Connect with us

Government

Week Ahead – Focus remains on Virus Spread, Fiscal Stimulus, Rebounding data, and Earnings

Week Ahead – Focus remains on Virus Spread, Fiscal Stimulus, Rebounding data, and Earnings

Published

on

Key Economic Events

Saturday, July 18th

EU leaders finish their two-day summit with hopefully an agreement on stimulus, or at the very least a breakthrough.

G20 finance ministers begin a two-day meeting in Saudi Arabia.

Sunday, July 19th

President Trump morning interview on Fox News

19:50 ET Japan Jun Trade Balance (JPY): -7.6B v -833.4B prior

19:50 ET BOJ Minutes

Monday, July 20th

Brexit talks resume in London

US Sec of State Pompeo meets UK PM Johnson and Foreign Sec Raab

21:30 ET China to keep 1-and-5 year loan prime rates steady

21:30 ET Australia RBA Minutes of July Policy Meeting

23:00 ET New Zealand Jun Credit Card Spending Y/Y: No est v -21.1% prior

Tuesday, July 21st

8:00 ET Hungary Central Bank Rate Decision: Expected to keep rates steady, last meeting they cut unexpectedly

8:30 ET Canada May Retail Sales M/M: No est v -26.4% prior

19:30 ET Japan Jun CPI Y/Y: 0.1%e v 0.1% prior

20:30 ET Australia Jun Westpac Leading Index M/M: No est v 0.19% prior

Wednesday, July 22nd

UK releases report on Russian meddling in British politics

8:30 ET Canada Jun CPI M/M: No est v 0.3% prior

10:00 ET US Jun Existing Home Sales: 4.80Me v 3.91M prior

10:30 ET Weekly DOE oil inventories report

Thursday, July 23rd

South Africa Central Bank (SARB) Interest Rate Decision: Expected to cut rates by 25 basis points to 3.50%

2:00 ET Germany Aug GFK Consumer Confidence: No est v -9.6 prior

2:45 ET France July Manufacturing Confidence:  No est v 77 prior

7:00 ET BOE’s Haskel Speaks on the economic effects of Covid-19

7:00 ET Turkey Central Bank Rate Decision: Expected to keep One-Week Repo rate unchanged at 8.25%

8:30 ET Weekly Initial Jobless Claims and Continuing Claims

10:00 ET Eurozone July Advance Consumer Confidence: -12.3e v -14.7 prior

Friday, July 24th

2:00 ET UK Jun Retail Sales (inc auto fuel) M/M: 9.0%e v 12.0% prior

3:30 ET Germany July Prelim Manufacturing PMI: 47.0e v 45.2 prior

4:00 ET Eurozone July Prelim Manufacturing PMI: 49.3e v 47.4 prior

4:00 ET UK July Prelim Manufacturing PMI: 52.0e v 50.1 prior

6:30 ET Russia Central Bank (CBR) Interest Rate Decision: Expected to cut rates by 25 basis points to 4.25%

9:45 ET US July Markit Manufacturing PMI: 52.0e v 49.8 prior

Country

US

The focus in the US stays with the coronavirus response, reopening process and sluggish economic recovery.  COVID-19 continues to batter the Sunbelt and that is starting to derail the economic recovery.  Much attention will go to California and their recent restrictions which will hopefully slow the rapid spread.  Americans need to show signs they can change their behavior otherwise, the revival of the economic recovery will stall even further.

Earnings season will also be closely watched as corporate America will likely need to downgrade their outlook and as the risk for job cuts grow.  The recovery was not as quick and strong as hoped and businesses may be forced to shrink their labor force.  Key updates will come from Microsoft, IBM, Lockheed Martin, UBS, Tesla, Novartis, Unilever, Twitter, and Coca-Cola.

US Politics

President Trump’s new re-election strategy will likely go strongly on the offensive against former-VP Biden.  Trump had to shake up his campaign after a disappointing rally turnouts and abysmal polling numbers.  President Trump will likely remain on the offensive with the rhetoric against China and that will see a tit-for-tat response.

