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Market Rally Fizzles As Volume Evaporates

Market Rally Fizzles As Volume Evaporates

Tuesday’s rally fizzled on Wednesday, as US emini futures were flat after erasing an earlier dip as attention again turned to news about the omicron variant as cases surged globally. Contracts on…

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Market Rally Fizzles As Volume Evaporates

Tuesday's rally fizzled on Wednesday, as US emini futures were flat after erasing an earlier dip as attention again turned to news about the omicron variant as cases surged globally. Contracts on the Nasdaq 100 led declines, slipping 0.3% in thin trading ahead of holidays. In Europe, stocks were little changed as more omicron woes weighed on sentiment. Oil steadied as investors assessed mixed demand signals and the dollar fell. Elon Musk sold even more Tesla shares, one step close to his promise to sell 10% of his stake in the electric carmaker.

Markets have been volatile at the end of a year that has seen equities rally amid a recovery from the pandemic, before losing steam on worries about inflation, tighter policy and stricter curbs brought on by the omicron virus variant. Thinner trading volumes heading into the holidays could exacerbate market swings, leaving strategists reluctant to read much into day-to-day gyrations during the period.

“Despite the new restriction measures, many investors believe that omicron would only have a temporary impact on the economic activity and should not be a problem for the overall positive trend in equities,” said Ipek Ozkardeskaya, senior analyst at Swissquote Group. “Investors should remain cautious with big ups and downs into the Xmas break.”

In the latest Omicron news, the U.K. not planning new restrictions before Christmas, while Germany stopping short of a full lockdown while imposing tighter curbs. In the US, Joe Biden said Tuesday omicron will result in more breakthrough infections among vaccinated Americans, potentially in large numbers, but that they are very unlikely to be severely ill. The top medical adviser to the world’s airlines said aircraft passengers are twice or even three times more likely to catch Covid-19 during a flight since the emergence of the variant.

“While this variant is significant and the impact is powerful, I do still have my rose-colored glasses heading into the New Year because below the surface there is still a lot of opportunity” away from trades that are played out or frothy, Nicole Webb, Wealth Enhancement Group senior vice president, said on Bloomberg Television.

Elsewhere, on the fiscal stimmy front, Biden said there’s still a chance he can make a deal with Senator Joe Manchin to drive his economic plan through Congress. 

In U.S. premarket trading, Tesla rose after Chief Executive Officer Elon Musk offloaded more of his stake in the electric-vehicle maker. Alibaba Group Holding Ltd. shares fell with other Chinese ADRs also coming under pressure, after local media reports that a unit’s cooperation with a government agency has been suspended. Online marketplace operator JD.com dropped -2.3%, ride-hailing firm Didi -2.2%, Bilibili -2.5%. The Nasdaq Golden Dragon China Index of U.S.- listed Chinese companies has slumped 43% YTD amid worries over increasing regulatory oversight from both China and the U.S. Here are some other notable U.S. movers:

  • Apple (AAPL US) slips 0.4% in U.S. premarket trading, easing after Tuesday’s 1.9% bounce. The iPhone maker’s shares have again outperformed the market this year and positive drivers remain ahead, Citi writes in note reiterating a buy rating and upping its target to $200 from $170.
  • BlackBerry (BB US) shares fell 2.2% in U.S. premarket trading after the company’s 4Q guidance disappointed, according to RBC Capital Markets.
  • Tesla (TSLA US) shares gain 2.3% in U.S. premarket trading after CEO Elon Musk offloaded more of his stake in the electric-vehicle maker.
  • Alibaba (BABA US) shares fall 3.2% in U.S. premarket trading, with other Chinese ADRs also coming under pressure, after local media reports that a unit’s cooperation with a government agency has been suspended.
  • Magnachip Semiconductor (MX US) buyback plan represents ~8.6% of the company’s current market value, data compiled by Bloomberg show. The stock rose in postmarket trading.
  • BioRestorative Therapies (BRTX US) rises as much as 70% in premarket trading after the company announced an agreement with contract research organization PRC Clinical for a phase 2 trial of its lead product.
  • AAR (AIR US) drops 8.3% in postmarket trading after the aerospace product supplier reported second quarter earnings that trailed the average analyst estimate.
  • Acasti Pharma’s (ACST US) merger gives it “a diversified, late-stage, orphan drug pipeline and bench strength,” writes Oppenheimer, launching coverage at outperform. Stock rallied 30% in postmarket.
  • Repro Med Systems (KRMD US) gains 7.8% in postmarket trading after reporting the FDA cleared the expanded on-label use of the Freedom60 infusion system to two additional subcutaneous Ig medications, Cutaquig and Xembify.

