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Week Ahead – Georgia reopening fallout, three big rate decisions, and big Tech earnings

Week Ahead – Georgia reopening fallout, three big rate decisions, and big Tech earnings



Global equities and the US dollar appear to be approaching a possible turning point with the stimulus trade.  Global equities have been widely supported by unprecedented stimulus from central banks and governments, but that seems to be losing some of its firepower, while the steady demand for US Treasuries has buoyed the dollar.  The next major move with risk appetite will likely stem from expectations on when key economies reopen.

In the US, Georgia will give key insights to how comfortable businesses and consumers are with reopening their economy.  The risks of seeing a spike in cases over the next few weeks seem fairly high and that could eventually set them back even further if they have to return to lockdown mode.  Georgia is one of the most important stories right now as it could potentially provide a path on what to expect when other states reach their thresholds to begin reopening.

The focus next week will remain on COVID-19, rate decisions by BOJ, Fed and ECB, big tech earnings, a plethora of data shows how bad economic conditions got in the first quarter and how China’s recovery is unfolding.

The Fed’s handling of the coronavirus pandemic has many investors looking beyond the April 29th policy meeting. The Fed’s action has been quick and so far effective in alleviating many strains in the financial system. The Fed should take a pass at this meeting after already delivering a smorgasbord of stimulus measures, which include cutting rates to near zero, massive QE, supporting money market mutual funds, repo operations, support for small-and mid-sized business, relief to state and local governments, all while working with Congress.

A great amount of attention will go to the US advance reading of first quarter GDP. The economy likely contracted anywhere between -7.0% to -1.0% since the coronavirus only impacted the month of March. The consensus estimate is for a 3.7% drop. Expectations are already bad for second quarter GDP to fall nearly 40%, but if the baseline is much worse than expected, we could see risk aversion prevail.

Earnings season heats up this week with huge results from technology, industrial, finance and energy stocks.  Thursday will be the main event with both Apple and Amazon reporting after the close.


US Politics
Everyone is watching Georgia. Governor Brian Kemp’s decision to allow some nonessential businesses to reopen means business owners (gyms, barber shops, bowling alleys) have to decide if they are confident enough to open for business. Georgia was late to the game in issuing a stay-at-home order and they will be the first state to reopen large parts of their economy.
Immediately, investors will closely watch how many business owners move forward in opening up, how many employees show up for work and whether consumers are comfortable to go back to stores. The
spread of COVID-19 might take up to two weeks, so if cases spike then, this will likely push back other governors in easing lockdown measures..

The UK may be heading for its sharpest contraction in more than a century, with the lockdown still having at least a couple of weeks to go and easing measures likely to be very gradual thereafter. The PMI data this week was horrific but the same is true everywhere. The all-important services sector unsurprisingly shrank at a phenomenal pace, leaving the 35% contraction estimates last week looking perfectly feasible. On the bright side, the trend of new cases and deaths is looking promising.

Italy is continuing on a positive trajectory and some small shops are starting to reopen, coming as a relief to the huge number of SME’s in the country. It comes with strict conditions and the lack of tourism and cautious consumer behaviour means it’s going to continue to be extremely tough, but it’s a crucial first step after weeks of lockdown.

The country is continuing to see cases and deaths broadly move in the right direction, although the last few days has seen slightly increasing cases while deaths have been broadly stable. The government is taking a very cautious approach, warning this week that they are aiming to ease lockdown measures in the second half of May. The country has the second highest number of confirmed cases behind the US and imposed among the most strict lockdown measures.

European Union
EU leaders underwent more painful negotiations this week as they work towards a recovery package for the bloc, estimated to be around €1 trillion. That may sound promising, except the leaders ended the meeting agreeing to leave the details for a future meeting. We all know how that’s going to go. Once again we’re seeing the drawbacks of a group of countries that have different ideas of what a union actually is, wasting time trying to agree on that and responding slowly to the actual crisis at hand.

