Connect with us

Government

Stocks Shrugs Off China Second Wave Fears, Asian Clashes, Rise On Stimulus Hopes

Stocks Shrugs Off China Second Wave Fears, Asian Clashes, Rise On Stimulus Hopes

Published

on

Stocks Shrugs Off China Second Wave Fears, Asian Clashes, Rise On Stimulus Hopes Tyler Durden Wed, 06/17/2020 - 08:01

For the third day in a row, global markets have shrugged off concerns about rising global coronavirus cases and that China is set to suffer a "second wave" as much of Beijing is once again under lockdown, with US equity futures advancing and European shares adding to their best gains in almost a month thanks to continued government and central bank stimulus and hopes of a rapid economic recovery.

As we accurately previewed earlier, Tuesday data showed US retail sales enjoyed a record 17.7% rebound in May, but new infections have hit record highs in six U.S. states, Brazil infections surged by a record 34,918, Iran warned it may need a new lockdown, and China cut flights and closed schools to contain a fresh outbreak in Beijing and a clear second wave in the country.

The theme of a strong global economic rebound "will need to be balanced against the 2nd wave COVID risks which are more difficult to assess, and we would argue investors have assumed to be perhaps more modest than in reality," said MUFG’s Head of Research Derek Halpenny quoted by Reuters.

Geopolitical tensions also remain rife with India reporting 20 of its soldiers were killed in clashes with Chinese troops at a disputed border site, while North Korea rejected a South Korean offer to send special envoys and said it would redeploy troops at the border. However, in a world where only central bank liquidity matters, all geopolitical concerns were quickly forgotten.Sentiment was also boosted after a simple, cheap steroid, dexamethasone, used to reduce inflammation in other diseases such as arthritis, reduced death rates by around a third among the most severely ill COVID-19 patients admitted to hospital.

“It is one of the best pieces of news we’ve had through this whole crisis,” Britain’s Health Secretary Matt Hancock said.

As a result, MSCI’s index of World shares rose 0.2%, having climbed 2.2% the previous day to reclaim a good portion of the ground it lost last week. European shares rebounded, after early gains of 1% were trimmed in half but with increases in real-estate and construction-firm shares brought fresh momentum to the Stoxx Europe 600 Index.

Asian equities saw a modest move higher except for shares in South Korea, which were volatile in the wake of rising tensions with North Korea, with the won currency sliding against the dollar.  Most other markets in the region were up, with Thailand's SET gaining 1% and Australia's S&P/ASX 200 rising 0.8%, while Japan's Topix Index dropped 0.4% after jumping almost 5% on Tuesday for its biggest daily gain in three months.  The Topix declined 0.4%, with Toho System and Enigmo falling the most. The Shanghai Composite Index rose 0.1%, with China Building Test and Nanjing Iron & Steel posting the biggest advances.

As Bloomberg notes, investor optimism toward risk assets is reflecting bets that new virus outbreaks won’t lead governments to pull back from gradually reopening their economies, even though Fed Chair Powell said the U.S. economy has a long way to go before it reverses the substantial damage done by the pandemic.

"Global markets could remain stretched between a health situation likely to remain a threat in several regions for some time on the one hand, and a stream of positive macro figures confirming that we have passed the low point on the other," said Xavier Chapard, a global macro strategist at Credit Agricole. He added that "the Fed’s priorities are shifting from emergency actions aimed at preventing a market melt-down to long-lasting actions to support the fastest possible recovery in the real economy", although we kinda disagree with that considering the Fed strategically re-announced the launch of its bond buying operation just as the market was about to drop below its gamma neutral level on Tuesday.

“There is little doubt that the global economy bottomed in April and is poised to post record-high growth rates over May and June, strongly lifting 3Q GDP above its 2Q trough,” wrote economists at JPMorgan. “But questions about the extent of lasting damage will have to wait for a number of months before being resolved.”

In rates, 30Y rose 2bps at 1.55%, having risen by the most in a month on Tuesday, and 10-year German Bunds led a flurry of similar rises in Europe ahead of a 5 billion euro bond sale. “The tension between better economic data and rising COVID-19 cases continues to drive market volatility,” said Antoine Bouvet, senior rates strategist at ING in London.

In FX, the Bloomberg Dollar Index swung between small gains and losses, though the upside seemed capped by the 200-DMA; the greenback advanced versus most Group-of-10 peers, though most traded in confined ranges. Risk-sensitive currencies were little changed against the dollar after earlier being weighed down on concern over the resurgence of the coronavirus outbreak, particularly in China. The euro reversed an early London-session gain; German bunds declined, with the oversubscription rate falling at an auction. The pound slumped; it had earlier bounced back from a slight decline after U.K. inflation data came in at its weakest since 2016, increasing expectations for more BOE stimulus.

In commodities, gold was stuck at $1,725 and well within the $1,670/$1,764 range of the past few weeks. Gains in oil prices slowed amid an increase in U.S. crude inventories. They had climbed 3% on Tuesday after the International Energy Agency (IEA) raised its oil demand forecast for 2020. Brent crude futures swung 1% higher to $41.35 a barrel, while U.S. crude ticked up 16 cents to $38.54.

Expected data include housing starts, mortgage applications reported earlier rose to the highest level since 2009.

Market Snapshot

  • S&P 500 futures up 0.9% to 3,155.75
  • STOXX Europe 600 up 0.8% to 366.28
  • MXAP up 0.2% to 158.71
  • MXAPJ up 0.5% to 511.09
  • Nikkei down 0.6% to 22,455.76
  • Topix down 0.4% to 1,587.09
  • Hang Seng Index up 0.6% to 24,481.41
  • Shanghai Composite up 0.1% to 2,935.87
  • Sensex up 0.7% to 33,846.95
  • Australia S&P/ASX 200 up 0.8% to 5,991.80
  • Kospi up 0.1% to 2,141.05
  • German 10Y yield rose 6.2 bps to -0.365%
  • Euro up 0.06% to $1.1271
  • Italian 10Y yield fell 6.1 bps to 1.269%
  • Spanish 10Y yield rose 1.8 bps to 0.551%
  • Brent futures down 0.3% to $40.82/bbl
  • Gold spot down 0.2% to $1,722.58
  • U.S. Dollar Index up 0.2% to 97.12