Most European equities were little changed in notably subdued volatility with Spain's IBEX outperforming, rising 0.4%; FTSE MIB lags. Tech and travel are the best performing sectors, utilities slip over 1%. Elsewhere, European power climbed to a fresh record as France faces a winter crunch.

Asian equities rose, on track for a second-straight day of gains, as investors assessed progress in the U.S. administration’s spending plans in thin trading ahead of year-end holidays. The MSCI Asia Pacific Index was up 0.3% as of 5:10 p.m. in Hong Kong, driven higher by consumer discretionary and IT shares. China’s tech stocks advanced for a second day as traders rushed to unwind short bets ahead of the year-end holidays. Investors returned to riskier assets globally after Monday’s selloff, as President Joe Biden said there’s still a chance he can strike a deal with Senator Joe Manchin to get his Build Back Better economic plan through Congress. While rates are expected to climb in 2022 thanks to inflation and signaled hikes from the Federal Reserve, strategists expect the advance to top out in negative territory on an inflation-adjusted basis.

“Even as central banks look to tighten up monetary policy a little bit because inflation is high, people aren’t looking at the bond market for an inflation hedge, that could still keep some attractiveness in the equity markets,” Jason Schenker, president at Prestige Economics LLC, told Bloomberg Television. Benchmarks in India and Hong Kong rose the most in the region, while Japan’s stocks edged higher. Singapore’s Straits Times Index was down 0.1% as the country halted ticket sales for quarantine-free travel lanes.

Japanese equities closed slightly higher after swinging in a narrow range, as trading thinned heading into the year-end holidays. Gains in electronics makers offset losses in auto and food makers, pushing the Topix 0.1% higher. Tokyo Electron was the biggest contributor to a 0.2% gain in the Nikkei 225. Volumes on both gauges were more than 25% below 30-day averages

India’s key indexes extended their rebound for a second day, tracking recoveries in regional peers, after the Nifty entered a correction earlier this week.  The S&P BSE Sensex rose 1.1% to 56,930.56 in Mumbai, its biggest advance since Dec. 8. The NSE Nifty 50 Index also advanced by a similar measure. Reliance Industries was among the biggest contributors to both gauges. All 19 sector sub-indexes compiled by BSE Ltd. climbed, led by the realty group. The Nifty’s two-day gain comes after the index entered a technical correction Monday, falling more than 10% from its record-high closing on Oct. 18, with the Sensex’s earlier drop just short of that level. “Volumes would remain muted for the rest of December, since there are expected to be few triggers in terms of news flow,” according to S. Hariharan, a sales trading head with Emkay Global Financial Services. He sees information-technology companies attracting interest from investors and bottom-fishing taking place in auto-related shares.

In rates, treasury yields rose modestly, led by the belly of the curve, and so did bund yields. The 10Y TSY traded at 1.4720% last. Gilts underperformed bunds and USTs, cheapening 3-4bps in a bear steepening move. Bunds and USTs bear flatten slightly. Much of the semi-core and peripheral space tightens to core; Italy underperforms, widening 1.5bps at the 10y point.

