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Pang of Uncertainty Spurs Profit-Taking

Pang of Uncertainty Spurs Profit-Taking

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Overview:  The optimism among investors appears to have evaporated in the face of new US-Chinese tensions, possible delays in the next US fiscal stimulus, and new record virus infections in Australia and Hong Kong.   US stocks had pared early gains yesterday, and the high-flying NASDAQ finished lower after setting new record highs.  Hong Kong (-2.25%) and Australia (-1.3%) led the regional declines, though China eked out some modest gains, helped by the energy sector.  The MSCI Asia Pacific and Europe's Dow Jones Stoxx 600 are snapping three-day advances today, and US shares are pointing to a lower open.  Bond markets are narrowly mixed, and the peripheral European bonds have lost bid seen earlier this week on the EU agreement.  The US 10-year has slipped below 60 bp.  The dollar is mixed.  The euro has is at new 14-month highs, near $1.1570. The Australian dollar is just below 15-month highs near $0.7170.  Sterling and Norwegian krone are leading the decliners with 0.4% and 0.2% declines near midday in Europe.  Emerging markets currencies are also seeing profit-taking after the JP Morgan Emerging Market Currency Index rose 1.1% yesterday, the most in a month.  Gold reached almost $1866 before profit-taking saw it fall $20 before buying re-emerged.   Oil is also pulling back after reaching a four-month high near $42.50 yesterday basis the September WTI contract.  It is trading about a dollar below yesterday's highs.  

Asia Pacific

The US has apparently ordered China to close its consulate in Houston within a few days.  It is not immediately clear why, though some are linking it to surveillance or attempts to steal or disrupt US efforts to find a vaccine.  There are reports that officials in the consulate were destroying documents.  Chinese officials threaten a tit-for-tat response.  The yuan did appear to weaken on the news, though most currencies, as we noted, are softer today against the greenback.  

Preliminary July PMI readings will mostly be reported Friday, but Japan's was released today and confirms that the world's third-largest economy continues to struggle at the start of Q3.  The manufacturing PMI edged up to 42.6 from 40.1 and the services to 45.2 from 45.0.  The composite stands at 43.9, up from 40.8 in June.  Recall that it finished last year at 48.6.  The BOJ does not meet again until the middle of September, and there continues to be talk of another supplementary budget in the second half of the fiscal year that begins October 1. 

The dollar found support near its recent lows against the yen around JPY106.65 yesterday, and Tokyo refrained from selling it.  It edged back above JPY107 in the European morning, but we suspect the JPY107.20 area may cap it and what appears to be a risk-off day.   The Australian dollar's 1.6% advance yesterday was the largest in nearly seven weeks.  Limited follow-through buying saw it rise to almost $0.7170 today before the profit-taking was seen.  It is finding support about half a cent lower.  The PBOC set the dollar's reference rate at CNY6.9718 compared with a median model estimate of CNY6.9712.  The dollar rose back above CNY7.0, and its 0.4% advance is the largest in a couple of months.  

Europe

The UK Telegraph reports that post-Brexit trade negotiations with the EU are on the verge of breaking down.  Businesses are apparently being instructed to prepare to have future trade on WTO terms.  UK Prime Minister Johnson had previously threatened to walk away from the talks if there was no substantial progress by the end of this month, and the two sides are still far apart, according to reports.  Given the disruption that is bound to happen regardless of the talks, game theory would suggest negotiating until the last minute to demonstrate everything was done to minimize it.  The virus slowed the negotiations in the first place, and to stop now seems more like a threat. 

The EU agreement has not been approved by the EU Parliament, but there are already some different interpretations.  The EC is claiming a link between access to the new funding and adherence to the rule of law.  Both Hungary and Poland are subject to EU probes and reportedly given some assurances to secure their support for the historic Recovery Plan and EU budget.  Separately, Greece and Turkey's simmering conflict is escalating as Turkey explores contested water on the continental shelf.   

