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Texas Gov Pauses Economic Reopening As Florida, Arizona Report Latest Batch Of Infections: Virus Updates

Texas Gov Pauses Economic Reopening As Florida, Arizona Report Latest Batch Of Infections: Virus Updates

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Texas Gov Pauses Economic Reopening As Florida, Arizona Report Latest Batch Of Infections: Virus Updates Tyler Durden Thu, 06/25/2020 - 11:36

Summary:

  • Arizona, Fla. report latest numbers
  • Texas Gov pauses reopening
  • Texas gov orders suspension of elective surgeries in some counties
  • NYC mayor says phase 3 could begin as soon as July 6
  • Deaths continue to lag new infections
  • Australia sees biggest jump in cases since April
  • UK warned about second wave
  • US sees ~45k jump in new cases reported yesterday
  • Global total nears 10 mil
  • Persian Gulf virus total tops 400k
  • India to carry out virus 'survey' of New Delhi
  • Russia sees ~7k new cases, 92 deaths
  • Dr. Scott Gottlieb: "complacency" driving new US outbreak
  • Eiffel Tower reopens Thursday

* * *

Update (1120ET): The leader of one of the largest meat-packing workers unions in the country just revealed that 92 plant workers have died so far as these plants have proven fertile breeding grounds for the epidemic (though, notably, Beijing has been testing imported meats and foodstuffs for the virus, and has so far come up with nothing).

While NY's Thursday case total showed a 0.2% growth, in line with the 7-day average, both Florida and Arizona have just reported their numbers for Thursday.

Florida now has 114,018 total COVID-19 cases, an increase of 5,004 in one day, along with 46 new deaths, according to Fox13.

The rate of positive tests has increased during that time period. It dropped back to 10% on Wednesday after spiking to 18% on Tuesday. Thursday's total new cases represented the second-largest single-day jump since the pandemic began, as well as the 23rd straight day where 1,000+ new cases were reported. Experts say the current spike is partly due to more tests being given, but also a result of reopening the state.

The median age of those testing positive remained 34.

Prior to this spike, the state had averaged just ~700 new cases per day in the last month. That was a level that the health care system could handle, according to Gov. DeSantis. And while the number of new cases has trended up over the last few weeks, the number of deaths has appeared to trend down, though "significant delays" in data reporting, as the state says, make interpreting short-term trends from that statistic less reliable.

Arizona, meanwhile, reported another DoD jump in new cases. Arizona reported 3,056 new cases (+5.1%) and 27 new deaths Thursday, bringing the total confirmed cases there to 63,030 and deaths at just 1,490 in total. That's compared with a 7-day average of just 2.3%.

Texas Gov Abbott meanwhile has just announced that he will halt reopening plan, sending US equities sliding back into the red.

  • TEXAS GOVERNOR HALTS NEW PHASES OF REOPENING STATE'S ECONOMY

Here's his newest reopening plan.

As more blue-checks groan about economists weighing in on epidemiological matters, as they are wont to do, Raphael Bostic, the head of the Philly Fed, warned that the rising cases suggest the first virus wave isn't over, and that he's "concerned" about the possibility of another wave of shutdowns.

Dr. Tedros from the WHO meanwhile warned that he expects a virus will be ready for mass distribution within a year. Earlier, a WHO official said during Thursday's briefing that the world will likely surpass 10 million cases and half a million deaths by next week. That is, unless the pandemic suddenly comes screeching to a halt (which isn't very likely).

* * *

Update (1020ET): Texas Gov. Greg Abbott issued an executive order suspending all elective surgeries in several of the state's worst-hit counties, including Travis County, which includes Houston and the surrounding area.

As Public health officials reported another disturbing jump in hospitalizations - statewide figures saw a 8% increase compared with 7.3% yesterday - as officials in Austin warned Thursday that if nothing is done, hospitals might reach capacity by mid-July.

Already, hospital capacity in Houston is stretched, with ICU capacity already '97%' full, as the city activates emergency capacity that could itself be overwhelmed in under two weeks.

In NYC, meanwhile, Mayor de Blasio, who, during the opening days of March, warned that New Yorkers should "go about their lives" as the coronavirus wasn't a major threat, advised that the second phase of reopening was going so well, that the city could enter Phase 3 as soon as July 6.

If Texas' outbreak isn't brought under control within two weeks, Austin's top county health officials said he would have no choice but to order another shutdown, which would inevitably lead to a political crisis.