In FX, the Bloomberg Dollar Spot Index slipped as the greenback traded weaker versus most of its Group-of-10 peers. Risk-sensitive currencies, led by the Norwegian krone, performed best; the euro hovered in a narrow 1.1264-1.1300 range. The pound edged higher against the dollar after revised data showed the U.K. economy has recovered from the pandemic faster than previously thought; gilt yields rose by 4-5bps across the curve. The Australian and New Zealand dollars weighed down in early trade before recovering ground, as rising Covid cases spur concerns about the economic outlook. Prime Minister Scott Morrison is urging state and territory leaders to move ahead with reopening plans even as omicron outbreaks push daily infections to record levels. Aggressive bets on rate hikes by the RBA are receding with the yield on 3-year bonds down 8bps to 0.84%. The yen slipped; concerns over debt supply and gains in overnight overseas yields capped bond prices. The world's most volatile security, the Turkish lira, held a tight range near 12.51/USD.

In commodities, crude futures hold in the green. WTI trades up 0.5% near $71.50, Brent near $74.25. Spot gold is little changed near $1,788/oz. Most base metals are in the green: LME zinc and aluminum are up over 2%, tin lags.

On today's calendar, we have the 2nd revision of Q3 GDP, the Conference Board sentiment index, and Existing home sales data.

Market Snapshot

  • S&P 500 futures down 0.2% to 4,632.75
  • STOXX Europe 600 up 0.2% to 474.88
  • MXAP up 0.3% to 190.50
  • MXAPJ up 0.5% to 617.81
  • Nikkei up 0.2% to 28,562.21
  • Topix little changed at 1,971.51
  • Hang Seng Index up 0.6% to 23,102.33
  • Shanghai Composite little changed at 3,622.62
  • Sensex up 1.1% to 56,927.27
  • Australia S&P/ASX 200 up 0.1% to 7,364.77
  • Kospi up 0.3% to 2,984.48
  • German 10Y yield little changed at -0.29%
  • Euro down 0.1% to $1.1273
  • Brent Futures up 0.4% to $74.30/bbl
  • Gold spot down 0.1% to $1,788.23
  • U.S. Dollar Index little changed at 96.54

Top Overnight news from Bloomberg

  • “We are well aware of the uncertainty around our inflation projections. There is a risk to the upside,” European Central Bank Executive Board member Isabel Schnabel says in interview with Le Monde
  • It was supposed to be a year when volatility in the currency space would make a strong comeback as yield-starved investors from the world of bonds shifted focus to create alpha. Yet inflation made for such volatility in rates and equities, that FX found itself in relatively calm waters
  • Anyone gearing up for bond yields to surge in 2022 should think again. A global glut of saved cash has the potential to restrain an increase in rates, even as central banks dial back their pandemic stimulus.
  • In the months after Boris Johnson signed his post- Brexit trade deal with the European Union, the coronavirus masked the economic damage of leaving the bloc. As the pandemic drags on, the cost is becoming clearer -- and voters are noticing
  • U.K. employer confidence plunged to the lowest level since the nation was still under lockdown earlier this year as the spread of the omicron variant and uncertainty about inflation and labor shortages dimmed the outlook
  • The green debt market is growing at a much faster pace than the real-world projects it was created to support, thanks to some financial engineering
  • A Chinese regulator has tightened rules regarding use of messaging tools in the nation’s local bond and derivative markets, clamping down on anonymous accounts following similar moves globally in recent years
  • For Turkish sovereign and corporate debt, Monday’s emergency measures to tackle the lira’s meltdown have come too late to rescue a painful 2021. Investors have lost 7.8% on the country’s dollar-denominated sovereign debt this year, compared to 2.9% across emerging markets in the worst performance since 2013