The euro is the second largest reserve currency behind the dollar.  Leaving aside theoretical debates about monetary union without fiscal union, many, if not most observers, see a chief obstacle to a greater reserve role is the lack of a common bond and bill market.   A new EU bond is clearly a welcome step in this context.  However, the size is relatively modest, and it could be a one-off, emergency-spurred offering.  A common bill market is also not in the cards.  This is why we are reluctant to fully embrace the EU's new budget and Recovery Plan as a major game-changer for the euro's reserve role.  

The euro made marginal news highs, a little shy of the $1.1550 level before profit-taking set in and knocked the single currency to almost $1.1500 in early European trade when new buying emerged. It could be linked to the 1.1 bln euro option at $1.15 that expires today and another one at the same strike for 1.2 bln euros tomorrow.  Recall that the 2019 high for the euro was near $1.1570. Sterling reached almost $1.2770 yesterday and is trading a cent below it near midday in Europe and is back below the 200-day moving average (~$1.2700). It found support a little below $1.2650, and the intraday technicals warn that the option at $1.2725 for roughly GBP460 mln that expires today may still be in play.   

America

Negotiations between the Republicans in the Senate and the White House appear to be stuck, and this may delay the next fiscal package into next month.  After the Republicans reach an agreement, then talks will be held with the House, where the Democrat-majority passed a bill for over $3 trillion that will be the basis of its position.  Meanwhile, the risk is that some programs, like the $600 a week federal unemployment insurance payment, expire.  

The other controversy is over Federal Reserve nominee Shelton, who, on a partisan vote, was approved by the Senate Banking Committee yesterday.  Critics do not like her gold views or that she apparently changed her views on other issues to become a more attractive nominee for President Trump.  However, the most important issue here is not the content of her views but the legitimate process that has been pursued.  Some observers urging the media and others to treat her differently if she is confirmed by the entire Senate, which is still an open question.  Six Republican dissenters could defeat the nomination.  Trump has appointed the majority of Fed governors, and the resilience of the institution tends to be under-appreciated by many of those who claim that Shelton will be a disruptive force.  

Canada's May retail sales showed a strong recovery from April's revised 25% drop (initially -26.4).  However, at 18.7%, it was not quite a strong as economists hoped.  Auto sales drove the gain, but even excluding them, retail sales rose 10.6%, as 10 of the 11 sectors improved, and the Statscan pointed to substantial gains last month as well.  Canada reports June CPI figures today.  The collapse in oil prices had driven the headline below zero, and it likely emerged from there for the first time since March.  Its three core measures have been more stable, but in any event, officials are more concerned about the economic slack.  The 10-year breakeven (the yield difference between conventional and inflation-linked bonds) set a new four-month high yesterday of a little more than 88 bp. Before the pandemic, it was closer to 140 bp. 

The US reports June existing home sales.  A strong gain is expected after the nearly 10% decline posted in May.  Housing and manufacturing appear to be leading the US recovery.  EIA oil inventory estimate will be watched as well following the API estimate of a 7.5 mln barrel build.  Mexico reports May retail sales.  A modest bounce (~3.5%) is expected after the 22.4% plunge in April.  

The US dollar was sold to around CAD1.3425 yesterday, its lowest level since June 11.  It is consolidating in a narrow range just above there so far today.  Previous support in the CAD1.3480-CAD1.3500 area should now offer resistance.  Like the Canadian dollar, the Mexican peso is little changed through the Asian session and the European morning.  The greenback is trading at the lower end of the recent range seen near MXN22.25.  Below there support is seen near MXN22.15. The MXN22.50 may offer initial resistance.  




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Are Voters Recoiling Against Disorder?

Are Voters Recoiling Against Disorder?

Authored by Michael Barone via The Epoch Times (emphasis ours),

The headlines coming out of the Super…

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Are Voters Recoiling Against Disorder?

Authored by Michael Barone via The Epoch Times (emphasis ours),

The headlines coming out of the Super Tuesday primaries have got it right. Barring cataclysmic changes, Donald Trump and Joe Biden will be the Republican and Democratic nominees for president in 2024.