Per the Chronicle, as COVID-19 cases continue to spike in Houston and Texas, leaders of the Texas Medical Center are expected to update an update on the hospital system's capacity levels during a Thursday press conference.

* * *

Update (0930ET): Here's something we don't see nearly enough.

As the media has raised the alarm about the outbreak in new cases in the south and west, deaths haven't been rising in lockstep with new cases and hospitalizations, as many of those infected are younger and more likely to survive even severe infections.

However, according to the Washington Post, health experts are taking little 'solace' from this, as Dr. Fauci said earlier this week that deaths "always" lag considerably behind cases.

"Deaths always lag considerably behind cases," he said. We're curious how he can be so certain when this virus has only been with us for a few months, but we digress...

This would suggest that Florida, Arizona and Texas will be burying more death in July...unless the heightened precautions being taken in facilities like nursing homes and long-term care facilities continue to protect the most vulnerable. One Veterans home, state-run by the VA and state of Masachusetts, saw the worst outbreak in the country due to absolutely unconscionable decisions like mixing wards of sick and health patients in a way suggesting that they were almost trying to expose their patients to the virus.

In New York, a policy that sent sick patients back to nursing homes where they infected their peers was in place until May.

States like Texas, California Florida and Arizona have seen deaths either stable or even declining in recent weeks.

Coronavirus hospitalizations have tripled in Houston since Memorial Day, Houston Methodist Hospital chief executive Marc Boom said Wednesday. Texas reported 5,551 new cases, the most in a single day, along with 4,389 hospitalizations, up almost 300 from Tuesday’s record high. But deaths in the city haven't seen a commensurate rise.

New rules by NY, NJ and Conn will apply to states with an infection rate of 10 per 100,000 people on a seven-day rolling average, which presently includes nine states currently are in that group: Alabama, Arkansas, Arizona, Florida, North Carolina, South Carolina, Washington, Utah and Texas.

In other news, public health experts who worked in the Obama administration insist that deaths will catch up because the virus will eventually find its way to vulnerable populations. But is that really accurate? As Obama's CDC head Tom Frieden pointed out, CDC statistics show how thoroughly the virus attacks the elderly. From Feb. 1 to June 13, the virus was involved in just 2,630 deaths among people 44 or younger. But it was fatal to 83,426 people 65 or older.

Frieden added that nursing homes and other long-term care facilities are much better protected this time around than they were during the first wave, which would suggest that deaths likely won't even come close during the second time around.

* * *

Update (0910ET): As more states join Louisiana and Oregon by 'pausing' their reopening plans, while more public health experts warn that 'more stringent' mitigation efforts might be necessary, CNBC's Meg Tirrell just pointed out that the impact of the protests on the overall number of coronavirus cases has been mixed.

In Massachusetts, public health officials have reported little impact. But in California, health officials are seeing what appears to be a surge in cases that would suggest the rallies have had an impact.

Meanwhile, demand for the steroid Dexamethasone, which one study showed had a substantially positive impact on patients COVID-19 symptoms, has skyrocketed. Keep in mind, both the CDC and WHO initially discouraged steroid use for...some reason...one of many conclusions that 'the experts' apparently jumped to...

...that has since proved incorrect.

* * *

Update (0745ET): Australia's reopening hasn't gone as smoothly as hoped. The country on Thursday confirmed its largest new batch of COVID-19 cases since April. Australia's Victoria state reported 33 additional coronavirus cases, compared with 20 yesterday, while it was also reported that Australia is to deploy 1000 troops to the Victoria state capital of Melbourne to help contain the latest cluster in the area.

The WHO's European Director says Europe saw its first increase in weekly cases in a long time, with 11 countries now facing a resurgence, as  public health officials in the UK warned that the country is at risk of a second wave as PM Boris Johnson struggles to reopen.

* * *

Thanks to the "complacency" of young (or young-ish) people across the south and the west of the US, the number of newly confirmed coronavirus cases topped its late-April peak of 36,400 new cases reported in a single day, with more than 45,000 new cases reported yesterday according to the latest tally from NBC News, up from the 39k we reported Wednesday evening.

All coronavirus data are reported with a 24-hour delay, so the record spike really happened on Tuesday. But the final numbers are in, and the picture is bleak. Seven states, including California, Florida, Oklahoma and Texas, reported record tallies of new cases yesterday, with the average age of hospitalized patients falling to 35, from 65 during the April peak in the northeast.

