly, often to pre-pandemic levels" - translation: whether on purpose or accidentally, the BLS is fabricating data.Also, the UBS economist flags, job openings are not a great indicator of current labor market conditions—they lagged the last two downturns in the labor market.
So what's the real story?
Well, as usual there is BLS "data" and everyone else... and as UBS cautions, other measures of openings tell a very different story: "Our UBS Evidence Lab data on job listings is weekly and more timely than the BLS series. The last datapoint is for the week of December 31. It shows openings down 30% from the March 2022 peak and only 25% higher than the 2019 average."
While BLS bureaucrats and Biden sycophants can argue UBS data is inaccurate, other longer dated series also indicate weaker openings. Take for example the NFIB Small Business Survey includes labor market measures that have correlated strongly with the JOLTS data over time but have weakened more sharply than the JOLTS measure in recent months. The percentage of small firms unable to fill open positions has a correlation of 0.95 with JOLTS openings since 2000. This series has declined 20% relative to the peak in May 2022 and is only 13% above the 2019 average. The NFIB series on percentage of firms with few or no qualified applicants tells a similar story.
Finally, the "Opportunity Insights" measure of openings (see here) is also below pre-pandemic levels.
So what's going on here?
As the UBS economist puts it, "in short, other surveys of job openings generally suggest that the BLS measure may be overstating labor market tightness. One reason to think the accuracy of the JOLTS data may have declined is that the sample shrank noticeably at the start of the pandemic. In 2019, the survey response rate was 60%. In December, it was 30%."
Or perhaps it's not gross BLS incompetence (or propaganda): maybe it's just a data quirk at key economic inflection points. As UBS observed in August, job openings tend to lag other labor market indicators. Ahead of the 2001 recession, the private sector job openings rate was still rising as private employment peaked and started printing negative. Again in 2007, as job openings were peaking, payroll employment in the revised data had slowed considerably, and job openings remained near their peak as employment was beginning to contract outright.
Whatever the reason for the discrepancy in this latest labor series, the bigger picture is getting troubling.
We already knew that the employment as measured by the Household survey has been flat since March even as the Establishment survey signaled 2.7 million job gains since then. Shortly thereafter the Philadelphia Fed found that contrary to the BLS "goalseeking" of 1.1 million jobs in Q2 2022, the US actually only added a paltry 10,000 jobs in the second quarter of 2022. As such, the validity and credibility of the US nonfarm payrolls report is suspect at best.
And now, we can also stick a fork in the JOLTS report, whose accuracy has just been steamrolled by UBS with its finding that job openings - a critical component of the US labor market and the Fed's preferred labor market indiator - are far lower than what the Dept of Labor suggests.
Bottom line: while it is obvious why the Biden admin would try hard to put as much lipstick as it can on US jobs data, the same data when measured with alternative measures shows a far uglier picture, one of a US labor market on the verge of cracking and hardly one meriting consistent rate hikes by the Fed.
Which, considering that in less than 24 hours the Fed will hike rates by another 25 bps, is extremely important, and we wish that we weren't the only media outlet to lay out the facts as the negative impact of continued policy error and tightening by the Fed will impact tens of millions Americans, not to mention the continued errors - whether premeditated or accidental - by the US Department of Labor. Alas, as so often happens, since nobody else in the "independent US press" is willing to touch the story of manipulated jobs data with a ten foot pole, it is again up to us to explain what is really going on.