Month: September 2024

Authored by Jack Phillips via The Epoch Times (emphasis ours),

Former U.S. Attorney General Bill Barr said there is no reason why the Department of Justice (DOJ) should have released a letter allegedly penned by the suspect of an alleged second assassination attempt against former President Donald Trump that was referenced during the suspect’s second court hearing on Monday.

The DOJ submitted the letter—which months before the alleged assassination attempt was left with an individual who contacted law enforcement after learning that Ryan Routh was the suspect—in a bid to keep him detained before his trial on federal weapons violations. A federal judge on Monday agreed to deny Routh’s request for bail, while prosecutors later said that they would seek attempted assassination charges against the suspect.

Barr told Fox News on Monday, however, that the DOJ should not have released the note because it contained a claim from Routh that he would offer a large sum of cash if he failed in his attempt.

“The letter … attempts to rouse people in incendiary terms” to take action against Trump, Barr said.

“There was no apparent justification for releasing this information at this stage.

“It served no purpose other than to risk inciting further violence.”

“I find that the weight of the evidence against the defendant is strong,” U.S. Magistrate Judge Ryon McCabe said during the bail hearing on Monday, according to court reporters. The judge sided with prosecutors in finding that Routh presents a risk to the public and also a flight risk, citing evidence presented in the court filing that Routh had searched on his phone how to travel from West Palm Beach, Florida, to Mexico.

The letter allegedly written by Routh in the months leading up to the alleged assassination attempt was addressed to the “World” and contained the suspect’s apparent admission that he was trying to assassinate Trump. The letter read, “But I failed you,” and added in part, “I tried my best and gave it all the gumption I could muster.”

Barr was the U.S. attorney general under the Trump administration before he resigned in late 2020. He previously served in that position under President George H.W. Bush.

“Even if DOJ thought it important to provide the letter to the court, it could have redacted inflammatory material or arranged to have the letter submitted under seal. It was rash to put out this letter in the midst of an election during which two attempts on the life of President Trump had been made,” the former attorney general told Fox News.

The letter and other new details were meant to bolster the DOJ’s contention that the 58-year-old suspect had engaged in a premeditated plan to assassinate Trump, which officials say was thwarted by a U.S. Secret Service agent who saw the suspect’s rifle in the bushes near Trump’s golf course in West Palm Beach while he was golfing. The agent then fired in Routh’s direction, forcing him to flee, authorities have said.

The handwritten letter allegedly describing Routh’s plans was placed in a box that he dropped off months earlier at the home of an unidentified person who did not open it until after last Sunday’s arrest, prosecutors said.

The box also contained ammunition, a metal pipe, building materials, tools, phones, and various letters. The person who received the box and contacted law enforcement was not identified in the DOJ’s detention memo and was described only as a “civilian witness.”

In Monday’s hearing, Kristy Militello, an assistant federal public defender representing Routh, asked during Monday’s hearing for Routh to be permitted to live with his sister in Greensboro, North Carolina, as the case moves forward. She argued that prosecutors had failed to show that he was a threat to the community and noted his track record of habitually showing up for court appearances throughout decades of legal troubles.

Previously, FBI officials said Routh was positioned near the golf course for 12 hours before he was arrested on Sept. 15. Routh didn’t fire any shots and had no direct line of sight to Trump, they said.

During the incident, authorities recovered an SKS-style rifle with a scope that authorities say had a scratched-off serial number. Routh currently faces charges of possession of a firearm as a felon and possession of a firearm with an obliterated serial number.

Routh has entered no plea, and his next court date is scheduled for next Monday, Sept. 30.

The alleged assassination plot was the second attempt in as many months against Trump, who was nearly struck in the skull by a bullet fired by a gunman at a rally in Butler, Pennsylvania, on July 13. The suspect in that case, Thomas Matthew Crooks, was shot and killed moments later by Secret Service snipers.

The Epoch Times contacted the DOJ for comment on Tuesday but received no word back.

The Associated Press contributed to this report.

Despite China’s ‘heroic’ measures to save its stock market, US (and European) equities were less than impressed…

Source: Bloomberg

…the yuan strengthened to 7.01/USD (strongest vs USD since May 2023)…

Source: Bloomberg

…and that sent the dollar index lower…

Source: Bloomberg

Domestically, bad news was bad news… consumer confidence crashed, home price appreciation slowed, and Richmond Fed manufacturing survey collapsed to COVID lockdown lows all sparked the biggest drop in ‘soft’ macro data since April…

Source: Bloomberg

…which pushed rate-cut expectations (dovishly) higher for 2024 (above 3 more rate-cuts expected now), while 2025 cuts remain flat-ish around 4 cuts…

Source: Bloomberg

…and while other asset classes were moved on this, gold shone most, surging up to a new record high above $2650…

Source: Bloomberg

This is gold’s best YTD performance in at least 30 years…

Source: Bloomberg

The US equity open saw immediate selling pressure but BTFD-ers stepped in to rescue stocks with Nasdaq outperforming (as the other majors clung to unchanged/small green on the day)…

The basket of Mag7 stocks shows the day’s big swing most clearly…

Source: Bloomberg

Most Shorted stocks also had a turbulent day… surging higher at the open only to be monkeyhammered to the lows of the day before a panic-bid squeezed it back to the highs….

