Month: July 2024

Ukrainian President Volodymyr Zelensky on Wednesday has issued an open challenge to former President Donald Trump, telling him that if the presumed Republican nominee has a peace plan for Ukraine, he should immediately inform the Ukrainian government.

“If Trump knows how to finish this war, he should tell us today,” Zelensky told Bloomberg Television in an interview given from Kiev on Wednesday. But he also warned that his government will never accept a peace plan that violates Ukraine’s sovereignty. “If there are risks to Ukrainian independence, if we lose statehood – we want to be ready for this, we want to know,” Zelensky asserted. 

His wording of “if we lose statehood” in the context of discussing a potential Trump peace proposal appears set up to blame a possible future Trump administration for Ukraine losing the war. He said he’s “potentially ready” to meet Trump and his team and explore a vision for bringing the war to an end.

Zelensky went on to claim in the interview that his military’s manpower crisis is not as severe as has been reported, with the situation in much better shape that it was several months ago. He also pushed back against widespread media reports which paint a hopeless picture of Ukraine’s battlefield chances. He described that it’s not a matter of not enough men, but that not enough weapons are reaching his forces at a fast enough rate.

“It’s not a deadlock, it’s a problematic situation,” Zelensky said. “A deadlock means there’s no way out. But a problem can be solved if one has the will and has the tools. We do have the will, and the tools – they haven’t arrived yet.”

It has been a common theme of his to castigate Western partners for increasingly slow weapons and ammo deliveries, despite the billions already sunk in to Kiev. This was again repeated in the Bloomberg interview:

While Zelenskiy lauded the $61 billion assistance package approved by the US Congress this year — after a six-month long delay — he said the equipment was taking too long to make its way to the front. 

“This is the biggest tragedy of this war, that between the decision and real fact, we have a real long, long, long wait,” Zelenskiy said. 

As for Trump, and the question of whether a future Republican administration might throttle arms and aid deliveries, Zelensky said, “They can’t plan my life and life of our people and our children.” He added: “We want to understand whether in November we will have the powerful support of the US, or will be all alone.”

“Nobody has an answer,” Zelensky continued. “I’m not accusing, I’m just explaining,” he said in the interview which happened to come a day after he hosted Hungarian Prime Minister Viktor Orban for the first time of the war. Orban had also urged entering quick peace negotiations with Russia.

As for Trump’s peace plan, a report in Reuters last week said that it centers on giving an ultimatum to Kiev – that it will only receive more American weapons and defense aid if it agrees to enter peace talks with Moscow. Another key ‘controversial’ part of the plan is to freeze battle lines where they are during the progression of peace talks, something which is likely to be unpopular among Ukrainian and NATO officials.

Zelensky has clearly appeared more open to negotiating a peace settlement of late. Below is an media statement from last week…

Zelensky Calls for a Peace Plan

“Many people are dying; we don’t have the men to continue the war much longer.”

“Ukraine does not want the war to continue for many years. We do not have that much time. Many people are dying,” he said.

He is clearly calling for a peace formula… pic.twitter.com/kwQuGlCD2Q

— Patricia Marins (@pati_marins64) June 27, 2024

Interestingly, there was also this moment of the fresh Bloomberg interview: “Zelenskiy declined to weigh in on Biden’s disastrous performance in last week’s debate, which he said he watched. Instead of domestic politics, he gauged each candidate’s position on Ukraine.”

As we’ve been reporting over the last months, NATO leadership has been busy trying to “Trump-proof” future alliance funding and support to Ukraine. This includes the current proposal of a $100 billion, five-year fund for Ukraine which will be considered at the NATO July annual summit which comes next week (July 9-10) in Washington DC.

Authored by Jonathan Turley,

The Washington Post is reporting that Special Counsel Jack Smith may try to convict former president Donald Trump all the way through the election and up to 11:59 am on January 20th. After the oath, the Justice Department has long maintained that it will not prosecute a sitting president.

There is also a long-standing policy of the Justice Department to abstain from criminal proceedings before an election to avoid the appearance of trying to influence the outcome.

Smith has signaled that he will discard that policy and that he is prepared to try Trump not only up to the election but through the election.

He is now reportedly willing to try Trump up to January 20th.

Smith has made trying Trump before the election the overriding priority in his two cases against the former president. He failed repeatedly to force a shorter schedule on appeal before the Supreme Court. His arguments were revealing. He suggested that the public should have a possible conviction before they cast their votes. It flipped the DOJ policy on its head in openly seeking to influence the election.

