Category: zerohedge

S&P futures rose overnight alongside European and Asian market in another quiet session, as commodities smashed higher ahead of a blockbuster jobs report (whispers of a 2MM+ print) which will cap a series of strong economic reports this week. Global stocks headed for their first weekly gain in three with MSCI’s world index rising about 0.1% and on course for a 0.4% gain this week amid a surge in commodity prices. Copper joined iron ore and steel by hitting a new all-time record as expectations that rebounding economies will spur a boom in global demand, while the Bloomberg Commodity Spot Index jumped to its highest level since 2011.

At 730 am ET, Dow e-minis were up 80 points, or 0.22%, S&P 500 e-minis were up 9.00 points, or 0.22%, and Nasdaq 100 e-minis were up 31.50 points, or 0.23%.

Sentiment was bolstered by China’s latest trade data which showed exports rose well ahead of expectations and imports saw the fastest growth since 2011 on the back of soaring commodity prices.

In premarket trading, most stocks traded in a tight range with mega-cap growth stocks such as Microsoft, Apple, Amazon.com and Facebook rising between 0.2% and 0.6%. Economically sensitive cyclical stocks also firmed, with Boeing up 0.4%, Goldman Sachs Group rising 0.5% and Chevron gaining 0.1%.

Traders now turn to Friday’s payrolls numbers, which are expected to show a million jobs added in April after rising by 916,000 in March. The data, due at 8:30 a.m. ET, is also expected to show that the unemployment rate fell to 5.8% from 6.0% and average hourly earnings dropped by 0.4% – the first annual decline in history – after a 4.2% increase in March.

“The U.S. employment report is bound to be the center of attention today,” said UBS chief economist Paul Donovan. “It’s not just going to be the overall employment data that will be of interest, but the patterns of employment by state and by industry that will be useful in assessing the direction of the U.S. economy.”

“The dilemma investors are facing right now is that while strong U.S. economic data is positive news, the accelerating growth is increasing the risk of an overheating economy and the Federal Reserve being forced to hike rates early,” said Milan Cutkovic, market analyst at Axi. It’s also why some have warned that a jobs number above 2 million could lead to a waterfall in risk.

European stocks traded near session highs after dripping earlier following comments from ECB Governing Council member Martins Kazaks became the latest to hint at an imminent taper when he said the European Central Bank could decide to scale back its emergency bond-buying program as early as next month if the euro-area economy doesn’t deteriorate. Kazaks, who also heads Latvia’s central bank, said the ECB’s pledge to keep financing conditions favorable remains key to determining how much support the 19-nation bloc needs to recover.  “If financial conditions remain favorable, in June we can decide to buy less,” Kazaks said in an interview on Thursday. “Flexibility is at the very core of PEPP.

The Stoxx Europe 600 Index rose 0.5% to 443.2 with miners, industrials and financial services the best performing sectors. Miners lead gains after copper hit an all time high. Miners with copper exposure like Rio Tinto, Glencore, BHP, Anglo American already advanced. Other copper miners that may also gain includes, TECK, FM CN, SCCO, CS CN, CMMC CN, ERO CN, LUN CN. Here are some of the biggest European movers today:

• Adidas shares jump as much as 8.8%, the most intraday since November, after the German sportswear maker reported 1Q results and increased its sales forecast for the year, impressing analysts.
• Meggitt shares jump as much as 16%, the most since Nov. 9. A report that aerospace company Woodward is working with advisers on a possible deal for the U.K. firm appears to make sense strategically, Jefferies writes in a note.
• KGHM shares soar as much as 6.2%, to the Polish copper producer’s highest since its 1997 debut, as the metal price jumps to a record. And Warsaw’s benchmark WIG20 index rises as much as 2%, fueled by KGHM’s gains.
• Siemens shares rise as much as 3.3% after the German industrial group’s results topped expectations, with analysts noting strength across the board.
• Rubis shares fall as much as 7.2% after Oddo BHF cuts the energy storage and distribution company to neutral from outperform, citing “limited” upside after recent gains.
• Klepierre shares fall as much as 5.4% after the French real-estate company lowered its FY net current cash-flow guidance due to longer-than-expected Covid-19 lockdowns.

Asian stocks also rose, heading for their first weekly gain since mid-April, as a rally in semiconductor-related shares helped offset a late sell-off in China. The MSCI Asia Pacific Index advanced for a second day. Chip-related stocks including TSMC and Tokyo Electron contributed heavily to the day’s gains, while game console developer Nintendo and Sony Group were among the biggest drags after the Kyoto-based studio warned of component shortages and announced a conservative profit outlook. China stocks slumped in the afternoon and notched their worst week since mid-March, as worries that the U.S. is maintaining investment limits in some Chinese companies outweighed better-than-expected growth in export data. Concerns the Biden administration will keep the investment bans imposed under former U.S. President Donald Trump add to investors’ worries of rising geopolitical tensions faced by China as Beijing halts its high-level economic dialogues with Australia. In addition, India’s Covid-19 outbreak remains a key risk investors should watch, as cases there have kept growing and could prompt a national lockdown, Yeap Jun Rong, a market strategist at IG Asia Pte wrote in a note. India reported a record 412,262 new infections and 3,980 deaths on Thursday, with experts saying that the reported figures likely underplay the real toll. That said, a mathematical model prepared by advisers to Prime Minister Narendra Modi suggests the country’s outbreak could peak in coming days

Chinese stocks notched their worst week since mid March, pushed lower by a slump in tech shares after news that the U.S. will likely maintain limits on investments in certain Chinese firms. The benchmark CSI 300 index fell 1.3% to close at 4,996.05 points on Friday, extending the week’s decline to 2.5%. Information technology firms were the worst performers, with Will Semiconductor falling 9.9% in Shanghai while Advanced Micro-Fabrication dropped 6.6%. A subgauge of that sector fell by the most in nearly two months. Consumer staples also extended recent declines this week, with former investor darlings like Kweichow Moutai and Anhui Gujing leading the retreat on concerns that were few catalysts ahead that could lift the sector. “There is still lots of profit-taking pressure in the sector and valuations are still very expensive,” Li Liangxu, a fund manager at Guangdong Ronghao Asset Management, said by phone. “Sell offs in heavyweight stocks like Moutai are far from over.” Friday’s selloff comes after a similar decline a day earlier after news that the U.S. will back a proposal to waive intellectual-property protections for Covid-19 jabs sent shares of Chinese vaccine makers tumbling. In Hong Kong, tech stocks also fell, with the Hang Seng Tech Index nearing the lowest this year. Meituan was set to fall for an eighth straight day, on track for its longest losing streak since the company went public in 2018. Alibaba was down as much as 1.2% while Tencent slid 1.7%.