Top Overnight News from Bloomberg

  • President Donald Trump’s trade chief, Robert Lighthizer, will tell U.S. lawmakers Wednesday that the time has come to renegotiate America’s fundamental tariff commitment at the World Trade Organization
  • Beijing reported new virus cases Wednesday, having closed schools and canceled more than 1,200 flights as authorities grapple with stemming the outbreak without sealing off the city
  • The European Commission on Wednesday will unveil a set of proposals to bolster local industries in fighting back against companies that receive aid from foreign governments. The plan could ban these non-EU firms from making acquisitions, or force them to divest assets, and allow the commission to impose fines
  • Italian Prime Minister Giuseppe Conte will likely seek parliament’s approval for about 10 billion euros ($11 billion) in extra spending soon, government officials said, in the latest step to revive one of Europe’s most vulnerable economies
  • South Korea warned North Korea against further provocations, after Kim Jong Un’s regime pledged to dismantle the last remnants of President Moon Jae-in’s legacy of rapprochement and move troops into disarmed border areas
  • The U.K. published its negotiating objectives for a trade deal with Australia and New Zealand, which the government said could boost exports by about 1 billion pounds ($1.3 billion) as it seeks to expand trade links after Brexit

Asian equity markets failed to fully sustain the positive handover from Wall St with regional bourses indecisive amid geopolitical tensions, COVID-19 fears and with early underperformance in Japan due to a firmer currency and weaker than expected trade data. ASX 200 (+0.8%) and Nikkei 225 (-0.6%) traded mixed as upside in consumer stocks and tech kept the Australian benchmark afloat, while sentiment among Tokyo exporters was subdued by a firmer currency and after the latest trade data showed a larger than expected slump in Exports Y/Y, with Japan’s US-bound exports at the fastest pace of decline since March 2009 and its trade surplus with the US at a record low. KOSPI (+0.1%) swung between gains and losses on increasing tensions in the Korean peninsula after North Korea demolished its inter-Korean liaison office in Kaesong yesterday and is reportedly to deploy the army to Kaesong and Mt. Kumgang. There were also criticism from North Korean leader Kim’s sister on South Korean President Moon which prompted a response from the Blue House that it will not tolerate North Korea's senseless remarks anymore and the Defense Ministry warned that North Korea will pay the price if it takes actual military action. Hang Seng (+0.6%) and Shanghai Comp. (+0.1%) conformed to the non-committal tone after another net liquidity drain by the PBoC and amid concerns regarding the outbreak in Beijing where the city government raised its COVID-19 emergency response to level II from level III and resulted to the cancellation of 1255 flights. In addition, deadly clashes between India and China at the Himalayan border where 20 Indian soldiers were killed also contributed to the ongoing geopolitical concerns. Finally, 10yr JGBs were slightly higher after having rebounded off support just below 152.00 although the underperformance of Japanese stocks and BoJ’s presence in the market only provided marginal gains for JGBs.

Top Asian News

  • Citi Sees Higher Chance of Possible Default for Hilong Bonds
  • RBA Saw Australian House Prices Falling 7% Over the Next Year
  • Foiled Kidnapping Hurls Publicity-Shy Tycoon Into Spotlight
  • Yes Bank Is Said to Plan $1 Billion Public Share Offering

European equities had a tame start to the session as bourses opened with very modest gains following a mixed APAC handover, before the region edged higher since the cash open. Europe has since given up early gains [Euro Stoxx 50 +0.1%] to return to levels seen around the cash open. Peripheries lag with Spain’s IBEX (-0.9%) is the marked underperfomer thus far and Italy’s FTSE MIB (-0.1%) also in the red – potentially heading into the European Council meeting with pessimistic rhetoric from Chancellor Merkel and European Council President Michel on the likelihood of a concensus on the Recovery Fund being reached on Friday. The periphery could also be seeing jitters of a second wave having been hit hard by the initial outbreak. Sectors are mixed with defensives overall faring better than cyclicals, whilst the breakdown sees Travel & Leisure the laggard amid fears of further disruptions to operations due to a second wave. On that front, Carnival (-3.5%) shares continue to deteriorate alongside the update from Norwegian Cruse Line – who cancelled all voyages until October. Elsewhere, European Auto names and part makers remain under pressure as May car registrations slumped 57% YY, with Renault (-1.2%), Daimler (-1.1%), Continental (-1.8%) and Ferrari (-1.5%) all at the foot of their respective bourses. HSBC (+0.1%) trades choppy but just about holds onto gains amid reports the group is poised to cut headcount by some 35k over the medium term; however, the firm could be further embroiled in politics, with Global Times stating that some observers have said the Anglo-Sino bank may experience more severe consequences for their collusion with the US against Huawei.

Top European News

  • U.K. Inflation at Weakest Since 2016 Adds Pressure on BOE to Act
  • German CabinetOkays $70 Billion in Debt to Combat Recession
  • Brexit Heartlands Are Paying the Highest Price for Coronavirus
  • Forget This Year’s Highs for European Equities, Strategists Warn

In FX, a rather muted start to the midweek EU session, as the Dollar consolidates following yesterday’s revival on encouraging US economic recovery leads via retail sales. However, the DXY remains relatively underpinned within a narrow 97.264-96.796 band amidst similarly tight ranges vs major counterparts in the run up to Fed Chair Powell’s 2nd semi-annual testimony and more data that could provide further evidence for or against the circa April COVID-19 trough theory in the form of housing starts and building permits.

  • NOK/SEK/AUD/CHF/NZD - The Norwegian Crown continues to rebound from Monday’s deep risk aversion and crude retracement lows, with Eur/Nok testing support ahead of 10.7000 awaiting further confirmation from the Norges Bank tomorrow that benchmark rates have hit the lower (zero in this case) bound. Meanwhile, the Swedish Krona has also regained some poise amidst mixed NIER GDP forecast revisions and jobs data, as Eur/Sek hovers near 10.5100 compared to a high just shy of 10.5800. Similarly, the Aussie and Kiwi have regrouped after more volatile trade overnight and Tuesday’s even sharper swings to revisit 0.6900 and pivot 0.6450 against their US peer respectively, and with the latter now looking for independent inspiration from NZ GDP tonight. Elsewhere, the Franc and Loonie are both meandering, around 0.9500 and 1.3550, eyeing the SNB on Thursday and Canadian CPI later today.
  • JPY/GBP/EUR - Marginal G10 underperformers, with the Yen still restrained below 107.00 in wake of a wider than expected Japanese trade deficit on weak internals and stymied by decent option expiry interest at 107.25 (1.1 bn), while Cable topped out ahead of 1.2600 and the 200 DMA again, albeit holding around the 100 DMA (1.2526) after little reaction to in line/softer UK inflation metrics. The Euro is also fading from a test of round number/psychological resistance at 1.1300, and testing support through the 50 DMA (1.1233) that sits close to recent sub-1.1230 lows and stops said to be residing on a break of 1.1228.
  • EM - Broad sentiment is notably more fragile against the backdrop of several geopolitical hotspots that could spiral given recent developments, and on that note the Lira is underperforming as Turkey steps up its offensive against PKK/YPG targets in Northern Iraq, with Usd/Try back over 6.8500 at one stage in contrast to flat/fractionally softer trade in Usd/Zar and Usd/Mxn.