Source: Bloomberg

Treasury yields were lower across the curve with the short-end outperforming (but the day was a rollercoaster with overnight selling erased by US session buying in USTs)…

Source: Bloomberg

The yield curve continues to steepen with 2s10s now at +20bps – its steepest since June 2022…

Source: Bloomberg

Crude prices bounced back from yesterday’s weakness (thanks to China) with WTI topping $72 – the highs of the month…

Source: Bloomberg

Bitcoin rallied up to $64,000 intraday – but remains somewhat rangebound…

Source: Bloomberg

And finally, still wondering why stocks just won’t stop rising despite all the ‘fears’…

Source: Bloomberg

Wonder no more – it’s not the economy, its global liquidity, stupid! And the Chinese just primed the pump for even more.

And if you are looking for a way to play that surge in liquidity that isn’t already priced in…

Source: Bloomberg

Bitcoin is ready to move.

Authored by Fred Fleitz via American Greatness,

Just in time for the 2024 presidential election, a new tell-all memoir has been published by a former senior Trump administration official that regurgitates the usual never-Trump criticisms of the former president. Like former National Security Adviser John Bolton’s spiteful 2020 tell-all book, former National Security Adviser H.R. McMaster’s tome, At War with Ourselves: My Tour of Duty in the Trump White House, is dripping with derision because of Trump’s decision to fire him after just over a year on the job.

McMaster is a learned man with a distinguished record of military service. He holds a Ph.D. in military history and is the author of several noteworthy books on national security. He claims to be a historian and quotes ancient Roman and Greek philosophers in his book.

However, McMaster has also long been part of the foreign policy establishment, and this got him in trouble with President Trump because he constantly deferred to establishment positions on foreign policy questions and opposed Trump’s often unconventional approaches. McMaster clearly gravitates toward elitist foreign policy circles and is more comfortable associating with the Council on Foreign Relations and Harvard University’s JFK School of Government than he is with Trump, whom he looked down on.

It was not a surprise when the Wall Street Journal ran an excerpt of McMaster’s book as a feature article titled “I Cannot Understand Putin’s Hold on Trump.” Although McMaster said allegations that the 2016 Trump campaign colluded with Russia “were found to be false,” he tries to revive this narrative by suggesting that Putin had somehow coopted Trump and portrays himself as a heroic Trump aide who was “swimming upstream” trying to warn the president of this.

This claim reflects the frustration of McMaster and the foreign policy establishment that, despite years of trying to discredit Trump for his statements and policies on Russia, Trump’s approach to Russia was far more successful than President Biden’s. McMaster and his establishment fellow travelers can’t get over the fact that Putin invaded neighboring states during three of the last four U.S. presidents but not Trump. They have no explanation for why U.S.-Russia relations were stable and peaceful during the Trump administration but a disaster during the Biden years.

Since McMaster can’t blame Trump for Russia invading Ukraine during Biden’s watch, he tries to change the subject by mocking Trump for the way he dealt with Putin and revealing alleged statements by Trump about Putin and other national security topics made in confidence to him in the Oval Office. Aside from the fact that revealing these candid conversations was a betrayal of the confidence of the president that he served, I doubt many Americans will believe such partisan accusations suddenly appearing just before the 2024 election.

On a related issue, McMaster’s account of President Trump’s anger with him over a statement he made at the February 2018 Munich Security Conference is quite enlightening. In response to a question by a Russian politician at this conference, McMaster said evidence in the Mueller investigation that Russia interfered in the 2016 presidential election was “incontrovertible.” In response to Trump’s anger over his comment, McMaster claimed he was quoted out of context and accused “those eager to undermine me” of stirring up Trump over his remark.

The reality is that this was not a matter of McMaster being misquoted or unnamed adversaries working against him with the president. Although McMaster’s comment about the Mueller report was in line with the New York Times editorial board, his remark obviously was not Trump’s view. As a cabinet member and the President’s National Security Adviser, McMaster had no business publicly disagreeing with Trump on such a sensitive issue, especially at a conference held overseas.

I was disappointed to read McMaster’s feeble attempt to blame President Trump for President Biden’s disastrous withdrawal from Afghanistan. He asserts that Trump’s agreement with the Taliban betrayed the Afghan government and notes that the Biden administration “claimed that it had been bound to adhere to the Trump administration’s negotiated timeline for withdrawal.” These claims are false because the Trump administration’s plan to withdraw from Afghanistan was to be done in phases and conditioned-based. The abrupt withdrawal ordered by Biden was very different and done with little planning.

