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US and Canada Report on Jobs as G7 Fin Mins Talk Taxes

Overview: Stronger than expected US employment data, ahead of today’s monthly report and compromise proposal on corporate tax by the White House to help secure a deal on infrastructure sent US bond yields and the dollar high. Late dollar shorts were force

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Overview: Stronger than expected US employment data, ahead of today's monthly report and compromise proposal on corporate tax by the White House to help secure a deal on infrastructure sent US bond yields and the dollar high. Late dollar shorts were forced to cover.  The greenback is mixed now, with the yen, sterling, and Antipodeans slightly firmer. The Norwegian krone, Canadian dollar, and euro are still heavy.  The dollar is rising against most emerging market currencies, though, of note, the Turkish lira is stabilizing after losing about 1.25% yesterday, its largest loss in four weeks.  The JP Morgan Emerging Market Currency Index is slipping for the second consecutive session and is practically flat on the week.  China, Australia, and New Zealand equities rose ahead of the weekend, but most other markets in the Asia Pacific region fell, while  Tokyo was mixed.  European bourses are mixed, with the Dow Jones Stoxx 600 hovering around the record high set on Tuesday.  US futures are little changed, and the 10-year Treasury yield is around 1.63%, about a three basis point increase on the week.  The two-year yield is poking above 16 bp for the first time in three weeks.  European bonds are quiet.  Note that rating decisions are expected today from Moody's for Russia and Turkey, while Fitch assesses Italy and DBRS, Germany.  Gold, which had traded as high as $1910 yesterday, extended the biggest drop in four weeks and fell to almost $1856 before finding a bid in Asia.  Even if little changed, oil prices are firm, with the July WTI contract hovering around $69 a barrel, consolidating a 4.25% gain this week.  

Asia Pacific

Japan's household spending in April was stronger than expected, rising 13% year-over-year.  The acceleration from 6.2% in March illustrates the powerful base effect.  On a seasonally adjusted basis, spending rose by a minor 0.1%, though it is the third consecutive monthly increase.  The extended emergency into June and the weakness in income point to continued challenges ahead.  Many economists expect the world's third-largest economy may be contracting still.  On the other hand, the pace of vaccinations is accelerating, and a stronger recovery is expected in H2.  

As widely anticipated, the Reserve Bank of India kept its repo at 4% but adjusted other dimensions of its monetary policy.  It announced a Q3 bond-buying of INR1.2 trillion (~$16.4 bln) after completing INR1 trillion purchases this quarter.  The central bank also extended its liquidity facility for businesses especially hit hard by the pandemic. As a result, the fiscal year's GDP forecast was cut to 9.5% from 10.5%.  The RBI now sees inflation finishing the year just above 5%.  The latest print, for April, stood at 4.3%.

The US will prohibit new purchases of equities in 59 Chinese companies as of August 2.  This looks like a net add of 11 new businesses from what was inherited from the previous administration.  The Biden administration has put the initiative on stronger legal footing and made the policy clearer and more transparent.  It will be run by the US Treasury, with input by State and Defense Departments.  It will be updated on a rolling basis. 

The dollar rose to almost JPY110.35 in early Asia before stalling.  It is holding above JPY110.00, and there is an expiring option for $440 mln at JPY109.90.  The attempt to rechallenge the year's high set at the end of March near JPY111 appears to require a further increase in US yields.  The Australian dollar consolidated yesterday's sell-off that brought it to its lowest level since mid-April, a little below $0.7650.  Yesterday's fall, about 1.3%, was the largest since mid-May.  The next important support is in the $0.7580-$0.7600 area.  The greenback rose against the Chinese yuan for the fourth session this week.  The cumulative gain of about 0.66% was the largest since last September.  The dollar approached the 20-day moving average (~CNY6.4140) for the first time since mid-April.  We had suggested potential into the gap from May 24-25 found between CNY6.4150 and CNY6.4180.  A move above there targets the CNY6.4400-CNY6.4550 area.  Today's fixing was the tightest this week.  At CNY6.4072, it compares with the median forecast in Bloomberg's survey of CNY6.4074.  

