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With a recession looming and Putin sabre rattling could UK defence stocks prove a countercyclical safe haven?

With a recession of as yet unknown severity a near certainty over the months ahead, stock market looks set to enter choppy…
The post With a recession…



With a recession of as yet unknown severity a near certainty over the months ahead, stock market looks set to enter choppy waters. There are strong signs that the summer optimism that surrounded a rebound for major indices was premature. What was once suspected as a bear market rally now looks like an obvious one from the rearview mirror and major markets have been in steep decline as September has progressed.

The S&P 500 has lost over 8% since the beginning of the month and the Nasdaq over 5%. Even the UK’s benchmark FTSE 100 index, previously insulated from the kind of declines growth-focused Wall Street peers have suffered by its heavy weighting to commodities and energy, has fallen 4.3% in September.

Energy and commodity stocks have proven a refuge due to soaring prices resulting from Russia’s invasion of Ukraine. Financial stocks can also be expected to attract renewed interest after the Fed yesterday raised its base interest rate by 0.75% for the third month in a row. Defensive stocks like consumer staples and utilities also historically do better than cyclical sectors that rely on discretionary consumer spending during economic downturns.

But another sector might also be worth close consideration – defence stocks. Defence stocks are not, despite the association, typically defensive. Countries tend to spend more money on defence when their tax receipts are looking healthy.

But that fiscal management of national defence spending goes out the window when electorates feel threatened. And there is probably no time in modern history when developed Western economies have felt as threatened as they do right now.

Russia’s invasion of Ukraine in late February sharply focused the attention of Nato members like Germany that had for years fallen behind in their commitment to spending a minimum 2% of GDP on defence. They, and several other major Western European economies, as well as Japan, South Korea and Taiwan further east, have significantly ramped up defence spending commitments in recent months.

The huge quantities of military equipment and ammunition being supplied to Ukraine’s armed forces, and rapidly spent keeping Russia’s invading forces from making further gains and recently counter-attacking, also needs to be replaced. Much more will also have to be delivered to Ukraine before there is any realistic hope of Russia being defeated, an outcome the West has heavily committed to supporting.

With Putin’s sabre rattling and nuclear threats this week also being interpreted as a new escalation in his proxy confrontation with the West, there is unlikely to be any imminent let up in renewed defence spending. If anything it is likely to increase and an economic recession as a backdrop will not, under the circumstances, prove a deterrent.

Defence stocks have been one of the few sectors to do well this year but they could still do much better if elevated military spending continues, as it seems certain to. That will draw the attention of investors with a strong incentive to put their money into countercyclical sectors over the near term at least, further boosting valuations.

If you do consider investing in defence stocks as a potential growth sector amid a broader bear market, which UK-based companies are worth your appraisal?


Source: Investors’ Chronicle


qinetiq group plc

Defence technology company QinetiQ had seen its valuation drop by around 17% from early August until this week but has been boosted again by Putin’s threats to resort to nuclear weapons.

It is estimated the UK could increase its service personnel count by 27%, as many as 42,000 new recruits, over the next few years. All of those troops will require the specialist training Britain’s armed forces are renowned for. That’s something QinetiQ, spun out from the UK government’s Defence Evaluation and Research Agency, is likely to benefit from as a provider of training and mission rehearsal systems.

BAE Systems

bae systems plc

BAE Systems, the defence and aerospace company, has seen its market capitalisation gain almost 46% this year and has held steady over the past few months while others in the sector have seen their valuations dip. If defence spending remains elevated or even increases from current levels, BAE will be in a very strong position to benefit.

The company is the UK’s largest defence group and generates the majority of its revenue from fighter jet programmes—especially the F-35 Lightning and the Eurofighter Typhoon. BAE’s customers include governments in the US, UK, Australia and Saudi Arabia.

Rolls-Royce Group

rolls-royce holdings

Unlike the other stocks mentioned here, Rolls-Royce is not a pure defence play with the majority of the company’s revenue coming from civil aerospace contracts providing and maintaining jet engines for civil airlines. However, its valuation is particularly low at the moment as a result of the impact of the Covid-19 pandemic leaving the potential for plenty of upside.