As Florida and Texas emerge as the two biggest 'hotspots', Disney has decided to delay the reopening of its theme parks in the US following a surge in cases in California and Florida, both of which reported record numbers of new cases yesterday. What's more, Disney is pondering whether to push back the release of its live-action "Mulan" blockbuster, which would have been the first major film release with movie theaters back open.

New York, NJ and Conn. have all said they'll be enforcing quarantine orders targeting travelers from out of state, and police will definitely be stopping cars with out-of-state license plates to see if they're violating quarantine orders: If they are, they can expect a hefty fine, after the states have seemingly had a change of heard following Cuomo's initial claim that the order wouldn't be enforced.

One health professional warned that the outbreak is likely the result of younger people getting "complacent" - going to bars and other crowded public places without taking proper precautions.

"People got complacent, And it’s coming back and biting us, quite frankly," according to the CEO of the Houston Methodist Hospital, who spoke to reporters as the health-care system in the city emerges as perhaps the most vulnerable in the country, as a new wave of COVID-19 patients flood the city's hospital and ICU beds, which are nearly at capacity.

According to the Associated Press, governments from NY to Melbourne are taking steps to prevent a resurgence, or get their outbreak under control.

In India, authorities are launching a massive coronavirus survey, perhaps the most ambitious the world has seen since the dawn of the pandemic, as the government tries to get a handle on New Delhi, both the nation's capital and one of the areas most impacted by the virus. The government will survey the city's entire population of 29 million, with everyone being tested and facing a brief survey by July 6. That's pretty, ambitious; Beijing managed to test millions of people in a week during its latest outbreak.

Per Al Jazeera, the new plan was announced Wednesday after the sprawling capital became the worst-hit city by the pandemic in India with 70,390 cases, exceeding the financial capital of Mumbai, its only real competition. 3,788 new cases were confirmed over the last 24 hours in Delhi, the government announced on Thursday, compared to 1,118 in Mumbai. India on Thursday registered another record high of 16,922 cases, taking the countrywide total to 473,105, leaving it still in fourth place behind the US, Brazil and Russia.

Latin America and the US are the two biggest contributors to the growing global coronavirus tally, but two other regions - the Middle East and Africa - are coming up in the rearview mirror.

COVID-19 cases in the Persian Gulf region have surpassed 400,000, according to Johns Hopkins data, as the number of daily cases reported climbs as governments start to ease restrictions. Africa's cases have surged past 336,000 on Thursday, following a 10k increase in infections announced Wednesday evening.

The UAE, home of Dubai and other popular international cities, announced that it would finally be lifting a nightly curfew in place since mid-March as the number of cases it's reporting every day has fallen by 2/3rds.

The global outbreak is on track to top 10 million next week, the World Health Organization has said, warning that the virus has yet to peak in North and South America. As of Thursday morning in the US, more than 9.4 million people around the world have been diagnosed with COVID-19, with more than 4.7 million recovered, and nearly 483,000 fatalities, per JHU.

Indonesia, a country that drew the world's attention during the early days when its government acknowledged that it was actively hiding evidence of the virus, has finally seen its case total top 50k, though the government insists that improved testing is responsible for the recent uptick in newly confirmed cases.

Russia confirmed 7,113 new cases of the novel coronavirus, pushing its tally to 613,994.

The Eiffel Tower on Thursday welcomed back visitors after the coronavirus outbreak forced the Paris landmark into its longest closure since WWII.

Before we go, Dr. Scott Gottlieb appeared on Squawk Box this morning to comment on the latest record numbers out of the US. He said more states are seeing troubling data on new cases and hospitalizations, including Georgia, South Carolina, North Carolina, Arkansas and others.

"This isn't confined to a handful of states anymore," the Dr. said. "It's going to be difficult now to get this under control."

Finally, Russia confirmed 7,113 new cases on Thursday, pushing its tally to 613,994, as the daily counts are slowly coming down. Only 92 deaths were recorded, bringing the death toll to 8,605. To be sure, critics claim Vladimir Putin's government is deliberately undercounting deaths.

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‘The Official Truth’: The End Of Free Speech That Will End America

‘The Official Truth’: The End Of Free Speech That Will End America

Authored by J.B.Shurk via The Gatestone Institute,

If legacy news corporations…

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6 hours ago

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May 29, 2023

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'The Official Truth': The End Of Free Speech That Will End America

Authored by J.B.Shurk via The Gatestone Institute,

If legacy news corporations fail to report that large majorities of the American public now view their journalistic product as straight-up propaganda, does that make it any less true?