In commodities, WTI and Brent front-month futures initially grinded higher in early European trade, having had somewhat of a lacklustre APAC session with the complex pressured by Beijing curbing some 60% of its flights in a bid to stem a second virus outbreak, whilst a surprise build in Private Inventories added to the downside factors. Nonetheless, the complex has given up recent gains as traders eye the release of the OPEC Oil Market Report for June alongside the start of the JTC meeting, and against the backdrop of heightened geopolitical tensions. Tomorrow’s JMMC meeting will see the committee (composed of Saudi, Russia, Iraq, UAE, Kuwait, Nigeria, Algeria, Venezuela and Kazakhstan) reviewing secondary source data alongside current market fundamentals before proposing policy recommendations – no policy will be set at this meeting. In terms of compliance, reports note that Iraq is aligning its cuts with the OPEC+ pact, shipping data and industry sources suggest the second largest OPEC member’s exports have declined some 300k BPD thus far in June. WTI July reliquinshed the USD 38/bbl to the downside (vs. 37.21/bbl low) whilst Brent August similarly lost its USD 41/bbl handle (vs. 40.03/bbl low). In terms of other scheduled events, the weekly DoEs could provide some volatility (in the short term at least) – with headline crude stocks seen drawing 152k barrels (vs. Private Inventory build of 3.9mln barrels). Elsewhere, spot gold succumbs to a firmer Buck as the yellow metal prints fresh session lows. It’s worth noting for precious metals that ETFs increased holdings gold holdings for a fifth consecutive session in which it added almost 48k oz yesterday to bring this year’s net buying to 18mln oz. Copper prices see modest gains well within yesterday’s ranges amid the indecisive APAC tone – prices remain north of USD 2.50/lb but just under USD 2.60/lb.

US Event Calendar

  • 7am: MBA Mortgage Applications, prior 9.3%
  • 8:30am: Housing Starts, est. 1.1m, prior 891,000; MoM est. 23.46%, prior -30.2%
  • 8:30am: Building Permits, est. 1.25m, prior 1.07m; MoM est. 16.79%, prior -20.8%

DB's Jim Reid concludes the overnight wrap

This morning we are hurtling deep into the 21st century here at DB Research as we have launched a new trial video research format. In this first trial you’ll see me talk through June’s market sentiment survey for four and a half minutes. It might be worth watching just to see the results of my wife’s attempts to style and pimp my WFH set up. We have guitars, books and a copy of an old master on an easel. The painting on the easel was a creative way of blocking out light from a window which is a bit of a VC nightmare. The painting was left over from my last house where we commissioned art students in Russia to paint replicas of old paintings at a very reasonable price and make them look old. Not obvious pieces but nice ones. Given my wife went to Art College she hated this philistine approach from me but I said I wasn’t prepared to pay for many antique oils. If anyone can recognise the painting then I’ll be very impressed!! Here is the link to the video. Let us know if the format is interesting to you and what you’d like to see on it from DB Research (link here).

In another WFH appearance from my crib, this Thursday (12:30pm London time) I’m taking part in a small fireside roundtable webinar on China, commodities and the reflation trade organised by our mining and metals team but containing macro content from our Chinese economist, China strategist, our commodities strategist and also myself. Feel free to register here.

While we are in full advertising mode, yesterday Henry Allen on my Thematic team put out a report that we’ve been working on looking at what might be the next massive tail risk after Covid-19, looking at events including further pandemics, volcanoes, solar flares, wars and earthquakes. The main takeaway is that there’s a one-in-three chance that the next decade will see at least one of a major flu pandemic killing more than 2m people; a globally catastrophic volcanic eruption; a major solar flare; and a global war. So some pretty striking stuff. You can read the full report here.

The most exciting thing today is the return of the English Premier League. I’m not sure I’ll ever be so happy to see Aston Villa vs Sheffield United or indeed ever watch that fixture again. Hopefully one of the tail risk disasters mentioned above won’t come before Liverpool are crowned champions within the first few games of the restart. In terms of markets, yesterday felt like one of those children’s football matches where one minute everyone rushes up the pitch towards the opposition’s goal to try to score before the other side then do exactly the same at the opposite end thus ensuring no formation, no structured defending and no tactics. Just an end to end slug fest. Indeed markets went from bullish, to worried, to extreme bullish to worried and back to bullish again.

By the end of the session, the S&P 500 was up +1.90% in its 3rd straight move upwards, with every sector moving higher on the day and only 35 stocks down. The VIX volatility index continued to unwind from its intraday peak early yesterday morning London time (44.44) with a further -0.73pts fall to close at 33.67. Energy stocks led the move higher in the US, with WTI up +2.67% and Brent crude up +2.79%. The latter closed above $40/barrel for the first time since risk assets dropped sharply last Thursday.

So going through the bewildering array of headlines, let’s begin with the pandemic. The good news yesterday was that an Oxford University trial reported that the steroid dexamethasone was found to reduce coronavirus deaths by a third in patients who required ventilation. In fact it was described by England’s Chief Medical Officer on twitter as “the most important trial result for COVID-19 so far.” On the other hand, there were some less positive developments elsewhere, with Beijing announcing that schools would be shut and online classes resuming for all grades, following a new cluster of cases in the city, that has also seen them raise their Covid-19 emergency response to the second-highest level. Further, the city has also ordered that people will have to be tested for the virus before being allowed to leave the city and has imposed restrictions on visits to all residential compounds with those in areas with medium and high-risk areas being barred from accepting visitors.