A more detailed look at global markets courtesy of Newsquawk

Asia-Pac stocks were indecisive overnight following the sharp rebound seen on Wall Street - which was spurred by the tech sector as Micron led the charge following solid earnings, whilst some reopening plays such as airlines and cruise lines saw substantial gains. The Russell 2000 saw gains of 2.9%, the Nasdaq rose 2.4% whilst the S&P 500 and DJIA closed higher by 1.8% and 1.6% respectively. US equity futures trade flat with a mild downside bias, whilst APAC stocks gradually trimmed earlier gains. The ASX 200 (+0.1) spent most of the session in modest negative territory, but gains in Tech cushioned losses. The Nikkei 225 (+0.1%) and KOSPI (+0.3%) opened with mild gains but the upside momentum petered out. The Hang Seng (+0.6%) initially outperformed amid a revival of large tech, with Alibaba, Tencent, NetEase and JD.com among the biggest gainers at one point. The Shanghai Comp (-0.1%) conformed to the indecisive tone, with the index caged to a tight range. US 10yr Treasury futures reflected the indecisiveness of markets overnight.

Top Asian News

  • Defaulter Sinic Says Unlikely to Repay January Bonds, Coupon
  • China’s Xi Tells Lam Hong Kong Is Heading in the Right Direction
  • Asian Stocks Extend Gains Slightly as Investors Tread Water
  • Alibaba Shares, Chinese ADRs Drop in U.S. Premarket Trading

European bourses are essentially unchanged, with both the direction and magnitude of action in-fitting with the dull trading conditions seen overnight. Since the cash open, indices have meandered around the unchanged mark; there are modest regional differences but no convincing or enduring moves in either direction. Sectors are in the green, but the breadth of performance is contained with less than 1.0ppts separating the best and worst performers. News flow remains thin and focus continues to fall on COVID; albeit, the clamour for updates has slowed somewhat with the UK and US confirming no pre-Xmas restrictions, but the post-Xmas period remains uncertain. Individual movers include Delivery Hero (+6.5%) after updating on Foodpanda divestments, Rio Tinto (-1.3%) following the acquisition of Rincon Mining Lithium for USD 825mln.

Top European News

  • U.K. to Say Omicron Causes Milder Disease Than Delta: Politico
  • European Gas Drops After Surging on Constrained Russian Flows
  • Cargill Inks $1 Billion Deal for Croda’s Tech, Chemical Unit
  • Delivery Hero Exits German Delivery Business in Reversal

In FX, newsflow and turnover is dwindling as the clock ticks down to Xmas, but the lack of depth in terms of trading volume is keeping price movement active or even lively for some financial market instruments and assets. Indeed, debt remains volatile and in the throes of a relatively pronounced, deep bull retracement, to the benefit of the Buck over lower yielders if not other rival currencies that are elevated or underpinned due to independent factors. As such, the Dollar index is holding around 96.500, and currently within a 96.361-604 range awaiting a decent line up of US data that may prompt a reaction and provide a fundamental distraction from the overriding focus on pandemic headlines/updates. Conversely, the Yen and Franc are lagging/underperforming, with the former now probing below its post-FOMC base and inching closer towards Fib support at 114.38, while the latter is trying to absorb more offers and soak up pressure at 0.9250.

  • GBP - The Pound has bounced further from recent lows across the board in wake of confirmation from UK PM Johnson that no new Omicron/COVID measures will be imposed this side of Christmas rather than final UK GDP data for Q3 that was somewhat mixed. Cable is eyeing edging through.3300 and Eur/Gbp is straddling 0.8500 irrespective of hawkish sounding comments from ECB’s Holzmann who suggests there may be an extreme case for a rate hike in 2022.
  • NZD/CAD/AUD/EUR - Risk sentiment appears to have plateaued following Tuesday’s significant revival in appetite, but the Kiwi, Loonie and Aussie have derived enough impetus to pare declines against the Greenback between 0.6773-40, 1.2924-04 and 0.7158-21 respective parameters, in keeping with crude, industrial and precious metals that are maintaining recovery momentum on the grounds that the latest pandemic waves might not be as damaging as prior episodes. Elsewhere, the Euro could be gleaning underlying support from decent option expiry interest at 1.1245-50 (1.3 bn) in the same vein as expiries capped the upside yesterday and on Monday, but the psychological 1.1300 level is still proving to be a tough hurdle even with the aforementioned ECB rhetoric.
  • EM - A new day brings more angst between Russia and the US, though the Rub is firmer alongside Brent and the Nok, while the Cnh and Cny are both on an even keel after another firmer PBoC midpoint setting. In Turkey, the Try seems to have topped out with little response to the first CBRT repo by quantity auction at 14% in Lira 38bn, maturing on December 29 that came at an official rate of 12.348 vs the Usd for time deposits. Indeed, the pair has rebounded from close to 12.0000 and is now nearer the upper end of a band reaching 12.6600, largely taking comments from President Erdogan in stride as well. However, for the record he declared in typical forthright fashion that the country has thwarted all games against the domestic economy, adding more dramatically that those calling to buy FX (Usd) have now had their ‘brains watered out’ (or washed presumably!).