According to a survey by Rasmussen Reports, 59% of likely voters in the United States view the corporate news media as "truly the enemy of the people." This is a majority view, held regardless of race: "58% of whites, 51% of black voters, and 68% of other minorities" — all agree that the mainstream media has become their "enemy."

This scorching indictment of the Fourth Estate piggybacks similar polling from Harvard-Harris showing that Americans hold almost diametrically opposing viewpoints from those that news corporations predominantly broadcast as the official "truth."

Drawing attention to the divergence between the public's perceived reality and the news media's prevailing "narratives," independent journalist Glenn Greenwald dissected the Harvard-Harris poll to highlight just how differently some of the most important issues of the last few years have been understood. While corporate news fixated on purported Trump-Russia collusion since 2016, majorities of Americans now see this story "as a hoax and a fraud."

While the news media hid behind the Intelligence Community's claims that Hunter Biden's potentially incriminating laptop (allegedly containing evidence of his family's influence-peddling) was a product of "Russian disinformation" and consequently enforced an information blackout on the explosive story during the final weeks of the 2020 presidential election, strong majorities of Americans currently believe the laptop's contents are "real." In other words, Americans have correctly concluded that journalists and spies advanced a "fraud" on voters as part of an effort to censor a damaging story and "help Biden win." Nevertheless, The New York Times and The Washington Post have yet to return the Pulitzer Prizes they received for reporting totally discredited "fake news."

Similarly, majorities of Americans suspect that President Joe Biden has used the powers of his various offices to profit from influence-peddling schemes and that the FBI has intentionally refrained from investigating any possible Biden crimes. Huge majorities of Americans, in fact, seem not at all surprised to learn that the FBI has been caught abusing its own powers to influence elections, and are strongly convinced that "sweeping reform" is needed. Likewise, large majorities of Americans have "serious doubts about Biden's mental fitness to be president" and suspect that others behind the scenes are "puppeteers" running the nation.

Few, if any, of these poll results have been widely reported. In a seemingly-authoritarian disconnect with the American people, corporate news media continue to ignore the public's majority opinion and instead "relentlessly advocate" those viewpoints that Americans "reject." When journalists fail to investigate facts and deliberately distort stories so that they fit snugly within preconceived worldviews, reporters act as propagandists.

Constitutional law scholar Jonathan Turley recently asked, "Do we have a de facto state media?" In answering his own question, he notes that the news blackout surrounding congressional investigations into Biden family members who have allegedly received more than ten million dollars in suspicious payments from foreign entities "fits the past standards used to denounce Russian propaganda patterns and practices." After Republican members of Congress traced funds to nine Biden family members "from corrupt figures in Romania, China, and other countries," Turley writes, "The New Republic quickly ran a story headlined 'Republicans Finally Admit They Have No Incriminating Evidence on Joe Biden.'"

Excoriating the news media's penchant for mindlessly embracing stories that hurt former President Donald Trump while simultaneously ignoring stories that might damage President Biden, Turley concludes:

"Under the current approach to journalism, it is the New York Times that receives a Pulitzer for a now debunked Russian collusion story rather than the New York Post for a now proven Hunter Biden laptop story."

Americans now evidently view the major sources for their news and information as part of a larger political machine pushing particular points of view, unconstrained by any ethical obligation to report facts objectively or dispassionately seek truth. That Americans now see the news media in their country as serving a similar role as Pravda did for the Soviet Union's Communist Party is a significant departure from the country's historic embrace of free speech and traditional fondness for a skeptical, adversarial press.

Rather than taking a step back to consider the implications such a shift in public perception will have for America's future stability, some officials appear even more committed to expanding government control over what can be said and debated online. After the Department of Homeland Security (DHS), in the wake of public backlash over First Amendment concerns, halted its efforts to construct an official "disinformation governance board" last year, the question remained whether other government attempts to silence or shape online information would rear their head. The wait for that answer did not take long.

The government apparently took the public's censorship concerns so seriously that it quietly moved on from the collapse of its plans for a "disinformation governance board" within the DHS and proceeded within the space of a month to create a new "disinformation" office known as the Foreign Malign Influence Center, which now operates from within the Office of the Director of National Intelligence. Although ostensibly geared toward countering information warfare arising from "foreign" threats, one of its principal objectives is to monitor and control "public opinion and behaviors."

