Month: July 2024

Disney heiress Abigail Disney told CNBC on Thursday, July 4, that she plans to stop making political donations to the Democratic Party until President Biden withdraws from the presidential race. She is among a growing number of Democrat donors who are pausing donations until Biden steps aside. 

“I intend to stop any contributions to the party unless and until they replace Biden at the top of the ticket. This is realism, not disrespect. Biden is a good man and has served his country admirably, but the stakes are far too high,” Disney said, who is the granddaughter of Roy O. Disney. Her statement comes as infighting in the leftist political party erupts, with donors, lawmakers, and even some left-wing media outlets calling for the president to step aside after last week’s disastrous debate with former President Trump. 

Disney continued, “If Biden does not step down the Democrats will lose. Of that I am absolutely certain. The consequences for the loss will be genuinely dire.”

Later in the day, Biden showcased his plummeting mental acuity, even though leftist corporate media outlets and those in the White House lied to the nation for years about the president’s cognitive capacities. On Philadelphia’s WURD radio, the president called himself the first black woman to serve in the White House.

“I am the first black woman to serve with a black president” – Biden just declared

Source: Philadelphia radio (WURD) pic.twitter.com/rKB9zGipPl

— End Wokeness (@EndWokeness) July 4, 2024

The Democratic Party has been freaking out all week about Biden, as one major donor declared: “We are in f*ck city.”

On Wednesday, Ari Emanuel, the CEO of Endeavor, which owns the UFC and WWE, told the audience at the Aspen Ideas Festival that other prominent donors are moving their money into the Congress and Senate races. 

NEW: Hollywood Democratic megadonor Ari Emanuel torches President Joe Biden

“I talked to a bunch of big donors, and they’re moving all their money to Congress and the Senate.”

“He gave us a bunch of malarkey, and I’m really pissed. We all should be really pissed.”

“He is not… pic.twitter.com/mKF8VuDVxz

— KanekoaTheGreat (@KanekoaTheGreat) July 3, 2024

Netflix’s billionaire co-founder Reed Hastings, another mega-donor, also called for Biden to step aside, telling the New York Times, “Biden needs to step aside to allow a vigorous Democratic leader to beat Trump and keep us safe and prosperous.”

According to AP News and Reuters, about 40 top donors last weekend asked Biden’s campaign manager whether the campaign would offer a refund if Biden doesn’t run. 

Meanwhile… 

Right-wing conspiracy theories suddenly acknowledged as true:
— Biden is senile.
— Democrats engaged in a massive cover-up of this for months if not years.
— The Biden presidency is run by an oligarchy.
— Democrat mega donors, not primary voters, actually choose the nominee.

— David Sacks (@DavidSacks) July 5, 2024

In the betting markets, data from PredictIt shows that on Tuesday, Vice President Kamala Harris’ odds of becoming the next president exceeded Biden’s. 

Trump’s odds via PredictIt also received a noticeable bump after Biden’s disastrous debate last week. 

Meanwhile, Biden’s first television interview following the debate will be aired on Friday when he sits down with “Good Morning America” and “This Week” anchor George Stephanopoulos in Wisconsin. 

By Peter Tchir of Academy Securities

On the surface the NFP data had a “goldilocks” type of character.

• Establishment jobs at 206k, good, but not too good.
• The household survey wasn’t too bad (this time) adding 116k jobs.

• The unemployment rate ticked up, marginally, to a still strong 4.1% – again, good, but not too good.

• Earnings, while still high at 0.3%, have stabilized, and hours worked remained stable at 34.3, indicating stability. All good, but not too good.

The obvious flaws in the report were:

• Downward revisions of 111k to the prior 2 months.

A significant miss on Private Payrolls. Private payrolls were only 136k, and we lost 8k in manufacturing. The headline number was supported by government jobs, which is consistent with JOLTS where the increase in jobs available was totally linked to government jobs, as opposed to private sector jobs.

The bigger questions remain:

• ISM Services Employment Index has been below 50 for 5 months in a row! In a “service” economy that is not good.
• The Birth/Death model “only” added 59k jobs. Since April of last year, 1.9 MILLION jobs have been attributed to this model. Maybe it is correct, but we have argued for some time that there are two potential flaws with this adjustment:

• The “gig” economy in all its various forms has led to a dramatic increase in EIN requests (tax IDs) that may not convert to the same number of jobs as tax ID requests did historically (drivers might have one for each provider they work with, as could influencers and others trying to maximize their take home pay from “gig” economy jobs).
• The seasonal adjustments may still reflect too much emphasis on “winters” in the Northeast, and not capture the massive geographical shift we have seen in the past few years. It might be difficult to start home construction in January in Connecticut, but not so hard to start in Tennessee. If that sort of transition isn’t being captured (and I suspect it isn’t as the seasonal adjustments seem to change only over longer periods of time), then we might see some weak results from this model in the summer.
• Part-time versus full-time jobs. The household survey (which has underperformed the establishment survey in terms of job creation) has 1.8 million part-time jobs added in the past year, versus 1.55 million full-time jobs being lost!

Bottom Line

We still have the drama unfolding in D.C., which we think warrants hedging against geopolitical risk (Don’t Assume) and lots of questions about valuations and breadth, but we can see an initial “goldilocks” type of reaction to the data.

• Treasury yields should do ok, as both the obvious and not so obvious aspects of this report support the Fed and lower yields. Having said that, we are near the lower bound of 4.3% on our 4.3% to 4.5% range, so trimming exposure here makes sense. The one thing that seems consistent in D.C. is that no one cares seriously about closing the deficit to do anything about it and that should weigh on the longer end of the yield curve.
• Equities could continue their bounce by cherry picking the good aspects of the report, and building on the momentum that has driven the Nasdaq 100 higher by 2.5% in this holiday shortened week. With trading volume expected to be very light today, that could continue. But, and this remains a big but, the risk that the data is deemed to be negative for the economy, such that it hurts equities is increasing, and we think vigilance on the geopolitical front is well warranted.
• Credit. Rangebound rates and a decent (even moderately slowing economy) shouldn’t pose a threat to credit spreads. Supply should ease, and there is fierce competition amongst lenders, for all but the weakest companies. Credit should remain boring, and generally continue to tighten over the summer.

Just over a week after initial rumors – and wallet movements – sent bitcoin prices lower, Mt. Gox – the collapsed crypto exchange – officially began repaying its debts yesterday (on one of the most illiquid days of the year, of course) in Bitcoin and Bitcoin Cash.

This overhang sparked a major wave of selling pressure across the crypto space (after German and US authorities ‘simultaneously’ moved the ill-gotten-gains on to exchanges – not coordinated on timing to hit July 4th though we are sure, as that would be conspiracy-theory-talk)…

Source: Bloomberg

Repayments are being made to some creditors via designated crypto exchanges per its rehabilitation plan.

According to an X post by the MtGoxBalanceBot account, the total Bitcoin balance on all known addresses of the Mt. Gox Trustee is 94,457 BTC, with 47,288 BTC being moved from these addresses since.