This is the misleading rationale that the Biden administration and the Harris campaign are using to escape responsibility for the deadly Afghanistan withdrawal fiasco. McMaster was only too happy to assist them.

One issue that caused tension between McMaster and Trump was the 2015 nuclear deal with Iran (the JCPOA). McMaster claims he was at odds with Trump supporters who wanted to get out of the deal, as well as Secretary of State Rex Tillerson and Secretary of Defense James Mattis, because of his efforts to give the president options to pressure Iran to work with the U.S. and Europe to fix the JCPOA. Maybe Tillerson and Mattis were upset with McMaster for not supporting their clear position that the U.S. remain in the JCPOA. But the truth is, there was no chance Iran would agree to amend the JCPOA, and McMaster actually worked to protect a bad nuclear agreement beloved by liberal foreign policy experts and European leaders by postponing and preventing a Trump decision to withdraw from it.

Strangely enough, McMaster gives Trump credit for his many national security successes. These include repairing frayed relations with Israel and negotiating the Abraham Accords. McMaster credited Trump for long-term strategies to defeat ISIS and al-Qaeda, strengthening U.S. defense, recapitalizing the U.S. nuclear deterrent, and long-term strategies to compete in space and cyberspace. He lauded Trump for overruling the bureaucracy to move America’s embassy in Israel to Jerusalem, cutting off aid to Pakistan, and stopping U.S. payments to UNRWA, which was helping fund Hamas.

McMaster also approved of Trump’s needling of German Chancellor Angela Merkel over Germany’s dependence on Russian gas and praised him for shutting down the Nord Stream 2 pipeline, constructed to transport Russian gas to Germany, with U.S. sanctions.

However, McMaster’s praise for Trump’s accomplishments comes off as hypocritical because it is accompanied by constant criticism of Trump’s leadership, character, and beliefs. Much of this criticism was petty and personal.

I was surprised to read about the intense infighting between McMaster and Secretary of State Rex Tillerson and Secretary of Defense James Mattis. McMaster writes about Tillerson’s astounding incompetence in conducting foreign policy and his refusal to cooperate with the NSC. He portrays Tillerson and Mattis as constantly going behind the backs of himself and Trump. McMaster said Mattis told him he was trying to ensure that “reason triumphs over impulse,” meaning Mattis viewed himself as “reason” trying to rein in “impulse”—President  Trump. McMaster indicated that he mostly agreed with Tillerson and Mattis’s efforts and did not take offense to their “obstructionist and occasionally rude and petty behavior,” even though they faulted McMaster for “enabling” the president.

This incredible arrogance adds up to three cabinet members who thought the president should defer to them on foreign policy and not the man—Donald Trump—who was elected president by the American people to make national security decisions to protect their security.

McMaster begins his book with high-minded statements that his work is not partisan or about payback.

He wrote:

But I wrote this book to get past the hyper-partisanship and explain what really happened. I wrote with no political agenda; the politics of our day are pulling this country apart. And I wrote with no desire for requital. I wrote to recount what I experienced.

These claims are laughable because McMaster obviously timed the release of the book to cash in on the 2024 presidential election and the vast audience of Trump haters. It is also crystal clear that he is trying to affect the outcome of the 2024 presidential election.

McMaster’s book proves that he is part of the foreign policy establishment and that this made it impossible for him to serve effectively as President Trump’s National Security Adviser. McMaster’s constant efforts to resist and counter Trump’s national security policies, the disloyalty he demonstrates in his book, and his gratuitous and petty criticism prove that President Trump was right when he decided to fire McMaster after only 15 months on the job.

*  *  *

Fred Fleitz previously served as National Security Council chief of staff, CIA analyst, and a House Intelligence Committee staff member.

China’s PBOC rolled out the monetary cannons to prop up the world’s second-largest economy, unveiled in an exceptionally rare overnight briefing by the central bank chief alongside top securities and financial regulators. The key takeaway: The breadth of action only suggests Beijing is extremely worried about what’s coming down the pipe. 

Notably, the PBOC’s stimulus package follows about a week after the Fed’s emergency-like 50bps interest rate cut. Despite what seems like coordinated global monetary easing, Goldman analysts remain unconvinced that this coordinated effort will stabilize specific commodity prices, such as iron ore.

On Tuesday, Goldman’s Thomas Evans told clients to “fade iron ore rallies”… 

“Any rally is to be faded. The only concern is potential short covering ahead of the long holiday in China given how short the market is at the moment. In the short term, market can be very choppy due to crowded short positioning and policy shock to the upside. In the long term, steel overcapacity and growing supply in iron ore are the two biggest headwinds to ferrous supply chain, which can’t be fixed any time soon. The indicator to watch is whether, when and how much iron ore production would be cut from junior miners for market to rebalance,” Evans said. 