The Supreme Court was not persuaded, though Smith did succeed in effectively cutting the appellate process a bit shorter.  He then lost in spectacular fashion before the Court on presidential immunity.

According to the Post, he is not giving up the ghost and is now committed to a trial running up to Inauguration Day: “Current officials, speaking on the condition of anonymity, expressed … that if Trump wins the election, the clock on the two federal cases against him would keep ticking until Jan. 20, when he would be sworn in as the 47th president.”

Even with Smith’s continued push to try Trump at all costs before the Inauguration, it could be a challenge. There is a 30-day period before the Supreme Court case is effectively returned to district court.

Judge Tanya Chutkan has been highly favorable for Smith and highly motivated in seeking a trial before the election. That led to problems highlighted in the recent opinion. Chutkan was so motivated that she failed to create an adequate record on these issues. That record will now have to be established.

If Chutkan rules as she did earlier, she is expected to be hostile to Trump’s claims on his conduct falling within official functions. However, she will need to make the record and her decision could again be appealed. The Court left clear guidelines that will make it difficult for Chutkan to, again, dismiss such claims.

Moreover, the pre-trial motions were stopped with the latest appeal. They must now be addressed.

Finally, she pledged to give the Trump team over 80 days for preparation after the appeal, which will be added to the 30 days, the period for the remand record, and the pre-trial motions.

There is also the need for the court and Smith to deal with the Fischer decision limiting the use of the obstruction charges — impacting two of the four counts against Trump. As I have previously written, Smith has various options but could trigger a new reversal on appeal if he follows his signature inclination to resist legal limits.

In other words, Smith’s appetite for a trial before the Inauguration may exceed his ability to force that expedited schedule.

The cyber incident that affected about 15,000 auto dealerships across North America is over. CDK Global said “substantially all” dealers in its network have seen backend management systems restored. 

“We are ahead of the anticipated schedule,” Tony Macrito, senior communications director at CDK, wrote in an email response to Bloomberg.

Disruptions began on Wednesday, June 19, after hacking group BlackSuit paralyzed CDK’s backend systems with ransomware, demanding millions of dollars. In return, thousands of dealers could not buy or sell vehicles for about three weeks, forcing some to switch to paper and pen to complete transactions. CDK said on Monday that all dealers are expected to be live by Wednesday, if not Thursday, at the latest. 

According to an estimate by Anderson Economic Group, the CDK disruption caused nearly a billion dollars in direct losses for car dealers.

Several dealers, including Sonic Automotive Inc., Penske Automotive Group Inc., Group 1 Automotive Inc., AutoNation Inc., Lithia Motors Inc., and Asbury Automotive Group Inc., have warned in SEC filings about a potential “material” impact from the attack. 

Bloomberg noted, “Vehicle sales were forecast to slow to an annualized rate of around 15.8 million vehicles in June, down from 16.1 million a year ago, due in part to the attack.” 

We suspect the cyber incident will prompt many auto dealers to reconsider their reliance on centralized backend systems provided by CDK.

Weeks ago, X user Car Dealership Guy was featured on CNBC. He said the auto industry’s biggest question after all of this chaos is: “Will the industry continue centralizing and consolidating technology? This has been the biggest trend in auto retail.”

“It’s disrupting the entire dealership [industry],” says @GuyDealership‘s Yossi Levi after a cyberattack hit 15,000 auto dealerships across the country. “Will the industry continue centralizing and consolidating technology? This has been the biggest trend in auto retail.” pic.twitter.com/oRTMYyPMfX

— Last Call (@LastCallCNBC) June 20, 2024

Authored by Jack Hellner via AmericanThinker.com,

In the wake of the catastrophic debate last week, Bill Clinton, most of the media, and other Democrats have been claiming that although Joe Biden had a rough night, he’s had an extremely successful presidency––basically the public is just too stupid to understand how great he is. Here’s this, from a report at Newsmax:

Bill Clinton Moves Past Debate, Cites Biden’s Accomplishments

‘I’ll leave the debate rating to the pundits, but here’s what I know: facts and history matter. Joe Biden has given us 3 years of solid leadership, steadying us after the pandemic, creating a record number of new jobs, making real progress solving the climate crisis, and launching a successful effort in reducing inflation, all while pulling us out of the quagmire Donald Trump left us in. That’s what’s really at stake in November,’ Clinton posted on X Friday.

Let’s break this down, one bullet point at a time.

Clinton said that Biden steadied the economy after the pandemic.

The recession of 2020 was the shortest in history (two months). It ended more than eight months before Biden took office.

Over twelve million jobs came back in the last eight months of Trump’s presidency.

