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Risk-Neutral Market Gauges Ahead of Sunday Deadline

We do not want to walk down the political aisle. Nonetheless, what person can turn their heads away from the Sunday deadline on funding the government?The…

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We do not want to walk down the political aisle. Nonetheless, what person can turn their heads away from the Sunday deadline on funding the government?

The aftermath of a shutdown will most likely include a credit downgrade for the US. Do Americans need another reason to distrust the politicos?

With a 90% consensus that the funding will not pass, the bounce we saw in equities last week could be short-lived.

The Retail ETF XRT had a technically perfect mean reversion in momentum and a classic glass bottom reversal. Coming into Friday, 3 of our risk gauges said risk neutral. That gave us hope that our Granny Retail could lead us out of harm's way. And, on the heels of Nike earnings, she kinda did.

However, will a bounce in the consumer sector help keep the risk gauges neutral? For that answer, we turn to another old reliable friend, high yield, high debt junk bonds.

These bonds are a key influencer for risk; after all, how bad can things be if companies with junk ratings are being bought for their higher-paying yield? That is a big risk-on factor.

We also look at their performance relative to the long bonds (TLT). Even though neutral can turn to risk-off, any hope from bond traders and/or the retail sector could also see risk-neutral turn to risk-on. We can hope, right?

The chart of HYG has several fascinating and a somewhat taming influence on the extreme negativity. For starters, HYG held its ground on Friday as the indices turned red. (So did XRT, by the way.) Secondly, HYG returned over the July 6-month calendar range low (red horizontal line). Thirdly, HYG held the March lows made after the mini-banking crisis. Fourth, HYG had a mean reversion buy in our Real Motion momentum indicator.

Fifth, and here is the risk gauge ratio, HYG is strongly outperforming the TLT (Leadership indicator). That is what bulls need to continue to see. Conversely, bulls do not want to see HYG fail the March lows. Nor do they want to see XRT take out last week's lows. Furthermore, they do not want to see TLT catch a bid in fear of an oncoming recession while junk bonds underperform.

We like it when we can simplify the narrative. Junk bonds help us to accomplish that.


This is for educational purposes only. Trading comes with risk.

For more detailed trading information about our blended models, tools and trader education courses, contact Rob Quinn, our Chief Strategy Consultant, to learn more.

If you find it difficult to execute the MarketGauge strategies or would like to explore how we can do it for you, please email Ben Scheibe at Benny@MGAMLLC.com.

"I grew my money tree and so can you!" - Mish Schneider

Get your copy of Plant Your Money Tree: A Guide to Growing Your Wealth and a special bonus here.

Follow Mish on Twitter @marketminute for stock picks and more. Follow Mish on Instagram (mishschneider) for daily morning videos. To see updated media clips, click here.


Mish in the Media

See Mish argus investors could jump into mega-tech over value and explain why she is keeping an eye on WTI prices on BNN Bloomberg's Opening Bell.

Even as markets crumble, there are yet market opportunities to be found, as Mish discusses on Business First AM here.

Mish explains how she's preparing for the next move in Equities and Commodities in this video with Benzinga's team.

Mish talks about the head-and-shoulders top pattern for the S&P 500 in The Final Bar.

Mish covers sectors from the Economic Family, oil, and risk in this Yahoo! Finance video.

Mish shares why the most important ETFs to watch are Retailers (XRT) and Small Caps (IWM) in this appearance on the Thursday, September 20 edition of StockCharts TV's The Final Bar with David Keller, and also explains MarketGauge's latest plugin on the StockCharts ACP platform. Mish's interview begins at 19:53.

Mish covers 7 stocks that are ripe for the picking on the Wednesday, September 20 edition of StockCharts TV's Your Daily Five, and she gives you actionable levels to watch.

Take a look at this analysis of StockCharts.com's Charting Forward from Jayanthi Gopalkrishnan, which breaks down Mish's conversation with three other charting experts about the state of the market in Q3 and beyond.

Mish was interviewed by Kitco News for the article "Oil Prices Hit Nearly One-Year High as it Marches Towards $100", available to read here.

Mish covers short term trading in DAX, OIL, NASDAQ, GOLD, and GAS in this second part of her appearance on CMC Markets.

Mish talks Coinbase in this video from Business First AM!

Mish looks at some sectors from the economic family, oil, and risk in this appearance on Yahoo Finance!

Mish covers oil, gold, gas and the dollar in this CMC Markets video.

In this appearance on Business First AM, Mish explains why she's recommending TEVA, an Israeli pharmaceutical company outperforming the market-action plan.