As CoinTelegraph reports, the repayments to the remaining rehabilitation creditors will be “promptly made” after multiple conditions have been met.

These conditions include confirming account validity and creditors’ acceptance of the intent to subscribe to the Agency Receipt Agreement by designated crypto exchanges.

In addition to assuring repayments are made safely and securely, discussions regarding repayment procedures between the Rehabilitation Trustee and the exchanges must also be completed.

According to several Reddit posts and users, BTC and Bitcoin Cash have begun to be repaid and credited to exchanges.

“On July 5, 2024, the Rehabilitation Trustee made a blockchain transfer of the BTC/BCH amount repayable to you as the Base Repayment and the Early Lump-Sum Repayment or the Intermediate Repayment.”

The Reddit post details the email received by Mt. Gox, with “MtGox Co., Ltd.” as the Rehabilitation Debtor and Nobuaki Kobayashi, Attorney-at-law, as the Rehabilitation Trustee.

The selling pressure is coming from ‘long liquidations’ which have soared in the last 48 hours with total crypto liquidations surging $664.5 million over the past 24 hours alone, the highest in two months, according to data from CoinGlass.

Source: CoinGlass

The smash-down in Bitcoin forced it back below its 200DMA for the first time since October of last year…

Source: Bloomberg

Other highly traded cryptocurrencies, including Ether and Solana’s, also saw almost 10% drops on the day.

ETH dropped to $2,898, below the key $3,000 level that it held since mid-May, according to Cointelegraph Markets Pro.

Despite the potential selling pressure, the repayments come as a positive for the industry and the exchange’s defunct users, as also highlighted by Mark Karpelès, the former CEO of Mt. Gox. He wrote in a July 5 X post:

“Mt. Gox customers have finally started receiving Bitcoins! After over 10 years I wasn’t sure anymore if it’d finally happen, but here we are finally!! This has been a long journey and I’m happy to see we’re finally getting there, only a bit more.”

More than $9.4 billion worth of Bitcoin is owed to approximately 127,000 Mt. Gox creditors who have been waiting for over 10 years to recover their funds.

CoinTelegraph notes that considering that the Bitcoin price increased by over 8,500% during the past 10 years, the majority of defunct creditors will likely look to lock in some profits.

This is partly why King also expects around 99% of the creditors to sell their BTC. He wrote:

“I’d say 99% of those on Mt. Gox are going to sell their coins the moment they get it. Imagine billions worth of Bitcoin all being dumped gradually over the next several weeks. There is no way to spin this to be bullish, or news that could offset this.”

In another significant development, Bitcoin fell below the average realized buying price of the spot Bitcoin ETF buyers, or $57,979 – considered a significant support line for BTC analysts.

Despite the fall, ETF buyers haven’t started panic selling, as there were only $20.5 million worth of net total outflows on July 3. Grayscale’s ETF accounted for the majority, or $27 million worth of outflows…

Source: Bloomberg

However, Willy Chuang, COO of crypto exchange WOO X points out that “it’s worth noting that despite these concerns, the long-term impact may be less severe as the market gradually absorbs the selling pressure.”

Additionally, Joe Burnett, a former Blockware Solutions analyst and senior product marketing Manager at Unchained, commented on the seemingly coordinated timing of the dump on X: “Announcing a sale of this size is idiotic and creates a reflexive feedback loop.”

Idiotic indeed… unless your goal is not economically rational, and instead ideological.

Via The American Institute for Economic Research,

In this morning’s US Bureau of Labor Statistics data release, the U-3 unemployment rate increased 4.1 percent in June 2024, rising by one-tenth of a percentage point above the forecast rate. The U-3 rate measures the percentage of the civilian labor force that is jobless, actively seeking work, and available to work, excluding discouraged workers and the underemployed. 

This uptick triggers the Sahm Rule, a real-time recession indicator, suggesting that the US economy is in, or is nearing, a recession. The Sahm Rule, developed by former Fed economist Claudia Sahm, is designed to identify the start of a recession using changes in the total unemployment rate.

According to the rule, a recession is underway if the three-month moving average of the national unemployment rate rises by 0.50 percentage points or more, relative to its low during the previous 12 months. With the June 2024 U-3 rate of 4.1 percent, the average of the last three months being 4.0 and the lowest 12-month rate of 3.5 percent in July 2023, this criterion has been met.

Sahm Rule indications (1960 – 2024)

Source: Bloomberg

Surveys had forecast the U-3 rate to hold steady at 4.0 percent in June, unchanged from May 2024. The seemingly small 0.1 percent uptick, however, carries substantial implications for the broader economy. One possible confounding effect of the signal is growth in the labor force: If the labor force grows rapidly and the economy does not generate enough jobs to match the increase, the unemployment rate might rise and the Sahm Rule may be triggered, even if overall employment is increasing.

The rise of initial claims over the past few weeks, and nine consecutive increases in continuing claims, support the June 2024 Sahm indication.

Source: Bloomberg

Equity futures were flat just after the release, while Treasuries rallied across all maturities.

In recent months, Fed Chairman Jerome Powell has indicated that “unexpected weakness” may prompt a start to an accommodative policy stance without the additional data sought regarding the pace of disinflation. Historically, an increase in unemployment rates and the onset of a recession have led to policy adjustments aimed at stimulating economic growth and mitigating job losses, and the reversal of the rate hikes which began in 2022 to mitigate the highest inflation in four decades has been widely anticipated.

While more data will be required to confirm the Sahm Rule indication, the impact of accelerating prices, interest rates at their highest levels since 2007, and commercially suppressive pandemic policies have probably caught up with US producers and consumers.

The Shanghai Stock Exchange Composite recently dropped below a key psychological level, reflecting the uninspiring economic recovery and muted credit impulse data. With no stimulus bazooka in sight, the economy struggles amid a property market downturn. The Market Ear recently questioned the future of Chinese stocks after their multi-month rally stalled and reversed in mid-May. However, there are indications that China’s ‘national team’ may have stepped in to purchase stocks.

On June 21, the Shanghai Stock Exchange Composite tumbled below 3,000 points for the first time since late March. There were possible signs the national team stepped in around June 26 to boost the main equity index to near 3,000, but that effort has since failed.

Last month, Shen Meng, director at Beijing-based Chanson & Co., told Bloomberg that the break below the 3,000 level “indicates that the overly stringent policies introduced by the new China Securities Regulatory Commission head have shaken investor confidence and made investors panic in the short term.” 

Fast forward to Friday, and the main equity index is trading at about a 1.6% discount to the 3,000 level. According to Bloomberg calculations, exchange-traded funds preferred by China’s sovereign wealth fund have recorded volume spikes, likely indicating increased activity by the national team. 

The increasing inflows into the ETFs, including the nation’s biggest Huatai-Pinebridge CSI 300 ETF, added to signs that the so-called “national team” may have stepped in to shore up market confidence ahead of the Communist Party’s Third Plenum later this month. State funds were crucial in stabilizing the stock market when the Shanghai Composite Index plunged in a February rout.