In commodities, WTI and Brent are modestly firmer in a continuation of the general trend of APAC trade, though the benchmarks remain within fairly narrow parameters. Prior to Tuesday’s private inventory report, some modest downside was seen, and while the API’s weekly inventory data reportedly showed a larger-than-expected build, the internals were more mixed. Today’s EIA release is expected to print a headline draw accompanied by mixed internals. Currently, the benchmarks are steady towards the top-end of the sessions range which stands at under USD 1.0/bbl. Natural gas prices remain in focus as reports once again indicated that the Yamal-Europe pipeline is operating in reverse mode. However, UK prices were subdued, retracing some of the upside seen yesterday on the referenced pipeline activity. Moving to metals, spot gold and silver are contained and have been pivoting the unchanged mark for this most part. Separately, base metals are modestly firmer deviating slightly from APAC pressure in copper, for instance.

US Event Calendar

  • 7am: Dec. MBA Mortgage Applications, prior -4.0%
  • 8:30am: 3Q GDP Annualized QoQ, est. 2.1%, prior 2.1%
  • 8:30am: 3Q PCE Core QoQ, est. 4.5%, prior 4.5%
  • 8:30am: 3Q GDP Price Index, est. 5.9%, prior 5.9%
  • 8:30am: 3Q Personal Consumption, est. 1.7%, prior 1.7%
  • 8:30am: Nov. Chicago Fed Nat Activity Index, est. 0.40, prior 0.76
  • 10am: Dec. Conf. Board Consumer Confidenc, est. 111.0, prior 109.5
    • Expectations, prior 87.6
    • Present Situation, prior 142.5
  • 10am: Nov. Existing Home Sales MoM, est. 3.0%, prior 0.8%
Tyler Durden Wed, 12/22/2021 - 07:50

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International

Pandas wants to give Latin American businesses buying power in Asia

Pandas connects Latin America’s small businesses directly with Asian manufacturers to reduce logistical problems and high fees often imposed by importers…

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Access to global supply chains can be difficult for small businesses in Latin America, but companies like Meru, which raised funding in March to source and import goods between Mexico and China, and now more recently Pandas, are tapping into overseas relationships and technology to make this easier.

In Pandas’ case, the company is doing something similar to Meru, but starting in Colombia, connecting small businesses directly with Asian manufacturers, so that they can reduce the high fees often imposed by half a dozen importers and intermediaries as well as logistical problems that all businesses are facing right now where inventory is now taking many more months to arrive than during pre-pandemic times.

Co-founders Rio Xin and Marcos Esterli started Pandas just three months ago to provide Asian-origin inventory to micro-businesses in Latin America. Their collective background includes careers at McKinsey and Treinta for Esterli, and McKinsey, with more than seven years spent in China, for Xin, where he told TechCrunch he developed a strong network in the region.

“The main issue that we’ve seen is people who don’t understand the Chinese language or how Chinese manufacturers work and then you add in the logistical problems,” Xin added. “We are able to bridge the breach, while at the same time having our team in China to overcome all these logistics problems.”

