Stocks Stumble As Investors Realize ISM “Good News” Is “Bad News” For Liquidity Lifelines

Stocks Stumble As Investors Realize ISM “Good News” Is “Bad News” For Liquidity Lifelines

Tyler Durden

Mon, 07/06/2020 – 10:16

After overnight exuberance – on the heels of China’s stock market surge – US equity markets are rapidly reversing gains after the record surge in ISM Services data this morning as investors begin to reslize that “good news is bad news” when it comes to keeping this alternative reality market afloat…

For now, Small Caps are getting hit the hardest…

Buy the dip?

via ZeroHedge News https://ift.tt/2BLpNcf Tyler Durden

Ghislaine Maxwell May Appear In Court As Soon As Friday

Ghislaine Maxwell May Appear In Court As Soon As Friday

Tyler Durden

Mon, 07/06/2020 – 10:10

US Prosecutors have requested a Friday bail hearing in New York for Ghislaine Maxwell – the longtime associate of Jeffrey Epstein, who is accused of procuring underage girls for the dead pedophile.

In a Sunday letter to Judge Alison Nathan of the US District Court for the Southern District of New York, acting US Attorney Audrey Strauss said that defense attorney Christian Everdell requested a Friday, July 10 hearing for the 58-year-old Maxwell, according to Reuters.

Maxwell is charged with four criminal counts related to procuring and transporting minors for illegal sex acts and two of perjury, according to the indictment by federal prosecutors in New York.

Epstein was awaiting trial on federal charges of trafficking minors between 2002 and 2005 when he was found hanged in an apparent suicide while in a New York City jail in August. He was 66. –Reuters

Ghislaine has been accused by three women of procuring and training young girls to perform massage and sexual acts on Epstein and his associates. 

Virginia Giuffre (previously named Virginia Roberts), one of Epstein’s alleged victims, claimed in a civil lawsuit that Maxwell “recruited” her into Epstein’s orbit, where she was forced to have sex with Epstein and his powerful friends, including Prince Andrew.

Giuffre asserts in her complaint that Maxwell, the sole defendant in the suit and the daughter of late publishing magnate Robert Maxwell, routinely recruited underaged girls for Epstein and was doing so when she approached the $9-an-hour locker room attendant at Mar-a-Lago in 1999 about giving massages to the wealthy investment banker.

Giuffre alleges that Maxwell ultimately trained her in how to give “massages” to Epstein that involved sex acts and, essentially, prostitution. When Maxwell publicly denied the allegations and called Giuffre a liar in 2015, that gave her the opening to head to federal court and file the defamation suit now headed for trial. –Politico

Though multiple survivors have alleged that Maxwell participated in Epstein’s alleged crimes, Maxwell had never been criminally charged until now. One thing that could stymie potential efforts to level charges against her – as a seemingly nervous Alan Dershowitz noted last week, is the infamous 2008 plea deal that Epstein struck with the US Attorney for Miami, Alexander Acosta, which found him serving just 13 months in prison after initially facing charges that could have garnered him a life sentence.

via ZeroHedge News https://ift.tt/3grjPf6 Tyler Durden

Surveys Suggest US Business Activity Saw Record Surge In June

Surveys Suggest US Business Activity Saw Record Surge In June

Tyler Durden

Mon, 07/06/2020 – 10:04

After US manufacturing surveys  soared by a record in June, the services sector surveys were both expected to confirm the re-opening euphoria… with all four surveys beating expectations and rising fast…

  • ISM Manufacturing in Expansion – 52.6 vs 49.8 expectations and 43.1 prior – best since April 2019

  • PMI Manufacturing in Contraction – 49.8 vs 49.6 expectations and 39.8 prior – a record 10 point jump

  • ISM Services in Expansion – 57.1 vs 46.9 expectations and 45.4 prior – record jump

  • PMI Services in Contraction – 47.9 vs 49.6 expectations and 37.5 prior – record jump

A massive surge in ISM’s Service survey, back to pre-Virus levels…

Source: Bloomberg

The purchasing managers’ measure of service-related business activity, which parallels the ISM’s factory production index, jumped a record 25 points to 66 in June, the second-highest in records dating back to 1997.

Source: Bloomberg

A gauge of new orders climbed nearly 20 points to a four-month high of 61.6.