In rates, yields were within a basis point of Thursday’s closing levels as trading activity simmered ahead of April jobs report. U.S. stock futures are higher with commodities, weighing slightly on bonds. Treasury 10-year yields around 1.575% outperform bunds by ~1bp with gilts keeping pace; dunds dipped after the abovementioned taper comments from ECB’s Kazaks who said a June decision to slow bond buying is possible. German curve bear flattens slightly, USTs and gilts bear steepen; ranges are tight ahead of today’s payrolls release. Peripheral and semi-core spreads widen with long-end Italy underperforming.

In FX, the safe-haven dollar sank to its lowest level this week against a basket of major peers on Friday ahead of the jobs report, as firmness in global stock markets boosted risk appetite.the Bloomberg Dollar Spot Index was on the back foot and the dollar traded mixed versus its Group-of-10 peers. European currencies were the top performers, while commodity currencies underperformed despite higher metal prices. The euro rose to a one-week high of 1.2089 after ECB Governing Council member Martins Kazaks said the central bank could decide to scale back its emergency bond-buying program as early as next month if the euro-area economy doesn’t deteriorate. The pound gained as the Bank of England’s upgraded forecasts filtered through and as investors awaited results from Scottish parliamentary elections. Australia’s April 2024 sovereign bond, the target maturity for the central bank’s yield control, surged on short- covering, sending yields to a record low of 0.06%. The yen was little changed against the dollar, with traders staying on the sidelines ahead of U.S. non-farm payrolls data. Japanese bonds were narrowly mixed.

In commodities, it was all about metals again as copper soared to an all-time high as optimism about a global rebound from the pandemic spurs a surge across commodities markets. “Get ready for payrolls, they could be huge,” Chris Weston, head of research at broker Pepperstone in Melbourne, wrote in a note for clients. “The commodity space is the talk,” and financials are the “bull play” going into the payrolls report, he said. Gold headed for a 2.5% weekly gain, the most since December, as the weaker dollar and easing Treasury yields propelled the precious metal, an inflation hedge, above the key $1,800 an ounce psychological level to last trade at $1,813.54.

Looking at the day ahead, and the aforementioned US jobs report for April will be the main highlight for markets. Central bank speakers include ECB President Lagarde, the BoE’s Broadbent and Haldane, and the Fed’s Barkin.

Market Snapshot

• S&P 500 futures up 0.12% at 4,199.25
• STOXX Europe 600 up 0.43% to 442.91
• MXAP up 0.3% to 207.00
• MXAPJ up 0.4% to 693.62
• Nikkei little changed at 29,357.82
• Topix up 0.3% to 1,933.05
• Hang Seng Index little changed at 28,610.65
• Shanghai Composite down 0.7% to 3,418.87
• Sensex up 0.5% to 49,204.20
• Australia S&P/ASX 200 up 0.3% to 7,080.83
• Kospi up 0.6% to 3,197.20
• German 10Y yield rose 0.6 bps to -0.219%
• Euro up 0.18% to $1.2087
• Brent Futures little changed at $68.07/bbl
• Gold spot up 0.3% to $1,820.71
• U.S. Dollar Index down 0.18% to 90.79

Top Overnight News from Bloomberg

• survey of economists. Imports climbed 43.1%, a sign of strong domestic demand and soaring commodity prices, resulting in a bigger-than-expected trade surplus of $42.85 billion for the month
• One of the biggest Brexit battlegrounds between the European Union and the U.K. now has a price tag: at least $2.4 million a day. That’s how much any move by the European Union to cut off access to London’s dominant clearinghouses for derivatives could cost traders in euro interest rate swaps, net of buying, according to an estimate from Albert Menkveld, professor of finance at Vrije Universiteit Amsterdam, who has sat on advisory panels to European regulatory authorities
• A large option bet on quicker rate-hikes by the Federal Reserve got bigger this week, even as officials pushed back against hawkish expectations. The wager — now carrying a notional value of $40 billion — is focused on a possible surprise at the annual August symposium in Jackson Hole, which has been used in the past by central bankers to signal changes in monetary policy
• One of the constants in the currency space is for euro-yen options to trade at a premium for downside protection. As the pair’s volatility skew flattens, it remains to be seen whether we are looking at a game changer or a move that will be seen as another opportunity to fade lifetime range extremes.
• A rising appetite for risk across a variety of asset markets is stretching valuations and creating vulnerabilities in the U.S. financial system, the Federal Reserve said in its semi-annual financial stability report
• The Reserve Bank of Australia released an upbeat outlook for the economy showing trajectories for growth and unemployment that suggest it’s on track to drive faster pay gains and inflation back toward its 2-3% target
• China’s exports rose more than expected in April and imports climbed, reflecting strong domestic and international demand and surging commodity prices
• Voting has finished in crucial British elections set to shape the future of the U.K., in the first electoral test for Prime Minister Boris Johnson’s government since the coronavirus pandemic struck. Counting of ballot papers will take place over the coming days in contests for the parliaments of Scotland and Wales, the Mayor of London and English local councils
• Copper soared to an all-time high, topping the previous record set in 2011, on expectations that rebounding economies will spur a boom in global demand. Oil headed for a second straight weekly advance as investors bet on rising energy demand amid a broad rally in commodities
• Japan is set to extend a virus state of emergency that includes Tokyo to the end of May, public broadcaster NHK reported. A mathematical model prepared by advisers to Prime Minister Narendra Modi suggests India’s coronavirus outbreak, which saw record cases and deaths Thursday, could peak in the coming days

Asian equity markets traded mostly higher following the late ramp up on Wall St. and encouraging trade data from China, but with gains capped ahead of the key risk US NFP jobs data and as increased US-China hawkish rhetoric contributed to the tentativeness. ASX 200 (+0.3%) was lifted by strength in mining names after gold prices reclaimed the USD 1800/oz level and with Dalian iron ore prices at record highs, while the latest RBA Statement on Monetary Policy saw upgrades to the central bank’s economic growth forecasts with GDP seen at 9.25% in June and 4.75% in December this year. Nikkei 225 (+0.1%) was kept afloat after yesterday’s outperformance although upside was limited as Japan braces for an extension of the state of emergency for four key areas including Tokyo and with the government seeking to add Aichi and Fukuoka to the emergency declaration. Hang Seng (-0.1%) and Shanghai Comp. (-0.6%) benefitted from firm Chinese Caixin Services and Composite PMI data in which the former printed a 4-month high, while the latest Chinese trade data mostly topped expectations. However, risk appetite in the mainland was affected by the hawkish US-China rhetoric in which sources noted that top US and Chinese trade negotiators may hold talks soon to review the Phase 1 trade deal and that the Biden administration is likely to go ahead with former President Trump’s China investment ban, while there were also comments from President Biden that the Chinese are “eating our lunch” economically and officials noted that Secretary of State Blinken is to keep pressure on China in his UN speech today. Finally, 10yr JGBs were flat amid the mild positive mood across stocks and after the choppy lead in T-notes, while firmer demand at the enhanced liquidity auction for 2yr, 5yr, 10yr and 20yr JGBs was also largely ignored by prices.