Evans noted, “Physical traders continue to buy fixed-price cargoes on the seaborne market below $100. CTA hold off from adding more shorts but seem to be rolling their shorts along the curve. Consumer interest seem to remain around 90$/mt along the curve. In options, both topside and downside gamma in prompt months are well bid upon higher realized volatility, in spite of the upcoming Golden Week decay.” 

The analyst said the market cannot rebalance “until steel capacities are shut down and junior iron ore miners cut production.”

He provided an overview of the iron ore market: 

1. Pre-holiday restocking is 60-70% done. Steel mills buy dips aggressively to replenish feedstock inventory for the Golden Week. The physical market liquidity sees the best week in Sep.

2. Traders hold off from offering down due to high purchase cost. Portside PBF basis (phys/fin spread) widens to a shy of +10rmb/mt from minus 5rmb/mt a month ago, implying phys holds up more firmly than paper on the way down.

3. IO inventory extends the draw by nearly 2mnt WoW on back of active restocking from onshore mills. Pig iron output picks up marginally on steel margin expansion to positive territory. Nothing to complain about the phys market. It is all about the excessive bearish sentiment and outlook that leads to the relentless sell off.

4. IO shipment from majors keeps the strong momentum. It is widely expected that IO inventory on port would build to above 160mnt+ by end of the year. We need to see a lower IO price for longer to trigger production cut from mining juniors to rebalance the market.

5. Seaborne premium market is faced with strong headwinds. PBF/NHGF/MACF all trade at discount of -$0.7/-2.9/-4.9/mt respectively due to abundant supply on water, port inventory overhang and negative import arb. It is said that Northern ports in China have run out of space for IO storage, leading to 1-week demurrage VS normally 1-2 days . Therefore, port authority is forcing traders with high inventory to move cargoes out of the ports ASAP.

6. The RB play of long everything (base/precious) VS short ferrous come into the spotlight again, which results in sharp underperformance in IO VS other industrial commodities. Short IO is mostly favored by both macro and discretionary fund managers to express bearish views in China’s distressed property and the loose IO SND.

Iron ore inventories remain well above average for this time of year, plus hot metal production in China is still seasonally in range. All of this combined, plus soft demand is a recipe for a continued bearish outlook.

Steel demand…

The big takeaway is that junior iron ore miners need to cut production to rebalance steel capacities. Until that happens, iron ore rallies should be sold, as per Goldman. Last week, the bank lowered its price forecast for the industrial metal. 

Tropical Storm Helene formed in the northwestern Caribbean on Tuesday morning and is forecasted to strengthen rapidly over the next few days, potentially making landfall along the coast of the Florida Panhandle and/or Florida west coast on Thursday.

As of late Tuesday morning, the National Hurricane Center’s latest advisory note said TS Helene was churning about 180 miles east-southeast of Cozumel, Mexico, with maximum sustained winds of 45 mph. The storm is moving northwest at 12 mph and could become a hurricane as soon as Wednesday. The storm could rapidly strengthen into a major hurricane by late Wednesday, if not early Thursday, before landfall. 

“The center of Helene will move across the far northwestern Caribbean Sea through tonight, then move across the eastern Gulf of Mexico Wednesday and Thursday, potentially reaching the Gulf Coast of Florida late Thursday,” NHC said.

The latest weather models show TS Helene’s cone of uncertainty making landfall around Florida’s Big Bend region. 

On Thursday, NHC forecasts huge storm surges, upwards of 12 feet or more in some areas, across the Big Bend region.  

Florida Governor Ron DeSantis declared a state of emergency on Monday for 61 counties. He said the state of emergency covers “every county in Florida outside Southeast Florida.”

DeSantis has requested a pre-disaster emergency declaration from FEMA. Several counties have already posted mandatory evacuations, including all residents in Charlotte and Franklin counties. Voluntary evacuations were issued for Gadsden County. 

In late August, Hurricane Idalia made landfall near Keaton Beach, Florida. So far this hurricane season, the tropics have been very quiet despite climate alarmists in leftist corporate media warning everyone that ‘boiling’ sea temperatures will cause destructive mega storms.

It seems like the ‘trust the science‘ crowd was very wrong. 

A federal jury in Texas on Sept. 23 rejected voter intimidation allegations against nearly all of the President Donald Trump supporters who surrounded a Biden–Harris campaign bus on a highway days before the 2020 election.

The campaign bus was traveling to Austin for an event when vehicles with Trump flags allegedly boxed it in.