The record surge in ISM was all driven by optimism (as opposed to real hard data flows):

  • “Advertisers are starting to place more advertisements and the media business is turning around. Generally, we are at the end of the employee furloughs and layoffs. Our work efforts have been focused on navigating COVID-19. We are now shifting to value-add projects. We are cautiously optimistic, although as we get closer to the presidential election, we are on guard of unprecedented civil and social unrest.” (Information)

  • “Activity level is holding steady, with the potential of a rebound in the near future.” (Mining)

  • Sales have picked up tremendously. Sporadic supply issues. Biggest concern for us is lumber shortages.” (Construction)

  • Surprising recovery to sales volume over the past four weeks.” (Agriculture, Forestry, Fishing & Hunting)

  • “Businesses are starting to reopen and the economy seems to be on the road to recovery, but let’s not get too complacent, [as] COVID-19 is still a pandemic, [and] a vaccine has not been developed. Economics is the reason for the push for businesses to reopen. Utmost care and awareness still needs to be cautiously and religiously followed.” (Accommodation & Food Services)

The ISM’s measure of services employment, however, remains weak and continues to signal job cuts. The gauge advanced to 43.1 in June from 31.8, but is well below a year-ago level of 55.2 as the pandemic continues to upend the labor market across industries.

Now that all the data is in, the IHS Markit Composite PMI Output Index posted 47.9 in June, up significantly from 37.0 in May, and was also higher than the earlier released ‘flash’ figure of 46.8. The slower overall decline in output was linked to the resumption of operations at manufacturers and many service providers.

Commenting on the latest survey results, Chris Williamson, Chief Business Economist at IHS Markit, said:

June saw a record surge in the PMI’s main gauge of business activity in the US as increasing numbers of companies returned to work and expanded their operations amid the reopening of the economy. The survey points to a strong initial rebound from the low point seen at the height of the pandemic lockdown in April, with indicators of output, demand, exports and employment all showing steep gains. Financial services and technology companies are now reporting improved demand, as are many consumer-facing companies. Many, however, remain constrained by social distancing measures.

“With business confidence in the outlook picking up again in June, a return to growth for the economy in the third quarter looks likely, though this will very much depend on the extent to which demand continues to strengthen. There remains a strong possibility that growth could tail off after the initial rebound due to weak demand and persistent virus containment measures. The need to reintroduce lockdowns to fight off second waves of coronavirus infections will pose a particular threat to recovery momentum, and could drive a return of the recession.

Companies expressed optimism towards the outlook for output over the coming year for the first time since March.

Source: Bloomberg

Behold the “V”-shaped recovery in soft survey sentiment data.

via ZeroHedge News https://ift.tt/3iAlwsJ Tyler Durden

Rabobank: The US Might Swap ‘The Apprentice’ For ‘Keeping Up With The Kardashians’

Rabobank: The US Might Swap ‘The Apprentice’ For ‘Keeping Up With The Kardashians’

Tyler Durden

Mon, 07/06/2020 – 09:47

Submitted by Michael Every of Rabobank

“Go West!”

Markets are starting to focus on the 2020 US elections. There are lots of headlines in the traditional mould of ‘This candidate is doing better than that candidate, and hence might win’: Biden is indeed polling far stronger than Trump across the board, in key states, and in key demographics.

However, it’s not hard to find articles suggesting that: Trump might step down if it looks like he is going to lose (in which case who would run?); Trump will find a constitutional trick to stay in office if he loses (which seems to counter the other story); Biden will step down for health reasons even if he wins; that a Dark Horse Duo plan might re-write the election; and that Fox News anchor Tucker Carlson might be the Republican candidate in 2024 if Trump loses (i.e., no return to pre-populism is on the cards in the long run).

Now we have a new wild card: Kanye West has announced he is running for president and has already been supported be Elon Musk, raising the possibility the US might swap The Apprentice for Keeping Up With The Kardashians. There are serious legal hurdles to getting on the ballot in all 50 states at this stage: either West must secure the backing of a small political party or run as an independent, where registration deadlines have already passed in New Mexico and North Carolina. However, he certainly has the money to run if he wishes to, further muddying the electoral waters. Might it draw votes from Biden and hence help Trump? Nothing is certain but uncertainty. Even within the traditional Republican-Democrat dyad there is little clarity on what each candidate is offering. Trump’s 4 July speech attacked “far-left fascism” and the economic messaging remains vaguely #MAGA; Biden’s policy platform (and even who his advisors are) is still far more of a mystery

“Go, West!”