Over in the US the news wasn’t exactly positive either as the case numbers in certain states continued to move in a concerning direction. In Florida they reported a +3.6% rise in cases yesterday, above the 7-day average of +2.5% and the most absolute cases reported in a day since the pandemic started. While in Texas, which has been something of a hotbed recently, the number of virus hospitalisations rose by +8.3%, the most in nearly 2 weeks. Cases in the state rose by +3.7% - the most in week - with the absolute number (3,358) the largest during the pandemic. California new cases rose by +2.3%, above the weekly average of 2.1% while confirmed hospitalisations rose by 7.5% to 3,335 across the state, the most since the first week of May. Much like we’ve previously highlighted in the Corona Crisis Daily in countries like the UK and France, there appears to be a Tuesday effect in some US states, where the Sunday and Monday reporting is slightly lower and then cases rise more sharply on Tuesday. Texas, California, Arizona, and Florida all have seen a noticeable rise in case growth on 4 out of the last 5 Tuesdays when compared to the 2 days prior. Remember our usual case and fatality tables are in the full report today. Click on “view report” at the top.

Against the worrying virus backdrop, a stunningly strong US retail sales report for May offered further hope to investors that the economy might be able to bounce back quicker than many had expected. The headline figure saw an increase of +17.7%, more than double the +8.4% expected, while the previous month’s decline was revised to show a smaller -14.7% contraction (from -16.4%). Autos dragged up the overall number, with vehicles and parts seeing a +44.1% rise in May, but even the ex-auto number at +12.4% (vs. +5.5% expected) came in stronger than anticipated, with increases in every category on the month. President Trump expressed his approval, tweeting that “Wow! May retail sales show biggest one-month increase of ALL TIME, up 17.7%. Far bigger than projected. Looks like a BIG DAY FOR THE STOCK MARKET, AND JOBS!”

We also saw a couple of geopolitical flare-ups yesterday, which in another world could have easily blown the rally off course. Firstly, we got the news not long after going to press yesterday that North Korea had blown up an inter-Korean liaison office on their side of the border, which comes against the backdrop of escalating threats from North Korea towards the south in recent weeks. North Korea has said overnight that it will be deploying troops on its side of the border where it had joint projects with South Korea, and to the Mount Kumgang tourist area. Secondly, there was a clash between Indian and Chinese soldiers yesterday in which at 3 Indian troops were confirmed to have been killed during a fight, before a further 17 passed away from injuries according to a New York Times report. A Chinese foreign ministry spokesman said that two Indian soldiers had crossed into Chinese territory on Monday, and that “They provoked and attacked the Chinese side, leading to a severe physical brawl.” By the looks of things it seems as though both sides are trying to de-escalate the situation, but this is nevertheless a very unwelcome development in an environment not short of possible risks.

In terms of the broader market moves, as mentioned the S&P 500 saw its 3rd upward move in a row, while the Dow Jones (+2.04%) and the NASDAQ (+1.75%) also saw strong performances. European equities outperformed their US counterparts, with the STOXX 600 up +2.90%, while the DAX, FTSE MIB, and IBEX were all up over 3%. Core sovereign bonds sold off as investors moved out of safe havens, with yields on 10yr US Treasuries (+3.1) and bunds (+1.9bps) both climbing. That said, there was another notable narrowing of peripheral spreads in Europe, with the spread of Greek 10yr yields over bunds falling by -7.8bps to their tightest level since late February. 10yr BTP spreads narrowed by -8.0bps.

The rally has taken a pause overnight with bourses slightly lower in Asia. Indeed the Nikkei (-0.81%), Hang Seng (-0.03%), Shanghai Comp (-0.10%) and Kospi (-0.03%) are all in the red with only the ASX (+0.54%) currently up. The geopolitical tensions we noted above have weighed on the Korean Won (-0.71%) and the Indian Rupee (-0.24%) while yields on 10y USTs are down -2.5bps and futures on the S&P 500 are trading down -0.25%. WTI oil has also retraced 3%. In other overnight news, Japan’s trade surplus with the US dropped -97% yoy in May to $96mn, the lowest in data going back to 1979, as car shipments declined by -79% yoy.

Back to the US, and Fed Chair Powell appeared before the Senate Banking Committee yesterday, as part of the semi-annual monetary policy report to the Congress. In his prepared remarks, Powell said that in spite of indicators that pointed towards a stabilisation or a small rebound in activity, “the levels of output and employment remain far below their pre-pandemic levels, and significant uncertainty remains about the timing and strength of the recovery.” So clearly not wanting to let positive data like the jobs report let people think the economy is out of the woods yet. Given this testimony occurred only days after the FOMC this was never likely to move the dial much but Powell’s tone on corporate bond purchases were a bit confusing. He suggested that purchases will be switched from ETFs to bonds but maintaining the same dollar amount. In speaking to Craig who covers US credit and who is, to be fair, co-authoring this report today, he suggests that at face value this would suggest the Fed will buy far far less than the $250bn capacity that the SMCCF has. So far ETF purchases have averaged between $1-1.5bn per week for context. The expectation was that bond purchases would be in addition to ETF purchases and also that bond purchases would be greater given the larger available universe to purchase from. We will see if this was a misinterpretation issue or an actual policy announcement. Credit had earlier been on an almighty tear. From opening levels iTraxx Main, Crossover, US IG and HY CDX were -10, -65, -6 and -32bps tighter at their spread lows for the session before closing a slightly more subdued close at -6, -33, -1 tighter and +2bps wider respectively. Cash did seemingly have a better day however, with US HY and IG spreads in particular 47bps and 12bps tighter respectively.

Powell was not the only Fed speaker yesterday as Fed Vice Chair Clarida weighed in on the inflation debate citing the pandemic as a deflationary shock. He indicated that the Fed is placing a high priority on keeping inflation expectation anchored, amidst risks of long-term inflation expectations falling due to the economic fallout. He admitted that these are not new concerns saying, “that measures of longer-term inflation expectations were, when the downturn began, at the low end of a range that I consider consistent with our 2% inflation objective and, given the likely depth of this downturn, are at risk of falling below that range.”

Wrapping up with yesterday’s other data now. The industrial production numbers from the US weren’t quite as positive as the retail sales figures, though they did show a +1.4% rebound in May (vs. +3.0% expected). That said, the NAHB’s housing market index rose to 58 (vs. 45 expected), so all eyes will be on today’s housing starts and building permits data to see if that rebound in housing is evident in other releases. Here in the UK meanwhile, the headline unemployment rate for the 3 months from February to April unexpectedly remained at 3.9% (vs. 4.7% expected). However, digging further into the labour market data showed things weren’t quite so rosy. The number of weekly hours worked fell to the lowest seen since 2013, while the number of vacancies in the more up-to-date March-May period fell to 476k, the lowest since 2012.