Six Trump supporters were sued by people on board the bus, including former Texas Democrat lawmaker Wendy Davis, alleging violations of the Ku Klux Klan Act and other laws.

But now, as The Epoch Times’ Zachary Stieber reports, jurors cleared five of the six defendants.

The jury found Texas man Eliazar Cisneros responsible after his car brushed against another vehicle as the caravan of vehicles, dubbed the “Trump Train,” traveled down Interstate 35 from San Antonio to Austin on Oct. 30, 2020.

Cisneros was ordered to pay the bus driver $10,000 in damages and an additional $30,000 in punitive damages.

“Today’s victory sends a strong message that in our democracy every individual has the right to express their support for a political candidate without the fear that they will be threatened for doing so,” David Gins, one of the plaintiffs and a former staffer with the Biden–Harris campaign, said in a statement.

Tim Holloway, the Biden–Harris campaign bus driver, said that he hopes the verdict “discourages people from doing things in the name of politics that endanger lives.”

Joeylynn Mesaros, one of the defendants who was cleared, said defendants were “just ready to feel like normal people again.”

Randi Ceh, Steven Ceh, Robert Mesaros, and Dolores Park were the other defendants found not liable.

An attorney for Cisneros said his team would appeal.

“With regard to my client, it’s not over yet,” attorney Francisco Canseco said.

Video footage recorded by Davis showed Cisneros hitting a campaign volunteer’s car, resulting in traffic slowing to a crawl.

People on board the bus, which was not hit, called 911 and asked for a police escort, but no escort came. The FBI investigated the situation. Prosecutors brought no criminal charges.

The Ku Klux Klan Act has rarely been invoked in recent years. It was enacted in 1871.

U.S. District Judge Robert Pitman, who oversaw the case, had previously said that the defendants’ alleged conduct was “similar to a type of political violence that the Klan engaged in at the time of the act’s enactment.” If jurors found that the defendants violated the law, it would overcome defense arguments that the defendants were protected by the U.S. Constitution’s First Amendment, he added.

Authored by Steve Watson via Modernity.news,

The deranged leftist who attempted to kill president Trump was in possession of a list of venues and events where the GOP nominee was going to appear, according to a detention filing.

Ryan Routh appeared in court Monday charged with two federal gun crimes: Possession of a firearm by a convicted felon and possession, and receipt of a firearm with an obliterated serial number.

The man suspected by the FBI of planning to kill former Pres. Trump possessed a list that included dates from August to October of venues where Trump had appeared or was expected to be, prosecutors said in a detention filing on Monday. @kfaulders reports. https://t.co/0YOKUObLBP pic.twitter.com/Dh12qeIiKI

— ABC News Live (@ABCNewsLive) September 23, 2024

DOJ prosecutors noted that Routh also conducted several reconnaissance trips to Trump’s West Palm Beach golf course and his Mar-a-Lago residence months before he was caught.

Prosecutors said Ryan Routh is suspected to have traveled near the golf course and Trump’s Mar-a-Lago resort multiple times in the month leading up to his arrest. https://t.co/s7kkCyKpWY

— Katherine Faulders (@KFaulders) September 23, 2024

Routh’s apparent knowledge of intimate details of Trump’s schedule has led many to question where he got it from, with Rep. Eli Crane even suggesting there could be a mole within the Secret Service who is intent on seeing Trump killed.

It also emerged that Routh weirdly wrote a letter addressed “Dear world” outlining how he had tried to assassinate Trump, but had failed. Within the letter he offers $150,000 to anyone who can finish the job.

The DOJ filed the letter along with other materials contained within a box that Routh left with someone he knew.

The filing states, “On September 18, 2024, law enforcement was contacted by a civilian witness who stated that ROUTH had dropped off a box at his residence several months prior. After learning of the September 15, 2024, incident at Trump International, the witness opened the box. The witness stated the box contained ammunition, a metal pipe, miscellaneous building materials, tools, four phones, and various letters. One handwritten letter, addressed to ‘The World,’ stated, among other things, ‘This was an assassination attempt on Donald Trump but I failed you. I tried my best and gave it all the gumption I could muster. It is up to you now to finish the job; and I will offer $150,000 to whomever can complete the job.’“

Images of the letter are now all over the internet.

Ryan Routh failed to assassinate President Donald Trump.

Routh is now offering a $150,000 bounty for whomever kills President Trump.

The DOJ released the letter.

Why would the DOJ publicly release this letter?

I have an idea–they’re all in on it.

They all want him dead.… pic.twitter.com/UCmI9PuZMJ

— Breanna Morello (@BreannaMorello) September 23, 2024

The immediate question arising from this is why has the DOJ made public, in open court with no redactions, a direct call from a violent lunatic to target Trump for yet another assassination attempt?

Donald Trump Jr. is asking the same question.