Still, the value of net inflows in the past two weeks is much smaller than purchases by state funds earlier this year, and the buying has done little to stem the ongoing market slump. China’s benchmark CSI 300 Index has finished with its seventh week of declines, the longest losing streak since 2012, due to increasing economic growth pressures at home and tariff disputes with the nation’s major trading partners.

The trading volume of the Huatai-Pinebridge ETF jumped to about 190% of three-month average on Friday, as the benchmark index pared a decline of as much as 1.3% to close just 0.4% lower.-BBG

Bloomberg shows when the Shanghai Stock Exchange Composite dips below 3,000, the volume of ETFs preferred by the national team surges. 

For further insights, The Market Ear published a recent note titled “China: Now what?” It’s a comprehensive chartbook breaking down Chinese markets.

Via SchiffGold.com,

While the cost of fireworks is down compared to last year, prices of just about everything else are way up.

That means individuals are still buying fireworks to light off themselves, but the size and scope of municipal fireworks shows are being downgraded in many towns and cities across the country – and in some areas, have been canceled entirely. 

By and large, fireworks are cheaper now than a year ago, but they’re still vastly more expensive if you go back a few years farther, to pre-covid. And a reduction in demand since then hasn’t fully stifled the cost increase, especially as fireworks produced in China still need to be shipped across the ocean to American buyers.

For towns and cities used to putting on extravagant displays, the costs are many. There’s a need for practical additions like portable bathrooms, shuttle buses, and trained pyrotechnicians. Some towns hire DJs to play music. But one of the largest costs is insurance, which every official fireworks display is required to have, and which has skyrocketed in cost.

Insurers know that if something goes awry and a claim is filed, the cost of dealing with it will be much higher than during previous years: fixing or replacing damage, handling medical emergencies, and planning for other externalities take much more fiat money than it did just a few years ago, and nothing is expected to change for the better. As Peter Schiff said earlier this year:

“The Fed printed an absurd quantity of money during the pandemic, and government deficits went through the roof. What has fundamentally changed since then?”

That’s even truer when you need specialized insurance coverage which has to cover a wide variety of things, as is the case for municipal fireworks shows. Towns don’t just need personal and property liability insurance to protect technicians and the public, but also insurance for transporting the fireworks, protection in case of event cancellation or inclement weather, and other aspects.

That’s why premiums for home, health, and car insurance have also gone way up, along with liability insurance and other types. Insurers know it’s going to cost way more to fix what breaks, whether it’s your home, your car, or a glitchy municipal fireworks demonstration going haywire and blowing up a public park.

Home Insurance Premiums, 2019-2024

Source

The problem will only get worse, so expect to see even more downscaling next year, especially if Trump wins the election and imposes tariffs on Chinese imports, and further pushes up the cost of fireworks themselves.

Municipalities are going to have to deal with those higher costs and adjust their shows — and the expectations of residents — accordingly. On the bright side, your dogs and cats may get a break from all the noise. But on the downside, goods and services for Americans will be less affordable than ever before as Americans try to spend their devalued dollars.

It appears that Biden’s apparatchiks refuse to give up on the myth of a “strong labor market” just yet even as they admit to anyone who reads between the lines just how ugly things are getting.

Moments ago the BLS reported that in June the US added 206K jobs, above the 190K expected.

Not bad, especially with Goldman expecting 140K. Of course, a quick glance reveals where the “beat” came from: both previous months were revised sharply lower:

• May jobs revised from 272K, to 218K
• April jobs revised from 165K to 108K

With these revisions, employment in April and May combined is 111,000 lower than previously reported. So yes, it is easy to “beat” when you have a pool of 111K jobs that never existed to push into this month. And course, next month when the June data is revised lower, the 206K beat will be revised to a sub 190K miss but by then it will be too late.  And as shown in the chart below, 4 of the past 5 months have seen payrolls revised lower.

Not only that but the composition of jobs was once again dismal and followed the same gimmick the BLS used for its “strong” JOLTS report this week: private sector workers came in at 136K, well below the 160K expected and down from a downward revised 193K (was 229K). The gap was filled by – what else- deep stater and other government workers, as government payrolls jumped from 25K to 70K!

The good news is that unlike last month when the number of employed workers actually plunged again leading to a a record gap between the Establishment and Household Surveys, in June at least the number of employed workers rose by 116K. Which however means that the gap between the two series rose by another 90K!

Turning to the unemployment rate, there was a big surprise here because contrary to expectations of a flat print, the number rose to 4.1%, up from 4.0% in May and the highest print since November 2021!

Among the major worker groups, the unemployment rates for adult women (3.7 percent) and Asians (4.1 percent) increased in June. The jobless rates for adult men (3.8 percent), teenagers (12.1 percent), Whites (3.5 percent), Blacks (6.3 percent), and Hispanics (4.9 percent) showed little or no change over the month.

Some more stats from the latest jobs report:

• The number of long-term unemployed (those jobless for 27 weeks or more) rose by 166,000 to 1.5 million in June. This measure is up from 1.1 million a year earlier. The long-term unemployed accounted for 22.2 percent of all unemployed people in June.
• The labor force participation rate changed little at 62.6 percent in June, and the employment-population ratio held at 60.1 percent. These measures showed little or no change over the year.
• The number of people employed part time for economic reasons, at 4.2 million, changed little in June.
• The number of people not in the labor force who currently want a job declined by 483,000 to 5.2 million in June. These individuals were not counted as unemployed because they were not actively looking for work during the 4 weeks preceding the survey or were unavailable to take a job.
• Among those not in the labor force who wanted a job, the number of people marginally attached to the labor force, at 1.5 million, was essentially unchanged in June. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months but had not looked for work in the 4 weeks preceding the survey. The number of discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, edged down to 365,000 in June.

Turning to hourly earnings, here too there was continued slowing with the average hourly earnings number rising 3.9% YoY, down from 4.1% in May and in line with expectations. On a monthly basis, the print also slower to 0.3%, down from 0.4% in May.

In keeping with the BLS’ other favorite gimmick of representing part-time jobs growth as the primary driver of the US labor market, in June, the number of part-time workers rose 50K to 28.1 million while full-time workers dropped by 28K. This means that since June 2023, the US has added 1.8 million part-time jobs and lost 1.6 million ful-time jobs.