Europe

The G7 finance minister meets today.  The focus is on coordinating the tax reform position that can be presented to the G20 and OECD.  The US is downplaying expectations.  As we discuss below, the minimum tax of the revised US proposal of 15% needs to be understood within the context of US domestic politics.  Previously, the OECD had been discussing a minimum rate of 12.5%, which would have avoided the pushback by Ireland.  There seems to be greater interest in Europe to address the problem that some companies with a large internet presence do not pay taxes to local authorities for local sales.  There does appear to be an agreement to reform this process and not just apply it to US tech giants, but the thresholds of revenues and profits appear to still be debated.  Separately, the UK host is pushing hard for an agreement to impose some environmental impact/risks reporting by large businesses.  

Yesterday's announcement that one of Russia's sovereign wealth funds would complete its shift away from the US dollar had little market impact. It seemed a more symbolic defiant move ahead of the Biden-Putin meeting on June 16.  To be sure, it is not Russia abandoning the dollar as much as it has been the US sanction regime that has tightened.  The National Well-Being Fund will shift its dollar holdings, estimated to be less than $35 bln to the central bank. No market operation is necessary. The central bank manages the allocation of its reserves and has been authorized to buy gold too.  Although there is a perennial fear that the dollar's reserve role will change, the fact of the matter is that as of the end of last year, foreign central banks held more dollars than ever before in reserves (~$7 trillion).  The US Treasury's TIC data, which is not comprehensive, showed Russia's Treasury bond holdings at $4 bln in March, down from $10 bln at the end of 2019 and $102.5 bln at the end of 2017.  We argue that a move out of Treasuries and into European bonds and gold comes at the cost of yield, transparency, and liquidity. 

The euro peaked on Monday near $1.2255.  It is testing the $1.2100 area in late morning turnover in Europe.  There is a 1.14 bln euro option at $1.21 that expires a little after the US jobs report.  Today could be the fourth consecutive losing session, and yesterday's loss was the biggest since April 30.  The next target is around $1.2050, a (38.2%) retracement of the rally since the March 31 low.  Below there, support is expected in the $1.1985-$1.2000 area.  The $1.2140 area offers the initial cap.  Sterling posted a bearish outside down day yesterday, but follow-through selling was limited to a few ticks, and it has returned above $1.4100.  It is holding below the 20-day moving average (~$1.4140) for the first time since mid-April. It needs to resurface above it to stabilize the tone into next week.   

America

To boost the chances of forging a deal with Republicans on a substantial infrastructure bill, the White House offered to amend its call to unwind Trump's tax cuts on corporations and lift the tax schedule back to 28%.  The problem with the tax hike is not that Republicans oppose it. Rather, it is that Biden has not persuaded all of the Democrat Senators of the merit.  The compromise is a 15% minimum tax--there is no minimum now, but the average effective tax rate is of profitable businesses is even lower, according to some estimates.  We had underscored the linkage between Biden's domestic agenda and the reversal of the US position at the OECD/G20.  Biden first proposed a 21% minimum corporate tax rate.  The lack of sufficient support spurred a compromise of a 15% global minimum.  The G7 finance ministers are coalescing around this now.  

The unexpectedly mediocre April job report presaged a string of disappointing data that included retail sales, industrial production,  housing starts, durable goods orders, and personal expenditures.  Even under normal times, employment data can be volatile and subject to statistically significant revisions.  While the market often does not focus on data revisions, a large upward revision to the April series coupled with a robust May report would be a powerful cocktail. Note that there have been more references to talking about tapering at the coming meetings since the big miss in the April report. Just like the Fed is looking through the near-term uptick in inflation, it is looking through the volatility of the monthly employment report.  The four-week moving average of weekly jobless claims has halved since late last year.  They remain elevated but significant progress has been made.  The median forecast in Bloomberg's survey has crept up and now is just north of 670k.  The surge in the ADP private-sector estimate to 978k was above expectation but partly blunted by the downward revision to the April series (to 654k from 742k). It is still a multiple of the government's initial estimate of  218k private-sector job growth.  Confidence that the combination of fiscal/monetary stimulus and the widespread vaccination and re-open is accelerating growth, we look for a strong report and upward revisions to the April estimate. Like last time, though, the initial move in the markets may be a head fake.   