Top Asian News

• Buyers Remorse Afflicts China’s Stock Traders Seeing Losses
• Taiwan Central Banker Says Currency Policy Faces ‘Turning Point’
• Huarong Wired Funds for Offshore Bond Coupons Due Friday
• Billionaire Li Ka-shing Bets on Southeast Asia’s Tech Startups
• Asia Is Exception as Emerging Markets Start to Look Fragile

Major European bourses trade mostly positive but off best levels at the time of writing (Euro Stoxx 50 +0.3%) as the initial optimism seen at the cash open turned more into a cautious tone as the US labour market report looms. The initial downside across the European equity complex coincided with comments from ECB’s Kazak who suggested that a decision on slowing down bond purchases is possible in June, although the comments do not make it clear as to whether a slow-down equates to a return to the pre-March pace, or a more pronounced decrease. US equity futures meanwhile remain caged heading into the US labour market report with the main contracts largely unchanged. Back to Europe, the DAX (+1.0%) remains the outperformer as Adidas (+8%) and Siemens (+3%) remain elevated post-earnings – with the former upgrading its guidance – whilst the FTSE MIB (-0.1%) is the laggard after outperforming yesterday. Sectors in Europe are mostly firmer with Basic Resources outperforming as base metal prices remain firm, closely followed by Oil & Gas whilst the Personal and Household Goods sector is propped up by Adidas. Autos meanwhile gave up some gains as the continued chip shortage remains a grey cloud over automakers, with Volkswagen (-1%), Renault (-0.7%), Stellantis (-0.1%) all subdued but BMW (+0.9%) bucks the trend after stellar earnings – with deliveries of electrified vehicles more than doubling – although the Co. warned that the rising cost of raw materials could dampen earnings ahead. The Construction/Manufacturing sector remains the laggard with rising costs of materials eating into margins. In terms of individual movers, Meggitt (+11%) rose around 15% at the open amid a report suggesting that Woodward is working with banks on a potential deal with Meggitt named as a potential target.

Top European News

• ECB’s Kazaks Says June Decision to Slow Bond-Buying Possible
• Siemens Lifts Guidance as China-Led Recovery Gains Momentum
• British Airways Owner Subdued on Impact of U.K. Travel Restart
• BMW Expects to Hit High End of Margin Goal Despite Rising Costs
• U.K.’s Johnson Wins Historic By-Election on Brexit, Vaccine Bump

In FX, not the best performing major or even the biggest mover, but certainly volatile in the run up to monthly US jobs data that often keeps currency moves relatively contained. However, reports of a big buy order in Eur/Usd on a break of 1.2070 saw the headline pair extend above the 100 DMA to post a new w-t-d peak circa 1.2090, and given the timing of the spike could well have been linked to or sparked by comments from ECB’s Kazaks on the prospect of scaling down the pace of QE from June – see 8.15BST post on the Headline Feed for more details, analysis and some context. 1.2100 may cap further Euro gains for psychological reasons and the fact that 1.4 bn option expiry interest resides at the strike, but by the same token 1.4 bn between 1.2050-40 and 1.8 bn from 1.2035-25 should provide support over NFP and into the NY cut.

• GBP – The Pound is actually topping the G10 ranks, and in truth has been relatively resilient around 1.3900 vs the Dollar for a while, albeit unable to breach 1.3950 and revisit highs around 1.4000 or maintain momentum against the Euro to breach resistance ahead of 0.8600 in the form of the 50 DMA. In terms of Sterling fundamentals, not much independent impetus from the BoE or somewhat mixed UK PMIs, so Cable and the Eur/Gbp cross have been moving on external and seasonal factors in the main, with some attention to latest Brexit developments as the NI protocol stand-off and fishing dispute rumble on.
• USD – Although the Greenback remains mixed overall, losses vs key DXY components are accumulating to nudge the index further below 91.000 and away from recent recovery highs as the countdown to NFP continues and expectations build for a consensus beating headline number. Hence, the Buck may be prone towards a deeper setback as the bar has risen and the Fed, bar more hawkish factions stick to an accommodative stance awaiting substantial progress towards inflation and full employment policy goals. Returning to the DXY, 90.963-742 covers trade so far.
• CHF/NZD/JPY/AUD – The Franc is consolidating off fresh peaks vs the US Dollar and Euro near 0.9058 and 1.0936 respectively in wake of a better than forecast Swiss sa jobless rate, while the Kiwi has faded ahead of 0.7250 against its US rival following firmer Q2 NZ inflation expectations overnight and the Yen has not been able to keep its head above 109.00 against the backdrop of moderately higher US Treasury yields and 1.2 bn option expiries from the round number up to 109.10. Similarly, the Aussie has waned into 0.7800 where 1.2 bn expiry interest resides even though robust Chinese trade data and Caixin PMIs may offer some incentive to resolve differences on tariffs and subsidies that have resulted in suspension of dialogue between the 2 sides.

In commodities, WTI and Brent front month futures remain choppy within a contained range yet again amid a lack of fresh catalysts heading into the US labour market report alongside further central bank commentary. The geopolitical landscape also remains little changed thus far, although a US official did note that the pace of talks would need to speed up in order to reach a deal in the coming weeks re. Iran, adding that the sides are not in the final stages of discussions yet. Meanwhile, eyes remain on the COVID situation in India, although concerns are seemingly under control as far as the crude markets go, whilst reports yesterday suggested that Indian state refiners placed orders for regular supplies from Saudi Aramco for June following a dip in May. WTI Jun reside around USD 64.50/bbl (vs a 64.44-65.24 range) whilst Brent Jul meanders USD 68/bbl (vs a 67.86-68.65 range). Moving on, spot gold and silver are on stand-by for the Tier-1 US data but hold onto a lion’s share of its recent gains with the former above USD 1,800/oz (1813-23 range) and the latter retaining its USD 27/oz handle. Turning to base metals, LME copper continues to gain ground above USD 10,000/t with similar upside price action seen in Shanghai copper and Dalian iron ore, with traders citing Chinese demand upon their return to the markets alongside Dollar weakness. There was also some commentary from the mining giant Glencore’s CEO who suggested that copper prices will need to increase to USD 15,000/t in order to encourage sufficient new supply to meet projected demand, specifically the mining industry would need to generate an additional 1mln tonnes of the metal each year.