The ECB loosened restrictions on its collateral requirements this week, allowing for assets that have been downgraded to junk since 7 April, as long as they remain in the upper tier (two notches into junk). The move eases pressure on banks to ensure they continue to have access to the central banks liquidity operations and lend to boost the economy. Further measures may be announced but nothing specific is expected from the ECB meeting next week, with many central banks increasingly making decisions in emergency meetings when necessary. That said, this may set a precedent on willingness to accept junk debt for its operations, which may encourage some tweaking to other bond buying programs at the meeting in order to further ease conditions.

The CBRT exceeded expectations, cutting rates by 100 basis points this week, adding to measures last week to mitigate the economic impact. The central bank claimed the inflation outlook is favourable, citing
weaker commodity prices even as the currency plunges back towards the depths of August 2018 against the dollar.

Following Friday’s 50 basis points rate cut, the Russian central bank seems poised to continue cutting rates further. The CBR GDP forecast sees the economy shrinking by 4-6% and Governor Nabiullina will likely ramp up stimulus efforts at the next policy meeting.
The Russian central bank’s forecast for oil only to rebound to $25 in the fourth quarter suggests a much slower economic recovery is now being priced in and that supports calls for more aggressive action by the CBR.

South Africa
South African President Cyril Ramaphosa has announced that lockdown measures will be eased starting on 1 May, with economic concerns driving the decision. The country has imposed severe restrictions on movement and work over the last month and while many will remain in place or only be eased slightly, it marks a significant change. The country is among those extremely vulnerable to the economic fallout, having already been suffering prior to the spread. Time will tell whether this is a risk worth taking or just premature.

China releases Industrial Profits on Monday 27th and the more important official Manufacturing and Non- Manufacturing PMI’s on Thursday 30th. Both sets of data are expected to disappoint, so a better then expected print could see a substantial jump in Mainland markets.
China continues to keep a lid on a secondary (most imported) wave of COVID-19 cases. Predominantly Chinese returning from Russia. A sharp increase will be negative for markets that are banking on peakvirus being near.

Hong Kong
Balance of Trade on Monday. Exp at HKD-71 billion.
HKMA has been intervening to buy US Dollars at the lower end of the band as rate differentials cause HKD to appreciate. Highly highly unlikely peg breaks. Worries mostly political with arrects of protest leaders, rhetoric from China saying basic law doesn’t apply and personnel changes in Government. All will weigh on investor sentiment.

No significant data. Lockdown extended and tightened until the end of May. More fiscal stimulus from the government.
Tightened COVID-19 “circuit-breaker” restrictions continue for the 3rd week, most of the economy that can is working from home. A huge increase in COVID-19 cases has occurred this week from worker dormitories. The headline numbers look terrible but it is actually planned for and under control. The
lockdown extension is more worrying with the economy now deep in recession and the REIT market under serious pressure. Potential downside for SIngapore stocks if bankruptcies increase..

No significant data next week.
Attention remains focused on the number of COVID-19 cases and a timetable for the easing of lockdown restrictions that were recently extended. Social unrest concerns are elevated. The worst is yet to come for India in all likelihood.

Inflation Wednesday and New Home Sales on Friday. Closed for ANZAC Day Monday.
The AUD has risen 8.0% this month, and the ASX 200 by 5% this month. Currency consolidated gains but equities have faded along with US ones. Acutely vulnerable to resource price fears, lower oil and poor China data next week.

New Zealand
Balance of Trade due Wednesday with ANZAC Day holiday this Monday. Level 4 lockdown finishes nationally on Tuesday after acceptable COVID-19 progress.
NZD has rallied 3.50% this month, and the stock market by a huge 12.50% on “peak-virus” and a potential China recovery. Disappointments on either front leave the NZD vulnerable to an aggressive downward reversal although level 4 exit is supportive as the country goes back to work.

Tuesday BoJ rate decision, Thursday Retail Sales and Industrial Production, Friday April Manufacturing PMI.
A heavy data week but the BoJ rate decision is the main event. Rates expected to be unchanged but high change BoJ cancels JGB buying limits ann expands QE programme to support Govt. fiscal stimulus. JPY should weaken although equities should outperform.