Certain interested parties are trying to do scenario planning, however. One of them is Europe, where it is unclear if remaining bridges across the Atlantic will be rebuilt or burned a few months from now. Another is China. Note this South China Morning Post article titled “Time for China to decouple the yuan from US Dollar, former diplomat urges”. Zhou Li, a former deputy director of the CCP’s International Liaison Department is “the latest in a series of voices in China” to warn the USD Weapon is real and “has us by the throat”, will pose an “increasingly severe threat” to Chinese development –USD oil sanctions seen as a key area of vulnerability– and so preparations for gradual decoupling and CNY internationalisation should begin “now”. Li adds China should “give up the illusion” of friendship and instead prepare for full-fledged conflict with the US.

His specific proposal is to increase cross-border payments and clearing, local FX settlement, and maximize CNY usage in industrial supply chains. The problems in internationalizing CNY are manifold, however, which is why the USD weapon exists. The capital account would need to be opened, precipitating a collapse in CNY as money floods out. To try to counter that, it’s China bubble time again – not just in property, but in stocks: the Shanghai exchange was up 4% at time of writing today, and 7% last week, as Chinese press openly talk up a new bull market –despite a flat economy– going so far as to imply this is part of the struggle between the “world’s powers”, according to Bloomberg: with different percentages, the same dynamic is of course true in the US. Yet for both this is lethal can-kicking at best that only creates far larger problems.

Moreover, we are literally talking about Australia, for example, being persuaded to accept CNY and not USD from China for its iron ore shipments in the near future. To say the timing of such a shift is not politically auspicious is an understatement.    

“GoW-est”

Indeed, the global backdrop is of Cold War and, indeed, of ‘Gods of War’. Last week’s announcement of a 40% increase in the Aussie defence budget came alongside PM Morrison saying: “…we have not seen the conflation of global economic and strategic uncertainty now being experienced here in Australia, in our region, since the existential threat we faced when the global and regional order collapsed in the 1930s and 1940s.” Aussie public broadcaster ABC comments: “If Morrison’s defence strategy sounds like war talk, that’s because it is”. The same is true in India, where military forces continue to build up along the border opposite those of China. Yes, talks are ongoing: and so is mobilisation. The US also has two aircraft carrier strike groups near Taiwan at the moment: that’s not mobilisation, but it is a clear message. (While the EU is setting up a committee that might greenlight a working paper on a potential future petition.)

In short, this is not a backdrop in which Australia will be accepting CNY for its iron ore. No more than the UK will be accepting Huawei in its 5G, according to the British press. Indeed, irrevocable splits appear closer and closer. One could look at the dichotomy in the United Nations Human Rights Council over the new Hong Kong national security law. Or one could read the Wall Street Journal saying “For the US to stay in the WTO, China may have to leave”, underlining that technically tricky and unthinkable as that outcome is, it may be where we are heading anyway.

US election result depending, of course. What is Kanye’s policy on the WTO and China? What is Biden’s?!

Go, West!”

Meanwhile, the West continues to try to jumpstart its flailing economy. The latest example being floated is from the forward-looking UK Chancellor Sunak. UK furlough schemes may be rolled back going forwards now pubs are open again but Sunak is perhaps set to introduce GBP500 time-delimited consumption vouchers for all adults targeted towards struggling bricks-and-mortar and services firms to try to jump-start that part of the economy.

When we see that this is all back-stopped by the BoE, and that the UK goods sold must be made in the UK, then I, like Kanye West, will be dropping the mic and walking away. One wonders which politicians looking to be elected in 2020 will pick it up.

via ZeroHedge News https://ift.tt/3e5nhdM Tyler Durden

239 Scientists Ask WHO To Change Its Position on How COVID-19 Spreads Through Air

sipaphotosten883470

Research scientists want less emphasis on hand-washing, more on masks. A group of 239 scientists from 32 countries is asking the World Health Organization (WHO) to revise its position on the airborne spread of COVID-19.