(Left) President Joe Biden delivers remarks on canceling student debt at Culver City Julian Dixon Library in Culver City, Calif., on Feb. 21, 2024. (Right) Republican presidential candidate and former U.S. President Donald Trump stands on stage during a campaign event at Big League Dreams Las Vegas in Las Vegas, Nev., on Jan. 27, 2024. (Mario Tama/Getty Images; David Becker/Getty Images)

With Nikki Haley’s withdrawal, there will be no more significantly contested primaries or caucuses—the earliest both parties’ races have been over since something like the current primary-dominated system was put in place in 1972.

The primary results have spotlighted some of both nominees’ weaknesses.

Donald Trump lost high-income, high-educated constituencies, including the entire metro area—aka the Swamp. Many but by no means all Haley votes there were cast by Biden Democrats. Mr. Trump can’t afford to lose too many of the others in target states like Pennsylvania and Michigan.

Majorities and large minorities of voters in overwhelmingly Latino counties in Texas’s Rio Grande Valley and some in Houston voted against Joe Biden, and even more against Senate nominee Rep. Colin Allred (D-Texas).

Returns from Hispanic precincts in New Hampshire and Massachusetts show the same thing. Mr. Biden can’t afford to lose too many Latino votes in target states like Arizona and Georgia.

When Mr. Trump rode down that escalator in 2015, commentators assumed he’d repel Latinos. Instead, Latino voters nationally, and especially the closest eyewitnesses of Biden’s open-border policy, have been trending heavily Republican.

High-income liberal Democrats may sport lawn signs proclaiming, “In this house, we believe ... no human is illegal.” The logical consequence of that belief is an open border. But modest-income folks in border counties know that flows of illegal immigrants result in disorder, disease, and crime.

There is plenty of impatience with increased disorder in election returns below the presidential level. Consider Los Angeles County, America’s largest county, with nearly 10 million people, more people than 40 of the 50 states. It voted 71 percent for Mr. Biden in 2020.

Current returns show county District Attorney George Gascon winning only 21 percent of the vote in the nonpartisan primary. He’ll apparently face Republican Nathan Hochman, a critic of his liberal policies, in November.

Gascon, elected after the May 2020 death of counterfeit-passing suspect George Floyd in Minneapolis, is one of many county prosecutors supported by billionaire George Soros. His policies include not charging juveniles as adults, not seeking higher penalties for gang membership or use of firearms, and bringing fewer misdemeanor cases.

The predictable result has been increased car thefts, burglaries, and personal robberies. Some 120 assistant district attorneys have left the office, and there’s a backlog of 10,000 unprosecuted cases.

More than a dozen other Soros-backed and similarly liberal prosecutors have faced strong opposition or have left office.

St. Louis prosecutor Kim Gardner resigned last May amid lawsuits seeking her removal, Milwaukee’s John Chisholm retired in January, and Baltimore’s Marilyn Mosby was defeated in July 2022 and convicted of perjury in September 2023. Last November, Loudoun County, Virginia, voters (62 percent Biden) ousted liberal Buta Biberaj, who declined to prosecute a transgender student for assault, and in June 2022 voters in San Francisco (85 percent Biden) recalled famed radical Chesa Boudin.

Similarly, this Tuesday, voters in San Francisco passed ballot measures strengthening police powers and requiring treatment of drug-addicted welfare recipients.

In retrospect, it appears the Floyd video, appearing after three months of COVID-19 confinement, sparked a frenzied, even crazed reaction, especially among the highly educated and articulate. One fatal incident was seen as proof that America’s “systemic racism” was worse than ever and that police forces should be defunded and perhaps abolished.

2020 was “the year America went crazy,” I wrote in January 2021, a year in which police funding was actually cut by Democrats in New York, Los Angeles, San Francisco, Seattle, and Denver. A year in which young New York Times (NYT) staffers claimed they were endangered by the publication of Sen. Tom Cotton’s (R-Ark.) opinion article advocating calling in military forces if necessary to stop rioting, as had been done in Detroit in 1967 and Los Angeles in 1992. A craven NYT publisher even fired the editorial page editor for running the article.