With tank tops almost being reached, energy traders will focus on production cuts. The upcoming week focuses on critical earnings from many major oil companies. BP reports on Tuesday. Valero and Diamond Offshore provide results on Wednesday. Thursday will have updates from Shell, Total, and ConocoPhillips. Friday will draw special attention with earnings results from Chevron and Exxon. Exxon has been one of the more resistant oil majors to rally behind others in participating with production cuts.
Oil prices have been stabilizing, but the OPEC + production cuts that take effect in May still fall several million barrels short of making up the demand shortfall. OPEC + and the Texas Railroad Commission (oil
regulator) will likely debate deeper coordinated production cuts over the next week, with possibly a coordinated announcement happening by May 5th.

Gold continues to benefit from global stimulus. Gold will likely see steady support from intensifying efforts by central banks that will expand their balance sheets and as governments continue to deliver regular spending aid. This big mix of stimulus seems to be the backbone argument for gold prices to run to the $2,000 an ounce level.
Gold volatility remains on high, especially to the downside as the bullish bets become overcrowded. Gold could see a lot of the bulls rush to the exits if one of the several vaccines that is phase one clinical trials, but that won’t happen for at least a month.

Bitcoin is starting to show signs of life ahead of its May 12th halving event and as central banks all over the world continuing to unveil fresh stimulus measures. Bitcoin appears to have found a new wave of retail interest that is firmly believing the macro fundamentals support a much higher valuation. Bitcoin’s recent rebound stemmed from expectations that central banks’ stimulus efforts all over the world will not slow down.
Volatility is about to pick up as the halving event will either be the key catalyst for Bitcoin to soar as it has with the prior two other halving moments or if the surge has already been priced in and this will be used as an excuse to sell it.

Key Economic Releases and Events:

Sunday, April 26th
Japan Lower House by-election in Shizuoka Prefecture
New Zealand and Australian banks will be closed in observance of Anzac Day

Monday, April 27th
UK PM Johnson expected to return to work
Bank of Japan (BOJ) Interest Rate Decision: Expected to increase stimulus efforts, may announce unlimited bond purchases

Tuesday, April 28th
Japanese banks will be closed in observance of Showa Day
BP, Caterpillar, and Alphabet earnings
8:00am Hungary Central Bank Interest Rate Decision: No change in policy expected (announced bond purchases at April 7th intra-policy meeting)
10:00am US April Consumer Confidence: 90e v 120 prior
9:30pm AUD Q1 CPI Q/Q: 0.2%e v 0.7% prior; Y/Y: 2.0%e v 1.8% prior

Wednesday, Apr 29th
8:30am US Q1 Advance GDP Annualized Q/Q: -3.7%e v 2.1% prior; Personal Consumption: -1.3%e v 1.8% prior, GDP Price Index: 0.9% v 1.3% prior, Core PCE Q/Q: No est v 1.3% prior
10:00am US Mar Pending Home Sales M/M: -10.0%e v 2.4% prior
2:00pm US FOMC Rate Decision: Expected to keep target range unchanged at 0.00-0.25%
2:30pm US Fed Chair Powell holds post-FOMC meeting press conference
9:00pm China Apr Manufacturing PMI: 51.0e v 52.0 prior; Non-Manufacturing PMI: 52.8e v 52.3 prior
9:00pm New Zealand Apr Final ANZ Business Confidence: No est v -73.1 prior