To the day ahead now, and we’ll hear from Fed Chair Powell once again today before the House Financial Services Committee, while the Fed’s Mester will also be speaking. On the data front, we’ll get a bunch of data releases out for May, including UK CPI, EU27 new car registrations and the final Euro Area CPI reading. Over in the US, there’ll also be housing starts and building permits, while Canada will also release their CPI.

Read More

Continue Reading

Government

TDR’s U.S. Stock Market Preview For The Week Of August 8, 2022

A weekly stock market preview and the data that will impact the tape. Sunday Evening Futures Open – Stock Market Preview Weekend News And Developments…

Published

on

A weekly stock market preview and the data that will impact the tape.

Sunday Evening Futures Open – Stock Market Preview

Weekend News And Developments

Berkshire Hathaway dramatically slowed new investment in the second quarter after setting a blistering pace at the start of the year, as the US stock market sell-off pushed the insurance-to-railroad conglomerate to a $43.8bn loss.

China’s southern island province of Hainan started mass Covid-19 testing on Sunday, locking down more parts of the province of over 10 million residents, as authorities scramble to contain multiple Omicron-driven outbreaks, including the worst in capital Sanya, often called “China’s Hawaii”.

Cuba: 17 missing, 121 injured as fire rages in oil tank farm in Matanzas City

Equity positioning for both discretionary and systematic investors remains in the 12th percentile of its range since January 2010, according to Deutsche Bank published last week.

Fisker Inc. (NYSE:FSR) unveils a process for qualifying US-based reservation holders of the Fisker Ocean all-electric SUV to retain access to the existing federal tax credit. The current $7,500 tax credit would be unavailable should Congress pass the Inflation Reduction Act of 2022 and President Biden signs the legislation into law.

Former Labour prime minister Gordon Brown has called for an emergency budget before the UK hits a “financial timebomb” this autumn. Mr. Brown said millions would be pushed “over the edge” if the government does not address the cost of living crisis.

Israel said Sunday it killed a senior Islamic Jihad commander in a crowded Gaza refugee camp, the second such targeted attack since launching its high-stakes military offensive against the militant group just before the weekend. The Iran-backed militant group has fired hundreds of rockets at Israel in response, raising the risk of the cross-border fighting turning into a full-fledged war.

NexJ Systems (TSX: NXJ) announced financial results for its second quarter ended June 30, 2022.

Rhine river hit by drought conditions, hampers German cargo shipping. According to reports, transport prices have shot up as drought and hot weather have affected water levels in the river Rhine in Germany leading cargo vessels to reduce loads during transportation.

Taiwan’s defense ministry said it had detected 66 Chinese air force planes and 14 Chinese warships conducting activities in and around the Taiwan Strait on Sunday, Reuters reports. Thursday’s drills involved the live firing of 11 missiles.

Unifor: 1,800 members from across the country arrive in Toronto this weekend before Monday’s start to the union’s 4th Constitutional Convention, where delegates will elect a new National President and vote on key priorities and initiatives. Unifor is Canada’s largest union in the private sector, representing 315,000 workers in every major area of the economy. 

U.S. rate futures have priced in a 69% chance of a 75 bps hike at its September meeting, up from about 41% before the payrolls data. Futures traders have also factored in a fed funds rate of 3.57% by the end of the year.

What The Analysts Are Saying…

Anybody that jumped on the ‘Fed is going to pivot next year and start cutting rates’ is going to have to get off at the next station, because that’s not in the cards. It is clearly a situation where the economy is not screeching or heading into a recession here and now.” — Art Hogan, chief market strategist at B. Riley Financial

“It is not a market bottom, things are not going to go up consistently from here because we are going to be buying low tech products for a while, so everyone has something to make up as COVID demand = pre-COVID​, there are fewer units for this. Reality check – unlike ‘Big Tech’, consumer discretionary related companies are offering more cautious guidance.”Morgan Stanley analyst commentary on a potential market bottom

The fact of the matter is this (Aug. 5 nonfarm payroll report) gives the Fed additional room to continue to tighten, even if it raises the probability of pushing the economy into recession. It’s not going to be an easy task to continue to tighten without negative repercussions for the consumer and the economy”. — Jim Baird, chief investment officer at Plante Moran Financial Advisors

“We are surprised to not see investors start to chase upside calls in fear of underperforming the market. People are just watching.” — Matthew Tym, head of equity derivatives trading at Cantor Fitzgerald

What We’re Watching

Psychedelic Sector Gaining Momentum: What started out as bottoming action after a protracted multi-quarter decline has now morphed into a tangible bullish impulse. We believe Netflix new docuseries How To Change Your Mind has played an important roll in the creation of critical mass awareness for the sector—and a rebound in broad market risk assets hasn’t hurt. At the tip of the spear for this sentiment shift is COMPASS Pathways plc (CMPS), which has risen 62.64% since  the docuseries debuted on July 12. Price on the benchmark Horizons Psychedelic Stock Index ETF has now breached the 20-day MA/EMA.

We are watching to see if investor sentiment shifts into laggard names such as Cybin Inc. and MindMed, which has continued to fall following a proposed 15-1 reverse stock split initiative announced this year. Many Tier-2/3 names still 90%+ off their highs…

Revive Therapeutics (RVV:CSE, RVVTF:OTC): This has been on our radar for the last couple of weeks, and remains on our watch list. The company has already confirmed that their statistician is in possession of 210 unblinded patient data for its Phase 3 clinical trial to evaluate Bucillamine to treat COVID-19. The company is currently attempting to revise endpoint data from a hospitalization/death focus to a symptoms focus. If they are to achieve this, it will mark a material event in the course of the trial.

YTD performance (+33.09%), Revive Therapeutics (RVVTF); Red line = 7day EMA

We believe an endpoint decision, either positive or negative, is imminent and will have cause a material price action event.

Consumer Price Index, August 10: Consumer inflation expectations for July are released by the New York Fed, while the University of Michigan’s preliminary survey of consumers for August is on tap. Taken together, these should give investors a better picture of how consumers are feeling about current economic conditions. 

As of June, it’s running at 9.1% on an annual basis. Investors, economists and consumers will be watching to see if price increases are easing as everything from gasoline to food is elevated.

Given the mixed signals on the overall state of the economy (i.e. indications of recession vs. this week’s strong nonfarm payrolls number), CPI will be in-focus by market participants. Scotiabank expects 8.9% y/y (9.1% prior) and 0.4% m/m for headline CPI; ex-food-and-energy: 6.1% y/y led by a 0.6% m/m gain.