Evidence of visible and tangible discontent with increasing violence and its consequences—barren and locked shelves in Manhattan chain drugstores, skyrocketing carjackings in Washington, D.C.—is as unmistakable in polls and election results as it is in daily life in large metropolitan areas. Maybe 2024 will turn out to be the year even liberal America stopped acting crazy.

Chaos and disorder work against incumbents, as they did in 1968 when Democrats saw their party’s popular vote fall from 61 percent to 43 percent.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times or ZeroHedge.

Tyler Durden Sat, 03/09/2024 - 23:20

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Veterans Affairs Kept COVID-19 Vaccine Mandate In Place Without Evidence

Veterans Affairs Kept COVID-19 Vaccine Mandate In Place Without Evidence

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

The…

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Veterans Affairs Kept COVID-19 Vaccine Mandate In Place Without Evidence

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

The U.S. Department of Veterans Affairs (VA) reviewed no data when deciding in 2023 to keep its COVID-19 vaccine mandate in place.

Doses of a COVID-19 vaccine in Washington in a file image. (Jacquelyn Martin/Pool/AFP via Getty Images)

VA Secretary Denis McDonough said on May 1, 2023, that the end of many other federal mandates “will not impact current policies at the Department of Veterans Affairs.”

He said the mandate was remaining for VA health care personnel “to ensure the safety of veterans and our colleagues.”

Mr. McDonough did not cite any studies or other data. A VA spokesperson declined to provide any data that was reviewed when deciding not to rescind the mandate. The Epoch Times submitted a Freedom of Information Act for “all documents outlining which data was relied upon when establishing the mandate when deciding to keep the mandate in place.”

The agency searched for such data and did not find any.

The VA does not even attempt to justify its policies with science, because it can’t,” Leslie Manookian, president and founder of the Health Freedom Defense Fund, told The Epoch Times.

“The VA just trusts that the process and cost of challenging its unfounded policies is so onerous, most people are dissuaded from even trying,” she added.

The VA’s mandate remains in place to this day.

The VA’s website claims that vaccines “help protect you from getting severe illness” and “offer good protection against most COVID-19 variants,” pointing in part to observational data from the U.S. Centers for Disease Control and Prevention (CDC) that estimate the vaccines provide poor protection against symptomatic infection and transient shielding against hospitalization.

There have also been increasing concerns among outside scientists about confirmed side effects like heart inflammation—the VA hid a safety signal it detected for the inflammation—and possible side effects such as tinnitus, which shift the benefit-risk calculus.

President Joe Biden imposed a slate of COVID-19 vaccine mandates in 2021. The VA was the first federal agency to implement a mandate.

President Biden rescinded the mandates in May 2023, citing a drop in COVID-19 cases and hospitalizations. His administration maintains the choice to require vaccines was the right one and saved lives.

“Our administration’s vaccination requirements helped ensure the safety of workers in critical workforces including those in the healthcare and education sectors, protecting themselves and the populations they serve, and strengthening their ability to provide services without disruptions to operations,” the White House said.

Some experts said requiring vaccination meant many younger people were forced to get a vaccine despite the risks potentially outweighing the benefits, leaving fewer doses for older adults.

By mandating the vaccines to younger people and those with natural immunity from having had COVID, older people in the U.S. and other countries did not have access to them, and many people might have died because of that,” Martin Kulldorff, a professor of medicine on leave from Harvard Medical School, told The Epoch Times previously.

The VA was one of just a handful of agencies to keep its mandate in place following the removal of many federal mandates.

“At this time, the vaccine requirement will remain in effect for VA health care personnel, including VA psychologists, pharmacists, social workers, nursing assistants, physical therapists, respiratory therapists, peer specialists, medical support assistants, engineers, housekeepers, and other clinical, administrative, and infrastructure support employees,” Mr. McDonough wrote to VA employees at the time.

This also includes VA volunteers and contractors. Effectively, this means that any Veterans Health Administration (VHA) employee, volunteer, or contractor who works in VHA facilities, visits VHA facilities, or provides direct care to those we serve will still be subject to the vaccine requirement at this time,” he said. “We continue to monitor and discuss this requirement, and we will provide more information about the vaccination requirements for VA health care employees soon. As always, we will process requests for vaccination exceptions in accordance with applicable laws, regulations, and policies.”