Canada's April employment report was also disappointed.  It lost 207k jobs, of which nearly 130k were full-time positions. It is expected to have shed employment again last month.  If it does, the Bank of Canada may temper its rhetoric at next week's meeting.  Recall that at its last meeting (April 21), it announced it would slow its bond purchases and anticipated the output gap would be closed in H2 22.  As early as mid-March, the market was discounting the better part of 75 bp of interest rate hikes over the next two years.  Since the April announcement, the market has moved broadly sideways between around 65-75 bp of tightening priced in.  However, during the same time, the Canadian dollar has appreciated by almost 2% to bring the year-to-date appreciation to over 5%, the strongest of the major currencies.  The Bank of Canada has expressed concern recently about the loss of competitiveness of further currency appreciation.  The Canadian dollar has stalled near $0.8330 (~CAD1.20), an important chart area.  It could mark the neckline of a large topping pattern that would signal a move back to parity and beyond over time.  

The US dollar set a new four-year low on Tuesday, a little above CAD1.20, and jumped to CAD1.2120 yesterday.  It closed above the 20-day moving average for the first time since April 20, the day before the Bank of Canada's hawkish announcement.  Follow-through buying is pressing into the CAD1.2130 area.  Resistance is seen in the CAD1.2145 area, and a break of it would signal a test on the CAD1.22 area, the high from mid-May.  The Mexican peso also remains under pressure after falling by 1.3% yesterday.  The dollar is trading near MXN20.20 in Europe. Nearby resistance around MXN20.22 does not look particularly strong, and the risk may extend toward the early May highs a little above MXN20.30.  The legislative and local elections this weekend may keep players on edge, but so will its proxy for the region as a whole.  Peru's presidential run-off has weighed on the sol.  Chile's legislature may consider a bill that allows entire pension savings to be withdrawn, and this undermined the peso yesterday and triggered a sharp 4% sell-off in local shares. It leaves Brazil as the regional favorite. Brazil reports May services and composite PMI.  Both are likely to have remained below the 50 boom/bust level.  The dollar fell for the sixth consecutive session yesterday against the Brazilian real and is approaching strong support near BRL5.00.  


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Government

New Hampshire Governor Vetoes Ivermectin Bill

New Hampshire Governor Vetoes Ivermectin Bill

Authored by Alice Giordano via The Epoch Times (emphasis ours),

New Hampshire’s Republican…

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New Hampshire Governor Vetoes Ivermectin Bill

Authored by Alice Giordano via The Epoch Times (emphasis ours),

New Hampshire’s Republican Gov. Chris Sununu vetoed a bill that would have made Ivermectin available without a prescription.

Ivermectin tablets packaged for human use. (Natasha Holt/The Epoch Times)

The Republican governor vetoed the bill on June 24, the same day that the U.S. Supreme Court overturned Roe v. Wade. Some fellow Republicans questioned the timing.

It certainly seemed like a convenient way to bury a veto of a bill that won support from the vast majority of Republicans in New Hampshire,” JR Hoell, co-founder of the conservative watchdog group RebuildNH, told The Epoch Times.

Hoell is a former four-term House Republican planning to seek re-election after a four-year hiatus from the the New Hampshire legislature.

Earlier this year, the New Hampshire Department of Children Youth and Family (DCYF) tried to take custody of Hoell’s 13-year old son after a nurse reported him for giving human-grade ivermectin to the teen months earlier.

Several states have introduced bills to make human-grade ivermectin available without a prescription at a brick and mortar store. Currently, it can be ordered online from another country. In April, Tennessee became the the first state to sign such a measure into law. New Hampshire lawmakers were first to introduce the idea.

Both chambers of the state’s Republican controlled legislature approved the bill.

In his statement explaining the veto, Sununu noted that there are only four other controlled medications available without a prescription in New Hampshire and that each were only made available after “rigorous reviews and vetting to ensure” before being dispensed.

“Patients should always consult their doctor before taking medications so that they are fully aware of treatment options and potential unintended consequences of taking a medication that may limit other treatment options in the future,” Sununu said in his statement.

Sununu’s statement is very similar to testimony given by Paula Minnehan, senior vice president of state government regulations for the New Hampshire Hospital Association, at hearings on the bill.