As independent journalist Matt Taibbi concludes of the government's resurrected Ministry of Truth:

"It's the basic rhetorical trick of the censorship age: raise a fuss about a foreign threat, using it as a battering ram to get everyone from Congress to the tech companies to submit to increased regulation and surveillance. Then, slowly, adjust your aim to domestic targets."

If it were not jarring enough to learn that the Office of the Director of National Intelligence has picked up the government's speech police baton right where the DHS set it down, there is ample evidence to suggest that officials are eager to go much further in the near future. Democrat Senator Michael Bennet has already proposed a bill that would create a Federal Digital Platform Commission with "the authority to promulgate rules, impose civil penalties, hold hearings, conduct investigations, and support research."

Filled with "disinformation" specialists empowered to create "enforceable behavioral codes" for online communication — and generously paid for by the Biden Administration with taxpayers' money — the special commission would also "designate 'systemically important digital platforms' subject to extra oversight, reporting, and regulation" requirements. Effectively, a small number of unelected commissioners would have de facto power to monitor and police online communication.

Should any particular website or platform run afoul of the government's First Amendment Star Chamber, it would immediately place itself within the commission's crosshairs for greater oversight, regulation, and punishment.

Will this new creation become an American KGB, Stasi or CCP — empowered to target half the population for disagreeing with current government policies, promoting "wrongthink," or merely going to church? Will a small secretive body decide which Americans are actually "domestic terrorists" in the making? US Attorney General Merrick Garland has gone after traditional Catholics who attend Latin mass, but why would government suspicions end with the Latin language? When small commissions exist to decide which Americans are the "enemy," there is no telling who will be designated as a "threat" and punished next.

It is not difficult to see the dangers that lie ahead. Now that the government has fully inserted itself into the news and information industry, the criminalization of free speech is a very real threat. This has always been a chief complaint against international institutions such as the World Economic Forum that spend a great deal of time, power, and money promoting the thoughts and opinions of an insular cabal of global leaders, while showing negligible respect for the personal rights and liberties of the billions of ordinary citizens they claim to represent.

WEF Chairman Klaus Schwab has gone so far as to hire hundreds of thousands of "information warriors" whose mission is to "control the Internet" by "policing social media," eliminating dissent, disrupting the public square, and "covertly seed[ing] support" for the WEF's "Great Reset." If Schwab's online army were not execrable enough, advocates for free speech must also gird themselves for the repercussions of Elon Musk's appointment of Linda Yaccarino, reportedly a "neo-liberal wokeist" with strong WEF affiliations, as the new CEO of Twitter.

Throughout much of the West, unfortunately, free speech has been only weakly protected when those with power find its defense inconvenient or messages a nuisance. It is therefore of little surprise to learn that French authorities are now prosecuting government protesters for "flipping-off" President Emmanuel Macron. It does not seem particularly astonishing that a German man has been sentenced to three years in prison for engaging in "pro-Russian" political speech regarding the war in Ukraine. It also no longer appears shocking to read that UK Technology and Science Secretary Michelle Donelan reportedly seeks to imprison social media executives who fail to censor online speech that the government might subjectively adjudge "harmful." Sadly, as Ireland continues to find new ways to punish citizens for expressing certain points of view, its movement toward criminalizing not just speech but also "hateful" thoughts should have been predictable.

From an American's perspective, these overseas encroachments against free speech — especially within the borders of closely-allied lands — have seemed sinister yet entirely foreign. Now, however, what was once observed from some distance has made its way home; it feels as if a faraway communist enemy has finally stormed America's beaches and come ashore in force.

Not a day seems to go by without some new battlefront opening up in the war on free speech and free thought. The Richard Stengel of the Council on Foreign Relations has been increasingly vocal about the importance of journalists and think tanks to act as "primary provocateurs" and "propagandists" who "have to" manipulate the American population and shape the public's perception of world events. Senator Rand Paul has alleged that the DHS uses at least 12 separate programs to "track what Americans say online," as well as to engage in social media censorship.

As part of its efforts to silence dissenting arguments, the Biden administration is pursuing a policy that would make it unlawful to use data and datasets that reflect accurate information yet lead to "discriminatory outcomes" for "protected classes." In other words, if the data is perceived to be "racist," it must be expunged. At the same time, the Department of Justice has indicted four radical black leftists for having somehow "weaponized" their free speech rights in support of Russian "disinformation." So, objective datasets can be deemed "discriminatory" against minorities, while actual discrimination against minorities' free speech is excused when that speech contradicts official government policy.