Thursday, Apr 30th

Amazon and Apple earnings after the close
1:30am France Q1 Preliminary GDP Q/Q: -4.0%e v -0.1% prior; Y/Y: -3.1%e v 0.9% prior
3:00am Spain Q1 Preliminary GDP Q/Q: -4.4%e v 0.4% prior; Y/Y: -2.9%e v 1.8% prior
3:55am Germany Apr Unemployment Change: 50.0K v 1.0K prior
5:00am Euro Zone Q1 Advance Q/Q: -3.9%e v 0.1% prior; Y/Y: -3.4%e v 1.0% prior
5:00am Euro Zone Apr Preliminary CPI M/M: 0.2%e v 0.5% prior; Y/Y: 0.1%e v 0.7% prior
7:45am EUR ECB Interest Rate Decision: Expected to keep interest rates unchanged
8:30am EUR ECB Press Conference
8:30am US Jobless Claims: 3.5Me v 4.43M prior; Continuing Claims: No est 15.98M prior
8:30am CAD Canada Feb GDP M/M: 0.0%e v 0.1% prior; Y/Y: 1.7%e v 1.8% prior
9:45am US Chicago PMI: 40.0e v 47.8 prior

Friday, May 1st
May Day holiday for many countries
10:00am US Apr ISM Manufacturing: 37.5e v 49.1 prio

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Many CDC Blunders Exaggerated Severity Of COVID-19: Study

Many CDC Blunders Exaggerated Severity Of COVID-19: Study

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

The U.S. Centers…



Many CDC Blunders Exaggerated Severity Of COVID-19: Study

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

The U.S. Centers for Disease Control and Prevention (CDC) made at least 25 statistical or numerical errors during the COVID-19 pandemic, and the overwhelming majority exaggerated the severity of the pandemic, according to a new study.

Researchers who have been tracking CDC errors compiled 25 instances where the agency offered demonstrably false information. For each instance, they analyzed whether the error exaggerated or downplayed the severity of COVID-19.

Of the 25 instances, 20 exaggerated the severity, the researchers reported in the study, which was published ahead of peer review on March 23.

The CDC has expressed significant concern about COVID-19 misinformation. In order for the CDC to be a credible source of information, they must improve the accuracy of the data they provide,” the authors wrote.

The CDC did not respond to a request for comment.

Most Errors Involved Children

Most of the errors were about COVID-19’s impact on children.

In mid-2021, for instance, the CDC claimed that 4 percent of the deaths attributed to COVID-19 were kids. The actual percentage was 0.04 percent. The CDC eventually corrected the misinformation, months after being alerted to the issue.

CDC Director Dr. Rochelle Walensky falsely told a White House press briefing in October 2021 that there had been 745 COVID-19 deaths in children, but the actual number, based on CDC death certificate analysis, was 558.

Walensky and other CDC officials also falsely said in 2022 that COVID-19 was a top five cause of death for children, citing a study that gathered CDC data instead of looking at the data directly. The officials have not corrected the false claims.

Other errors include the CDC claiming in 2022 that pediatric COVID-19 hospitalizations were “increasing again” when they’d actually peaked two weeks earlier; CDC officials in 2023 including deaths among infants younger than 6 months old when reporting COVID-19 deaths among children; and Walensky on Feb. 9, 2023, exaggerating the pediatric death toll before Congress.

“These errors suggest the CDC consistently exaggerates the impact of COVID-19 on children,” the authors of the study said.

Read more here...

Tyler Durden Fri, 03/24/2023 - 20:20

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Southwest Airlines Has a New Way To Fix Boarding Process Problem

The company has a novel way to end a practice that passengers hate.



The company has a novel way to end a practice that passengers hate.

Southwest Airlines boards its planes in a way very different from that of any of its major rivals.

As fans and detractors of the brand know, the airline does not offer seat assignments. Instead, passengers board by group and number. When you check into your flight, Southwest assigns you to the A, B, or C boarding groups and gives you a number 1-60. The A group boards first in numerical order.

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In theory, people board in the assigned order and can claim any seat that's available. In practice, the airline's boarding process leaves a lot of gray area that some people exploit. Others simply don't know exactly what the rules are.

If, for example, you are traveling with a friend who has a much later boarding number, is it okay to save a middle seat for that person?

Generally, that's okay because middle seats are less desirable, but technically it's not allowed. In general practice, if you move into the second half of the plane, no passenger will fight for a specific middle seat, but toward the front some may claim a middle seat.

There's less grey area, however, when it comes to trying to keep people from sitting in unoccupied seats. That's a huge problem for the airline, one that Southwest has tried to address in a humorous way.