Minnehan too placed emphasis on the review that went into the four prescription medications the state made available under a standing order. They include naloxone, the generic name for Narcan, which is used to counter opioid overdoses, hormone replacement therapy drugs, and a prescription-version of the morning after pill.

It also includes a collection of smoking cessation therapy drugs like Chantix, which has been linked to suicide, depression, and other neuropsychiatric conditions. Last year, Pfizer, the leading maker of the FDA-approved drug, conducted a voluntarily recall of Chantix. Narcan has also been linked to deaths caused by severe withdrawals that have led to acute respiratory distress.

Rep. Melissa Blasek, a Republican co-sponsor of the New Hampshire ivermectin bill, told The Epoch Times, that one could veto any drug-related bill under the pretense of overdose concerns.

The reality is you can overdose on Tylenol,” she said. “Ivermectin has one of the safest track records of any drug.”

The use of human-grade ivermectin became controversial when some doctors began promoting it for the treatment and prevention of COVID-19. Government agencies including the FDA and CDC issued warnings against its use while groups like Front Line COVID-19 Critical Care Alliance (FLCCC) heavily promoted it.

Some doctors were  disciplined for prescribing human-grade ivermectin for COVID-19 including a Maine doctor whose medical license was suspended by the state.

Read more here...

Tyler Durden Thu, 06/30/2022 - 20:30

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Economics

The Jaws Of Trade Squeezing The Supply Chain

The Jaws Of Trade Squeezing The Supply Chain

By FreightWaves

The jaws of the supply chain vise are squeezing trade so tight that the headache…

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The Jaws Of Trade Squeezing The Supply Chain

By FreightWaves

The jaws of the supply chain vise are squeezing trade so tight that the headache it is creating will be a whopper for logistics managers this peak season. Port congestion is growing again as a result of labor and equipment inefficiencies. Trade requires people, and what we see in the CNBC Supply Chain Heat Maps is the people component in trade is behind this latest squeeze.

Shanghai is still in the process of reopening, and while there are more green lights on the screen, the supplying of drivers and people to move and make the product is slower than normal. This is affecting the delivery of critical medical devices. 

“The manufacturing plant in Shanghai was down for 75 days because of the ‘zero-COVID’ restrictions,” explained Gerry LoDuca, president of Dukal, which sells infection-control products and has manufacturing plants in Shanghai, Wuhan and Xingtai, China. “They are now operating 24/7 and they will be caught up by the end of July. Then the products will need to be packed up, shipped to Shanghai port and moved by vessel.”

Unfortunately, this delay is one of many being experienced by global importers.

Another vise squeezing trade is Europe.

Labor strife between the German trade union ver.di and the Central Association of German Seaport Companies (ZDS) is white-hot. Almost all ports in the German Northern Sea were impacted by a second warning strike last week that lasted 24 hours.  

According to sources, a final offer of a wage increase of up to 11% in 18 months was offered. Some hope for a conciliation procedure in which politicians or a neutral person become involved in mediation.

The delays created by the latest warning strike have added to the congestion already plaguing the German ports. Container ships are currently delayed by several weeks at some German ports. Logistics executives are concerned the congestion is going to get worse, as will the availability of empty containers to be filled with trade.

“The overall situation in North European ports is deteriorating,” warned Andreas Braun, EMEA ocean product director for Crane Worldwide Logistics. “Port congestion is on the increase as well as yard occupancy. The first shipping lines like MSC are reacting to the current scenario with emergency storage surcharges for both imports and exports. These surcharges will be applied after exceeding the standard storage free time and are in addition to the standard tariffs.  Although this surcharge is currently limited to Dutch ports only, and to date only MSC has circulated communication relating to the additional fees, we can assume that other ports and shipping lines will follow.”

Ocean carrier Hapag-Lloyd issued a notice on the increased demand on trucks as a result of this labor slowdown. And Maersk reported it would “absorb” the stoppage at its German terminals, telling customers that “in the interest of minimizing any further disruption to your supply chain, we will be keeping a close eye on developments up to and during the next round of meetings between trade union ver.di and ZDS, acknowledging that further strike action is possible.”

The U.S. logistics system continues to have its own host of issues with the persistent rail problems, chassis shortages and warehouses at capacity.