The version of the shots cleared in the fall of 2022, and available through the fall of 2023, did not have any clinical trial data supporting them.

A new version was approved in the fall of 2023 because there were indications that the shots not only offered temporary protection but also that the level of protection was lower than what was observed during earlier stages of the pandemic.

Ms. Manookian, whose group has challenged several of the federal mandates, said that the mandate “illustrates the dangers of the administrative state and how these federal agencies have become a law unto themselves.”

Tyler Durden Sat, 03/09/2024 - 22:10

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Low Iron Levels In Blood Could Trigger Long COVID: Study

Low Iron Levels In Blood Could Trigger Long COVID: Study

Authored by Amie Dahnke via The Epoch Times (emphasis ours),

People with inadequate…

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Low Iron Levels In Blood Could Trigger Long COVID: Study

Authored by Amie Dahnke via The Epoch Times (emphasis ours),

People with inadequate iron levels in their blood due to a COVID-19 infection could be at greater risk of long COVID.

(Shutterstock)

A new study indicates that problems with iron levels in the bloodstream likely trigger chronic inflammation and other conditions associated with the post-COVID phenomenon. The findings, published on March 1 in Nature Immunology, could offer new ways to treat or prevent the condition.

Long COVID Patients Have Low Iron Levels

Researchers at the University of Cambridge pinpointed low iron as a potential link to long-COVID symptoms thanks to a study they initiated shortly after the start of the pandemic. They recruited people who tested positive for the virus to provide blood samples for analysis over a year, which allowed the researchers to look for post-infection changes in the blood. The researchers looked at 214 samples and found that 45 percent of patients reported symptoms of long COVID that lasted between three and 10 months.

In analyzing the blood samples, the research team noticed that people experiencing long COVID had low iron levels, contributing to anemia and low red blood cell production, just two weeks after they were diagnosed with COVID-19. This was true for patients regardless of age, sex, or the initial severity of their infection.

According to one of the study co-authors, the removal of iron from the bloodstream is a natural process and defense mechanism of the body.

But it can jeopardize a person’s recovery.

When the body has an infection, it responds by removing iron from the bloodstream. This protects us from potentially lethal bacteria that capture the iron in the bloodstream and grow rapidly. It’s an evolutionary response that redistributes iron in the body, and the blood plasma becomes an iron desert,” University of Oxford professor Hal Drakesmith said in a press release. “However, if this goes on for a long time, there is less iron for red blood cells, so oxygen is transported less efficiently affecting metabolism and energy production, and for white blood cells, which need iron to work properly. The protective mechanism ends up becoming a problem.”

The research team believes that consistently low iron levels could explain why individuals with long COVID continue to experience fatigue and difficulty exercising. As such, the researchers suggested iron supplementation to help regulate and prevent the often debilitating symptoms associated with long COVID.

It isn’t necessarily the case that individuals don’t have enough iron in their body, it’s just that it’s trapped in the wrong place,” Aimee Hanson, a postdoctoral researcher at the University of Cambridge who worked on the study, said in the press release. “What we need is a way to remobilize the iron and pull it back into the bloodstream, where it becomes more useful to the red blood cells.”

The research team pointed out that iron supplementation isn’t always straightforward. Achieving the right level of iron varies from person to person. Too much iron can cause stomach issues, ranging from constipation, nausea, and abdominal pain to gastritis and gastric lesions.

1 in 5 Still Affected by Long COVID

COVID-19 has affected nearly 40 percent of Americans, with one in five of those still suffering from symptoms of long COVID, according to the U.S. Centers for Disease Control and Prevention (CDC). Long COVID is marked by health issues that continue at least four weeks after an individual was initially diagnosed with COVID-19. Symptoms can last for days, weeks, months, or years and may include fatigue, cough or chest pain, headache, brain fog, depression or anxiety, digestive issues, and joint or muscle pain.

Tyler Durden Sat, 03/09/2024 - 12:50

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