The change could “cause an enormous shudder through the infection control society,” said New South Wales University epidemiologist Mary-Louise McLaws, part of a WHO committee on the issue.

But this brewing battle will likely have little impact on behavior, at least in America, where coronavirus containment measures have depended little on the slow-moving advice of public health bodies or state and federal authorities. Many of us have been doing things like wearing masks inside stores and other businesses, keeping our distance from others within them, and avoiding them if they’re too crowded—regardless of, or with no idea about, what the WHO recommends. We’ve been hearing for months that droplets from people infected with the new coronavirus could linger in the air and cause new infections, and doing our best to take precautions.

Precisely how much danger aerosol droplets from COVID-19 patients pose is still unclear.

“There is no incontrovertible proof that SARS-CoV-2 travels or is transmitted significantly by aerosols, but there is absolutely no evidence that it’s not,” Trish Greenhalgh, a doctor at the University of Oxford, told The New York Times.

For a while, however, most scientists have seemed more worried about the airborne spread of COVID-19 than surface-based spread.

But not the WHO. “Even in its latest update on the coronavirus, released June 29 … [it] said airborne transmission of the virus is possible only after medical procedures that produce aerosols, or droplets smaller than 5 microns,” notes the Times. The WHO’s focus has been to emphasize surface-based spread.

In not recommending precautions against airborne spread, the WHO is lagging behind not only scientists but basically everyone else, too.

This isn’t the first time in this pandemic that the WHO—or public health authorities and government “experts” more broadly—have sowed scientific confusion or lagged on recommending things that many people and businesses are already doing and many individual scientists and medical workers were already encouraging.

The good news: nobody seems to be waiting for the WHO catch up—and the precautions a lot of people are currently taking to stop indoor transmission are probably fine.

Bill Hanage, an epidemiologist at Harvard University, told the Times we needn’t go overboard with fear of the virus hanging in the air:

We have this notion that airborne transmission means droplets hanging in the air capable of infecting you many hours later, drifting down streets, through letter boxes and finding their way into homes everywhere.

But that’s not the case.

As the Times explains, “the coronavirus seemed to be most infectious when people were in prolonged contact at close range, especially indoors, and even more so in superspreader events—exactly what scientists would expect from aerosol transmission.”

WHO members told the Times that airborne spread was downplayed because they worried that it would distract people from handwashing or that it would lead poorer hospitals and countries to divert resources from other strategies.

In interviews, other scientists criticized this view as paternalistic. “‘We’re not going to say what we really think, because we think you can’t deal with it?’ I don’t think that’s right,” said Don Milton, an aerosol expert at the University of Maryland.


QUICK HITS

• “When A.B. 5 took effect in California on January 1, we didn’t see hundreds of companies convert independent contractors into employees. Instead, thousands of independent contractors lost work they loved, sometimes ending up without any income at all,” writes Kim Kavin.

• Defund U.S. Air Marshals? A thread:

• Food and Drug Administration commissioner Stephen Hahn said it’s “too early to tell” whether the Republican National Convention that’s scheduled for Jacksonville in August will be able to happen.

• Kanye West tweeted Saturday night that he’s running for president.

from Latest – Reason.com https://ift.tt/31SU8jF
via IFTTT

239 Scientists Ask WHO To Change Its Position on How COVID-19 Spreads Through Air

sipaphotosten883470

Research scientists want less emphasis on hand-washing, more on masks. A group of 239 scientists from 32 countries is asking the World Health Organization (WHO) to revise its position on the airborne spread of COVID-19.

The change could “cause an enormous shudder through the infection control society,” said New South Wales University epidemiologist Mary-Louise McLaws, part of a WHO committee on the issue.

But this brewing battle will likely have little impact on behavior, at least in America, where coronavirus containment measures have depended little on the slow-moving advice of public health bodies or state and federal authorities. Many of us have been doing things like wearing masks inside stores and other businesses, keeping our distance from others within them, and avoiding them if they’re too crowded—regardless of, or with no idea about, what the WHO recommends. We’ve been hearing for months that droplets from people infected with the new coronavirus could linger in the air and cause new infections, and doing our best to take precautions.

Precisely how much danger aerosol droplets from COVID-19 patients pose is still unclear.