Meanwhile, the DHS has been exposed for paying tens of millions of dollars to third-party "anti-terrorism" programs that have not so coincidentally equated Christians, Republicans, and philosophical conservatives to Germany's Nazi Party. Similarly, California Governor Gavin Newsom has set up a Soviet-style "snitch line" that encourages neighbors to report on each other's public or private displays of "hate."

Finally, ABC News proudly admits that it has censored parts of Robert F. Kennedy Jr.'s interviews because some of his answers include "false claims about the COVID-19 vaccines." Essentially, the corporate news media have deemed Kennedy's viewpoints unworthy of being transmitted and heard, even though the 2024 presidential candidate is running a strong second behind Joe Biden in the Democrat primary, with around 20% support from the electorate.

Taken all together, it is clear that not only has the war on free speech come to America, but also that it is clobbering Americans in a relentless campaign of "shock and awe." And why not? In a litigation battle presently being waged over the federal government's extensive censorship programs, the Biden administration has defended its inherent authority to control Americans' thoughts as an instrumental component of "government infrastructure." What Americans think and believe is openly referred to as part of the nation's "cognitive infrastructure" — as if the Matrix movies were simply reflecting real life.

Today, America's mainstream news corporations are already viewed as processing plants that manufacture political propaganda. That is an unbelievably searing indictment of a once-vibrant free press in the United States. It is also, unfortunately, only the first heavy shoe to drop in the war against free speech. Many Chinese-Americans who survived the Cultural Revolution look around the country today and see similarities everywhere. During that totalitarian "reign of terror," everything a person did was monitored, including what was said while asleep.

In an America now plagued with the stench of official "snitch lines," censorship of certain presidential candidates, widespread online surveillance, a resurrected "disinformation governance board," and increasingly frequent criminal prosecutions targeting Americans who exercise their free speech, the question is not whether what we inaudibly think or say in our sleep will someday be used against us, but rather how soon that day will come unless we stop it. After all, with smartphones, smart TVs, "smart" appliances, video-recording doorbells, and the rise of artificial intelligence, somebody, somewhere is always listening.

Tyler Durden Sun, 05/28/2023 - 23:00

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Never Short a Dull Market; AI is Sexy, But Everyone Hates Oil

There’s an old adage of Wall Street, which says: "never short a dull market." And while AI is getting all the press these days, the oil market is about…

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May 28, 2023

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There's an old adage of Wall Street, which says: "never short a dull market." And while AI is getting all the press these days, the oil market is about as dull as it gets. This, of course, brings the energy sector to the top of my contrarian alert list.

This is not to say that I'm buying oil-related assets with both hands. It just means that, at this point, it makes more sense to look at energy as a value asset, as it is oversold and ripe for a move up whenever the right set of variables required to deliver such a move line up just right.

In the current world, the variables could line up just right as early as today.

There are No Oil Bulls Left

Nobody loves oil.

The level of bearishness expressed by futures traders is at least equal to where it was during the pandemic, and after the Silicon Valley Bank (SIVB) collapse. The International Energy Agency (IEA), forecasts that, of the expected $2.8 trillion in energy investments for 2023, roughly $1.7 trillion will be allocated to low carbon energy sources, including nuclear, solar, and other potential sources. Only $1.1 trillion will be invested in fossil fuels.

And according to the Financial Times, auctioneers in Texas are trying to unload two brand new fracking rigs, which together cost $70 million, for a starting combined bid of just below $17 million.

Supply is the Primary Influence on Oil Prices

Meanwhile, oil companies are quietly merging with competitors, and exploration outside the United States is continuing aggressively, with new discoveries being frequently announced. 

Simultaneously, the U.S. active rig count is slowly falling, led by natural gas. The price of gasoline is steadily rising, as the market begins to price in future supply reductions. Just in my neck of the woods, regular unleaded is up some $0.32 in the last week alone.

That doesn't sound like an industry that's planning on fading away. It sounds like an industry that's hunkering down and waiting for better times and preparing to squeeze supply in order to boost prices.

Charting the Oil Sector

The price chart for West Texas Intermediate Crude, the U.S. benchmark (WTIC), shows the depressed price picture which has led investors to walk away. And, until proven otherwise, there are plenty of sellers at the $75-$80 price area, where a sizeable Volume by Price bar highlights the point of resistance.