“Consumer trends are changing,” explained Spencer Shute, senior consultant at Proxima. “Buying patterns have shifted from home, electronics, casual apparel to more services. We are seeing buying apparel for travel and cosmetics coming back to pre-pandemic levels. Luggage, sunscreen, bug spray, these are items in higher demand because consumers need them in their experience pursuits. Larger appliances are not being purchased anymore. It’s an interesting dynamic to see how quickly the consumer has flipped considering what is going on in the economy.”

Despite the historic volume of containers, a pullback is expected as future orders for Chinese manufacturing have dropped anywhere from 20% to 30%, according to shippers surveyed.  Lumber orders have been cut along with orders for furniture, appliances and DIY products.

“But for other sectors like garments, sporting goods and e-commerce, they are still seeing strong demands,” explained Akhil Nair, senior vice president of products for Asia-Pacific at Seko Logistics.

Steve Lamar, CEO of the American Apparel and Footwear Association, explained the continued strength in orders is a result of consumers looking to outfit themselves for experiences like back to school, back to in-office work and travel. But despite this demand, the impact of inflation is a top worry.

“We remain deeply concerned that persistently high prices — in our sector and throughout the economy — will begin to dampen consumer spending and harm American families,” Lamar said. “That is why, with consumers still being a driver for economic growth in our economy, we continue to push for the [Biden] administration to avail itself of all its own inflation-cutting tools, including relief from the high and regressive tariffs that are currently being charged on products in our industry.”

Alan Baer, CEO of OL USA, tells American Shipper the decrease in container volume is being seen.

“We are seeing drops by some customers from 30-50 FEU per week down to 10 FEU per week,” Baer said. 

The squeeze is on. Time to pop that aspirin.

Tyler Durden Thu, 06/30/2022 - 15:45

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Government

5 Top Biotech Stocks To Watch In July 2022

Amid choppy markets, could there be potential in these top biotech stocks?
The post 5 Top Biotech Stocks To Watch In July 2022 appeared first on Stock…

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Should Investors Be Watching These Top Biotech Stocks In The Stock Market Now?

Just as most people think that pandemic woes are behind us, we now have the emergence of the monkeypox. While this virus may not be as contagious as the coronavirus, there is still a real cause for concern. On Tuesday, the Centers for Disease Control and Prevention (CDC) announced the activation of an emergency operations unit for monkeypox. This signals the initial stages of a public health concern. Epidemiologist Dr. Eric Feigl-Ding believes that the number of cases could reach 100,000 worldwide by August. In light of these circumstances, biotech stocks could be gaining more attention in the stock market. 

Furthermore, the coronavirus is not going away anytime soon. Recently, the U.S. Food and Drug Administration (FDA) Vaccines and Related Biological Products Advisory Committee (VRBPAC) voted that there is a need to modify the current strain composition of available COVID-19 vaccines to target the Omicron variant. If this is approved, vaccine makers such as Pfizer/BioNTech, and Moderna (NASDAQ: MRNA) will need to provide modified boosters of their coronavirus vaccines. In fact, Pfizer (NYSE: PFE) and BioNTech (NASDAQ: BNTX) just announced a new vaccine supply agreement with the U.S. government. Under the agreement, the U.S. government will receive 105 million doses with an option of up to 195 million additional doses. With all this in mind, here are five of the top biotech stocks to note in the stock market today. 

Biotech Stocks For Your July 2022 Watchlist

Regeneron Pharmaceuticals 

biotech stocks to buy (regn stock)

First up, we have the integrated biotech company, Regeneron Pharmaceuticals. Essentially, the company discovers, invents, manufactures, and commercializes medicines for serious diseases. For the most part, its medicines and products aim to help patients with eye diseases, allergic and inflammatory diseases, cancer, cardiovascular, and metabolic diseases. REGN stock has been trading sideways over the past year. 

Having said that, the company received a boost on Wednesday as the U.S. FDA has accepted for review the EYLEA Injection supplemental Biologics License Application for every 16-week 2 mg dosing regimen. This specifically caters to patients with diabetic retinopathy. Should this go according to plan, the 16-week dosing regimen could offer patients a potentially longer treatment interval. Also, it will allow doctors to have greater flexibility to individualize treatment. Given such a positive development, should investors be paying more attention to REGN stock?