Pot stocks earnings continue, with several Tier-1/Teri-2 names reporting including Curaleaf Holdings, Trulieve Cannabis, Marimed Inc., Cronos Group, TerrAscend Corp. and more. Last Wednesday, Green Thumb Industries allayed fears somewhat that this earnings season would be a write-off, producing solid numbers which beat expectations on several key metrics. An additional strong report or two will go a long way to help improve sentiment for a sector that’s been decimated over the past six quarters.

U.S. Economic Calendar

TIME (ET)REPORTPERIODMEDIAN FORECASTPREVIOUS
Monday, August 8
11:00 AMNY Fed 3-year inflation expectationsJuly3.60%
Tuesday, Aug. 9
6:00 AMNFIB small-business indexJuly89.589.5
8:30 AMProductivityQ2-4.30%-7.30%
8:30 AMUnit labor costsQ29.30%12.60%
Wednesday, August 10
8:30 AMConsumer price indexJuly0.30%1.30%
8:30 AMCore CPIJuly0.60%0.70%
8:30 AMCPI (year-over-year)July-8.70%9.10%
8:30 AMCore CPI (year-over-year)July6.10%5.90%
10:00 AMWholesale inventories (revision)June1.90%1.70%
2:00 PMFederal budget (compared with year earlier)July-$302 billion
Thursday, August 11
8:30 AMInitial jobless claimsAug. 6265,000260,000
8:30 AMContinuing jobless claimsJuly 301.42 million
8:30 AMProducer price indexJuly0.20%1.10%
Friday, Aug. 12
8:30 AMImport price indexJuly-0.80%0.20%
10:00 AMUMich consumer sentiment index (preliminary)Aug.5352
10:00 AMUMich 5-year inflation expectations (preliminary)Aug.2.90%

Meme Of The Week

Key Earnings (US Markets)

DateCompanySymbolEarnings estimate
Monday, August 83D SystemsDDD$0.00 per share
BarrickGOLD$0.22
BioNTechBNTX$7.08
EnergizerENR$0.76
News Corp.NWSA$0.08
NovavaxNVAX$5.18
Palantir TechnologiesPLTR$0.03
Take-Two Interactive SoftwareTTWO$0.86
Tyson FoodsTSN$1.97
UpstartUPST$0.08
Tuesday, Aug. 9Akamai TechnologiesAKAM$1.31
AramarkARMK$0.24
Bausch HealthBHC$0.91
Carlyle GroupCG$1.07
CoindeskCOIN-$2.68
Cronos GroupCRON-$0.07
EbixEBIX$0.58
EmersonEMR$1.29
GlobalFoundriesGFS$0.45
Grocery OutletGO$0.24
H & R BlockHRB$1.24
Hilton Grand VacationsHGV$0.88
Hyatt HotelsH$0.03
IAC/InterActiveCorpIAC-$2.35
iRobotIRBT-$1.55
Maxar TechnologiesMAXR$0.12
Norwegian Cruise LineNCLH-$0.83
Plug PowerPLUG-$0.20
Rackspace TechnologyRXT$0.16
Ralph LaurenRL$1.71
RobloxRBLX-$0.26
Spirit AirlinesSAVE-$0.46
Super Micro ComputerSMCI$2.35
SyscoSYY$1.11
The Trade DeskTTD$0.20
TTEC HoldingsTTEC$0.85
Unity SoftwareU-$0.21
Warner Music GroupWMG$0.20
World Wrestling EntertainmentWWE$0.55
Wynn ResortsWYNN-$0.97
Wednesday, August 10AppLovinAPP$0.50
CoherentCOHR$2.13
CoupangCPNG-$0.10
CyberArk SoftwareCYBR$0.01
Dutch BrosBROS$0.07
Fox Corp.FOXA$0.77
Franco-NevadaFNV$0.98
Jack in the BoxJACK$1.42
Manulife FinancialMFC$0.76
MatterportMTTR-$0.14
Pan Am SilverPAAS$0.14
Red Robin GourmetRRGB-$0.16
SonosSONO$0.21
TraegerCOOK$0.04
Wendy’sWEN$0.22
Wolverine World WideWWW$0.65
Thursday, August 11AerCapAER$1.42
BaiduBIDU$10.92
Brookfield Asset ManagementBAM$0.69
Canada GooseGOOS$2.98
Cardinal HealthCAH$1.18
Dillard’sDDS$2.88
Flower FoodsFLO$0.27
IlluminaILMN$0.64
LegalZoomLZ$0.02
Melco Resorts & EntertainmentMLCO-$0.44
NioNIO-$1.36
PoshmarkPOSH-$0.25
Rivian AutomotiveRIVN-$1.63
Ryan Specialty GroupRYAN$0.35
Six FlagsSIX$1.04
Solo BrandsSOLO$0.28
ToastTOST-$0.12
Utz BrandsUTZ$0.12
Warby ParkerWRBY-$0.02
W&T OffshoreWTI$0.37
Wheaton Precious MetalsWPM$0.32
Friday, Aug. 12Broadridge FinancialBR$2.65
Honest CompanyHNST$-$0.09
Spectrum BrandsSPB$1.42

FDA Calendar

None

Source: CNN Business – TDR’s stock market preview sentiment indicator

Past Week What’s Hot… and What’s Not

Source: TradingView – TDR’ stock market preview what’s hot this past week

Top 12 High Short Interest Stocks

TickerCompanyExchangeShortIntFloatShares O/SIndustry
BBBYBed Bath & Beyond Inc.Nasdaq46.38%61.57M79.96MRetail (Specialty Non-Apparel)
ICPTIntercept Pharmaceuticals IncNasdaq43.76%23.62M29.71MBiotechnology & Medical Research
MSTRMicroStrategy IncNasdaq39.29%9.32M9.33MSoftware & Programming
BYNDBeyond Meat IncNasdaq37.91%56.79M63.54MFood Processing
SWTXSpringWorks Therapeutics IncNasdaq37.51%31.64M49.41MBiotechnology & Medical Research
BIGBig Lots, Inc.NYSE37.37%26.49M28.92MRetailers – Discount Stores
EVGOEvgo IncNasdaq35.65%67.76M69.00MUtilities – Electric
UPSTUpstart Holdings IncNasdaq35.60%72.32M84.77MConsumer Lending
BGFVBig 5 Sporting Goods CorpNasdaq34.65%20.85M22.33MRetailers – Miscellaneous Specialty
SRGSeritage Growth PropertiesNYSE34.38%23.58M43.68MReal Estate Operations
NKLANikola CorporationNasdaq32.77%265.95M421.14MAuto & Truck Manufacturers
BLNKBlink Charging CoNasdaq32.54%33.98M50.20MUtilities – Electric

Tags: stock market preview, stock market preview August 8, 2022.