That was over 1.5 million jobs per month, much faster than the jobs coming back or new jobs after Biden got in office.

No matter how many times Biden and others repeat the lie that he inherited a disastrous economy, the media just goes along. 

Clinton said Biden made real progress on the climate crisis.

What exactly did he do? They seem to be very proud that he signed a massive green slush fund that was falsely named the Inflation Reduction Act to intentionally mislead the public. And, he rejoined the Paris Climate Accord, which basically permits China and India to do whatever they want with industry and energy, while richer more developed nations pay all the costs.

We have been told for around 40 years that there is an existential threat from global warming and climate change, and the government is throwing lots of money to green pushers to supposedly correct this climate change. The Biden administration took $7.5 billion to build 500,000 electric charging stations, and after three years, they have built a grand total of…seven. What a raging success.

So, what has happened to the climate in the last 40 years because of these government policies?

Sometimes we have record cold and sometimes we have record warmth.

Sometimes we have droughts and sometimes we have lots of rain and floods.

Sometimes there are small amounts of snow and sometimes we have record snow.

Some years have huge and damaging storms, and some don’t.

In other words, the weather changes cyclically and normally as it always has. 

Clinton said that we should celebrate the launch of a successful effort in reducing inflation.

This was the stupidest and silliest claim of all; what a joke.

Trump left an inflation rate of 1.4%, and it skyrocketed to over 9% in 2022. Now it is supposedly down to around 3%, which is more than double the rate when Biden took office. Is that really something to brag about? 

The inflation was primarily caused by Biden’s policies to destroy reasonably priced energy (gas and oil), excess spending, open borders, and massive new regulations.

I would challenge Clinton on what policies Biden “launched” to reduce inflation. I can’t think of any. The reason the rate of increase slowed is because consumers and businesses couldn’t afford continually high inflation. 

The “solution” offered by Biden and other Democrats for when things become unaffordable, is to continually increase the subsidies. Whether it is health care, daycare, college, housing, food, or anything else, the “solution” is always to throw more government money, meaning taxpayer money, at it. Those subsidies make prices go up, not down.

When Biden forces companies to make electric cars that people don’t want, these companies lose money, and jack up the cost of gas-powered cars, which also increases insurance, loans, and repair costs. It compounds the problem. 

Here are some things Biden deserves credit for, which may be why he isn’t so popular:

Mass migration from a dissolved border, which has made cartels rich, increased drug-, human-, and child-trafficking, is destroying cities, and putting pressure on schools, police, housing, and health care, and made our southern border is now the deadliest border in the world; dictatorially and unconstitutionally paying off hundreds of billions in student loans; making the world much more dangerous, as Biden’s energy policies are essentially funding Russia and Iran (we are funding both sides in the Ukraine-Russia conflict); and destroying women’s sports by making them compete against men. 

It is truly a shame that people like Bill Clinton watched as Biden was unable to hold a train of thought for a single minute, and then claim that he is a great president. It is obvious that Biden isn’t capable of running anything.

Oil prices briefly spiked after last night’s API-reported big crude draw, but that reverted back lower fast. Overnight has seen a small roller-coaster with prices slipping during the US session and then a series of bad news data point in the US sparking a ‘good news for Fed cuts’ response in oil prices, holding just above green on the day.

The question is – was API’s data fluke…

API

• Crude -9.16mm – biggest draw since mid-Jan 2024

• Cushing +404k

• Gasoline +2.47mm

• Distillates -740k

DOE

• Crude -12.16mm – biggest draw since Jul 2023

• Cushing +345k

• Gasoline -2.21mm

• Distillates -1.54mm

Nope. The official data confirms the huge crude draw last week (which we suspect was pre-emptive draws ahead of ‘Beryl’

Source: Bloomberg

Adjusted for the 398k barrel addition to SPR, the 11.579mm barrtel draw was the largest since the last week of July last year…

Source: Bloomberg

Oil prices spiked on the big crude draw…

Source: Bloomberg

Even if crude prices ease a little, pump-prices are set to rise further…

Source: Bloomberg

Pouring more salt in President Biden’s polling wounds.

By Rabobank

Yesterday the Dutch national team sealed a 3-0 victory against Romania which resulted in festivities amongst enthusiastic fans. Earlier, Dutch football supporters went viral on social media for celebrating the European Championship while dancing to a Dutch party song of which the simple refrain goes like: To the left, to the right. Simple lyrics that could easily be applied to the upcoming elections in France next weekend.