His motives are unknown folks!!!! DOJ releasing this in a week but not the trans killer manifesto for months isn’t signaling anything.

— Donald Trump Jr. (@DonaldJTrumpJr) September 23, 2024

Meanwhile, Trump himself sent out an email to supporters Monday describing the federal charges brought against Routh as  a “slap on the wrist”

Trump wrote, “The Kamala Harris/Joe Biden Department of Justice and FBI are mishandling and downplaying the second assassination attempt on my life since July.”

He added, “The charges brought against the maniac assassin are a slap on the wrist. It’s no wonder, since the DOJ and FBI have been coming after me nonstop with Weaponized Lawfare since I announced my first Historic Campaign for the Presidency.” 

Trump continued, “The DOJ and FBI have a Conflict of Interest since they have been obsessed with ‘Getting Trump’ for so long,” adding “It’s very difficult to trust the Biden/Harris DOJ/FBI to investigate the assassination attempts, due to Election Interference and the FAKE CASES brought against me, including their control over local D.A.s and A.G.s.”

“Shockingly, after the bullet went through my ear on that fateful day in Butler, Pennsylvania, the FBI Director went before Congress and falsely said that it may not have been a bullet, ‘It was just glass or shrapnel’ – a lie condemned by even my worst enemies. What he said was disgraceful, especially since it was witnessed LIVE by millions of people, and he was forced to immediately retract,” Trump further urged.

“If the DOJ and FBI cannot do their job honestly and without bias,” Trump continued, “and hold the aspiring assassin responsible to the full extent of the Law, Governor Ron DeSantis and the State of Florida have already agreed to take the lead on the investigation and prosecution.”

He concluded, “Florida charges would be much more serious than the ones the FBI has announced. The TRUTH would be followed, wherever it leads. OUR JUSTICE SYSTEM IS CORRUPT AND DISCREDITED, especially as it pertains to the 45th President of the United States, Donald J. Trump. LET FLORIDA HANDLE THE CASE!”

*  *  *

Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews.

Speaking at the Marine Money conference in Singapore earlier today, Jeremy Nixon, CEO of Ocean Network Express, warned that container shipping disruptions in the southern Red Sea will persist “well into 2025.”

“Based on current geopolitical developments at the end of September, it looks quite likely that we will continue to have Cape of Good Hope routing well into 2025,” Nixon said on the sidelines of the conference. 

He said the diversion of container ships around the Cape of Good Hope to avoid Iran-backed Houthi drone and missile attacks in the Red Sea has resulted in forward cargo ordering jumping by 10% in North America on a ton-mile basis. He said this outpaced the injection of container supply for the year.

Nixon’s container ship fleet is comprised of more than 200 vessels worldwide. The direct result of tight container capacity has pushed prices higher.

Nixon also commented on looming labor strikes to hit US East/Gulf Coast ports next Tuesday: 

“We’re preparing now for the 30th of September when we expect that the terminals all along the East Coast will come to a stop.” 

Back to the Red Sea, the militaries of the US and European Allies have not ensured freedom of navigation and maritime security in the critical maritime chokepoint. 

Since October 2023, Houthi rebels have launched over 80 attacks on vessels in the region.

The latest Bloomberg data shows that no LNG vessels are traversing the critical waterway, with destinations in Europe, the US, and South America. 

Anas Alhajji, an energy market expert based in Dallas, recently wrote on X, “Whoever controls the Red Sea controls the trade of China, India, Russia, and the Middle East. Houthis are just a tool…” 

Authored by Lance Roberts via RealInvestmentAdvice.com,

Last week, the Federal Reserve made a significant move by cutting its overnight lending rate by 50 basis points. This marks the first rate cut since 2020, signaling the Fed is aggressively supporting the economy amid a backdrop of softening economic data. For investors, understanding how similar rate cuts have historically impacted markets and which sectors tend to benefit is key to navigating the months ahead.

In this post, we will explore the historical market performance following similar 50-basis-point rate cuts, highlight the best-performing sectors and market factors after such cuts, and outline three critical risks investors should be aware of heading into year-end.

Historical Outcomes To Rate Cuts

A 50-basis-point rate cut, especially the first one, is an aggressive action by the Fed. The Fed historically uses such a sizable cut during economic slowdowns or rising recession risks. Here are a few notable examples:

1. January 2001: Following the dot-com bubble bursting, the Fed cut rates by 50 basis points in January 2001 to stabilize the economy. While the S&P 500 initially rallied, the broader market eventually experienced continued declines due to the deepening tech recession.

2. October 2007: In the early stages of the Global Financial Crisis, the Fed implemented a 50-basis-point cut to inject liquidity into the system. As credit markets imploded due to an accelerating mortgage crisis, the immediate response from the stock market was positive, but the underlying financial instability resulted in prolonged market weakness throughout 2008.