Pandas B2B marketplace. Image Credits: Pandas

Here’s how it works: Businesses order products via the Pandas marketplace, touting lower pricing, in which the business can make purchases in a few clicks. Pandas takes it from there, offering one-day-delivery and customer support.

Esterli explained that people in Latin America have been using smartphones for their personal finances and other tasks, but that has not translated as quickly to the business side.

“A lot of customers told us Alibaba was something they wanted to use, but that it was very complicated to figure out,” he added. “We wanted to build an easy solution that was super intuitive because business owners don’t have that time to spend.”

Initially providing basic electronics products — think headphones, accessories and cables — and with a new round of funding, $5.8 million pre-seed, Pandas will move into categories like textiles and home accessories. The company touts the pre-seed investment as “the largest pre-seed financial in Spanish-speaking LatAm to date.”

Third Kind Venture Capital led the round and was joined by Acequia Capital, Picus Capital, Tekton Ventures, Partech, Liquid2 Ventures, Clocktower Technology Ventures, Gaingels and a host of individual investors, including Tul’s Juan Carlos Narvaez, Jose Jair Bonilla from Chiper, Treinta’s Man Hei and Lluís Cañadell, Pablo Viguera from Belvo, Nowports’ Alfonso de los Rios, Sujay Tyle from Merama and Ironhack’s Gonzalo Manrique.

So far in its young journey, the company is growing 100% month over month and has amassed a supplier network of about 300 out of 5,000 in China, Xin said.

In addition to moving into those new inventory categories, the new capital will enable Pandas to scale its operations, technology and product development and make new hires.

Xin expects to be in most of the main markets across Latin America in the next three years. In the meantime, new features coming down the pipeline in the next 12 months include a suite of fintech and analytics tools like financing.

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Government

Monkeypox cases are rising. Should we be worried?

The World Health Organization has said the current outbreak of monkeypox is the largest ever recorded outside sub-Saharan
The post Monkeypox cases are…

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The World Health Organization has said the current outbreak of monkeypox is the largest ever recorded outside sub-Saharan Africa, with cases rising above the 100-mark a few days ago and the UK top of the table with 56 as of yesterday.

Top of the list of concerns is how the virus – which does not spread easily between humans and requires skin-to-skin contact – is spreading so quickly in so many countries in Europe, the Americas and Australia where the disease is not endemic.

There is speculation that monkeypox may be being spread between sexual partners, even though it is not normally considered a sexually-transmitted infection. Thankfully, there have been no deaths reported so far, although the WHO notes monkeypox has a fatality rate of between 3% and 6%.

While health authorities are on alert, the WHO said it thinks the outbreak can be contained and that the overall risk to the population remains low. It also stressed there is no evidence that a viral mutation is responsible for the unusual pattern of infections.

Monkeypox is considered less likely to mutate quickly because it is a DNA virus rather than an RNA virus like influenza or COVID-19.

Several countries including Belgium and the UK are already advising a three-week quarantine period for anyone who contracts the virus and their close contacts.

The increasing case numbers in the current monkeypox outbreak are certainly concerning,” commented Dr Charlotte Hammer, an expert in emerging infectious diseases based at the University of Cambridge in the UK.

“It is very unusual to see community transmission in Europe – previous monkeypox cases have been in returning travellers with limited ongoing spread. However, based on the number of cases that were already discovered across Europe and the UK in the previous days, it is not unexpected that additional cases are now being and will be found, especially with the contact tracing that is now happening.”

Vaccines and drugs are available

Meanwhile, attention is now being turned to other measures to control the outbreak, including the use of vaccines against smallpox – a related virus – in a ‘ring vaccination’ approach designed to control the spread among contacts.

Vaccines used during the smallpox eradication programme can provide around 85% protection against monkeypox, according to the WHO, which notes that one newer vaccine – Bavarian Nordic’s Jyneos – has been approved by the FDA for prevention against both viruses.