A recession would not be good for civil aviation but it can’t get much worse than the past couple of years. The group could also be significantly boosted by defence contracts with Rolls-Royce engines also used in military aircraft, transport vehicles and naval vessels.

Babcock International

babcock international

It’s been a volatile year for Babcock, which is also heavily exposed to the civil nuclear power sector as a specialist in the construction and decommissioning of nuclear power plants. But nuclear power has a bright future and Babcock also specialises in nuclear submarine construction and decommissioning.

The company also offers fleet management services for military vehicles and provides technical training and maintenance support for military infrastructure. It has a well-diversified client base with customers in the UK, Europe, Africa, North America and Australia.

Chemring Group

chemring group plc

Chemring Group’s share price is up 63% in the last 5 years, clearly ahead of the market. However, despite the rise in military spending this year more recent returns haven’t been as impressive and investors are disappointed by dividend growth.

Chemring has moved into profitability from losses over the past few years and dividends have been steadily growing, even if shareholders would like more. The company provides chaff for aircraft and makes sensors used in electronic warfare, explosive hazard detection and chemical and biological detection. It also develops and manufactures advanced expendable countermeasures and countermeasure suites for protecting air, sea and land platforms against the threat of guided missiles.

Higher international defence spending and a continuation of the war in Ukraine will see robust demand for all of those products and services.

The post With a recession looming and Putin sabre rattling could UK defence stocks prove a countercyclical safe haven? first appeared on Trading and Investment News.

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Repeated COVID-19 Vaccination Weakens Immune System: Study

Repeated COVID-19 Vaccination Weakens Immune System: Study

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

Repeated COVID-19…



Repeated COVID-19 Vaccination Weakens Immune System: Study

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

Repeated COVID-19 vaccination weakens the immune system, potentially making people susceptible to life-threatening conditions such as cancer, according to a new study.

A man is given a COVID-19 vaccine in Chelsea, Mass., on Feb. 16, 2021. (Joseph Prezioso/AFP via Getty Images)

Multiple doses of the Pfizer or Moderna COVID-19 vaccines lead to higher levels of antibodies called IgG4, which can provide a protective effect. But a growing body of evidence indicates that the “abnormally high levels” of the immunoglobulin subclass actually make the immune system more susceptible to the COVID-19 spike protein in the vaccines, researchers said in the paper.

They pointed to experiments performed on mice that found multiple boosters on top of the initial COVID-19 vaccination “significantly decreased” protection against both the Delta and Omicron virus variants and testing that found a spike in IgG4 levels after repeat Pfizer vaccination, suggesting immune exhaustion.

Studies have detected higher levels of IgG4 in people who died with COVID-19 when compared to those who recovered and linked the levels with another known determinant of COVID-19-related mortality, the researchers also noted.

A review of the literature also showed that vaccines against HIV, malaria, and pertussis also induce the production of IgG4.

“In sum, COVID-19 epidemiological studies cited in our work plus the failure of HIV, Malaria, and Pertussis vaccines constitute irrefutable evidence demonstrating that an increase in IgG4 levels impairs immune responses,” Alberto Rubio Casillas, a researcher with the biology laboratory at the University of Guadalajara in Mexico and one of the authors of the new paper, told The Epoch Times via email.

The paper was published by the journal Vaccines in May.

Pfizer and Moderna officials didn’t respond to requests for comment.

Both companies utilize messenger RNA (mRNA) technology in their vaccines.

Dr. Robert Malone, who helped invent the technology, said the paper illustrates why he’s been warning about the negative effects of repeated vaccination.

“I warned that more jabs can result in what’s called high zone tolerance, of which the switch to IgG4 is one of the mechanisms. And now we have data that clearly demonstrate that’s occurring in the case of this as well as some other vaccines,” Malone, who wasn’t involved with the study, told The Epoch Times.