Democrats are eagerly awaiting former-VP Biden’s decision on his running mate.  Prior to COVID-19, the Democratic National Convention was originally scheduled in July, meaning we should have found out his decision by June.  Since the convention was delayed till August 17th, he will have more time to evaluate his candidates.  Biden will turn 78 a few weeks after the election, so his VP selection will be critical for many voters.

 

EU

EU leaders will hopefully finalize their historic stimulus package, solidifying the strength of the union and providing a strong bid for European assets.  On the data front, close attention will be paid on Friday’s flash PMI readings.  Europe is fairing much better than the US with COVID-19 and expectations are growing for their economic rebound to outperform.

UK

The British pound could start to feel heavy as Brexit negotiations will unlikely see any immediate breakthroughs on which trade agreement to seek.  Brexit will need to show some progress by late September, but some investors may want to abandon their sterling bets.

Excessive weakness for the British pound seems unlikely as the UK economy is starting to look more attractive than the US as the UK has several promising vaccine candidates and their fiscal response has been stronger.

Russia

The Russian ruble could be vulnerable to some pressure with a correction in oil prices and since the Bank of Russia has room to cut rates further due to inflation running below their target.

South Africa

South Africa is expected to cut rates after inflation fell below the target range for the first time in 15 years.  The SARB has noted they expect inflation to remain low over the next quarter and may not signal additional cuts unless inflation drops more strongly. The rand continues to benefit from the broader emerging market rally, which will likely take its cue from China.

China

Ongoing geo-political tensions with the US, although the market appears to be building herd immunity to developments from both sides.

China Loan prime Rate decision Monday the highlight of a dull data week.

Hong Kong

Danger of increasingly stringent lock-down conditions hampering economic activity as Covid-19 cases reappear. Ongoing fallout from security law continues. Yet to see mass exodus of multinationals, but it is a multi-month evolving situation. China decided to tax PRC nationals globally at national rates seen as a blow to the SAR, possible mass returns of PRC nationals.

India

Covid-19 cases continue skyrocketing. India is now in top 4 for infections. INR remains under pressure as stress on the government budget and banking sector continue. Very real possibility that India will repeat Indonesia’s recent playbook, and get the central bank to directly purchase new government bond issues. Negative currency and stocks.

No significant data.

Australia

Australian Dollar range trading. Stock market holding steady as Covid-19 localised to Melbourne environs. Danger of impact to fragile consumer sentiment though.

China relations continue to deteriorate. Unlikely to escalate to barring mineral ore or major agricultural exports, but an increasing risk.

Japan

USD/JPY range trading. Equity markets holding near highs. Trade balance and PMI are expected to confirm Japan remains in recession.

Covid-19 cases are increasing in Tokyo but the government is refusing to declare an emergency causing disquiet amongst domestic investors.

Markets

Oil

OPEC+ did the right thing, but it’s a whole new ballgame. The decision to taper production cuts gives them some room to maneuver in case a second wave of the coronavirus forces a return of lockdowns that will shock crude demand.  Oil prices are slumping as the global economic recovery is threatened by risks of new closures and as US unemployment remains high and China’s consumer struggles to bounce back.

WTI Crude remains trapped in the low-$40s but that could break if the slow labor market recovery is not met with a strong fiscal response next week.  Right now, oil prices will take their queue primarily on demand headlines, which means it’s all about coronavirus lockdowns and travel restrictions.

Gold                

Gold’s slump may turn into further weakness tentatively if risk aversion continues to drive the dollar rebound.  Gold prices fell after US retail sales beat forecasts and on President Trump’s comment that he would not sign the next COVID relief bill without a payroll tax.  It is widely expected for the US to see another fiscal stimulus package, but Trump’s comment threatened the immediacy of one passing.  Gold’s fundamentals still support the climb to record high territory, but in the short-term prices could see a retest near last week’s low.