Indeed a question that many market participants will ask themselves is: Will France go to the left or to the right? According to French newspaper Le Monde no less than 221 candidates have withdrawn their candidacy for the upcoming election. This in order to improve chances for a victory of either Macron’s renaissance movement or the left coalition in order to prevent the electorate of swinging to the right. 

Activity in China’s services sector –reflected by the Caixin services PMI– still expanded, albeit at the slowest pace in 8 months. This indicates that China’s economy continuous to struggle to gain stable traction and confirms our view that our current forecast of 4.9% has significant downward risks. The index came in at 51.2 while 53.4 was expected. Rising competition and softer expectations regarding the economy also led to smaller firms being more cautious about hiring staff.

Jolts job openings came out yesterday and while the previous figure for April was revised downward (from 8,059,000 vacancies to 7,919,000), the data for May surprised to the upside. Economists forecasted 7,946,000 vacancies but the first estimate came out at 8,140,000 vacancies which seems to indicate that the labor market is still quite resilient. Of course markets will await the ADP report later today which is expected to show a relatively mild job growth of 165k jobs, whereas current polling for the non-farm payroll report that will be released on Friday hovers around a job growth of 190k.

In combination with the average hourly earnings that will be released at the same time and date, this will provide the market with an important overall picture over the general situation on the US labor market. The regular reader of the Global Daily of course knows that this is important input for the Fed.

Indeed Fed president Jerome Powell stated only yesterday that: “Because the US economy is strong and the labour market is strong, we have the ability to take our time and get this right.” During a panel at the European Central Bank Forum on Central Banking, Powell added: “And that’s what we’re planning to do.” Furthermore he said inflation is getting back on a downward path.

But we all know that inflation is notoriously hard to predict. Moreover, a Trump victory seems ever more likely which we expect will lead to higher tariffs and as such, higher inflation. So the writer of today’s Global Daily suggests:  let’s take our time as well later today and on Friday and see what the latest data will tell us about the most recent developments and what this might mean for monetary policy. For now we stick to our view that the Fed will lower the Fed Funds rate just twice this year, and two times next year before it is forced to take a pause in the second half of next year.

Markets however don’t seem to take their time and continue placing their bets on a steady continuation of rate cuts. This is illustrated by today’s opening of European stock markets that track a record S&P 500 close. The latter closed above 5,500 for the first time which is the 32nd time this year that the index touches a new record. As such a lot of good news seems to have been priced in making it increasingly vulnerable for a correction

And to cap a day of serially ugly US macro data, factory orders unexpectedly plunged (-0.5% MoM) in May (against expectations of a 0.2% rise and worse still April was revised lower)…

Source: Bloomberg

The YoY rise in factory orders is just 0.9%… and remember that is nominal… So in reality factory orders are tumbling on a YoY real basis.

After three strong months, Core Factory Orders also dropped (tumbling 0.7% MoM)…

Source: Bloomberg

Is this bad enough to be good news for Fed doves?

Following the mixed picture on Manufacturing (despite the collapse in ‘hard’ data), the Servcies dats could not be more mixed:

• S&P Global US Services PMI rose to 55.3 from 54.8, better than the 55.1 expected (and flash print)

• ISM US Services PMI plunged to 48.8 from 53.8, well below the 52.7 expected.

Source: Bloomberg

So to clarify:

• S&P Global Services respondents see their industry at its strongest since April 2022

• ISM Services respondents see their industry at its weakest since April 2020 (COVID Lockdowns)

Under the hood, ISM was a shitshow (time for a rate-cut?)

The S&P Global US Composite PMI Output Index posted 54.8 in June, up from 54.5 in May and signaling the fastest increase in business activity since April 2022, with Services continuing to outperform the Goods side of the economy

Source: Bloomberg

Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, said:

“US service sector companies reported an encouragingly solid end to the second quarter, with output rising at the fastest rate for over two years. Both new order inflows and hiring have also accelerated, the latter buoyed by firms taking on more workers in response to rising backlogs of work.

“With additional – albeit more muted – support coming from the manufacturing sector, the survey data point to GDP rising at an annualized 2.0% rate in the second quarter, with a 2.5% rate seen for June. Forward momentum is therefore gathering pace.

This is not what the doves wanted to see…

Oh and BTW – the entire rest of the world is seeing economic composites tumbling… but not Biden’s Murica!

But…

“There is some nervousness creeping in regarding the post-election business environment, but for now at least confidence about the outlook for the coming year remains elevated by recent standards and supportive of businesses investing in expansion.