US Event Calendar

• 8:30am: April Change in Nonfarm Payrolls, est. 1m, prior 916,000
  • 8:30am: April Change in Private Payrolls, est. 938,000, prior 780,000
  • 8:30am: April Change in Manufact. Payrolls, est. 57,000, prior 53,000
  • 8:30am: April Unemployment Rate, est. 5.8%, prior 6.0%; Underemployment Rate, prior 10.7%
  • 8:30am: April Labor Force Participation Rate, est. 61.6%, prior 61.5%
  • 8:30am: April Average Hourly Earnings YoY, est. -0.4%, prior 4.2%; Average Hourly Earnings MoM, est. 0%, prior -0.1%
  • 8:30am: April Average Weekly Hours est. 34.9, prior 34.9
• 10am: March Wholesale Trade Sales MoM, est. 1.0%, prior -0.8%; Wholesale Inventories MoM, est. 1.4%, prior 1.4%
• 3pm: March Consumer Credit, est. $20b, prior $27.6b

DB’s Jim Reid concludes the overnight wrap

For most of yesterday it was fairly quiet as markets seemed to be in a holding pattern as we all awaited today’s all-important US jobs report. However just as we thought we could go on auto pilot until the big number, some late dovish Fed comments sent US equities higher. The S&P 500 moved from flat 90 minutes before the close to finish +0.82% and only just shy of a new record close. Banks (+1.52%) remain among the leading industries in the S&P, however there was a recovery in some growth sectors as well with tech hardware (+1.29%) media (+1.02%) and software (+0.98%) all bouncing back. The gain in tech saw the NASDAQ rise (+0.37%) for the first time in five sessions after the first four day decline index since mid-October. European indices earlier held steady for the most part, with the STOXX 600 only seeing a modest -0.12% decline, while the DAX was +0.17% higher.

The market seemed to turn higher on comments from Fed Governor Bostic, who indicated that even a very strong jobs number is not going to cause the committee to formally discuss changing the pace of bond purchases. Governor Bostic earlier this year had been more open to talk about the committee thinking about tapering and so his comments seem to highlight a certain cohesiveness from the recent Fed speakers to remain on message. Was this co-ordinated after Secretary Yellen’s comments earlier this week?

Talking of the Fed, they released their semi-annual financial stability report late last night. It’s certainly an interesting one to read as they warn about stretched asset prices and high debts. The paradox is that their actions have been a big part of why we have such conditions. I can’t help think that life becomes a lot harder for the Fed once the economy reopens in earnest and inflation numbers start shooting up – transitory or not.

Looking forward now and that jobs report at 13:30 London time will be the focal point today as markets seek to gauge the strength of the economic recovery. In terms of what to expect, our US economists are looking for strong nonfarm payrolls growth of +1.275m, and a decline in the unemployment rate to a post-pandemic low of 5.7%. Fed Chair Powell has said that they “want to see a string of months” like the March report in order to reach the Fed’s goals, so all eyes will be on whether this report fits that definition. Though of course, even job growth at that level would still leave the total number of nonfarm payrolls more than 7m beneath the pre-Covid peak, and the Fed have been consistent in their message they want to see actual rather than simply forecasted progress. On this point, the weekly initial jobless claims data released yesterday fell to a post-pandemic low of 498k (vs 538k expected) in the week through May 1, but that still leaves it at more than double its pre-Covid levels.

With all that to look forward to, Treasury yields were fairly steady yesterday, with the 10yr yield up just +0.4bps to 1.570%. Real yields were up +2.0bps, though that was mostly offset by a -1.6bps decline in inflation expectations – just the second daily drop in 10yr breakevens in the last 10 trading sessions. And in Europe there was a similar pattern of modest upward rises in yields, with those on 10yr bunds up +0.3bps, though Italian sovereign bonds underperformed once again with the spread of their 10yr yields over bunds widening to a fresh 3-month high of 114bps.

On another theme, the upward march of commodities showed no sign of abating yesterday, with copper prices up another +1.76% to reach a fresh high for the decade, and spot iron ore prices rose above $200/ton for the first time ever. My summer building project at my house looks like it is getting more expensive by the day. Even precious metals surged, with gold (+1.59%) seeing its best day in nearly 2 months, and silver up +3.10%. The main exception to this were oil prices, which pared back their morning gains as both WTI (-1.40%) and Brent crude (-0.97%) ended the session lower. This all came as the US dollar index fell -0.46%, taking the weekly move negative, which would be the 4th in the last 5 if the dollar does not rally today.

Overnight, Asian markets have followed Wall Street’s lead with the Nikkei (+0.08%), Hang Seng (+0.52%), Shanghai Comp (+0.42%), Kospi (+0.72%) and India’s Nifty (+0.85%) all making advances. Besides the positive US equity moves, sentiment is also being helped by decent Chinese economic data with exports in April printing at 32.3% yoy (vs. 24.1% yoy expected) while imports stood at 43.1% yoy (vs. 44% yoy expected). China’s Caixin April Services PMI also printed strong at 56.3 (vs. 54.2 expected). Japan’s final services PMI also increased and was +1.2pts from flash at 49.5. Away from Asia, futures on the S&P 500 are also up +0.10% while Stoxx 50 futures are up as much as +0.68% as they try to catch up with the late rally in US equities yesterday. Meanwhile the rally in commodities is continuing unabated with Copper up another +1.4% this morning to $10,206.

Here in the UK, we are yet to get results of the by election in Hartlepool but the Press Association has reported that Labour has all but conceded defeat after shadow transport secretary Jim McMahon, who led the Opposition party’s campaign to hold the North East town, said it looked clear that Labour had not “got over the line”. If final results indeed confirm a win for Conservatives then this would be first defeat for the Labour party in Hartlepool in almost 50 years. Lots more local election results and the crucial Scottish vote will come through in the hours ahead.

Staying on the UK, the Bank of England kept their policy settings unchanged, in line with expectations, and revised up their growth forecasts from February, now seeing 2021 GDP growth at +7.25% (vs. +5% before). We did get one dissenting vote on QE from chief economist Haldane, who preferred to reduce the target for the stock of UK government bond purchases to £825bn, down from the current £875bn amount. However, there aren’t really implications for markets since Haldane is due to leave the committee after next month’s meeting anyway. Overall, the BoE struck a more optimistic note relative to their forecasts back in February, raising their 2021 growth forecast for the UK to +7.25% (vs. +5% before). Meanwhile on inflation, their forecasts based on market interest rate expectations showed CPI at 1.96% in Q2 2023, and 1.93% in Q2 2024, so slightly beneath their 2% target and suggesting that the market pricing of future hikes is a little too rapid for keeping inflation at target. Finally on tapering, there was a reduction in the pace of purchases, but the size of the total envelope for government bond purchases remains unchanged at £875bn. See DB’s piece on the meeting here.

On the pandemic, the data at a global level continues to show that the latest wave seems to have peaked for now, with the week-on-week growth in cases having peaked on April 28 according to John Hopkins University’s numbers. In terms of the latest on the patent waiver plan, German Chancellor Merkel cast doubts that the idea would garner enough international support to be viable. A German government spokeswoman said, “The limiting factor for the production of vaccines are manufacturing capacities and high quality standards, not the patents”, before going on to say that “protection of intellectual property is a source of innovation.” There was some good news on the production front with Pfizer and BioNtech announcing that they will now be able to make as much as 3 billion doses of its Covid-19 vaccine this year, double their initial estimates, with their international partners expecting to make another 3 billion next year. Moderna announced that the companies vaccine trial amongst teens showed a 96% efficacy rate as the US looks to expand its vaccination program to the younger population. The need for that expansion was emphasised by Colorado’s state epidemiologist announcing yesterday that junior high and high school aged populations (11-17) have the highest transmission rates in the state.