Bitcoin

Bitcoin and the entire crypto space are selling off as investors question the safety in dealing with cryptocurrencies.  Yesterday’s Twitter hack was a great reminder of how vulnerable cryptocurrency traders are too hacking incidents.  Malicious activity has always been a concern for Bitcoin and those concerns are not going away anytime soon. Despite the selling pressure, Bitcoin is still respecting its two-month trading range.  Wednesday’s Twitter hacking incident will likely not derail institutional interest as many crypto experts believe that blockchain technology is needed to enhance security efforts.

 

Read More

Continue Reading

Government

Survey Shows Declining Concerns Among Americans About COVID-19

Survey Shows Declining Concerns Among Americans About COVID-19

A new survey reveals that only 20% of Americans view covid-19 as "a major threat"…

Published

on

Survey Shows Declining Concerns Among Americans About COVID-19

A new survey reveals that only 20% of Americans view covid-19 as "a major threat" to the health of the US population - a sharp decline from a high of 67% in July 2020.

(SARMDY/Shutterstock)

What's more, the Pew Research Center survey conducted from Feb. 7 to Feb. 11 showed that just 10% of Americans are concerned that they will  catch the disease and require hospitalization.

"This data represents a low ebb of public concern about the virus that reached its height in the summer and fall of 2020, when as many as two-thirds of Americans viewed COVID-19 as a major threat to public health," reads the report, which was published March 7.

According to the survey, half of the participants understand the significance of researchers and healthcare providers in understanding and treating long COVID - however 27% of participants consider this issue less important, while 22% of Americans are unaware of long COVID.

What's more, while Democrats were far more worried than Republicans in the past, that gap has narrowed significantly.

"In the pandemic’s first year, Democrats were routinely about 40 points more likely than Republicans to view the coronavirus as a major threat to the health of the U.S. population. This gap has waned as overall levels of concern have fallen," reads the report.

More via the Epoch Times;

The survey found that three in ten Democrats under 50 have received an updated COVID-19 vaccine, compared with 66 percent of Democrats ages 65 and older.

Moreover, 66 percent of Democrats ages 65 and older have received the updated COVID-19 vaccine, while only 24 percent of Republicans ages 65 and older have done so.

“This 42-point partisan gap is much wider now than at other points since the start of the outbreak. For instance, in August 2021, 93 percent of older Democrats and 78 percent of older Republicans said they had received all the shots needed to be fully vaccinated (a 15-point gap),” it noted.

COVID-19 No Longer an Emergency

The U.S. Centers for Disease Control and Prevention (CDC) recently issued its updated recommendations for the virus, which no longer require people to stay home for five days after testing positive for COVID-19.

The updated guidance recommends that people who contracted a respiratory virus stay home, and they can resume normal activities when their symptoms improve overall and their fever subsides for 24 hours without medication.

“We still must use the commonsense solutions we know work to protect ourselves and others from serious illness from respiratory viruses, this includes vaccination, treatment, and staying home when we get sick,” CDC director Dr. Mandy Cohen said in a statement.

The CDC said that while the virus remains a threat, it is now less likely to cause severe illness because of widespread immunity and improved tools to prevent and treat the disease.

Importantly, states and countries that have already adjusted recommended isolation times have not seen increased hospitalizations or deaths related to COVID-19,” it stated.

The federal government suspended its free at-home COVID-19 test program on March 8, according to a website set up by the government, following a decrease in COVID-19-related hospitalizations.

According to the CDC, hospitalization rates for COVID-19 and influenza diseases remain “elevated” but are decreasing in some parts of the United States.

Tyler Durden Sun, 03/10/2024 - 22:45

Read More

Continue Reading

Government

Rand Paul Teases Senate GOP Leader Run – Musk Says “I Would Support”

Rand Paul Teases Senate GOP Leader Run – Musk Says "I Would Support"

Republican Kentucky Senator Rand Paul on Friday hinted that he may jump…

Published

on

Rand Paul Teases Senate GOP Leader Run - Musk Says "I Would Support"

Republican Kentucky Senator Rand Paul on Friday hinted that he may jump into the race to become the next Senate GOP leader, and Elon Musk was quick to support the idea. Republicans must find a successor for periodically malfunctioning Mitch McConnell, who recently announced he'll step down in November, though intending to keep his Senate seat until his term ends in January 2027, when he'd be within weeks of turning 86. 