“There is no incontrovertible proof that SARS-CoV-2 travels or is transmitted significantly by aerosols, but there is absolutely no evidence that it’s not,” Trish Greenhalgh, a doctor at the University of Oxford, told The New York Times.

For a while, however, most scientists have seemed more worried about the airborne spread of COVID-19 than surface-based spread.

But not the WHO. “Even in its latest update on the coronavirus, released June 29 … [it] said airborne transmission of the virus is possible only after medical procedures that produce aerosols, or droplets smaller than 5 microns,” notes the Times. The WHO’s focus has been to emphasize surface-based spread.

In not recommending precautions against airborne spread, the WHO is lagging behind not only scientists but basically everyone else, too.

This isn’t the first time in this pandemic that the WHO—or public health authorities and government “experts” more broadly—have sowed scientific confusion or lagged on recommending things that many people and businesses are already doing and many individual scientists and medical workers were already encouraging.

The good news: nobody seems to be waiting for the WHO catch up—and the precautions a lot of people are currently taking to stop indoor transmission are probably fine.

Bill Hanage, an epidemiologist at Harvard University, told the Times we needn’t go overboard with fear of the virus hanging in the air:

We have this notion that airborne transmission means droplets hanging in the air capable of infecting you many hours later, drifting down streets, through letter boxes and finding their way into homes everywhere.

But that’s not the case.

As the Times explains, “the coronavirus seemed to be most infectious when people were in prolonged contact at close range, especially indoors, and even more so in superspreader events—exactly what scientists would expect from aerosol transmission.”

WHO members told the Times that airborne spread was downplayed because they worried that it would distract people from handwashing or that it would lead poorer hospitals and countries to divert resources from other strategies.

In interviews, other scientists criticized this view as paternalistic. “‘We’re not going to say what we really think, because we think you can’t deal with it?’ I don’t think that’s right,” said Don Milton, an aerosol expert at the University of Maryland.


QUICK HITS

• “When A.B. 5 took effect in California on January 1, we didn’t see hundreds of companies convert independent contractors into employees. Instead, thousands of independent contractors lost work they loved, sometimes ending up without any income at all,” writes Kim Kavin.

• Defund U.S. Air Marshals? A thread:

• Food and Drug Administration commissioner Stephen Hahn said it’s “too early to tell” whether the Republican National Convention that’s scheduled for Jacksonville in August will be able to happen.

• Kanye West tweeted Saturday night that he’s running for president.

from Latest – Reason.com https://ift.tt/31SU8jF
via IFTTT

“Anarchists Have No Bounds” – Trump Rage-Tweets After Black Abolitionist Statue Torn Down In Rochester

“Anarchists Have No Bounds” – Trump Rage-Tweets After Black Abolitionist Statue Torn Down In Rochester

Tyler Durden

Mon, 07/06/2020 – 09:24

Update (0900ET): President Trump has https://t.co/8iEBxSHm52 via @BreitbartNews. This shows that these anarchists have no bounds!

— Donald J. Trump (@realDonaldTrump) July 6, 2020

“>rage-tweeted his disgust and confusion at the actions of whoever tore down the statue, blasting that:

“This shows that these anarchists have no bounds!”

*  *  *

As  Summit News’ Paul Joseph Watson detailed earlier, a statue of black anti-slavery activist Frederick Douglass was torn down overnight in Rochester, New York.

“Rochester Police are investigating damage done to a statue of Frederick Douglass in Maplewood Park. It happened over the weekend, and police say that the statue was torn off its base, and left about 50 feet from its pedestal. The statue had been placed over the fence to Genesee River gorge and was leaning against the fence,” reports WXXI News.

“Police say in addition to the damage at the bottom of the statue, one of the fingers on the left hand of the statue was damaged. Aside from that damage, there was no graffiti on the statue or in the surrounding park. The statue has been removed for repairs.”

Frederick Douglass was a social reformer who escaped from slavery in Maryland and went on to become a national leader of the abolitionist movement in Massachusetts and New York who was noted for his outstanding speeches and antislavery writings.

A 2 minute perusal of Wikipedia would have confirmed this fact for whoever decided to topple the statue, but facts don’t seem to matter anymore.