As the stock market tries to shake off a slow summer, Mish joins Investing with IBD to explain how she avoids analysis paralysis using the six market phases and the economic modern family. This edition of the podcast takes a look at the warnings, the pockets of strength, and how to see the bigger picture.

Mish was the special guest in this edition of Traders Edge, hosted by Jim Iuorio and Bobby Iaccino!

In this Q3 edition of StockCharts TV's Charting Forward 2023, Mish joins a panel run by David Keller and featuring Julius de Kempenaer (RRG Research & StockCharts.com) and Tom Bowley (EarningsBeats). In this unstructured conversation, the group shares notes and charts to highlight what they see as important considerations in today's market environment.


Coming Up:

October 2: Schwab, The Watch List 

October 4: Jim Puplava, Financial Sense

October 5: Yahoo! Finance

October 12: Dale Pinkert, F.A.C.E.

October 26: Schwab at the NYSE

October 27: Live in-studio with Charles Payne, Fox Business

October 29-31: The Money Show

Weekly: Business First AM, CMC Markets


ETF Summary

  • S&P 500 (SPY): There are multiple timeframe support levels round 420-415.
  • Russell 2000 (IWM): 170 huge.
  • Dow (DIA): 334 pivotal.
  • Nasdaq (QQQ): 330 possible if can't get back above 365.
  • Regional banks (KRE): 39.80 the July calendar range low.
  • Semiconductors (SMH): 133 the 200-DMA with 147 pivotal resistance.
  • Transportation (IYT): Could be another bright spot if clears 237. 225 support.
  • Biotechnology (IBB): 120-125 range.
  • Retail (XRT): 57 key support; if can climb over 63, get bullish.


Mish Schneider

MarketGauge.com

Director of Trading Research and Education

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Novel enzyme family could provide insights into bacterial pathogenicity

Gram-negative bacteria cause a variety of infectious diseases in plants and animals alike. Outbreaks of Salmonella and E. coli infections often make headlines…

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Gram-negative bacteria cause a variety of infectious diseases in plants and animals alike. Outbreaks of Salmonella and E. coli infections often make headlines due to their severity, and people have to resort to allopathic as well as natural remedies, increasing the burden on the healthcare system. While antibiotics offer an effective solution against bacterial infections, the increasing incidence of antibiotic-resistant bacteria have prompted researchers to identify other possible treatments against these infections. With technological advances and modern medicine, researchers are looking into the possibility of disrupting the pathogenicity of the bacteria at a molecular level by interfering with molecular processes at the gene as well as protein level.

Credit: Masahiro Nakajima, Tokyo University of Science

Gram-negative bacteria cause a variety of infectious diseases in plants and animals alike. Outbreaks of Salmonella and E. coli infections often make headlines due to their severity, and people have to resort to allopathic as well as natural remedies, increasing the burden on the healthcare system. While antibiotics offer an effective solution against bacterial infections, the increasing incidence of antibiotic-resistant bacteria have prompted researchers to identify other possible treatments against these infections. With technological advances and modern medicine, researchers are looking into the possibility of disrupting the pathogenicity of the bacteria at a molecular level by interfering with molecular processes at the gene as well as protein level.

Gram-negative bacteria, notorious for their infection capability, produce osmo-regulated periplasmic glucans (OPGs)—long-chain carbohydrates made of multiple glucose units—in the extracellular and/or periplasmic space. Initially, it was believed that OPGs were by-products produced under low solute concentrations, but recent reports confirm that they are crucial for pathogenicity, symbiosis, cell adhesion, and signaling.

However, the enzymes involved in the synthesis, regulation, and degradation of OPGs are not fully known. Genetic analysis revealed that the removal of opgH and/or opgG genes, partially responsible for OPG synthesis, causes bacteria to lose their infection capability, suggesting strong potential links of these genes with bacterial pathogenicity.

Although the structure of OpgG from E. coli (EcOpgG) has been elucidated, the mechanism of action of OpgG and OpgD from E. coli (EcOpgG and EcOpgD, respectively) remains unclear. Understanding the enzymes involved in OPG synthesis and the mechanisms underlying their function could provide us vital insights into the pathogenicity of Gram-negative bacteria, allowing us to develop more effective ways to deal with bacterial infections.

To bridge this gap in knowledge, Mr. Sei Motouchi from Tokyo University of Science, Dr. Kaito Kobayashi from the National Institute of Advanced Industrial Science and Technology (AIST), Associate, Associate Professor Hiroyuki Nakai from Niigata University and Professor Masahiro Nakajima from the Tokyo University of Science conducted structural and functional analyses of EcOpgD and EcOpgG. The study was published in Communications Biology on September 21, 2023.