So far, the announced field consists of two quintessential establishment types: John Cornyn of Texas and John Thune of South Dakota. While John Barrasso's name had been thrown around as one of "The Three Johns" considered top contenders, the Wyoming senator on Tuesday said he'll instead seek the number two slot as party whip. 

Paul used X to tease his potential bid for the position which -- if the GOP takes back the upper chamber in November -- could graduate from Minority Leader to Majority Leader. He started by telling his 5.1 million followers he'd had lots of people asking him about his interest in running...

...then followed up with a poll in which he predictably annihilated Cornyn and Thune, taking a 96% share as of Friday night, with the other two below 2% each. 

Elon Musk was quick to back the idea of Paul as GOP leader, while daring Cornyn and Thune to follow Paul's lead by throwing their names out for consideration by the Twitter-verse X-verse. 

Paul has been a stalwart opponent of security-state mass surveillance, foreign interventionism -- to include shoveling billions of dollars into the proxy war in Ukraine -- and out-of-control spending in general. He demonstrated the latter passion on the Senate floor this week as he ridiculed the latest kick-the-can spending package:   

In February, Paul used Senate rules to force his colleagues into a grueling Super Bowl weekend of votes, as he worked to derail a $95 billion foreign aid bill. "I think we should stay here as long as it takes,” said Paul. “If it takes a week or a month, I’ll force them to stay here to discuss why they think the border of Ukraine is more important than the US border.”

Don't expect a Majority Leader Paul to ditch the filibuster -- he's been a hardy user of the legislative delay tactic. In 2013, he spoke for 13 hours to fight the nomination of John Brennan as CIA director. In 2015, he orated for 10-and-a-half-hours to oppose extension of the Patriot Act

Rand Paul amid his 10 1/2 hour filibuster in 2015

Among the general public, Paul is probably best known as Capitol Hill's chief tormentor of Dr. Anthony Fauci, who was director of the National Institute of Allergy and Infectious Disease during the Covid-19 pandemic. Paul says the evidence indicates the virus emerged from China's Wuhan Institute of Virology. He's accused Fauci and other members of the US government public health apparatus of evading questions about their funding of the Chinese lab's "gain of function" research, which takes natural viruses and morphs them into something more dangerous. Paul has pointedly said that Fauci committed perjury in congressional hearings and that he belongs in jail "without question."   

Musk is neither the only nor the first noteworthy figure to back Paul for party leader. Just hours after McConnell announced his upcoming step-down from leadership, independent 2024 presidential candidate Robert F. Kennedy, Jr voiced his support: 

In a testament to the extent to which the establishment recoils at the libertarian-minded Paul, mainstream media outlets -- which have been quick to report on other developments in the majority leader race -- pretended not to notice that Paul had signaled his interest in the job. More than 24 hours after Paul's test-the-waters tweet-fest began, not a single major outlet had brought it to the attention of their audience. 

That may be his strongest endorsement yet. 

Tyler Durden Sun, 03/10/2024 - 20:25

Read More

Continue Reading

Government

The Great Replacement Loophole: Illegal Immigrants Score 5-Year Work Benefit While “Waiting” For Deporation, Asylum

The Great Replacement Loophole: Illegal Immigrants Score 5-Year Work Benefit While "Waiting" For Deporation, Asylum

Over the past several…

Published

on

The Great Replacement Loophole: Illegal Immigrants Score 5-Year Work Benefit While "Waiting" For Deporation, Asylum

Over the past several months we've pointed out that there has  been zero job creation for native-born workers since the summer of 2018...

... and that since Joe Biden was sworn into office, most of the post-pandemic job gains the administration continuously brags about have gone foreign-born (read immigrants, mostly illegal ones) workers.