The possibility remains that the statue could have been removed by an anti-BLM agitator, but other statues of abolitionists and anti-slavery activists have been removed by Antifa and BLM mobs across the country.

Whoever took down the statue has not been caught and police say the motive remains unknown.

*  *  *

My voice is being silenced by free speech-hating Silicon Valley behemoths who want me disappeared forever. It is CRUCIAL that you support me. Please sign up for the free newsletter here. Donate to me on SubscribeStar here. Support my sponsor – Turbo Force – a supercharged boost of clean energy without the comedown.

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Facebook, Telegram Refuse To Process Requests For User Data Under New Hong Kong Nat Sec Law

Facebook, Telegram Refuse To Process Requests For User Data Under New Hong Kong Nat Sec Law

Tyler Durden

Mon, 07/06/2020 – 09:04

While corporate advertisers cut ties with Facebook over CEO Mark Zuckerberg’s refusal to kowtow to American SJWs urging the company to step up its policing of ‘hate speech’ and conservative political thought, Facebook is suspending its processing of all requests from Hong Kong law enforcement for information made in accordance with the new National Security law recently enacted by Beijing.

Whatsapp and Facebook are “pausing” all such reviews “pending further assessment of the impact of the National Security Law, including formal human rights due diligence and consultations with human rights experts,” a WhatsApp spokeswoman told the WSJ.

In the week since President Xi signed the law into effect, protesters who took to HK’s streets in defiance are already being arrested and prosecuted under the law, which makes carrying pro-democracy or pro-independence ‘signage’, including the Hong Kong independence flag, a fixture at Hong Kong’s pro-democracy protests last year.

While politicians, including many Republicans, have spoken out, American companies have been mostly silent on Hong Kong, probably fearing retaliation from the Chinese elite, who control access to the lucrative Chinese market. Facebook is the first social media company to implement such a brazen policy.

Reports emerged in WSJ earlier this morning that Facebook-owned Whatsapp, which is extremely popular in Hong Kong, would stop processing the requests. Facebook soon confirmed that the policy would be implemented company wide.

Facebook isn’t the only company taking such an inhospitable stance toward Beijing’s demands. Telegram, another popular messaging app, that, like Whatsapp, uses end-to-end encryption, is also refusing the process the nat sec law requests.

As 9to5Mac points out, both Telegram and Whatsapp are popular among protesters, who use them to organize and plan rallies. Since both apps use the end-to-end encryption, they wouldn’t even be able to hand over data on message content, since it’s not accessible even to them. But the fear is that Chinese authorities might infiltrate messaging groups used by protestors, and then seek information on the account holders.

NYT’s (now former) Beijing bureau chief Paul Mozur, who was among the American journalists booted from the country earlier this year, explained in a series of tweets how the decision to not comply is effectively resisting Beijing’s attempts to expand its “Great Firewall” to Hong Kong.

Just in, WhatsApp “pausing” reviews of law enforcement requests in Hong Kong until an assessment including human rights consultations of the new realities brought by the National Security Law. We’re in unprecedented territory with the law, tech cos very much caught in the middle.

Here’s a part of the statement: “We will pause reviewing law enforcement requests for WhatsApp user data from the HK government pending further assessment of the impact of the National Security Law, including formal human rights due diligence+consultations with HR experts.”

Telegram made a similar call today too. The back and forth over this will begin to chart a path for the future of Hong Kong’s internet under the national security law. It may well be internet cos. decide to treat HK requests as they would China ones. Which would be a big change.

We’ll see if Facebook more broadly follows WhatsApp’s lead on this. Also uncertain is Google and Twitter. Beijing will make firms pay if they don’t comply w/ the nat sec law. Feels like a first salvo in a dispute that could eventually lead to something like a Great Firewall in HK 

Of course, whether they are successful will depend, as Mozur points out, on whether Google, Twitter and other American tech giants decide to follow suit.

via ZeroHedge News https://ift.tt/2ADWHLq Tyler Durden

Trump Blames NASCAR’s “Lowest Ratings Ever” On Flag Decision & Bubba Wallace “Hoax”

Trump Blames NASCAR’s “Lowest Ratings Ever” On Flag Decision & Bubba Wallace “Hoax”

Tyler Durden

Mon, 07/06/2020 – 08:48

In a tweet that is sure to outrage the outrage mob even more, President Trump took aim at what many would consider one of his base’s favorite sports – NASCAR.