So it’s basically validating that this rush to administer and re-administer without having solid data to back those decisions was highly counterproductive and appears to have resulted in a cohort of people that are actually more susceptible to the disease.”

Possible Problems

The weakened immune systems brought about by repeated vaccination could lead to serious problems, including cancer, the researchers said.

Read more here...

Tyler Durden Sat, 06/03/2023 - 22:30

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Study Falsely Linking Hydroxychloroquine To Increased Deaths Frequently Cited Even After Retraction

Study Falsely Linking Hydroxychloroquine To Increased Deaths Frequently Cited Even After Retraction

Authored by Jessie Zhang via Thje Epoch…



Study Falsely Linking Hydroxychloroquine To Increased Deaths Frequently Cited Even After Retraction

Authored by Jessie Zhang via Thje Epoch Times (emphasis ours),

An Australian and Swedish investigation has found that among the hundreds of COVID-19 research papers that have been withdrawn, a retracted study linking the drug hydroxychloroquine to increased mortality was the most cited paper.

Hydroxychloroquine sulphate tablets. (Memories Over Mocha/Shutterstock)

With 1,360 citations at the time of data extraction, researchers in the field were still referring to the paper “Hydroxychloroquine or chloroquine with or without a macrolide for treatment of COVID-19: a multinational registry analysis” long after it was retracted.

Authors of the analysis involving the University of Wollongong, Linköping University, and Western Sydney Local Health District wrote (pdf) that “most researchers who cite retracted research do not identify that the paper is retracted, even when submitting long after the paper has been withdrawn.”

“This has serious implications for the reliability of published research and the academic literature, which need to be addressed,” they said.

Retraction is the final safeguard against academic error and misconduct, and thus a cornerstone of the entire process of knowledge generation.”

Scientists Question Findings

Over 100 medical professionals wrote an open letter, raising ten major issues with the paper.

These included the fact that there was “no ethics review” and “unusually small reported variances in baseline variables, interventions and outcomes,” as well as “no mention of the countries or hospitals that contributed to the data source and no acknowledgments to their contributions.”

A bottle of Hydroxychloroquine at the Medicine Shoppe in Wilkes-Barre, Pa on March 31, 2020. Some politicians and doctors were sparring over whether to use hydroxychloroquine against the new coronavirus, with many scientists saying the evidence is too thin to recommend it yet. (Mark Moran/The Citizens’ Voice via AP)

Other concerns were that the average daily doses of hydroxychloroquine were higher than the FDA-recommended amounts, which would present skewed results.

They also found that the data that was reportedly from Australian patients did not seem to match data from the Australian government.

Eventually, the study led the World Health Organization to temporarily suspend the trial of hydroxychloroquine on COVID-19 patients and to the UK regulatory body, MHRA, requesting the temporary pause of recruitment into all hydroxychloroquine trials in the UK.

France also changed its national recommendation of the drug in COVID-19 treatments and halted all trials.

Currently, a total of 337 research papers on COVID-19 have been retracted, according to Retraction Watch.

Further retractions are expected as the investigation of proceeds.

Tyler Durden Sat, 06/03/2023 - 17:30

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Complying, Not Defying: Twitter And The EU Censorship Code

Complying, Not Defying: Twitter And The EU Censorship Code

Authored by ‘Robert Kogon’ via The Brownstone Institute,

So, word has it that…



Complying, Not Defying: Twitter And The EU Censorship Code

Authored by 'Robert Kogon' via The Brownstone Institute,

So, word has it that Twitter has withdrawn from the EU’s Code of Practice on Disinformation, a fact that appears only to be known thanks to a couple of pissy tweets from EU officials. I cannot help but wonder if this is not finally Elon Musk’s response to the question I asked in my article here several weeks ago: namely, how can a self-styled “free-speech absolutist” be part of a “Permanent Task-Force on Disinformation” that is precisely a creation of the EU’s Code?