Sharing the motivation behind this study, Professor Nakajima tells us, “Glycans are important biological macromolecules that play a variety of roles in living organisms, including pathogenicity and symbiosis. Their structure is very diverse and complex, and thus there are many types of enzymes that may synthesize and degrade them. However, we humans know only a small fraction of them”.  

The researchers investigated the functions of OPG-related genes in the model organism E. coli. Functional analyses revealed that E. coli OpgD (EcOpgD) was an endo-β-1,2-glucanase, which specifically broke down β-1,2-glucans. It also had similar kinetic properties as those of general glycoside hydrolases (GH), further confirming its identity as a β-1,2-glucanase.

Structural analysis using crystallography revealed a high degree of similarity between the structures of EcOpgG and EcOpgD. However, the two enzymes had remarkably different activity. Upon further investigation, the researchers found that a few amino acids forming the reaction pathway, termed ‘Loop A’, were critical for enzyme activity and regulated the rate of reaction. EcOpgG and EcOpgD differed in their catalytic functions, possibly due to the difference in the amino acids in the Loop A region. The LoopA region diversifies among this group of enzymes, which may lead to functional diversity. Nevertheless, the basis of the catalytic center is shared in this group of enzymes. This common point will help scientists develop therapies that could potentially disrupt OPG synthesis and hinder the infection capability of bacteria.

Further, while the two enzymes belonged to the same family of GHs, their structure did not match with any of the existing GH enzymes. Thus, the authors confirmed that they belonged to a novel GH family, namely GH186. This information opens avenues for research into therapies that can target GH186 proteins to stop the progression of bacterial infections.

Professor Masahiro concludes by explaining the long-term applications of the study, “Although it was known that some Gram-negative plant pathogens synthesize OPGs for pathogenicity, most of the key enzymes for their synthesis had not been identified, preventing the development of agrochemicals targeting OPGs. We have identified a family of enzymes (GH186) involved in the direct synthesis of OPGs and elucidated their detailed functions, which has presented us with new targets (GH186) to inhibit pathogens and provides a solid foundation for ‘structure-based pesticide discovery’”.

The findings of this study lay down a strong foundation for further investigation of OPGs and related genes and may usher in a new era of disease management.

 

***

 

Reference                    

DOI: https://doi.org/10.1038/s42003-023-05336-6

Authors: Sei Motouchi1, Kaito Kobayashi2, Hiroyuki Nakai3 and Masahiro Nakajima1

Affiliations: 

1Department of Applied Biological Science, Faculty of Science and Technology, Tokyo University of Science

2Artificial Intelligence Research Center, National Institute of Advanced Industrial Science and Technology (AIST)

3Faculty of Agriculture, Niigata University

 

Further Information

Associate Professor Masahiro Nakajima

Department of Applied Biological Science, Faculty of Science and Technology

Tokyo University of Science

Email: m-nakajima@rs.tus.ac.jp

 

Associate Professor Hiroyuki Nakai

Faculty of Agriculture

Niigata University

Email: nakai@agr.niigata-u.ac.jp

 

 

Media contact

Hiroshi Matsuda

Public Relations Divisions

Tokyo University of Science

Email: mediaoffice@admin.tus.ac.jp

Website: https://www.tus.ac.jp/en/mediarelations/

 

Public Relations office

Niigata University

Email: pr-office@adm.niigata-u.ac.j

 

Funding information

This work was supported in part by JST SPRING, Grant Number JPMJSP2151.


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Australia open to idea of CBDC as future of money — RBA

The assistant governor of the Reserve Bank of Australia noted that pilot projects have highlighted several key areas where CBDCs could be of great use….

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The assistant governor of the Reserve Bank of Australia noted that pilot projects have highlighted several key areas where CBDCs could be of great use.

The Reserve Bank of Australia (RBA) is open to using a central bank digital currency (CBDC) as the future of money, where state-issued digital money would represent a tokenized form of central bank reserves.

In a speech titled “A Tokenised Future for the Australian Financial System,” Brad Jones, assistant governor (financial system) of the RBA, talked about the opportunities and challenges arising from the tokenization of assets and money in the digital age while shedding light on the proposed plan to use CBDCs as a form of money.

Jones started his speech by outlining the use of different forms of money throughout history and how financial instruments have evolved over time. While talking about tokenization and tokenized forms of money in the modern era, Jones mentioned stablecoins and CBDCs.