At first glance, there little difference in the general price behavior for Brent Crude, the European benchmark. (BRENT) where there is a resistance band defined by VBP bars between $80 and $90. A closer look reveals an uptick in Accumulation Distribution (ADI) and the semblance of some nibbling in On Balance Volume (OBV). It's subtle, but it's there.

The oil stocks are far from a bull trend. The Energy Select Sector SPDR ETF (XLE) is trading below its 200-day moving average, facing resistance put from $78 to $90 (VBP bars).

So why bother? Simply stated, OPEC has an upcoming meeting on June 3-4. The cartel is not happy about the prices and the way things are evolving. The Saudi oil minister recently warned bearish speculators to "watch out." And my gut is doing flips when I think about oil, as I see gasoline prices creep up when I drive to work.

But mostly, it's because there are no oil bulls left. This is what we saw in the technology sector a few months ago before its current rally. In early 2023, the tech sector was pronounced dead. The stories were all about the technology sector shuddering as the economy slowed. How about this one, from March 2023, which breathlessly announced a 5.2% decrease in semiconductor sales on a month to month basis and an 18.5% year to year drop?

Yet, as validated by the recent AI-fueled rally, the bad news first marked a bottom, while preceding a significant move up in tech shares.

Never short a dull market.

I've recently recommended several energy sector picks. You can have a look at them with a free trial to my service. In addition, I've posted a Special Report on the oil market which you can gain access to here.

Bond and Mortgage Roller Coaster Reverses Course

Expect negative news about the effect of rising mortgage rates on the homebuilder industry. That's because, as the chart below illustrates, there is a tight and very close correlation between rising bond yields, mortgage rates, and the homebuilder stocks (SPHB).

Moreover, the rise above 3.75% on the U.S. Ten Year Note yield (TNX) has triggered headlines about mortgage rates climbing above 7%. What the news isn't reporting is that, once bond yields roll over, which they are likely to do at some point in the future when the economy shows more signs of slowing and the Fed finally admits that they must pause, is that mortgage rates will drop and demand for new homes will once again pick up. Thus, we will see the homebuilders pick up where they left off.

As things stood last week, SPHB seems to have made a short term bottom.

For now, expect a continuation of the backing and filling in the homebuilder stocks. But, if I'm right and bond yields reverse course, the homebuilders are likely to rally again.

For an in-depth comprehensive outlook on the homebuilder sector click here.

NYAD Holds Above 200-Day Moving Average. SPX Joins NDX in Breaking Out. Liquidity is Shrinking.

The New York Stock Exchange Advance Decline line (NYAD) tested its 200-day moving average on an intra-week basis but did not break below the key technical level. On the other hand, NYAD remained below its 50-day moving average, which is still an intermediate-term negative.

Moreover, with the major indexes (see below) breaking out to new highs, we remain in a technical divergence as the market's breadth is lagging the action in the indexes. This is of some concern, given the fade in the market's liquidity, as I point out below.

The Nasdaq 100 Index (NDX) extended its recent breakout, closing the week well above 14,200. The current move is unsustainable, so some sort of pullback and consolidation are likely over the next few days to weeks. Both ADI and OBV remain encouraging.

What's more bullish is that the S&P 500 (SPX) finally broke out above the 4100–4200 trading range on 5/24/23. On Balance Volume (OBV) is perking up while the Accumulation Distribution (ADI) indicator is very encouraging.

We may be seeing a shift from a short-covering rally to a fear-of-missing-out buyer's rally.

VIX Holds Steady

The CBOE Volatility Index (VIX) remained below 20, as it has since March 2023. This remains a positive for the markets, as it shows short sellers are staying away at the moment.

When the VIX rises, stocks tend to fall, as rising put volume is a sign that market makers are selling stock index futures to hedge their put sales to the public. A fall in VIX is bullish, as it means less put option buying, and it eventually leads to call buying, which causes market makers to hedge by buying stock index futures. This raises the odds of higher stock prices.

Liquidity is Getting Squeezed

The market's liquidity is now in a downtrend. The Eurodollar Index (XED) is now below 94.5, and looks weak. A move above 95 will be a bullish development. Usually, a stable or rising XED is very bullish for stocks.

To get the latest up-to-date information on options trading, check out Options Trading for Dummies, now in its 4th Edition—Get Your Copy Now! Now also available in Audible audiobook format!