But does it matter? The answer is no. The withdrawal of Twitter’s signature from the Code is a highly theatrical, but essentially empty gesture, which will undoubtedly serve to shore up Musk’s free speech bad-boy bona fides, but has virtually no practical consequences. 

This is because: (1) as I have discussed in various articles (for instance, here and here), the effect of the EU’s Digital Services Act (DSA) is to render the hitherto ostensibly voluntary commitments undertaken in the Code obligatory for all so-called Very Large Online Platforms (VLOPs) and (2) as discussed here, the European Commission just designated a whole series of entities as VLOPs that were never signatories of the Code.

Twitter is thus in no different a position than Amazon, Apple and Wikipedia, none of which were ever signatories of the Code, but all of which will be expected by the EU to comply with its censorship requirements on the pain of ruinous fines. 

As EU officials like to put it, the DSA transformed the “code of practice” into a code of conduct: i.e. you had better do it or else.

Compliance is thus not a matter of a signature. The proof of the pudding is in the eating. And the fact of the matter is that Musk and Twitter are complying with the EU’s censorship requirements. Much of the programming that has gone into the Twitter algorithm is obviously designed for this very purpose.

What, for instance, are the below lines of code?

They are “safety labels” that have been included in the algorithm to restrict the visibility of alleged “misinformation.” Furthermore – leaving aside the handy “generic misinfo” catch-all – the general categories of “misinformation” used exactly mirror the main areas of concern targeted by the EU in its efforts to “regulate” online speech: “medical misinfo” in the context of the COVID-19 pandemic, “civic misinfo” in the context of issues of electoral integrity, and “crisis misinfo” in the context of the war in Ukraine.

Indeed, as Elon Musk and his lawyers certainly know, the final version of the DSA includes a “crisis response mechanism,” (Art. 36) which is clearly modeled on the European Commission’s initially ad hoc response to the Ukraine crisis and which requires platforms to take special measures to mitigate crisis-related “misinformation.” 

In its January submission to the EU (see reports archive here), in the section devoted precisely to its efforts to combat Ukraine-war-related “misinformation,” Twitter writes (pp. 70-71): 

“We … use a combination of technology and human review to proactively identify misleading information. More than 65% of violative content is surfaced by our automated systems, and the majority of remaining content we enforce on is surfaced through regular monitoring by our internal teams and our work with trusted partners.”

How is this not compliance? Or at least a very vigorous effort to achieve it? And the methodology outlined is presumably used to “enforce on” other types of “mis-“ or “disinformation” as well.

Finally, what is the below notice, which many Twitter users recently received informing them that they are not eligible to participate in Twitter Ads because their account as such has been labeled “organic misinformation?”

Why in the world would Twitter turn away advertising business? The answer is simple and straightforward: because none other than the EU’s Code of Practice on Disinformation requires it to do so in connection with the so-called “demonetization of disinformation.” 

Thus, section II(d-f) of the Code reads:

(d) The Signatories recognise the need to combat the dissemination of harmful Disinformation via advertising messages and services.

(e) Relevant Signatories recognise the need to take granular and tailored action to address Disinformation risks linked to the distribution of online advertising. Actions will be applicable to all online advertising.

(f) Relevant Signatories recognise the importance of implementing policies and processes not to accept remuneration from Disinformation actors, or otherwise promote such accounts and websites.

So, in short, vis-à-vis the EU and its Code, Twitter is complying, not defying. Removing Twitter’s signature from the Code when its signature is no longer required on the Code anyway is not defiance. Among other things, not labeling content and/or users as “misinformation,” not restricting the visibility of content and/or users so labeled, and accepting advertising from whomever has the money to pay would be defiance.

But the EU’s response to such defiance would undoubtedly be something more than tweets. It would be the mobilization of the entire punitive arsenal contained in the DSA and, in particular, the threat or application of the DSA fines of 6 percent of the company’s global turnover.

It is not enough to (symbolically) withdraw from the Code of Practice to defy the EU. Defying the EU would require Twitter to withdraw from the EU altogether.

Tyler Durden Sat, 06/03/2023 - 10:30

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