Trump claims NASCAR’s “lowest ratings EVER” are due to the decision to ban the Confederate Flag and what he calls the Bubba Wallace noose “hoax”

Interestingly, SpeedSports.com reports that this weekend’s IndyCar/NASCAR twin-bill drew strong ratings for NBC with a 30% increase when compared to 2019.

via ZeroHedge News https://ift.tt/2D8t1GY Tyler Durden

Robinhood Envy: China Tells Its Population To Flood Into Stocks In Repeat Of 2015 Bubble

Robinhood Envy: China Tells Its Population To Flood Into Stocks In Repeat Of 2015 Bubble

Tyler Durden

Mon, 07/06/2020 – 08:41

Five years after Beijing openly urged its population to buy stocks, creating a massive stock bubble which then promptly burst, resulting in massive losses for all those who bought at or near the top, Beijing is at it again, and after a week of staggering gains in China’s Shanghai Composite and the CSI 300 Index, on Monday state officials doubled down and a front-page editorial in the state-owned China’s Securities Journal said that fostering a “healthy” bull market after the pandemic is now more important to the economy than ever.

In other words, as we noted last night, we can now add one more race in the great geopolitical rivalry between the US and China – whose stonk bubble is biggest.

Similar to the Robinhood euphoria that has gripped millions of Gen-Z’ers and Millennials in the US, Chinese social media exploded with searches for the term “open a stock account.” The result: Monday saw the biggest one day jump in the Shanghai Composite in 5 years, which closed up 5.7%, the most since 2015.

Ever before Beijing official invitation to buy stocks on Monday the euphoria had made a dramatic comeback: leverage in the nation’s equities in the form of outstanding margin debt in China’s stock exchanges, has risen to 1.16 trillion yuan ($164 billion), the highest since the wake of 2015’s epic bubble…

… turnover has soared above 1 trillion yuan, suggesting the rally has broad support…

… and the CSI 300 Index has surged to hit a five-year high at the close of last week even before today’s latest surge.

The $1.65 trillion rebound since March has pushed the value of China’s stock market – the world’s second largest – to $8.4 trillion.

And, as Bloomberg warns, all of China’s major stock benchmarks, from indexes tracking Shanghai’s giant state-owned firms to those that follow start ups in Shenzhen, are technically overbought.

That however has not tempered retail investor enthusiasm, in fact quite the opposite and is also evident in China’s convertible bond market, where deals are seven times more competitive than last year. One note was so popular it was 170,600 times oversubscribed, the most since at least 2007.

Indeed, as history has repeatedly shown, such momentum-fueled rallies in China tend to accelerate as the fear of missing out grows, posing challenges for officials as they seek to limit speculation – especially when there’s plenty of liquidity looking for returns within the nation’s capital-controlled borders.

As Bloomberg cautions, the pace of recent Chinese gains matches the market’s melt-up that started in the final weeks of 2014: The CSI 300 Index has now added 14% in five days, the most since December that year. A gauge of momentum on the CSI 300 is also the strongest since late 2014. Shares of brokerages surged as daily turnover exceeded 1.5 trillion yuan ($213 billion) for the first time since 2015, indicating increasing participation from retail investors. Monday’s more-than-5% gain in stocks had only happened once before since the bubble burst.

To be sure, some have said comparisons to the 2014/2015 bubble are premature, citing a lower starting point for equity valuations, margin debt which is about half what it was at its peak five years ago, and a central bank which has taken a cautious approach to liquidity, withdrawing funds from the financial system for a seventh day on Monday. That said, it is only a matter of time before US daytraders – bored with the lack of insane momentum in US stocks – redirect their attention to Chinese stocks…

… and quickly send the Shanghai Composite to new all time highs, in the process trapping even more longs, and forcing most of China’s momentum-addicted middle class to chase local stocks…

… until it all comes crashing down again. And yes, it will be ironic if a few million unemployed US teenagers with Robinhood accounts end up sparking the middle-class revolution that Beijing has been so terrified of for decades, the next time the Chinese stock bubble bursts. But until then, there’s always money in the banana stand…

via ZeroHedge News https://ift.tt/38v7TGA Tyler Durden