A Southwest Airlines plane is in the air. 

Image source: Shutterstock

Southwest Airlines Has a Boarding Problem

When Southwest boards its flights it generally communicates to passengers about how full it expects the plane to be. In very rare cases, the airline will tell passengers when the crowd is small and they can expect that nobody will have to sit in a middle seat.

In most cases, however, at least since air travel has recovered after the covid pandemic, the airline usually announces that the flight is full or nearly full as passengers board. That's a de facto (and sometimes explicit) call not to attempt to discourage people from taking open seats in your row.

Unfortunately, many passengers know that sometimes when the airline says a flight is full, that's not entirely true. There might be a few no shows or a few seats that end up being open for one reason or another.

That leads to passengers -- at least a few of them on nearly every flight -- going to great lengths to try to end up next to an empty seat. Southwest has tried lots of different ways to discourage this behavior and has now resorted to humor in an effort to stop the seat hogs.

Southwest Uses Humor to Address a Pain Point

The airline recently released a video that addressed what it called "discouraged but crafty strategies to get a row to yourself" on Southwest. The video shows a man demonstrating all the different ways people try to dissuade other passengers from taking the open seats in their row.

These include, but are not limited to:

  • Laying out across the whole row.   
  • Holding your arm up to sort of block the seats.
  • Being too encouraging about someone taking the seat.
  • Actually saying no when someone asks if they can have an open seat. 

The airline also detailed a scenario it called "the fake breakup," where the person in the seat holds a loud phone conversation where he pretends he's being broken up with.

That one seems a bit of a reach, especially when Southwest left the most common seat-saving tactic out of its video -- simply putting some of your stuff in the open seat to make it appear unavailable.

Related Link:

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NIH awards researchers $7.5 million to create data support center for opioid use disorder and pain management research

WINSTON-SALEM, N.C. – March 24, 2023 – Researchers at Wake Forest University School of Medicine have been awarded a five-year, $7.5 million grant…



WINSTON-SALEM, N.C. – March 24, 2023 – Researchers at Wake Forest University School of Medicine have been awarded a five-year, $7.5 million grant from the National Institutes of Health (NIH) Helping End Addiction Long-term (HEAL) initiative.

Credit: Wake Forest University School of Medicine

WINSTON-SALEM, N.C. – March 24, 2023 – Researchers at Wake Forest University School of Medicine have been awarded a five-year, $7.5 million grant from the National Institutes of Health (NIH) Helping End Addiction Long-term (HEAL) initiative.

The NIH HEAL initiative, which launched in 2018, was created to find scientific solutions to stem the national opioid and pain public health crises. The funding is part of the HEAL Data 2 Action (HD2A) program, designed to use real-time data to guide actions and change processes toward reducing overdoses and improving opioid use disorder treatment and pain management.

With the support of the grant, researchers will create a data infrastructure support center to assist HD2A innovation projects at other institutions across the country. These innovation projects are designed to address gaps in four areas—prevention, harm reduction, treatment of opioid use disorder and recovery support.

“Our center’s goal is to remove barriers so that solutions can be more streamlined and rapidly distributed,” said Meredith C.B. Adams, M.D., associate professor of anesthesiology, biomedical informatics, physiology and pharmacology, and public health sciences at Wake Forest University School of Medicine.

By monitoring opioid overdoses in real time, researchers will be able to identify trends and gaps in resources in local communities where services are most needed.

“We will collect and analyze data that will inform prevention and treatment services,” Adams said. “We’re shifting chronic pain and opioid care in communities to quickly offer solutions.”

The center will also develop data related resources, education and training related to substance use, pain management and the reduction of opioid overdoses.

According to the CDC, there was a 29% increase in drug overdose deaths in the U.S.  in 2020, and nearly 75% of those deaths involved an opioid.

“Given the scope of the opioid crises, which was only exacerbated by the COVID-19 pandemic, it’s imperative that we improve and create new prevention strategies,” Adams said. “The funding will create the infrastructure for rapid intervention.”

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