“Some of this optimism relates to ongoing convictions that interest rates will start to fall before the end of the year. In this respect, a further cooling of price pressures in the survey – notably in the services sector – adds to signs that inflation should trend lower in the coming months to open the door further for rate cuts.”

So, once again, it’s not the economy, it’s The Fed, stupid!

Authored by Felix Ng via CoinTelegraph.com,

Galaxy Digital’s head of asset management believes spot Ether exchange-traded funds will be approved in “weeks” rather than days but agrees the decision will come sometime in July. 

“Look, we’ve done this before. This is methodical, this is window dressing, the SEC is engaged,” said Steve Kurz in an interview with Bloomberg TV on July 2.

Galaxy Digital is one of eight asset managers with a proposed spot Ether ETF currently under review with the United States Securities and Exchange Commission. It is collaborating with Invesco on the ETF.

“We’ve been doing this for months now, we did it with the Bitcoin ETF, the products are substantially similar — we know the plumbing, we know the process.”

Kurz’s estimate is largely in line with other ETF analyst estimates.

On June 28, Bloomberg ETF analyst Eric Balchunas pushed back his early July estimate for ETF approvals after the SEC took “extra time” to get back to applicants about their S-1 paperwork.

Galaxy Digital’s Steve Kurz speaking on Bloomberg TV. Source: Bloomberg

A July 2 Bloomberg report, citing two people familiar with the matter, added fuel to this theory, stating Ether ETF applicants have been given until July 8 to submit updated paperwork to address some minor issues.

This could be followed by an additional round of filings, they said.

Eight bidders, including BlackRock, Fidelity, 21Shares, Grayscale, Franklin Templeton, VanEck, iShares, and Galaxy/Invesco, have already been given the green light to list their shares on their respective exchanges.

The issuers now need an approved S-1 filing for the Ethereum ETFs to go live for trading.

In a July 2 research report, K33 Research suggested Ether ETFs would be a “golden egg” for ETH’s price and could even outperform Bitcoin in the first weeks after it goes live.

[ZH: ETH has held its relative strength to BTC over the past month as the odds of approval of ETFs increase]

K33 analysts Vetle Lunde and David Zimmerman expect Ether “to stumble immediately following the launch of the ETFs” but noted that, much like what happened with Bitcoin, inflows to the funds would likely bolster ETH’s price.

 

In what seems to be a last-ditch effort by the Biden administration to regain voter support as polling numbers and election odds tumble following last week’s disastrous debate, President Biden and Vermont Senator Bernie Sanders co-authored an opinion piece in USA Today, urging big pharma to slash the prices of anti-obesity drugs.

“The bad news is that Novo Nordisk is charging the American people unconscionably high prices for these prescription drugs. If your doctor prescribes you a GLP-1, the prices of Ozempic and Wegovy can be up to six times higher than prices in Canada, Germany, Denmark, and other major countries,” President Biden and Sen. Sanders wrote, adding, “That’s unacceptable.” 

They said, “If Novo Nordisk and other pharmaceutical companies refuse to substantially lower prescription drug prices in our country and end their greed, we will do everything within our power to end it for them.”

Under scrutiny from the White House, shares of Novo Nordisk and Eli Lilly declined following the news of the op-ed targeting Novo’s Ozempic and Wegovy and Lilly’s Mounjaro on Tuesday. Novo shares fell 1.5% in Copenhagen on Wednesday, while Lilly’s shares in New York have pared losses in premarket trading.

Companies with exposure to GLP-1s are pausing this week after the news as companies at risk from GLP-1s also trend lower. 

“It is most certainly not Americans’ patriotic duty to pay high drug prices at home so others abroad can enjoy the fair prices that every American is entitled to,” they wrote.

The op-ed follows Biden’s disastrous debate with former President Trump last Thursday amid increasing calls from leftist corporate media outlets and within the Democratic Party for the elderly president to step aside. 

“At a time when many Americans are dealing with the myriads of chronic illnesses, no one in our country should be forced to pay over $2,000 a year for the prescription drugs they need, not just seniors,” they wrote.

Soaring demand for Novo and Lilly’s anti-obesity drugs has pushed their shares to record highs. Some Wall Street analysts believe the market for these drugs could exceed $150 billion by the early 2030s. 

The latest data from the Centers for Disease Control and Prevention shows more than 40% of Americans are considered obese. 

“If the prices of these drugs are not substantially reduced, they have the potential to bankrupt the American healthcare system,” Biden and Sanders said. 

Biden and Sanders did not explain what exact actions they might take or inform Americans that exercising regularly and eating a healthy diet is an alternative way to lose weight.