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Joe Duarte

In The Money Options

Joe Duarte is a former money manager, an active trader, and a widely recognized independent stock market analyst since 1987. He is author of eight investment books, including the best-selling Trading Options for Dummies, rated a TOP Options Book for 2018 by Benzinga.com and now in its third edition, plus The Everything Investing in Your 20s and 30s Book and six other trading books.

The Everything Investing in Your 20s and 30s Book is available at Amazon and Barnes and Noble. It has also been recommended as a Washington Post Color of Money Book of the Month.

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International

Costco Tells Americans the Truth About Inflation and Price Increases

The warehouse club has seen some troubling trends but it’s also trumpeting something positive that most retailers wouldn’t share.

Published

12 hours ago

on

May 28, 2023

By

Costco has been a refuge for customers during both the pandemic and during the period when supply chain and inflation issues have driven prices higher. In the worst days of the covid pandemic, the membership-based warehouse club not only had the key household items people needed, it also kept selling them at fair prices.

With inflation -- no matter what the reason for it -- Costco  (COST) - Get Free Report worked aggressively to keep prices down. During that period (and really always) CFO Richard Galanti talked about how his company leaned on vendors to provide better prices while sometimes also eating some of the increase rather than passing it onto customers.

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That wasn't an altruistic move. Costco plays the long game, and it focuses on doing whatever is needed to keep its members happy in order to keep them renewing their memberships.

It's a model that has worked spectacularly well, according to Galanti.

"In terms of renewal rates, at third quarter end, our US and Canada renewal rate was 92.6%, and our worldwide rate came in at 90.5%. These figures are the same all-time high renewal rates that were achieved in the second quarter, just 12 weeks ago here," he said during the company's third-quarter earnings call.

Galanti, however, did report some news that suggests that significant problems remain in the economy.

Costco has done an incredibly good job at holding onto members.

Image source: Xinhua/Ting Shen via Getty Images

Costco Does See Some Economic Weakness

When people worry about the economy, they sometimes trade down when it comes to retailers. Walmart executives (WMT) - Get Free Report, for example, have talked about seeing more customers that earn six figures shopping in their stores.

Costco has always had a diverse customer base, but one weakness in its business may be a warning sign for its rivals like Target (TGT) - Get Free Report, Best Buy (BBY) - Get Free Report, and Amazon (AMZN) - Get Free Report. Galanti broke down some of the numbers during the call.

"Traffic or shopping frequency remains pretty good, increasing 4.8% worldwide and 3.5% in the U.S. during the quarter," he shared.

People shopped more, but they were also spending less, according to the CFO.

"Our average daily transaction or ticket was down 4.2% worldwide and down 3.5% in the U.S., impacted, in large part, from weakness in bigger-ticket nonfood discretionary items," he shared.

Now, not buying a new TV, jewelry, or other big-ticket items could just be a sign that consumers are being cautious. But, if they're not buying those items at Costco (generally the lowest-cost option) that does not bode well for other retailers.

Galanti laid out the numbers as well as how they broke down between digital and warehouse.

"You saw in the release that e-commerce was a minus 10% sales decline on a comp basis," he said. "As I discussed on our second quarter call and in our monthly sales recordings, in Q3, big-ticket discretionary departments, notably majors, home furnishings, small electrics, jewelry, and hardware, were down about 20% in e-com and made up 55% of e-com sales. These same departments were down about 17% in warehouse, but they only make up 8% in warehouse sales."

Costco's CFO Also Had Good News For Shoppers

Galanti has been very open about sharing information about the prices Costco has seen from vendors. He has shared in the past, for example, that the chain does not pass on gas price increases as fast as they happen nor does it lower prices as quick as they sometimes fall.

In the most recent call, he shared some very good news on inflation (that also puts pressure on Target, Walmart, and Amazon to lower prices).

"A few comments on inflation. Inflation continues to abate somewhat. If you go back a year ago to the fourth quarter of '22 last summer, we had estimated that year-over-year inflation at the time was up 8%. And by Q1 and Q2, it was down to 6% and 7% and then 5% and 6%," he shared. "In this quarter, we're estimating the year-over-year inflation in the 3% to 4% range."

The CFO also explained that he sees prices dropping on some very key consumer staples.

"We continue to see improvements in many items, notably food items like nuts, eggs and meat, as well as items that include, as part of their components, commodities like steel and resins on the nonfood side," he added.

  

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