3. July 2019: The Fed’s most recent rate cut was in July 2019, responding to concerns about global trade tensions and an economic slowdown. Again, the market initially rallied, with the S&P 500 posting positive returns in the months following the cut. That period is notable because the rate cut was more of a precautionary measure, as the most recent rate cut seems to be, rather than a reaction to an existing economic downturn.

This is just an analysis of the Federal Reserve’s most recent rate cuts. Reviewing the history of rate-cutting cycles back to 1960 reveals some interesting points. The table below shows the 3-month average of the Effective Fed Funds Rate, the total decrease during a rate-cutting cycle, and related market outcomes or events.

It is worth noting that while many analysts point to periods where the Fed cut rates and stocks initially rose over the next few months to a year, in many cases, those rate cuts preceded more significant events, as shown in the chart below.

The 1995 Analogy

For example, many analysts point to 1995 as a similar period to today, when the Fed initially cut rates, and the market continued to rise without realizing a recession. However, a difference between 1995 and today is the inversion of the yield curve. In 1995, the yield curve never inverted, signaling a healthy economy. As shown, the yield curve did not invert until 1998, and the Fed resumed its rate cuts with a recession following in 2000, triggering the “Dot.com” crisis.

It is not unusual for investors to see an initial positive response in the short term as they welcome the Fed’s efforts to stimulate economic growth. Furthermore, prevailing bullish sentiment and momentum continue pushing higher asset prices. As shown in the table above, the primary determinant of whether the market experiences a significant correction or not hinges on a recessionary impact.

Historically, performance over a six-month to two-year period is primarily dependent on whether the rate cut successfully stimulates the economy or if deeper economic issues persist. For example, in 2001 and 2007, the six-month performance following the rate cuts was negative due to underlying economic challenges, while in 2019, the market continued to perform well until the onset of the pandemic-related economic shutdown.

Given this background, where should investors focus their attention?

Best-Performing Sectors and Market Factors

When the Federal Reserve reduces interest rates, in this case by 50 basis points, the decline in borrowing costs tends to benefit different sectors and asset classes in varying ways. While there are many options, here are five areas to start your research based on historical trends.

1. Large-Cap Stocks: Large-cap stocks, and in particular, the “Mega-cap” stocks, tend to benefit the most immediately after a rate cut. With strong balance sheets and the ability to access cheaper capital, they can expand operations, boost profit margins, and, most importantly, buy back shares. Furthermore, these companies are highly liquid and benefit more from passive indexing flows than small and mid-cap companies.

2. Small-Cap Stocks: Speaking of small-cap stocks, they tend to see a delayed response. These companies primarily use floating-rate debt; lower borrowing costs improve their financial strength. However, they are more sensitive to economic cycles, so recessions remain an important risk. Investors favor large-cap stocks, but small-caps may gain momentum once economic conditions stabilize.

3. Treasury Bonds: Bonds tend to perform well during interest rate cuts. Bond prices typically rise as rates fall, providing investors with capital appreciation. Longer-duration Treasury bonds historically perform as lower interest rates drive demand for fixed-income assets.

4. Real Estate Investment Trusts (REITs): REITs benefit significantly from rate cuts, as lower interest rates reduce borrowing costs for real estate acquisitions and development. Additionally, REITs provide steady income through dividends, which become more attractive as bond yields decline.

5. Gold: Gold tends to perform well during an interest rate-cutting cycle when the economy slips into a recession and the dollar weakens. However, gold has already had a tremendous run in anticipation of the Fed’s most recent rate cut, so much will depend on the strength or weakness of the dollar and economic outcomes.

Some Areas To Consider

With that information, and given the historical performance of various sectors and market factors following rate cuts, here’s how investors might consider positioning their portfolios:

• Large-Cap Stocks: Focus on high-quality, large-cap stocks that can benefit from lower borrowing costs and have a strong track record of weathering economic uncertainty. Companies in consumer staples, technology, and healthcare tend to perform well in rate-cut environments.

• Fixed Income: To capitalize on rising bond prices, consider adding exposure to long-term bonds or bond ETFs. Fixed-income investments provide stability and income, which can be particularly attractive in a low-rate environment.

• REITs and Income-Producing Assets: Look for opportunities in REITs and other income-generating assets, which benefit from lower interest rates and provide reliable cash flow through dividends.

• Small/Midcap Companies: Consider selective exposure to small and mid-capitalization companies that have low debt levels and strong balance sheets and pay a dividend.

Three Key Risks for Investors Post Rate-Cut

While there are potential benefits to a Fed rate cut, there are also risks:

1. Presidential Election: Given the disparity between the current candidate’s economic policies, particularly around tax rates and deficit spending, there is a risk of market participants derisking ahead of the outcome. One key issue to focus on is the outcome of the congressional races. A bifurcated outcome between control of the House and Senate would be most favorable for Wall Street as it would limit any drastic changes to current economic and regulatory policies.