The post TDR’s U.S. Stock Market Preview For The Week Of August 8, 2022 appeared first on The Dales Report.

Read More

Continue Reading

Government

Senate Passes $740 Billion Tax, Climate Package — Will Go To House Next

Senate Passes $740 Billion Tax, Climate Package — Will Go To House Next

Update (1532ET): After much wrangling, the Democrats finally passed…

Published

on

Senate Passes $740 Billion Tax, Climate Package -- Will Go To House Next

Update (1532ET): After much wrangling, the Democrats finally passed their sweeping economic package through the Senate on Sunday.

The estimated $740 billion "Inflation Reduction Act" - far less ambitious than their original $3.5 trillion vision - next heads to the House, where its passage is a foregone conclusion. According to Axios, a vote could come as early as Friday before it heads to President Biden's desk.

The package includes provisions to address climate change, pharmaceutical costs, and a supercharged IRS.

"It’s been a long, tough and winding road, but at last, at last we have arrived," said Senate Majority Leader Chuck Schumer (D-NY). "The Senate is making history. I am confident the Inflation Reduction Act will endure as one of the defining legislative measures of the 21st century."

As the Washington Post notes, "Senators engaged in a round-the-clock marathon of voting that began Saturday and stretched late into Sunday afternoon. Democrats swatted down some three dozen Republican amendments designed to torpedo the legislation. Confronting unanimous GOP opposition, Democratic unity in the 50-50 chamber held, keeping the party on track for a morale-boosting victory three months from elections when congressional control is at stake."

And as Axios reports,

The Senate returned to the Capitol Saturday afternoon, and began voting late Saturday night and into Sunday on a series of amendments — part of the process known as "vote-a-rama."

  • Senate Republicans offered dozens of amendments aimed at minimizing the bill, including stripping out funding for the Internal Revenue Service and eliminating COVID-19-related school mandates.
  • Democrats held firm in their unity, with the help of Harris, of preserving the core elements of the package and voting down each GOP amendment.

.  .  .

The bill includes:

  • $370 billion for climate change - the largest investment in clean energy and emissions cuts the Senate has ever passed.
  • Allows the federal health secretary to negotiate the prices of certain expensive drugs for Medicare.
  • Three-year extension on healthcare subsidies in the Affordable Care Act.
  • 15% minimum tax on corporations making $1 billion or more in income. The provision offers more than $300 billion in revenue.
  • IRS tax enforcement.
  • 1% excise tax on stock buybacks.

Drilling down on the climate portion - Axios' Andrew Freedman writes:

  • This includes tax incentives to manufacture and purchase electric vehicles, generate more wind and solar electricity and support fledgling technology such as direct air capture and hydrogen production. 
  • Independent analyses show the bill, combined with other ongoing emissions reductions, would cut as much as 40% of U.S. greenhouse gas emissions by 2030, short of the White House's 50% reduction target. However, if enacted into law, it would reestablish U.S. credibility in international climate talks, which had been flagging due in part to congressional gridlock. 
  • As part of Democrats' concessions to Sen. Manchin, the bill also contains provisions calling for offshore oil lease sales in the Gulf of Mexico and off the coast of Alaska, and a commitment to take up a separate measure to ease the permitting of new energy projects. 

*  *  *

Senate Democrats late on Aug. 6 advanced a mammoth spending bill on climate and energy, health care, and taxes, after overcoming unanimous Republican opposition in the evenly divided chamber.

The procedural vote to advance the Democratic bill - which authorizes over $400 billion in new spending - was 51–50 after Vice President Kamala Harris arrived at the Capitol to cast a vote, breaking the deadlock in the Senate over the measure that Democrats say would reform the tax code, lower the cost of prescription drugs, invest in energy and climate change programs, all while lowering the federal deficit.

The vote means that senators will have 20 hours to debate on the measure, followed by a vote-a-rama, a marathon open-ended series of amendment votes that has no time limit. After that, the bill will head to a final vote. The measure is anticipated to pass the chamber as early as this weekend.

The House, where Democrats have a majority, could give the legislation final approval on Aug. 12, when lawmakers are scheduled to return to Washington.

The vote came after the Senate parliamentarian - the chamber’s nonpartisan rules arbiter - gave a thumbs-up to most of the Democrats’ revised 755-page bill.

But Democrats had to drop a significant part of their plan for lowering prescription drug prices, Parliamentarian Elizabeth MacDonough said.

The provision would have essentially forced companies not to raise prices higher than inflation. MacDonough said Democrats violated Senate budget rules with language in the bill imposing hefty penalties on drugmakers who raise their prices beyond inflation in the private insurance market.

As Mimi Nguyen Ly details at The Epoch Times, while the bill’s final costs are still being determined, it includes about $370 billion on energy and climate programs over the next 10 years, and about $64 billion to extend subsidies for Affordable Care Act program for federal subsidies of health insurance for three years through 2025.

It also seeks generate about $700 billion in new revenue over the next 10 years, which would leave roughly $300 billion in deficit reduction over the coming decade, which would represent just a tiny proportion of the next 10 year’s projected $16 trillion in budget shortfalls.

A large portion of the $700 billion—an estimated $313 billion—is expected to be generated by increasing the corporate minimum tax to 15 percent, while the remaining amounts include $288 billion in prescription drug pricing reform and $124 billion in Internal Revenue Service tax enforcement.

According to the current version of the bill, the new 15 percent minimum tax would be imposed on some corporations that earn over $1 billion annually but pay far less than the current 21 percent corporate tax. Companies buying back their own stock would be taxed 1 percent for those transactions, swapped in after Sinema refused to support higher taxes on private equity firm executives and hedge fund managers. The IRS budget would be increased to strengthen its tax collections.

The White House said in a statement of administrative policy on Aug. 6 that it “strongly supports passage” of the bill.

“This legislation would lower health care, prescription drug, and energy costs, invest in energy security, and make our tax code fairer—all while fighting inflation and reducing the deficit,” the statement reads.

“This historic legislation would help tackle today’s most pressing economic challenges, make our economy stronger for decades to come, and position the United States to be the world’s leader in clean energy.”