Finally, looking at the various industries, we find that the bulk of jobs growth in June was on the back of government workers, which as is well-known, do not actually produce anything but are a drain of US wealth and merely serve to redistribute income.  Here is the full breakdown:

• Government employment rose by 70,000 in June, higher than the average monthly gain of 49,000 over the prior 12 months. Over the month, employment increased in local government, excluding education (+34,000) and in state government (+26,000).
• Health care added 49,000 jobs in June, lower than the average monthly gain of 64,000 over the prior 12 months. In June, employment rose in ambulatory health care services (+22,000) and hospitals (+22,000).
• Employment in social assistance increased by 34,000 in June, primarily in individual and family services (+26,000). Over the prior 12 months, social assistance had added an average of 22,000 jobs per month.
• Construction added 27,000 jobs in June, higher than the average monthly gain of 20,000 over the prior 12 months.
• Retail trade employment changed little in June (-9,000), after trending up earlier in the year. Furniture, home furnishings, electronics, and appliance retailers lost 6,000 jobs over the month, while warehouse clubs, supercenters, and other general merchandise retailers gained 5,000 jobs.
• Employment in professional and business services changed little in June (-17,000) and has shown little change over the year. And the best leading indicator for jobs: temp-help services employment declined by 49,000 over the month and is down by 515,000 since reaching a peak in March 2022.

Commenting on the jobs report,  Rubeela Farooqi, chief US economist at High Frequency Economics said that “Overall, a moderation in payrolls in Q2 coupled with a rise in the unemployment rate and a slower growth path suggested by recent data bolster the case for rate cuts this year. We think the Fed could certainly start the discussion about cutting rates at the upcoming FOMC meeting, and lower the policy rate in September, if the data continue to show moderation.”

And here is Seema Shah, chief global strategist at Principal Asset Management:“The equity market may be a little conflicted how to respond to today’s jobs report. On one hand, the downward revisions to prior months and the rise in the unemployment rate raises the odds of a September Fed rate cut – bond markets are certainly celebrating this. But those same figures cannot help but prompt a twinge of concern about the direction of the US economy. The broad host of economic data all point to a softening – today’s report adds to that picture.”

However, the bigger take home message here besides the timing of the next Fed cut which will come – just a matter of when – is that the Biden BLS is now clearly expecting to dump the mother of all disastrous job report realities on the Trump admin, which will come in just in time to have to revise the actual number of jobs lower by several million.

Authored by Steve Watson via Modernity.news,

A major donor to the Democratic Party has torched Joe Biden, declaring that “we are in fuck city,” and noting that other prominent donors are moving their money into the Congress and Senate races.

Ari Emanuel, the CEO of Endeavor, which owns the UFC and WWE, made the comments during the Aspen Ideas Festival, noting that Biden “said he was gonna run for one term and he was doing it to restore democracy. He now runs for a second term. That’s the first bit of malarkey, as he would say.”

NEW: Hollywood Democratic megadonor Ari Emanuel torches President Joe Biden

“I talked to a bunch of big donors, and they’re moving all their money to Congress and the Senate.”

“He gave us a bunch of malarkey, and I’m really pissed. We all should be really pissed.”

“He is not… pic.twitter.com/mKF8VuDVxz

— KanekoaTheGreat (@KanekoaTheGreat) July 3, 2024

Emanuel continued, “His cohorts have told us that he’s healthy for over a year, and I think it was two weeks ago, there was an article in the Wall Street Journal.”

“I had a father who died at 92 but at 81, I took away his car. It’s a very simple test for me. If you were driving from downtown Beverly Hills to Malibu, would you want Biden to do it at night?” he further posited.

Emanuel further charged that Biden is “telling us malarkey, his people are telling us malarkey, and we’re in a very bad problem.”

Then came the kicker.

“I talked to a bunch of big donors, and they’re moving all their money to Congress and the Senate,” the CEO stated, adding “He gave us a bunch of malarkey, and I’m really pissed. We all should be really pissed.”

“He is not the candidate anymore. This is a legal issue now,” Emanuel insisted, adding that removing Biden is tricky legally in some states, and suggesting that it could be done if the campaign money dries up.

Emanuel concluded by declaring “It’s a legal issue now… but we’re in fuck city.”

Another prominent donor, Netflix’s billionaire co-founder Reed Hastings, has also called for Biden to drop out of the race, telling the New York Times that “Biden needs to step aside to allow a vigorous Democratic leader to beat Trump and keep us safe and prosperous.”

Reed Hastings, co-founder of Netflix, told the New York Times that President Biden needs to step aside to “allow a vigorous democratic leader to beat Trump and keep us safe and prosperous.”

Hastings and his wife have donated more than $20 million to Democrats in recent years. pic.twitter.com/Eis98ab278

— Scripps News (@scrippsnews) July 4, 2024

As we highlighted earlier, the Times has also reported that Biden told a “key ally” that he may be forced to drop out of the race if upcoming appearances do not go well.

*  *  *

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US equity futures are unchanged for two days in a row – having gone nowhere during the July 4th holiday – erasing an earlier attempt to break out to all time highs. At 8:00am ET, S&P futures were flat while Nasdaq futures rose 0.1% as global stocks traded at all-time highs before crucial US jobs data that’s expected to show some moderation in hiring. The US dollar dropped for fourth day to its lowest level in three weeks while the pound notched its longest winning streak in four years as Labour swept to power in the UK’s general election. Bond yields are modestly lower ahead of NFP. Commodities are mixed: oil and base metals are lower; precious metals are higher. Today, the key focus today will be NFP release and any further updates on the US election (our full NFP preview is here). Consensus sees 190k jobs being added, with Goldman calling for a street low 140K; unemployment is expected to hold at 4.0% while average hourly earnings are expected to rise 0.3%, down from last month’s 0.4%.

In premarket trading, tech are once again in the lead: TSLA rose 2.2%, on track to turn positive for 2024 after a seven-day winning streak that’s added about $200 billion in market value. Other techs also rose: GOOGL +39bp, AMZN +23bp; Semis are mixed: NVDA -16bp, AMD +20bp, MU -42bp. Macy’s rallied after the Wall Street Journal reported that Arkhouse Management and Brigade Capital Management have raised their buyout offer to about $6.9 billion.

In contrast with the positive tone for equities, Bitcoin sank to the lowest since February without any actual incremental news, as a “motivated seller” took advantage of the liquidity vacuum of July 4th and the lack of ETF buying to dump several billion in hopes of pushing prices lower. And succeeded: bitcoin dropped for a fourth session as part of a wider crypto selloff. Crypto-related shares fell.

Turning back to equities, a series of soft US economic readings has revived hopes that the Federal Reserve will start cutting interest rates as soon as September, pushing MSCI Inc.’s world index of equities to a record.

“Given other evidence of a cooling economic backdrop — weaker ISM Manufacturing PMI and ISM Service Sector PMI reports — the payroll report could be increasingly decisive for the Fed as it seeks a rationale to signal an easing of rates,” said Quincy Krosby, chief global strategist for LPL Financial.

As previewed overnight, the focus during today’s skeleton crew session (where most traders are away from the office), will be the US jobs figures. Payrolls probably rose by 190,000 in June, a step-down in hiring from the previous month, according to the median estimate in a Bloomberg survey.  Average hourly earnings likely increased 3.9% from a year earlier, the least in three years. The unemployment rate is seen holding at 4%, the highest level in more than two years.