In terms of yesterday’s other data, Euro Area retail sales rose by a stronger-than-expected +2.7% in March (vs. +1.6% expected), and February’s growth was also revised up 1.2 percentage points. German factory orders also surprised to the upside in March, with growth of +3.0% (vs. +1.5% expected), while the UK’s composite PMI for April was revised up to 60.7 (vs. flash 60).

To the day ahead now, and the aforementioned US jobs report for April will be the main highlight for markets. Over in Europe, the data releases include March figures on German and French industrial production, along with Italian retail sales, as well as the UK’s construction PMI for April. Central bank speakers include ECB President Lagarde, the BoE’s Broadbent and Haldane, and the Fed’s Barkin.

Baltimore City has recorded a 17% jump in homicides in 2021 compared with the same time last year so far. Violent crime is spiraling out of control ahead of the summer month as the city halted prosecutions of prostitution, drug possession, and other minor offense. There was one point where so much chaos unfolded in such a short period that the city did not have enough medic units to treat shooting victims. 

On April 30, Baltimore City reached a grave milestone of 100 homicides. Frustrated with new city leadership, Maryland Gov. Larry Hogan is concerned about the city descending into further chaos in the months ahead. 

“We’ve had several discussions with our entire team. We’re very concerned about the increase in violent crime in the city,” Hogan said when asked by local news Fox45 if he spoke with the new mayor, Mayor Brandon Scott, about the violence. 

Hogan said violent crime “has three main root causes,” one of which he said is implementing stricter penalties for repeat violent offenders.

Homicides are already following prior-year trends that suggest another +300 year could be possible. 

However, Baltimore City State’s Attorney Marilyn Mosby halted the prosecution of prostitution, drug possession, and other minor offenses, a move directed at preventing outbreaks of COVID-19 in regional jails. But maybe now that strategy is backfiring ahead of the deadliest months of the year. 

At one point earlier this month, there was so much chaos that the city did not have enough medics “to a mass homicide/shooting scene,” tweeted Baltimore City Fraternal Order of Police. Turn the sound up and listen to the police scanner. One individual is heard, “we have no units to send you,” while referring to a homicide scene. 

During the multiple shooting in Carroll Park, when 3 additional #BCFDEMS units were requested, communications replied “we have NO units to send you.” The delays in service cannot be measured. Our dedicated members still provided world class EMS care until ambos arrived. SOUND UP https://t.co/GwxKQnzNhr pic.twitter.com/CcpY8quzVN

— Baltimore Firefighters IAFF Local 734 (@BCFDL734) May 3, 2021

Baltimore City FOP also addressed the issue the city is 500 officers short. In another tweet, the FOP said:

“Word is Police Commissioner Harrison will need to close 2 police districts. As of today, Patrol has fallen below 700 sworn officers! #500copsshort #cityincrisis @BaltimorePolice @GLFOP”  

So much for President Biden’s “unity” and progressive policing policies that have decimated Baltimore City Police’s ability to function. Prepare for another grim year in Baltimore as the summer months are just ahead. 

Authored by Bill Blain via MorningPorridge.com,

“It was worth being a bubble, just to have held that rainbow for thirty seconds..”

As the Federal Reserve wakes up to “elevated relative risks” and the rest of us scream “bubble”, the real questions are about real value. Why is a Bitcoin worth as much as Renaissance Art? Why is Dogecoin the top performing asset off the year when everyone knows it’s a joke? And when are people going to drink the proverbial coffee?

I am going to be sending US Federal Reserve governor and head of financial stability, Lael Brainard, her second coveted No S**T Sherlock award. This is not an insult – she is a very erudite, clever and talented central banker, but she really could not have stated the downright bleeding obvious any clearer than we she warned yesterday that some asset valuations are “elevated relative to historical norms… [and].. maybe vulnerable to significant declines should risk appetite fall.” (Check it out in the FT: Fed warns of hidden leverage lurking in the financial system.)

Really?

Who knew… ?

“Measures of hedge fund leverage may not be capturing important risks..” or that the pandemic may “stress the financial system in emerging markets and some European countries..” Well… I am very glad someone has finally noticed… To think we all missed it.. (US Readers: sarcasm alert.)

If Lael really wants something to worry about, how about stock market volumes (declining) versus crypto-trading volumes – which topped $1.7 trillion during April. Again, check out the FT: “Crypto trading volumes boom as activity cools on stock markets”. It’s like watching a teething toddler chewing on a live electric cable.. and wondering what will happen next..

Meanwhile… on another planet…

On behalf of the nation, Queen Elizabeth’s Royal Collection owns 144 of Leonardo da Vinci’s drawings; sketches made for paintings, sculptures, maps and designs for devices his fertile imagination concocted. They are beguiling and quite extraordinary.

We really don’t know how many Leonardo drawings there are; only 11 of his multitude of notebooks survive intact. Many more will have been divided. Every so often (as happened in 2016) a few more pages and drawings are found in some forgotten collection left in a suitcase in an attic. One recently discovered da Vinci sketch of St Sebastian sold in auction for $16 million.

Even rarer are his deliberate works of art. There are only some 24 da Vinci paintings. Salvator Mundi, which many still doubt is authentic, sold at auction in 2017 for $450mm. And, no, Leonardo did not offer it in NFT format – nor would he approve giving the NFT owner the right to destroy the original, as has happened with Basquiat. Da Vinci’s painting of Christ is extraordinary, but we will never know that because its apparently on view only to Saudi Prince MBS, hanging on his luxury Yacht.

The interesting thing is – Da Vinci’s art is scarce, it is desirable, it is…. wonderful. And it is definitionally and undeniably valuable.

Dogecoin was dreamt up by two software nerds, Billy Markus and Jackson Palmer, as a joke. Fuelled by the juice of the agave, they spent three hours writing the underlying programme – by taking the original Bitcoin code and replacing Bitcoin with Dogecoin throughout. Bingo! It’s now, Lord forgive us, the top performing “asset” of 2021. There are some tech differences to Bitcoin – apparently you “dig it” rather than “mine” it.

Absolutely nobody thinks Dogecoin is the solution to financial uncertainty or a valid investment proposition, yet is got a market cap of $50 bln! Nobody disputes the only reason to buy Dogecoin is in the expectation you will be able to sell it to the next greater fool at a higher price. The queue of greater fools stretches around the block.