Republicans say the legislation is simply an alternate, dwindled version to the Democrat’s earlier Build Back Better bill—a multitrillion-dollar social spending package that was a major agenda of President Joe Biden—that Democrats have now dubbed the “Inflation Reduction Act of 2022.”

Senate Minority Leader Mitch McConnell (R-Ky.) said Democrats “are misreading the American people’s outrage as a mandate for yet another reckless taxing and spending spree.” He said Democrats “have already robbed American families once through inflation and now their solution is to rob American families yet a second time.”

“There is no working family in America whose top priorities are doubling the size of the IRS and giving rich people money to buy $80,000 electric cars,” McConnell said in a separate statement on Twitter.

“Americans want Washington to address inflation, crime, and the border—not another reckless liberal taxing and spending spree.”

Democrats have said the measure would “address record inflation by paying down our national debt, lowering energy costs, and lowering healthcare costs,” but Republicans have criticized the measure as having no potential other than to make matters worse, nicknaming the legislation “Build Back Broke,” in part because the bill would fulfill many parts of Biden’s Build Back Better agenda.

“The time is now to move forward with a big, bold package for the American people,” said Senate Majority Leader Chuck Schumer (D-N.Y.).

“This historic bill will reduce inflation, lower costs, fight climate change. It’s time to move this nation forward.”

But not every Democrat is buying what Chuck is selling...

As John Solomon reports at JustTheNews.com, Sen. Bernie Sanders, the former presidential candidate and proud socialist, on Saturday attacked President Joe Biden‘s Inflation Reduction Act for failing to live up to its name, after the non-partisan Congressional Budget Office declared it would have a minimal impact on surging prices.

“I want to take a moment to say a few words about the so-called Inflation Reduction Act that we are debating this evening," Sanders said just after voting with Democrats to advance the bill to debate on the Senate floor.

"I say so-called because according to the CBO and other economic organizations that have studied this bill, it will in fact have a minimal impact on inflation."

CBO declared this week that the $740 billion piece of legislation would only affect inflation by 0.1% in either direction.

"I don't find myself saying this very often. But on that point, I agree with Bernie," Sen. John Thune, R-S.D., told Insider.

Overall, economic analysts are divided on the measure, with some having predicted that the bill will worsen inflation and lead to stagnation in growth.

As Will Cain explained in an excellent monologue reality check, "look at the name of the bill, whatever it is, you can be sure the legislation will do the opposite."

Finally, as Goldman details in a new notes, the net fiscal impact of these policies continues to look very modest, likely less than 0.1% of GDP for the next several years...

While the final outcome may still yet differ in details, the fiscal impact is likely to be similar.

Tyler Durden Sun, 08/07/2022 - 15:32

Read More

Continue Reading

Government

UN Warns Of ‘Worrying And Dangerous’ Conspiracy Theories

UN Warns Of ‘Worrying And Dangerous’ Conspiracy Theories

The United Nations would like everyone to be on the lookout for ‘worrying and dangerous’…

Published

on

UN Warns Of 'Worrying And Dangerous' Conspiracy Theories

The United Nations would like everyone to be on the lookout for 'worrying and dangerous' conspiracy theories - especially those that might lead people to the conclusion that COVID-19 escaped from a lab in Wuhan, China... you know, the thing the WHO just admitted could very well be the case, and which Sen. Rand Paul (R-KY) has launched recent investigations into.

Some background

Before we get into the UN's latest salvo in the war over narratives (feel free to scroll down if you're a regular reader); We know from government contracts, FOIA records, and leaked emails that the US government was conducting risky gain-of-function research on US soil until former President Obama banned it in 2014 over ethical questions raised by the scientific community. The 'research' included manipulating bat Covid to be more transmissible to humans, and following Obama's ban, was funneled overseas to the Wuhan Institute of Virology through New York nonprofit, EcoHealth Alliance - whose CEO Peter Daszak secured lucrative contracts to study and manipulate bat coronaviruses in Wuhan China four months before Obama's ban.

Daszak was the guy behind The Lancet's "it couldn't have come from a lab" Natural Origin statement - for which he reportedly engaged in a "bullying campaign" - before generating significant controversy over conflicts of interest involving many of its authors and co-signatories, to which the Lancet later admitted.

The first $666,442 installment of EcoHealth's $3.7 million NIH grant was paid in June 2014, with similar annual payments through May 2019 under the "Understanding The Risk Of Bat Coronavirus Emergence" project.

Then, in 2017, a subagency of the National Institutes of Health (NIH) - headed by Dr. Anthony Fauci - resumed funding a controversial grant to genetically modify bat coronaviruses in Wuhan, China without the approval of a government oversight body.

Notably, the WIV "had openly participated in gain-of-function research in partnership with U.S. universities and institutions" for years under the leadership of Dr. Shi 'Batwoman' Zhengli, according to the Washington Post's Josh Rogin.

We also know (thanks to a FOIA lawsuit by The Intercept) that Daszak wanted to release 'Chimeric Covid Spike Proteins' Into Bat Populations Using 'Skin-Penetrating Nanoparticles,' only for the 'DEFUSE' proposal to be denied by DARPA on the grounds that it was too risky.

Further reading:

We challenge the UN to 'debunk' any of the above.

Now that you're up to speed

Enter the UN's new #ThinkBeforeSharing campaign, which helps people "learn how to identify, debunk, react to and report on conspiracy theories to prevent their spread."

To aid gullable individuals navigate the information highway without hitting any conspiracy potholes, UNESCO provides some helpful infographics - one of which thanks Stephen Lewandowsky - Australian psychologist and co-author of a March 2022 Scientific American report complaining about how "The Lab-Leak Hypothesis Made It Harder for Scientists to Seek the Truth."

So the default position of those behind the UN's "watch out for conspiracy theories" campaign is that the lab leak is a conspiracy theory. Right.

They recommend taking action when you've "identified a conspiracy theory," but that you don't get lured into an argument with a conspiracy theorist.

"Any argument may be taken as proof that you are part of the conspiracy and reinforce that belief," which will cause the conspiracy theorist to "argue hard to defend their beliefs."

So what to do? Show "empathy," and avoid "ridiculing them."

"If you are certain you have encountered a conspiracy theory," you must "react" immediately and post a link to a "fact-checking website" in the comments.

In short - this (from 2020):

Stay safe out there citizen!

Tyler Durden Sun, 08/07/2022 - 14:00

Read More

Continue Reading

Trending