“The US data will be very interesting for a couple of reasons — you see signs of a bit of a slowdown in the labor market, and the market appears for now to have taken that in stride because it does raise the possibility of an easier monetary policy going down the track,” said Richard Flax, chief investment officer at European digital wealth manager Moneyfarm.

On the policy front, New York Fed President John Williams said Friday that while inflation has cooled recently toward the central bank’s 2% target, policymakers are still some distance from their goal. “Inflation is now around 2-1/2%, so we have seen significant progress in bringing it down. But we still have a way to go to reach our 2% target on a sustained basis,” Williams said in prepared remarks for an event at the Reserve Bank of India in Mumbai. “We are committed to getting the job done.”

European stocks climbed, led by the tech sector. In the UK, domestically focused stocks and government bonds rose and the pound strengthened for a seventh day after the landslide victory for Labour, which handed Keir Starmer’s party 412 of the 650 seats in the House of Commons and a clear mandate to deliver on a pledge of greater economic stability.

“A clear majority could bring some much-needed stability to the UK political landscape at a time of heightened global uncertainty,” said Samuel Zief, head of global FX strategy at J.P. Morgan Private Bank. That “could provide a bit of a kicker for the pound,” he said.

France’s CAC40 advanced for a third day, following indications that Marine Le Pen’s National Rally party will likely fall short of an absolute majority in second-round elections this weekend. Still, no matter which party comes out on top in the French parliamentary vote, some investors are betting it marks the beginning of a more turbulent period for the country’s stock and bond markets. The CAC 40 has been the worst performer among major European stock indexes since the snap election was called last month, while at the height of the selloff a metric of bond-market risk soared to its highest since the sovereign debt crisis.

Earlier in the session, Asian equities were little changed as advances in South Korea and Taiwan were tempered by a continued selloff in Chinese shares. The MSCI Asia Pacific Index is steady for the day, though the gauge was still on track for its best weekly gain since mid-May. A measure of regional tech stocks climbed to a record high, propelled by Samsung Electronics showing its fastest pace of profit growth in years. Chinese shares in Hong Kong and mainland were the worst performers in the region, with the CSI 300 Index erasing its year-to-date gains. Chinese stocks extended their decline to a seventh straight week — the longest losing streak since early 2012 — as investor sentiment continues to weaken ahead of the Third Plenum later this month. About 800 stocks on the Shanghai and Shenzhen bourses closed below their book value on Friday, surpassing the number during the market trough in February and underscoring the pervasiveness of bearish sentiment, according to Bloomberg-compiled data.

China’s central bank took the next step toward selling government bonds to cool a record-breaking rally, saying it now has “hundreds of billions” of yuan of the securities at its disposal through agreements with lenders. “The domestic economy is really weak with May-Jun macro data and feedback from companies mostly turning south,” said Xin-Yao Ng, director of investment at abrdn. Plus, there are “low expectation for economic support from the Third Plenum.”

In FX, the US dollar dropped for a 4th straight session to a 1 month low. A disappointing US monthly jobs report could push down the dollar, Philip Wee, a senior FX strategist at DBS Bank Ltd. in Singapore, writes in a research note. “Once considered exceptional, the US economy has witnessed a significant downgrade in its growth outlook.” Sterling rose for a seventh straight day against the greenback, its longest winning streak in four years. The Japanese yen strengthened for a second day against the greenback to rebound further from the lowest level since 1986 reached on Wednesday. Most currencies traded within narrow ranges amid the wait-and-see mode following a US holiday on Thursday.

In rates, treasuries are richer across the curve in a slight bull-steepening move, following wider gains across European rates market after digesting Labour’s landslide UK election win, which broadly matched projections. Front-end yields are lower by more than 2bp with 2s10s, 5s30s spreads steeper by 0.5bp and 1.5bp on the day. 10-year TSY yields are around 4.34% is 2.6bp richer vs Wednesday’s close, in line with bunds while gilts outperform by 1.5bp in the sector

In commodities, oil traded near a two-month high as Hurricane Beryl portended a potentially worse storm season, while shrinking US crude stockpiles hinted at improved demand. Gold headed for a back-to-back weekly gain.

In crypto, Mt. Gox has begun repaying Bitcoin (BTC) and Bitcoin Cash (BCH) to creditors, according to Cointelegraph. Furthermore, Crypto exchange Mt Gox creditors “may need to wait up to three months to receive their bitcoin or bitcoin cash repayments depending on which crypto exchanges they made the claims with”, according to a trustee document cited by The Block. Crypto has been pressured across the session given the above reports. BTC falling over USD 5k on the session to a USD 53.56k base.

US economic data slate includes June jobs report at 8:30am New York time.

Market Snapshot

• S&P 500 futures little changed at 5,593.75
• STOXX Europe 600 up 0.4% to 519.36
• MXAP little changed at 184.57
• MXAPJ little changed at 576.72
• Nikkei little changed at 40,912.37
• Topix down 0.5% to 2,884.18
• Hang Seng Index down 1.3% to 17,799.61
• Shanghai Composite down 0.3% to 2,949.93
• Sensex down 0.4% to 79,731.19
• Australia S&P/ASX 200 down 0.1% to 7,822.26
• Kospi up 1.3% to 2,862.23
• German 10Y yield little changed at 2.59%
• Euro up 0.1% to $1.0827
• Brent Futures up 0.1% to $87.54/bbl
• Gold spot up 0.4% to $2,366.25
• US Dollar Index down 0.15% to 104.97

Top Overnight News

• Keir Starmer’s Labour won a landslide victory in the UK general election after Rishi Sunak’s Conservatives imploded, a result that dramatically reshapes the political landscape while still falling short of a ringing endorsement of the party’s plan for government.
• Global stocks traded at all-time highs before crucial US jobs data that’s expected to show some moderation in hiring. The pound added to its longest winning streak in four years as the Labour Party swept to power in UK elections.
• President Joe Biden is embarking on the most consequential weekend of his political career, knowing that he must restore the faith of voters, donors, and party officials deeply skeptical of his acuity — and that any misstep will prove fatal to his reelection campaign.
• China’s central bank took the next step toward selling government bonds to cool a record-breaking rally, saying it now has “hundreds of billions” of yuan of the securities at its disposal through agreements with lenders.
• Currency traders face a long and nail-biting wait this month until the Bank of Japan’s policy decision on July 31, when a potential interest-rate hike and cut to bond purchases may finally bring some relief to the embattled yen.
• Iran’s presidential runoff on Friday will see the election’s only reformist candidate, Masoud Pezeshkian, face off against anti-Western Islamist Saeed Jalili in the race to run the country’s government.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded somewhat mixed in the absence of a lead from the US owing to the Independence Day holiday, while there was also a lack of fireworks from the UK election exit polls which showed the Labour Party are on course for a landslide victory. ASX 200 was contained amid weakness in miners and the top-weighted financial sector. Nikkei 225 traded indecisively and initially climbed to fresh record highs but then failed to sustain the momentum as the yen began to strengthen and as participants also digested weak Household Spending data which showed a surprise contraction. KOSPI was boosted amid gains in index heavyweight Samsung Electronics following its preliminary Q2 earnings. Hang Seng and Shanghai Comp. were pressured with weakness seen in automakers after the EU confirmed it is to move ahead with planned tariffs on Chinese EVs with provisional duties effective today, while China is to continue the anti-dumping probe into EU port imports and will hold an EU brandy probe hearing on July 18th.