I got a call from No 1 Son earlier this week wondering if Doge is worth a punt. He’s been following the saga of Elon Musk hosting this week’s Saturday Night Live and the widespread expectation he’ll say something to ratchet up the foolishness another notch. Why not? Dogecoin is the epitome of the Zeitgeist stock.

Perusing the newspapers this morning I was delighted to read soon-to-be-jailbird Theranos founder Elizabeth Holmes is using Silicon Valley’s culture of “exaggeration and hyperbole” as a defence against the fraud claims against her. Because every other tech start up lies about its prospects, it was perfectly acceptable for her little lie that her little black box of blood testing marvellocity could do anything to become a massive lie.

I also note Peloton’s problems. Not only have people discovered that there are bikes that can actually be cycled outdoors, and the gyms have reopened, but it also appears their rush to exploit lockdown with their Tread devices resulted in tragedy. And, lets face it, taking a cheap as chips treadmill and jazzing it up with screens and logos was hardly disruptive tech. It was seizing the opportunity

Uber is taking a $600mm backdated hit after being forced to give UK drivers the minimum wage and holiday pay – it will cost the company around $350mm this year. On the back of flat demand for ride sharing and the pandemic, it morphed into a deeply unprofitable food delivery business. On a global basis, UBER lost $360mm Q1 this year and was around $1 bln unprofitable back in the last normal year – 2019.

There is genuine surprise among some young investors the current market seems to have flatlined on their expectations of further massive new tech gains. They absolutely believe in the new, new normal; that disruptive tech stocks don’t need profits – all they need is growth and a really cool and defining mission statement and objectives that trump actual products every time.

Wake up and smell the coffee. (A real one, rather than some digital thingymaboab..)

But let’s go back to the more “serious” cryptocurrencies… I am reminded that ARKK Maven CIO Cathie Wood, (11% of her disruptive tech funds invested in Bitcoin via Greyscale), recently said institutional acceptance of crypto will push Bitcoin up by $500,000. Why? Oh because there can only ever be 21 million Buttcons? Intangible, digitally ledgered, bitcoins are worth so much because they are comparatively rare?

Well… give me the choice of 10 bitcoins or a Leonardo drawing?

I have been resolutely unconvinced by cryptocurrencies since I first encountered them 10-years ago. Interesting, but I didn’t see the why of them. But, very quickly opportunities emerged in illegal trading. I have questioned the basis of every claim that they can transform and improve finance – I still question all these claims. When someone shows me something a bitcoin can do which a dollar can’t (that doesn’t involve the risk of jail-time) I shall be genuinely delighted.

They are generally bunkum. Yes, the transfer of cash is still in the equivalent of the steam age, but it can be done efficiently via umpteen fintech solutions without undermining the primacy of fait money.

It all boils down to the primacy of money. I’ve come to the conclusion the seeds of crypto and decentralised finance stem from the Libertarian agenda that central banks can’t be trusted with our money. I also suspect the technological beauty of Blockchains acted as a lure for clever but naïve developers to invent around. I doubt most crypto barkers care.. they now see crypto as a genuine asset they are going to get rich on.

When people tell me bitcoin is digital gold.. give me real gold every time. When it all goes wrong, I’ll have the yellow metal rather than an inaccessible digital wallet anytime.

But…. The bottom line is you can’t uninvent crypto – but then you can also argue it’s an evolving asset class and market. Bitcoin was merely the first iteration. Its notoriously useless as a transactional store of value – only 8 transactions at a time or something like that. There is a new crypto that promises its blockchain can handle more transactions per second than mastercard. Other cryptonuts say Ethereum is the one to watch..

I’m watching Coinbase – a spectacular flop of an IPO – traded down nearly 40%! But it’s interesting. Its profitable, and it’s got some credibility. As crypto’s continue to evolve, Coin will continue to be seen as a safe place for institutions and retail to trade and hold. I’m thinking of taking a punt… And meanwhile, my Coinbase account is up 30% since I decided to punt on it back in April. There are over 400 cryptocurrencies, and I bet on Ethereum. Yay!

*  *  *

Back when President Trump was in office, JP Morgan CEO Jamie Dimon occupied himself writing lengthy missives to his bank’s shareholders about the need to hike taxes on the rich, proclaiming that “capitalism must be modified” for the American project to succeed.

Now that Democrats are in power, and Elizabeth Warren’s “wealth tax” is now firmly on the table, it looks like Dimon – who is, according to Forbes, a billionaire – has changed his tune. Back in September, before the election, Dimon modified his stance, arguing that while higher taxes on high earners would be appropriate, a “wealth tax “ like Warren’s would do more harm than good.

And as Democrats prepare to push through the first part of Biden’s two-part “Build Back Better” ‘Great Society’-style “infrastructure” plan, which will be heavily offset by tax hikes, the biggest in decades, Dimon added yet more caveats to his original position in an interview with the Investment Company Institute this week.

Clearly having read the outlines of Biden’s plans, Dimon says he’s “concerned” about how the money raised by new taxes will be spent. To ensure that taxpayer money is spent “responsibly”, Dimon insisted that the administration should produce an itemized list detailing “miles of highway will get built and how many students the government expects to graduate from free community colleges and get high-paying jobs.” He also worried that some of the tax hikes being considered sound “a little crazy”.

Here’s more from CNN:

“I’m concerned about how the money’s going to be spent,” Dimon said in a recorded interview for the Investment Company Institute’s general membership meeting Thursday.

“The government needs to be very clear about what they want to accomplish,” he added.

Dimon said that he wants to see a bipartisan bill that specifically spells out details such as how many miles of highway will get built and how many students the government expects to graduate from free community colleges and get high-paying jobs.

“We’re just throwing money. It doesn’t work,” Dimon said. “We already waste tremendous sums of money.”

Lawmakers and the administration owe this level of transparency to the public. “If you’re going to give me your money, I’m going to be a good steward of it and here’s what I am going to accomplish and I am going to report back to you,” he said, comparing it to the information companies disclose.”

One Democratic Senator “clapped back” at Dimon on twitter, noting that “we totally do this” already.

We totally do that. He can start here. https://t.co/8nfen0xHVe https://t.co/SyWaGXPye2

— Brian Schatz (@brianschatz) May 6, 2021

Later in the interview, Dimon ounded more like a conservative Republican when he warned that scrapping the Trump-era corporate tax cuts – something he once spoke out against – and imposing higher rates on businesses will hurt capital formation and the economy.

“If policymakers don’t get that … they are making a mistake,” Dimon said, adding that wealthy individuals will have to pay more but that a potential capital gains tax rate of nearly 40% “won’t be successful.”

Though he apparently has caved on higher taxes, Dimon continued to virtue-signal about the importance of battling climate change.

“Climate change is a real issue that we need to attack as a nation,” he said. But he added that simply imposing more rules on businesses over emissions reporting is not the answer. He said he is in favor of a carbon tax.