[Read More] Stock Market Today: Dow Jones, S&P 500 Falter; Walgreens Stock Slides Despite Strong Quarter

Sanofi

best health care stocks to buy now (SNY stock)

Another top biotech name making waves this week is Sanofi. The France-based company engages in the research, development, and marketing of therapeutic solutions. Over the past week, there have been several key developments that could potentially excite investors. For starters, the company and GSK (NYSE: GSK) announced positive data from their vaccine trial last Friday. The vaccine candidate is the first to ever demonstrate efficacy in a placebo-controlled trial in an environment of high Omicron variant circulation. 

Furthermore, Sanofi’s Nexviadyme (avalglucosidase alfa) has recently gained marketing authorization from the European Commission. For the uninitiated, this is an enzyme replacement therapy for long-term treatment of both late-onset and infantile-onset Pompe disease. This is a significant development because Nexviadyme is the first and only newly approved medicine for Pompe disease in Europe since 2006. On that note, would you say that SNY stock is a top biotech stock to watch?

Novavax

best biotech stocks (NVAX stock)

Following that, let us look at the biotech company, Novavax. In detail, it promotes improved health globally through the discovery, development, and commercialization of vaccines to prevent serious infectious diseases. Its recombinant technology platform harnesses the power and speed of genetic engineering. As a result, the company produces immunogenic nanoparticles designed to address urgent global health needs. That said, NVAX stock has been struggling to find its footing since the start of the year. 

During the VRBPAC meeting, Novavax highlighted data showing that its protein-based coronavirus vaccine showed epitopes across both the original strain and emerging variants. Therefore, it will be able to contribute to the generation of broadly cross-reacting antibodies. The company also provided pre-clinical data that suggests boosting with Novavax’s Omicron or prototype vaccine will induce an immune response against Omicron variants. Overall, there are reasons to believe that Novavax will close the second half of the year on a better note. With that in mind, would you consider adding NVAX stock to the top of your watchlist?

Arrowhead Pharmaceuticals 

ARWR stock

Arrowhead Pharmaceuticals develops medicines that treat intractable diseases by silencing the genes that cause them. It uses a portfolio of ribonucleic acid (RNA) chemistries and modes of delivery. Most of its therapies trigger the RNA interference mechanism to induce rapid, deep, and durable knockdown of target genes. Those following the medical space would notice that gene therapies have been gaining popularity within the industry over the past few years. Hence, it would not be surprising if investors are taking note of Arrowhead. 

As a matter of fact, the company recently claimed that its experimental drug fazirsiran can reduce the accumulation of mutant protein known as Z-AAT by 83%. This result is based on an open-label phase 2 trial involving 16 volunteers with alpha1-antitrypsin deficiency disease. For now, there is still no approved treatment for such genetic liver disease. All in all, Arrowhead appears to be making strides in the right direction. Thus, should you be keeping a closer tab on ARWR stock?

[Read More] Best Long-Term Stocks To Buy Now? 5 Semiconductor Stocks To Know

Global Blood Therapeutics

gbt stock

To sum it all up, we have the biopharmaceutical company, Global Blood Therapeutics. As its name suggests, this is a company that specializes in blood-related treatments. The company is currently focused on Oxbryta, an FDA-approved medicine that inhibits sickle hemoglobin polymerization. In addition, it is also advancing its pipeline program in Sickle Cell Disease with inclacumab, and GBT021601. Impressively, GBT stock has been on bullish momentum lately, rising more than 28% within the past month.

Not to mention, the company announced on Thursday that it initiated the Phase 2 portion of its Phase 2/3 trial of GBT021601. The study aims to evaluate the safety, tolerability, efficacy, pharmacokinetics, and pharmacodynamics of the drug. So far, the preclinical results and data have been encouraging. Smith-Whitley, the company’s head of research and development, believes the drug has “the potential to improve on the clinical results achieved with Oxbryta® at a lower daily dose.” If so, this would be a huge boost for the company as it continues to work towards its long-term goals. All things considered, is GBT stock a buy right now?

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The post 5 Top Biotech Stocks To Watch In July 2022 appeared first on Stock Market News, Quotes, Charts and Financial Information | StockMarket.com.

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