Top Asian News

• PBoC has hundreds of billions of yuan of medium- and long-term bonds at its disposal to borrow and signed agreements with several major financial institutions regarding bond borrowing, according to Bloomberg.
• China officially sets up a special fund for revitalisation of state firms’ land assets worth CNY 30bln, according to state media.
• China’s MOFCOM confirmed it is to hold an EU brandy probe hearing on July 18th.
• Japanese Finance Minister Suzuki warned of inflation concerns despite recent wage rises and noted that a weak yen is pushing up costs for imports and impacting prices, while he said they are to monitor stocks and FX trends urgently.
• BoJ report is to reportedly reveal broadening wage rise trend, according to Reuters sources; report likely to show increasing number of small and mid-sized firms raising wages.

European bourses have been tilting higher throughout the morning with the region benefitting from a continuation of recent broad gains and as political risk is removed in the UK (election), Germany (2025 budget) & France (polls erode chance of a RN majority), Stoxx 600 +0.5%. DAX 40, +1.0%, outperforms despite dismal industrial output metrics for May with tech names bolstered after Samsung’s update and the index generally benefitting from the German coalition government coming to a draft deal on the 2025 budget framework. UK’s FTSE 250 (+1.2%) outperforms the FTSE 100 (+0.3%) as the domestic economy welcomes the return of a Labour government, with housebuilders in particular benefitting. Stateside, futures have been pivoting the unchanged mark with specifics light on the return from Independence Day into a docket which is dominated by the monthly jobs report, ES +0.1%, NQ +0.1%. Foxconn (2317 TT) June revenue +16.1% Y/Y, Q2 +19.1% (-9.6% in Q1). Samsung Electronics (005939 KS) – The world’s largest memory chip, smartphone and TV maker sees a better than expected increase in Q2 profits, as the AI boom lifts chip prices. Sees Q2 profit rising to KRW 10.4tln (exp. 8.8tln; prev. 670bln in Q2 2023), and sees Q2 sales of KRW 74tln (exp. 74.5tln).

Top European News

• ECB’s Lagarde said officials are in no hurry to cut rates again after June’s move and the central bank requires additional reassurance that inflation is headed back towards 2% before it cuts rates further, according to an interview with RTP.
• German coalition government agreed on a 2025 draft budget after months of negotiations, according to a government source.
• Thereafter, German Finance Minister Lindner says the 2025 budget deal is EUR 481bln in size, incl. EUR 57bln in investments. Chancellor Scholz says they will fully meet the 2% NATO spending goal every year; high billion-EUR sum is planned for housing construction. Growth package to be presented on 17th July

UK Election

• UK election exit polls showed the Labour Party is set to win 410 seats for a 170-seat majority, Conservatives 131, Lib Dems 61, SNP 10, Reform 13, Greens 2. This suggested the Labour Party will win the most seats by any party since 2001 and the Conservatives are to win the fewest seats since the party was founded in 1834. The latest results show Labour has won for majority.
• UK Labour Party leader Starmer won his seat and said the people have spoken, while he added that people are ready for change and it is now time for them to deliver. Starmer said in his victory speech “country first, party second” and vowed a transformed Labour Party, while he added that he doesn’t promise it will be easy and they will have to move immediately
• UK PM Sunak won his parliament seat in Richmond and Northallerton, while he conceded defeat in the general election and stated that the Labour Party has won and the British people have delivered a sobering verdict. Furthermore, Sunak said he will continue to serve as a Member of Parliament and he takes responsibility for the loss. It was separately reported that Sunak is expected to resign as Conservative party leader on Friday morning, according to Times’ Shipman
• UK Reform Leader Farage won his parliament seat and said there is no enthusiasm for Labour, while he added they are coming for Labour votes and this is just the first step that will stun everyone.
• Goldman Sachs raises UK’s GDP growth forecast by 0.1ppts in 2025 and 2026 after the UK election; says Labour Party’s fiscal policy agenda to provide a modest boost to demand growth in the near-term.

FX

• A slightly softer start for the USD with the index weighed on by the EUR and GBP as election risk fades and passes respectively. DXY down to a 104.93 base with the 100- & 200-DMAs below and potentially in focus into Payrolls.
• GBP deriving some modest benefit from the passing of any election risk, though the outcome has been nailed on for weeks and Cable itself was unreactive to the exit poll and updates since; at the top-end of a 1.2755-1.2783 bound.
• EUR edging higher into Sunday’s second round of the French legislative elections and benefitting from the main market risk of a RN absolute majority being removed in the latest polls, single currency finds itself in a slim range and holding above a cluster of DMAs.
• JPY outperforms with USD/JPY below 161.00 and testing 160.50. No real move to comments from the Finance Minister or thereafter from a Reuters sources piece regarding a report next week which is set to reveal a broadening wage trend
• PBoC set USD/CNY mid-point at 7.1289 vs exp. 7.2704 (prev. 7.1305).

Fixed Income

• Benchmarks generally modestly firmer but very much in a holding pattern into payrolls.
• No move from Fed’s Williams who noted of progress in bringing inflation back to target, with the line echoing Powell earlier in the week who said they have made quite a bit of progress on inflation.
• USTs a touch firmer with the US yield curve mixed but slightly steeper into Payrolls.
• OATs steady into Sunday’s second round; Bunds unreactive to dismal German data this morning with no real or sustained move on the fiscal related updates before or since, with Bunds in a relatively narrow 130.53-130.78 band.
• Gilts gapped higher on the open but initially stalled shy of Thursday’s best before extending modestly but stopping within reach of Wednesday’s 97.78 WTD peak.

Commodities

• Crude benchmarks near the unchanged mark. Initially lifted alongside an uptick in stock performance in the early European morning before benefitting further on a steady flow of hurricane and geopolitical developments.
• WTI and Brent around USD 84.00/bbl and USD 87.40/bbl respectively, towards the mid-point of parameters.
• Metals generally firmer; spot gold picking up as the USD slips and as yields having a very slight negative bias into NFP. XAU at a fresh WTD peak of USD 2367/oz, stalling just shy of the 21st June high at USD 2368/oz.
• Base metals similarly supported with 3M LME Copper inching towards USD 10k/T, though iron ore was pressured in APAC trade with profit taking from recent gains seemingly the driver.
• Qatar set August Marine crude OSP at Oman/Dubai plus USD 0.15/bbl and land crude OSP at Oman/Dubai minus USD 0.40/bbl.
• Chevron (CVX) announced it was removing non-essential personnel from its Gulf of Mexico facilities due to approaching Hurricane Beryl but noted that production from its Gulf of Mexico assets remains at normal levels. It was also reported that Shell (SHEL LN) said is evacuating all personnel at its Perdido asset due to Hurricane Beryl, according to Reuters.
• Russian Energy Ministry says gasoline export supplies to “friendly countries” now 70% lower than average daily level in July 2023; Russia has ample fuel reserves for stable supply of domestic market.