Finally, Dimon also weighed in on Bitcoin. Now that his bank is launching its own cryptocurrency-focused funds for institutional clients, Dimon claimed that he’s still “not a fan” of the cryptocurrency and that the government should do more to control the rapidly growing space.

Like a wealthy liberal New Yorker opposing the development of a halfway house in their neighborhood, Dimon is just the latest example of a time-honored phenomenon. It’s easy to offer lip service about raising taxes and promoting economic equality. But when the reality that their tax bill is about to explode finally sinks in, many of these pro-tax corporate crusaders change their tune.

Authored by Michael Snyder via TheMostImportantNews.com,

Have you noticed that the corporate media has been repeatedly using the word “violent” to describe what the summer of 2021 is going to be like? 

Many Americans believed that once Joe Biden was in the White House that all of the civil unrest that we have been witnessing would magically disappear and that violent crime rates would go back to normal.  Of course neither of those things has happened.  We continue to see civil unrest erupt in major U.S. cities such as Portland, and murder rates are even higher in 2021 than they were in 2020.  This is a fact that was highlighted in a recent Axios article entitled “It’s set to be a hot, violent summer”…

• A sample of 37 cities with data available for the first three months of 2021 collected by the crime analyst Jeff Asher indicates murders are up 18% over the same period in 2020.

• The continued increase comes after a year in which major U.S. cities experienced a 33% rise in homicides, and 63 of the 66 largest police jurisdictions saw an increase in at least one category of violent crime, according to a report from the Major Cities Chiefs Association.

In this instance, Axios is right on the money.

Murder rates were way, way up all over the nation last year, and this year murder rates are shooting even higher.

It is also true that we tend to see a spike in violence over the summer, and one expert that was interviewed by Axios is warning that this upcoming summer will be “abnormally violent”…

“Summer 2021 is going to be abnormally violent,” John Roman, a senior fellow at the economics, justice and society group at NORC at the University of Chicago, wrote this year. “It is the new normal.”

There is that word “violent” again.

It is almost as if they are trying to mentally condition us for something.

Once you are alert to it, you will start noticing the corporate media using it constantly.

And actually this is one point in which I am in full agreement with the corporate media.  There will be tremendous violence during the summer of 2021, and certain decisions that our political leaders are now making will contribute to that violence.

For example, it was just announced that 76,000 inmates could soon be permanently released in California, and we are being told that 63,000 of those inmates have actually been “convicted of violent crimes”…

California is set to release at least 63,000 inmates convicted of violent crimes in an effort to create “safer prisons.”

Yes, the prisons will most definitely be safer if all of those criminals are released.

But the mean streets of California will become even more dangerous.

I have no idea why California Governor Gavin Newsom would do such a thing.  Releasing tens of thousands of violent criminals just in time for the summer is incredibly foolish, and he is being strongly criticized by Republicans for choosing to do this…

A number of Republican lawmakers in the state have opposed the move and criticized Gov. Gavin Newsom for acting “on his own authority, instead of the will of the people.”

“This is what I call Newsom’s time off for bad behavior. He’s putting us all at greater risk, and there seems to be no end to the degree to which he wants to do that,” Republican state Sen. Jim Nielsen said.

Murder rates in California are already threatening to spiral out of control.

Is Governor Newsom purposely trying to make things even worse?

On a national level, it has been announced that there are no plans to bring the federal inmates that were released during the COVID pandemic back to prison…

The U.S. Bureau of Prisons has no immediate plans to send thousands of inmates released during the COVID-19 pandemic back to prison, but to prevent that from happening in the future, Congress needs to change the law, its head said Thursday.

“We’re going to use good judgment and common sense and work within the law,” said BOP Director Michael Carvajal in testimony before the Senate Judiciary Committee, noting the agency has no desire to “arbitrarily” disrupt peoples’ lives by forcing them to return to prison.

I have an idea.

Let’s just release all of the inmates in all of the prisons and see what happens.

Doesn’t that sound like fun?

For a long time I have been warning that crime rates would spike dramatically and that we would see tremendous civil unrest in our cities, and now it is happening right in front of our eyes.

The elite can see what is happening too, and they have been purchasing very large chunks of real estate in very remote areas.

For instance, billionaire Mark Walter recently bought up large sections of a very small town in Colorado called “Crested Butte”…

But Walter’s activity in Crested Butte has drawn lots of local attention among its population of about 4,700. This year alone, Walter purchased six commercial properties, including several historic buildings downtown and a family resort called the Almont, which sits at the intersection of the East and Taylor rivers. Walter closed the deals under limited liability companies registered to his work address in Chicago.

“He’s been very—I wouldn’t say ‘secretive’—but certainly not forthcoming with what he’s going to be doing with the buildings,” Crested Butte Mayor Jim Schmidt told The Daily Beast. Realtor Eric Roemer echoed the uneasy feeling: “Nobody really knows what his game plan is.”

And Facebook CEO Mark Zuckerberg made headlines when he gobbled up another 600 acres in Hawaii for 53 million dollars…

Mark Zuckerberg and Priscilla Chan have nearly doubled their controversial land holdings in Hawaii, after buying almost 600 acres on Kauai from a non-profit for $53 million.

The deal, which closed on March 19, according to deeds first reported by Pacific Business News, comprises three parcels, including the remote northern waterfront known as Larsen’s Beach.

It must be nice to have an extra 53 million dollars lying around.

Do you ever wonder what Mark Zuckerberg would be doing today if Facebook had not worked out?

Of course Facebook and the other major social media platforms are also helping to fuel the civil unrest and violence that we have been witnessing.  There is so much anger and frustration in our society today, and all of that anger and frustration is constantly being magnified by the corporate media and the major social media platforms.

Yes, this will be a long, hot summer filled with violence, but that won’t be the end of it.

Because the truth is that this party is just getting started, and it is going to rip this country to shreds.

*  *  *

Michael’s new book entitled “Lost Prophecies Of The Future Of America” is now available in paperback and for the Kindle on Amazon.

After years of lackluster performance, Warren Buffett’s Berkshire Hathaway has seen its Class A shares climb 20% so far this year, bolstered by the reflation trade that has sapped tech stocks. But Buffett’s old-fashioned resistance to a stock split is creating serious problems for the engineers who maintain Nasdaq’s data feeds, which are used by everyone from discount brokerages like Robinhood, to financial news websites that offer live stock quotes.

The problem, according to a report published in Wednesday’s WSJ, is that the biggest number that Nasdaq’s data feeds can handle is $429,496.7295. However, surpassing that level could create a Y2K-style meltdown, so the exchange was forced on Tuesday to suspend price quotes for Berkshire’s Class A shares when they closed at a record high above $421K.

And Nasdaq isn’t alone. IEX Group, the upstart exchange profiled by Michael Lewis in his book “Flash Boys”, first warned back in March that it would be forced to stop accepting orders for Class A shares “due to an internal price limitation within the trading system.”