2. Economic Recession: As noted above, the most significant determinant between rate-cutting cycles, market corrections, and bear markets is the onset of a recession. The markets will likely respond negatively if upcoming data shows significant deterioration, particularly in employment and services-related data. In such an event, sectors such as financials and cyclicals are particularly vulnerable to prolonged economic downturns, as banks may face higher loan defaults and reduced demand for their services.

3. Geopolitical Risks: Geopolitical tensions, particularly around trade, energy supply, or global conflicts, can exacerbate market volatility. External shocks such as escalating trade wars or energy supply concerns can weigh on investor sentiment and disrupt global markets even with lower rates. For instance, disruptions in the oil market or increased trade tensions with major economies could derail the positive effects of rate cuts.

4. The Japanese Yen: In August, we discussed the impact of the “Yen Carry Trade” on the financial markets. That risk has not subsided, particularly should the Bank of Japan continue to hike interest rates while the rest of the world is cutting them. Such a move by the Bank of Japan would likely create another spike in the Japanese yen, creating another “margin call” for those highly levered positions held by Wall Street.

Conclusion: Navigating the Market Post-Rate Cut

The Federal Reserve’s 50-basis-point rate cut signals a proactive effort to support the economy amid potential risks. Historically, the S&P 500 and various sectors have responded positively to rate cuts in the short term, with large-cap stocks and bonds often leading the way. However, investors should remain cautious of risks such as the upcoming election, recession, geopolitical tensions, and the Japanese Yen that could impact market performance in the coming months.

At RIA Advisors, we remain allocated to the equity markets as momentum, relative strength, and the overall trend remain bullishly biased. However, we continue to regularly implement risk management protocols, evaluate opportunities, and closely watch the incoming economic data.

While everyone is trying to guess how this turns out, history suggests exercising some caution seems prudent. For us, it is always preferable to err on the side of caution. While it is easy to reallocate cash into equities, it is much more difficult to recoup losses.

Trade accordingly.

Russia has taken the rare step of issuing a blanket condemnation of Israeli military actions in Lebanon. On Tuesday its foreign ministry spokeswoman Maria Zakharova said in a scathing statement that these escalated attacks which have reached Beirut could destabilize the whole Middle East region.

She began the statement by reviewing that starting Monday “the Israeli leadership announced that the IDF had launched an offensive operation, dubbed ‘Northern Arrows,’ aimed at undermining the military infrastructure of the Hezbollah movement.” At this point Israel has mounted three major missile strikes on Beirut, specifically the southern suburbs.

“Hezbollah, in turn, intensified its rocket attacks on military facilities in Israel,” she continued. However, Israel would disagree with the Kremlin spokeswoman’s assessment, as it has pointed to rocket attacks on Israeli civilian towns and settlements, which have also resulted in the indefinite evacuation of at least 80,000 people since last year.

Zakharova then stressed, “We strongly condemn the large-scale military attacks against Lebanon. We would especially like to emphasize our principled position on the inadmissibility of indiscriminate attacks that target civilians.”

She urged that the international community must press both sides to halt the “spiral of violence” before the situation “gets out of control”. 

“We must do everything possible to prevent the Middle East from plunging into a full-scale armed conflict, the devastating consequences of which will inevitably affect everyone – both in the region and beyond,” the diplomat said. “We proceed from the fact that the security of any state in the region should not be ensured at the expense of others,” she said.

Israel on Monday reported an attempt by Iran-linked paramilitaries in Iraq to launch a missile on its territory, which wasn’t successful. As for Syria, some regional pundits have expressed surprise that President Bashar Al-Assad has been relatively quiet and appears ready to stay on the sidelines.

Iran has meanwhile warned that Israel is seeking to use its offensive in Lebanon as a ‘trap’ to draw in Iran and the plunge the whole region into crisis.

Israel has said Hezbollah has for the past year been launching rockets attacks on Israeli civilians, while others view the IDF’s new offensive as being disproportionate…

https://t.co/5OhY72JHLy pic.twitter.com/7JBs9PXkck

— Adam Johnson (@adamjohnsonCHI) September 23, 2024

Iranian President Masoud Pezeshkian alleged that Israel is laying “traps”. Times of Israel describes that “Pezeshkian pointed to the deadly explosions of pagers, walkie-talkies and other electronic devices in Lebanon last week, which he blamed on Israel, and the assassination of Hamas’s political leader Ismail Haniyeh in Tehran on the eve of his inauguration.”

“They are dragging us to a point where we do not wish to go,” the Iranian leader said in reference to Israel and the Netanyahu government. “There is no winner in warfare. We are only fooling ourselves” if we believe that, Pezeshkian said.