Geopolitics

• Israeli PM Netanyahu told US President Biden he has decided to send a delegation to continue negotiations on hostages but reiterated that Israel will only end the war after achieving all of its objectives.
• US senior administration official said President Biden and Israeli PM Netanyahu walked through the draft Israel-Hamas agreement in a 30-minute call and the US believes there is a significant opening for a hostage deal, while the official stated that the Hamas response moves the process forward and could provide basis for closing a deal on hostages and ceasefire. Furthermore, the US official said outstanding issues relate to the implementation of an agreement in which there is significant work to be done and a deal is not likely to be closed in a period of days but they have had a breakthrough on the critical impasse in Israel-Hamas talks.
• Israel’s Mossad chief Barnea is travelling to Doha to resume Gaza ceasefire and hostage talks which will likely take place on Friday and will meet with Qatar’s PM in an effort to bring Israel and Hamas closer to a Gaza peace deal, according to a source cited by Reuters.
• Israeli official confirmed that the Mossad chief will lead a hostage negotiations delegation and another official said there is a real chance for a deal, while it was also stated that the proposal put forward by Hamas includes a very significant breakthrough and the official stated that they can proceed with a deal but it depends on PM Netanyahu.
• Hamas said it did not drop the condition of a ceasefire in Gaza, while it added that Israeli PM Netanyahu did not want a permanent ceasefire in Gaza and requires the movement to lay down arms, according to Al Arabiya.
• Hamas leader said they are waiting for a positive response from the Israeli side to start negotiations on the details of the deal, according to CNN.
• “There are some obstacles before reaching an agreement, including demanding that Hamas not have the right to object to the Palestinian “security” prisoners who will be released”, according to Sky News Arabia citing Israeli press Yedioth Ahronoth.
• “The army is making progress in Rafah But the fighting is expected to last at least another month.”, according to Israeli press Yedioth Ahronoth cited by Al Jazeera.
• Russia’s Defence Ministry said it is carrying out drills involving mobile nuclear missile launchers, according to Interfax.

US Event Calendar

• 08:30: June Change in Nonfarm Payrolls, est. 190,000, prior 272,000
• 08:30: June Change in Private Payrolls, est. 160,000, prior 229,000
• 08:30: June Underemployment Rate, prior 7.4%
• 08:30: June Unemployment Rate, est. 4.0%, prior 4.0%
• 08:30: June Labor Force Participation Rate, est. 62.6%, prior 62.5%
• 08:30: June Average Hourly Earnings YoY, est. 3.9%, prior 4.1%
• 08:30: June Average Hourly Earnings MoM, est. 0.3%, prior 0.4%
• 08:30: June Average Weekly Hours, est. 34.3, prior 34.3

DB’s Jim Reid concludes the overnight wrap

After 31 all time highs in H1, last night saw the first in H2 for the S&P 500 (+0.62%) after a steady rally once Europe went home. Meanwhile yields on 10yr Treasuries (-3.0bps) fell back after a bit of a two-way battle with some dovish-leaning comments from Fed Chair Powell initially sending yields lower, before this was outweighed by a more hawkish JOLTS report as he was speaking. However, after Europe went home US Treasury yields drifted back to near the pre-JOLTS levels. Market may wind down later ahead of tomorrow’s US Independence Day. However remember payrolls on Friday in what will be a lightly staffed US market. It seems like the year for such occurances as payrolls was released on Good Friday only three months ago.

Back to yesterday, one of the main highlights was a panel at the ECB’s forum in Sintra, in which both Fed Chair Powell and ECB President Lagarde were speaking. Powell sounded positive about disinflation, saying that “inflation now shows signs of resuming its disinflationary trend”. That reassured investors that the Fed was becoming more confident about the path of inflation, although Powell also pointed out that given the strength of the economy and the labour market “we have the ability to take our time and get this right”.

However, Powell’s optimistic remarks on disinflation were countered by the latest JOLTS report of job openings, which showed a tighter labour market than expected. For instance, the number of job openings unexpectedly rose in May to 8.140m (vs. 7.946m expected), and the hires rate also ticked up a tenth to 3.6%. In addition, the quits rates held steady at 2.2% for a 7th consecutive month, so there was little sign of a further deterioration in the labour market that we’ve seen in other recent data.

On balance, the more dovish tones won out though, and investors became a bit more confident in the prospect of rate cuts this year. Indeed, investors dialled up the chance of a cut by the September meeting from 69% to 75%, even though Powell said that “I am not going to be landing on any specific dates” when he was asked about September. We also saw similar moves in the yield curve, with the 2yr yield coming down -1.45bps to 4.741%, whilst the 10yr yield fell -3.0bps to 4.432%. Intraday the 2s10s curve reached its steepest level since January before re-flattening a bit and closing at -31.4bps. The intra-day highs were just a week after hitting the most inverted since December. The 23.4bps range over the last week shows both the scale of the move in the last few days and also how narrow the range has been since January. This morning in Asia, yields on 10yr USTs are edging back up less than a basis point across the curve.

Meanwhile in the Euro Area, ECB President Lagarde didn’t provide too much news on the policy path, but we did get the flash CPI release for June yesterday, which saw headline inflation fall by a tenth to +2.5% as expected. Even so, core CPI was a bit stronger than expected, coming in at +2.9% (vs. +2.8% expected). In light of that, investors further priced out the chance of a cut at the next meeting in a couple of weeks’ time, which is now down to just 7%. But they still think there’s a strong chance of a cut by the September meeting, which is now priced as a 72% chance from 70% on Monday.

Over in France, all eyes are on Sunday’s election, and yesterday saw Marine Le Pen say that the National Rally would still try and form a government even if they didn’t achieve an overall majority. But other parties have been seeking to stop them reaching a majority, and over 200 candidates have now dropped out from the second round. In most cases, they’ve been withdrawals by Macron’s centrist group or the left-wing alliance in order to stop the National Rally from winning. So there are now less than a hundred three-way contests on Sunday. In terms of the market reaction, yesterday saw the Franco-German spread tighten for a third consecutive day, which is the first time that’s happened since the snap election announcement. That took it down by -2.7bps to 71.4bps, and the moves came in the context of a broader sovereign bond rally across Europe, which saw yields on 10yr bunds (-0.4bps), OATs (-3.2bps) and BTPs (-5.0bps) all move lower.