He stated that stablecoins issued by “well-regulated financial institutions and that are backed by high-quality assets (i.e., government securities and central bank reserves) could be widely used to settle tokenized transactions;“ however, due to lack of regulatory guidelines, stablecoins issued by private parties often come with increased risk. On the other hand, CBDCs in the form of tokenized bank deposits could become a good form of transaction settlement, according to Jones.

The assistant governor added that introducing tokenized bank deposits would represent a minor change to current practice given that deposits issued by various banks are already widely exchanged and settled (at par) across the central bank balance sheet. A payment between two parties using tokenized deposits would still be settled via a transfer of exchange settled (or wholesale CBDC) balances between the payer and payee bank.

Related: China opens industrial park for digital yuan CBDC development in Shenzhen

Jones also shared some of the findings from the central bank’s pilot CBDC program findings, including a range of areas where CBDC could add value in wholesale payments, such as facilitating atomic settlement in tokenized asset markets. The pilot project also highlighted opportunities for a wholesale CBDC to complement new forms of privately issued digital money, namely tokenized bank deposits and asset-backed stablecoins.

Magazine: Real reason for China’s war on crypto, 3AC judge’s embarrassing mistake: Asia Express

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Crypto payment option for Honda cars only works via third-party platform

FCF Pay’s X account has been suspended amid circulating misreporting about its “partnership” with Honda, which has never happened.

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FCF Pay’s X account has been suspended amid circulating misreporting about its “partnership” with Honda, which has never happened.

Major automobile manufacturer Honda does not accept cryptocurrency payments directly but one can use cryptocurrencies like Bitcoin (BTC) to buy a Honda car through a third party.

In early October, several publications mistakenly reported that Honda started accepting cryptocurrency as payment. But Honda doesn’t allow one to purchase its cars in exchange for crypto, a spokesperson for the firm told Cointelegraph, stating:

“American Honda does not accept cryptocurrency as payment. The recent reports regarding a change to this policy are incorrect.”

Honda didn’t respond to additional questions on its stance on crypto or whether the company is planning to integrate cryptocurrency payments in the future.

While direct crypto payments for Honda automobiles aren’t available, one can still use cryptocurrency payment platforms like FCF Pay to buy a Honda car.

According to FCF Pay chief operating officer Joseph Parkin, Honda isn’t the only car brand that can be bought using crypto on the platform. “There are more car manufacturers on the list, including Mercedes, BMW, Ford, Nissan and Mitsubishi,” Parkin told Cointelegraph in early October.

According to the COO, payments on FCF Pay are settled by a payment aggregator through the same payment rails that allow one to pay in cash in bank branches. “In the case of this payment flow, crypto really is acting as digital cash or the cash of the internet,” Parkin said. He added that only those companies that are part of FCF Pay-deployed bill payment aggregation system are currently available.

The service is currently only available in the United States. Still, FCF Pay is working with additional partners to carry out crypto-to-fiat bill settlement in Mexico, several Latin American countries, multiple African nations, and Asia, according to the exec. The bill payments system went live in September 2023, enabling one to buy products using coins like Bitcoin, Ether (ETH), XRP (XRP), Tether (USDT), USDC (USDC) and others for a $3 plus 2% fee.

“Our aim is to onboard companies and corporations of every size and in every sector for direct crypto payments and we hope that governments around the world open their eyes soon to the benefits of making it easier for companies to accept crypto payments,” Parkin stated.

The COO also emphasized that FCF Pay hasn’t entered into a partnership with firms like Honda to enable crypto payments for Honda cars. “Our system allows customers to pay with cryptocurrency, but the nearly 21,000 companies that feature on the system receive fiat via our payment aggregator partner,” Parkin noted.

The news comes amid FCF Pay's struggle to restore its page on X (formerly Twitter) after its account got suspended on Oct. 5. Parkin has linked the suspension to accusations based on the fake news that has been circulating.

Related: Shopify to accept USDC payments with Solana: Report

“We were being accused of claiming partnerships with the companies on our bill payments system, whereas we were actually trying our absolute best to dispel these misrepresentations from other news sources,” the exec said. He added that FCF Pay’s X account encountered a lot of “bot-like interactions” days before the suspension. FCF Pay suggested that the activity might have been an attempt to get the account suspended by competitors or the supporting communities.

FCF Pay’s suspended account on X (formerly Twitter). Source: X

“The good news is that we are actually in the process of rebranding anyway as we lead up to our mobile app release at the end of the year. We may simply accelerate the process to switch over to the new branding if the FCF Pay account doesn't get unblocked soon,” the COO stated.

Magazine: The Truth Behind Cuba’s Bitcoin Revolution: An on-the-ground report

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