There’s also a licensed antiviral drug for monkeypox. SIGA Technologies’ oral drug Tpoxx (tecovirimat) is approved for smallpox, monkeypox and cowpox in Europe, and in the US and Canada for smallpox, although it can be used off-label for the other disease. The US FDA also approved a new intravenous form of the drug last week.

The WHO says there is no need for widespread vaccination, as other control measures like isolation of patients should be enough to curb the spread and in any case supplies of vaccines are limited.

Monkeypox causes symptoms similar to but milder than smallpox, typically beginning with fever, headache, muscle aches and exhaustion. It is transmitted to people from various wild animals, such as rodents and primates, and is usually a self-limited disease with symptoms lasting from two to four weeks.

In 2003, the US experienced an outbreak of monkeypox, which was the first time human monkeypox was reported outside of Africa. The Centers for Disease Control and Prevention (CDC) is making some Jyneos vaccine reserves available for close contact inoculations, including healthcare workers tending to patients.

The UK Health Security Agency (UKHSA) said yesterday it had identified 36 additional cases of monkeypox in England, and that vaccination of high-risk contacts of cases is already underway.

“A notable proportion of recent cases in the UK and Europe have been found in gay and bisexual men so we are particularly encouraging these men to be alert to the symptoms,” said the agency’s chief medical advisor Dr Susan Hopkins.

“Because the virus spreads through close contact, we are urging everyone to be aware of any unusual rashes or lesions and to contact a sexual health service if they have any symptoms.”

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UK’s Johnson Urges Talks As Unions Threaten “Biggest Rail Strike In Modern History”

UK’s Johnson Urges Talks As Unions Threaten "Biggest Rail Strike In Modern History"

Authored by Alexander Zhang via The Epoch Times,

British…

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UK's Johnson Urges Talks As Unions Threaten "Biggest Rail Strike In Modern History"

Authored by Alexander Zhang via The Epoch Times,

British Prime Minister Boris Johnson has urged rail unions to talk to the government before causing “irreparable damage” with strike action.

The National Union of Rail, Maritime, and Transport Workers (RMT) is holding a ballot of its 40,000 members on plans to strike over jobs, pay, and conditions. The ballot is set to close on Tuesday, and the union has claimed that a yes vote could lead to “the biggest rail strike in modern history.”

Another union, the Transport Salaried Staffs’ Association (TSSA), has also warned of a “summer of discontent” with similar action on the way unless pay disputes are resolved.

The prime minister’s official spokesman said on Monday:

“Railways are going through difficult times with passenger numbers down. We need to make sure they’re fit for the future.”

He said the government wants “a fair deal for staff, for passengers, and taxpayers” so that “money isn’t taken away from other essential services” such as the National Health Service.

“The prime minister is firmly of the view that unions should talk to the government before causing irreparable damage to our railways—strikes should be the last resort not the first,” he added.

Transport Secretary Grant Shapps told The Sunday Telegraph that ministers are looking at drawing up laws which would make industrial action illegal unless a certain number of staff are working.

Shapps said the government hopes the unions will “wake up and smell the coffee” and suggested that strikes could put more people off rail travel.

He also accused unions of going straight to industrial action rather than using it as a last resort, adding that railways were already on “financial life support” because of the CCP (Chinese Communist Party) virus pandemic.

Referring to a pledge in the Conservative Party’s 2019 election manifesto, which promised minimum services during rail strikes, he said:

“We had a pledge in there about minimum service levels. If they really got to that point then minimum service levels would be a way to work towards protecting those freight routes and those sorts of things.”

Unions have reacted to the threat with anger.

RMT General Secretary Mick Lynch said, “Any attempt by Grant Shapps to make effective strike action illegal on the railways will be met with the fiercest resistance from RMT and the wider trade union movement.”

He said the government needs to “focus all their efforts on finding a just settlement” to the rail dispute rather than “attack the democratic rights of working people.”

Tyler Durden Tue, 05/24/2022 - 02:00

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