And while the left might find this data almost as verboten as FBI crime statistics - as it directly supports the so-called "great replacement theory" we're not supposed to discuss - it also coincides with record numbers of illegal crossings into the United States under Biden.

In short, the Biden administration opened the floodgates, 10 million illegal immigrants poured into the country, and most of the post-pandemic "jobs recovery" went to foreign-born workers, of which illegal immigrants represent the largest chunk.

Asylum seekers from Venezuela await work permits on June 28, 2023 (via the Chicago Tribune)

'But Tyler, illegal immigrants can't possibly work in the United States whilst awaiting their asylum hearings,' one might hear from the peanut gallery. On the contrary: ever since Biden reversed a key aspect of Trump's labor policies, all illegal immigrants - even those awaiting deportation proceedings - have been given carte blanche to work while awaiting said proceedings for up to five years...

... something which even Elon Musk was shocked to learn.

Which leads us to another question: recall that the primary concern for the Biden admin for much of 2022 and 2023 was soaring prices, i.e., relentless inflation in general, and rising wages in particular, which in turn prompted even Goldman to admit two years ago that the diabolical wage-price spiral had been unleashed in the US (diabolical, because nothing absent a major economic shock, read recession or depression, can short-circuit it once it is in place).

Well, there is one other thing that can break the wage-price spiral loop: a flood of ultra-cheap illegal immigrant workers. But don't take our word for it: here is Fed Chair Jerome Powell himself during his February 60 Minutes interview:

PELLEY: Why was immigration important?

POWELL: Because, you know, immigrants come in, and they tend to work at a rate that is at or above that for non-immigrants. Immigrants who come to the country tend to be in the workforce at a slightly higher level than native Americans do. But that's largely because of the age difference. They tend to skew younger.

PELLEY: Why is immigration so important to the economy?

POWELL: Well, first of all, immigration policy is not the Fed's job. The immigration policy of the United States is really important and really much under discussion right now, and that's none of our business. We don't set immigration policy. We don't comment on it.

I will say, over time, though, the U.S. economy has benefited from immigration. And, frankly, just in the last, year a big part of the story of the labor market coming back into better balance is immigration returning to levels that were more typical of the pre-pandemic era.

PELLEY: The country needed the workers.

POWELL: It did. And so, that's what's been happening.

Translation: Immigrants work hard, and Americans are lazy. But much more importantly, since illegal immigrants will work for any pay, and since Biden's Department of Homeland Security, via its Citizenship and Immigration Services Agency, has made it so illegal immigrants can work in the US perfectly legally for up to 5 years (if not more), one can argue that the flood of illegals through the southern border has been the primary reason why inflation - or rather mostly wage inflation, that all too critical component of the wage-price spiral  - has moderated in in the past year, when the US labor market suddenly found itself flooded with millions of perfectly eligible workers, who just also happen to be illegal immigrants and thus have zero wage bargaining options.

None of this is to suggest that the relentless flood of immigrants into the US is not also driven by voting and census concerns - something Elon Musk has been pounding the table on in recent weeks, and has gone so far to call it "the biggest corruption of American democracy in the 21st century", but in retrospect, one can also argue that the only modest success the Biden admin has had in the past year - namely bringing inflation down from a torrid 9% annual rate to "only" 3% - has also been due to the millions of illegals he's imported into the country.

We would be remiss if we didn't also note that this so often carries catastrophic short-term consequences for the social fabric of the country (the Laken Riley fiasco being only the latest example), not to mention the far more dire long-term consequences for the future of the US - chief among them the trillions of dollars in debt the US will need to incur to pay for all those new illegal immigrants Democrat voters and low-paid workers. This is on top of the labor revolution that will kick in once AI leads to mass layoffs among high-paying, white-collar jobs, after which all those newly laid off native-born workers hoping to trade down to lower paying (if available) jobs will discover that hardened criminals from Honduras or Guatemala have already taken them, all thanks to Joe Biden.

Tyler Durden Sun, 03/10/2024 - 19:15

Read More

Continue Reading

Trending