When it came to equities, Europe saw declines across the continent, with the STOXX 600 (-0.42%), the DAX (-0.69%) and the CAC 40 (-0.30%) all moving lower. Meanwhile the US continued to diverge from Europe, especially with the late rally, as the S&P 500 (+0.62%) closed at a record high, powered by the Magnificent 7 (+1.00%) own record high which included a +10.20% rise for Tesla on better Q2 delivery numbers. Small caps rallied as well with the Russell 2000 gaining a more subdued +0.19%.

Asian markets are mostly trading higher this morning with the exception of mainland China . The Hang Seng (+0.93%) is outperforming with the Nikkei (+0.88%) breaking back above the 40,000 level for the first time in three months. Elsewhere, the KOSPI (+0.40%) is also edging higher but Chinese stocks are falling following a disappointing reading on service sector activity (more on this below). S&P 500 (-0.14%) and NASDAQ 100 (-0.11%) futures are seeing minor losses but European ones are up around half a percent after missing out on the US late rally.

Coming back to China, service sector activity decelerated in June dragged down by slower growth in new orders. The Caixin services PMI fell to 51.2 (v/s 53.4 expected) from 54 in May, marking the lowest reading since October 2023 thus raising concerns over a broader slowdown. Meanwhile in Japan services activity contracted for the first time in nearly two years in June as the final estimate of the Jibun Bank services PMI slipped to 49.4 from 53.8 in May, ending 21 straight months of expansion.

Elsewhere, retail sales in Australia advanced +0.6% m/m in May (v/s +0.3% expected) as against a +0.1% increase in April, reinforcing the case for an interest-rate hike. Following release, yields on 3yr government bonds extended their rise, edging up by +2.3bps to trade at 4.16% as we go to print.

Here in the UK, attention is also shifting to politics ahead of tomorrow’s general election. Today we should get a lot of final opinion polls, including an MRP poll from YouGov at 5pm London time that will have seat projections for the different constituencies. As it stands, all opinion polls still give the opposition Labour Party a decisive lead that’s consistent with them reaching a majority in the House of Commons. For instance, Politico’s polling average gives them a 20-point lead on 41%, ahead of the governing Conservatives on 21%. They’re followed up by the right-wing Reform UK led by Nigel Farage, who are currently in third on 16%.

To the day ahead now, and data releases include the final services and composite PMIs for June from around the world, and in the US there’s also the ISM services index for June, the ADP’s report of private payrolls for June, the weekly initial jobless claims, along with the trade balance and factory orders for May. From central banks, we’ll get the minutes from the Fed’s June meeting, and hear from ECB President Lagarde, ECB Vice President de Guindos, the ECB’s Cipollone, Lane and Knot, and the Fed’s Williams.

Seemingly crumbling under immense pressure to undo the damage from a debate performance that showcased his plummeting mental acuity, President Biden’s Fourth of July was a veritable fireworks show of bewildering statements and derailed trains of thought — that saw Biden calling himself a black woman who was elected president as a child. The grand finale to the destructive holiday-weekend display could come at 8pm ET tonight, when Biden appears in a primetime, sit-down interview on ABC News. 

Thursday’s dark comedy started with an appearance on Philadelphia’s WURD radio, which features a format categorized as “urban talk.” Having already boasted about appointing the first black woman to the Supreme Court and selecting the first black woman as vice president, Biden short-circuited and said, “I’m proud to be, as I said, the first vice president…the first black woman to serve with a black president.”

“I am the first black woman to serve with a black president” – Biden just declared

Source: Philadelphia radio (WURD) pic.twitter.com/rKB9zGipPl

— End Wokeness (@EndWokeness) July 4, 2024

In the same interview, Biden completely garbled his reminiscing about John F. Kennedy, Jr serving as a barrier-breaking inspiration to Biden’s younger self:

“I remember, as a Catholic kid growing up up in an area where we didn’t like, Catholics didn’t get — I’m the first president to be elected statewide in the state of Delaware when I was a kid. Well, you know, I was, I looked at John Kennedy and said, ‘Well, he got elected. Why can’t I get elected?

BIDEN: “I’m the first president that got elected statewide in the state of Delaware when I was a kid.” pic.twitter.com/YpFEM8GJhx

— RNC Research (@RNCResearch) July 4, 2024

Later, in remarks to military families at the White House, Biden twice showcased another of his chronic symptoms, as he started a train of thought, only to quickly abandon it. The first example came as he attempted to trot out the disputed allegation that then-President Trump called dead American soldiers in a French World War I cemetery “losers” and “suckers.” After his anecdote stalled, Biden tried recovering with one of his all-purpose rhetorical crutches, shouting, “We gotta just remember WHO IN THE HELL WE ARE…We’re the UNITED STATES OF AMERICA!”

DISGRACEFUL: A heavily slurring Biden starts to stumble through the debunked “suckers and losers” hoax at the White House Independence Day celebration — in front of our great military families pic.twitter.com/57O54Gt8zZ

— RNC Research (@RNCResearch) July 4, 2024

Another dead-end sentence came as he seemed to be making an exaggerated claim about putting himself in danger alongside service members in foreign conflicts:

BIDEN to the troops: “I’ve been all over the world with you. I’ve been in and out of battles, anyway…” pic.twitter.com/vXo4muna89

— RNC Research (@RNCResearch) July 4, 2024

In another radio interview meant to reach black audiences, Biden appeared on the nationally syndicated Earl Ingram Show. “Despite the low-pressure nature of the interview, the president at times spoke haltingly as he delivered his rapid-fire answers,” the New York Times reported. “In the 17-minute interview, he sometimes stopped himself in the middle of an answer.” For example, in the middle of a sentence about Trump’s proposed tariffs, Biden abandoned the venture, saying, “…anyway, just, I don’t want to get too wrapped up in it, really.”

With his flub-filled Fourth in the books, Biden’s next major opportunity to shore up voters’ perception of this mental soundness comes tonight, when appears in his first sit-down interview since last week’s debate disaster. The interview with ABC‘s George Stephanopoulos will be recorded during the day amid Biden campaign stops in Wisconsin and then aired in an 8pm ET “primetime special.”

To counter suspicions that the network will edit the interview to Biden’s benefit, ABC has committed to releasing a transcript of the entire interview sometime today or this evening. As we noted yesterday:

“Readers will naturally view the idea of a Stephanopoulos interview with justifiable wariness of soft-pitch questions and friendly editing. However, we’re in a different political world than last week…

Given the debate-triggered earthquake that’s altered the leftist landscape, Stephanopoulos will likely feel significant pressure to act something like a real journalist, for once.”

As Biden staggers from one risky public appearance to the next, a white-knuckled Team Biden is surely sweating next week’s schedule: Biden will host a three-day NATO summit in Washington that starts on Tuesday. As part of that event, he will conduct a rare solo press conference, which could well prove the most treacherous challenge he’s faced since last week’s debate — and perhaps even more so.

Biden: “Ho, ho, ho! Happy Independence Day!”

The rehab tour is not going at all well.

pic.twitter.com/VDUAtFgFyQ

— Western Lensman (@WesternLensman) July 5, 2024