Nasdaq is scrambling to finish an upgrade within the month that would fix the problem, which stems from the fact that Nasdaq records stock prices in a compact computer format they used for communicating prices. The biggest number the exchange can currently handle is $429,496.7295.

In an alert to clients on Monday, Nasdaq said it would finish an upgrade of its data feeds on May 17 to allow stock prices greater than $429,496.7295. Until then, however, the exchange said it must temporarily suspend publishing prices of any stock that exceeds 98% of this threshold – or $421K, roughly the level where Berkshire’s Class A shares are currently at.

James Angel, a finance professor at Georgetown University, told WSJ that the issue is another example of how Buffett’s old-fashioned ways can create new costs and disadvantages for traders. Now, Berkshire’s outsize share price, driven by Buffett’s refusal to split the stock, has forced a time-consuming overhaul of stock-market systems.

“This is but one of the many problems that Berkshire inflicts upon many others by their refusal to split the stock,” Angel said, though he cautioned that he continues to have great respect for Buffett.

While it was virtually unheard of years ago for stocks to trade above $100 a share, many companies presently have allowed their shares to trade above $1,000. This group includes Amazon, Chipotle and others. However, no other stock trades anywhere near the per-share prices seen by Berkshire’s Class A shares. The US stock with the second-highest share price, home builder NVR is trading just above $5,100 a share.

The engineers who designed Nasdaq’s system favored this compact format for a reason: It takes up less memory and therefore can make software more efficient, a high priority in the world of electronic stock trading.

Authored by Simon Black via SovereignMan.com,

In the winter of 1837, Charles Dickens published the first two chapters of what would become one of his most popular works– the story of an orphan called Oliver Twist.

If you’ve never read it, the book is one of Dickens’ most damning condemnations of the poverty, crime, and child labor that dominated 19th century Britain.

It was personal for Dickens; as a boy, he was forced to work long hours in a shoe polish factory for pitiful wages after his father had been hauled off to debtors’ prison.

And Oliver Twist was so shocking it began a global conversation about child labor and contributed to the worldwide Children’s Rights Movement.

By the early 20th century, children were starting to be viewed as more than just cheap, easily exploitable workers. Instead, western nations began to prioritize children’s well-being.

It’s been that way for generations.

Then along came COVID-1984… and all the dictatorial public health measures that have accompanied it.

Entire economies were locked down, borders closed, business shuttered, and basic human interactions forbidden.

These restrictions have been especially damaging for children.

Even to this day, more than a YEAR later, schools are still closed in many parts of the world.

Millions of children simply stopped learning at the age when their minds develop more rapidly than at any other time in life.

Sheepish bureaucrats hid behind Zoom classes as an adequate substitute for real learning and human interaction, though hardly a thought was given to the cost versus benefit.

It’s hard to fault anyone for the decisions they made back in March or April of 2020. There was no data. And plenty of people took the most conservative approach.

But by summer 2020, there were mountains of data to support an informed decision.

Consider, for example, precisely 54 children in the Land of the Free have died from COVID (according to CDC data through April 28).

Given that there have been roughly 4 million confirmed COVID cases among children, this implies a survival rate of 99.999%.

For kids, even the Chicken Pox is more fatal, not to mention a variety of other common illnesses ranging from the flu to strep throat.

Yet the world never closed schools due to the chicken pox.

Curiously, his grace, Lord Protector Anthony Fauci, noted back in 2009 during the Swine Flu epidemic that “we have already 76 children dying from the 2009 H1N1 virus, and it’s only the beginning of October.”

Yet his eminence did not demand schools close. And the CDC specifically recommended NOT closing schools.

(Fauci also stated then, “you can’t isolate yourself from the rest of the world for the whole flu season. . .”)

Then there’s the Holy See of the World Health Organization, of whom no one is worthy to question. Yet the WHO says that “diarrhea kills around 525,000 children under five” every year.

Yet did anyone ever close the schools to prevent the spread of the diarrhea-causing rotavirus?

(And as long as we’re all wearing masks, should we be forced to wear diapers too?)

Point is, public health bureaucrats and school officials clearly didn’t conduct a basic cost/benefit analysis before closing the schools.

They didn’t consider how many kids would fall behind. Or the mental health consequences of social isolation, like the higher rates of self-harm and skyrocketing calls to suicide hotlines.

The only thing that mattered was a disease with a 99.999% survivability rate. Not their learning, their future, or their mental health.

And for schools that did open, students were subjected to ridiculous protocols, including even literally being placed inside of plastic bubbles.

But this doesn’t even scratch the surface of the real damage.

It’s bad enough that the COVID hysteria has caused generational academic regression. But on top of this, teachers and school administrators are now prioritizing a new, woke curriculum.

Rather than focus on helping students become more intellectually and professionally competitive, children are instead being taught to view themselves and others as either victims or oppressors, and to define themselves and everyone around them by skin color, gender, or sexual orientation.

The content of one’s character is now irrelevant.

Kids who are too young to know anything about sexual intercourse are being forced to learn about sexuality in an effort to break free of ‘heteronormative thinking.’

Biology is now a social science that has become completely subjective. History is being rewritten on the fly in front of the children’s very eyes.

Even mathematics is now full of white supremacy. Several state education departments, including Oregon and California, are promoting new training for their teachers aimed at “Dismantling Racism in Mathematics Instruction.”

I’ve read the full 82-page document. It’s bizarre. They lament, for example, that “White Supremacy culture shows up in math classrooms when teachers are teachers and students are learners.”

Come again? Unless Doogie Howser is sitting in the front row ready to teach Calculus, aren’t the teachers supposed to do the teaching?

But apparently this “reinforces the ideas of paternalism and powerhoarding” which somehow relates to White Supremacy.

It’s truly astonishing what they’re doing to young minds.

• Children have been indoctrinated to believe that other human beings are disease-infested filth.

• They’re taught to subordinate themselves to idiotic bureaucrats and to never question authorities, no matter how illogical their edicts may be.

• They’re taught that thinking outside the box results in being ridiculed and censored.

• They’re taught that science is subject to the whims of the Twitter mob, and that mathematics is racist.

Honestly I don’t think any of this is on purpose. The people who control the education system probably feel like they’re doing the right thing.

But as they say, the road to hell is paved with good intentions. And they’re on course to completely ruin an entire generation.

Frankly I can’t think of any job that’s more important right now than being a parent… and teaching proper values and independent thinking to a child.

*  *  *

On another note… We think gold could DOUBLE and silver could increase by up to 5 TIMES in the next few years. That’s why we published a new, 50-page long Ultimate Guide on Gold & Silver that you can download here.

As the green energy transition gains momentum, the broader transformation of the transport sector to electric vehicles will have profound changes in the automobile industry in Germany. For instance, more than 100,000 jobs in combustion engine production could be at risk, according to Munich-based Ifo Institute for Economic Research. 

Ifo released a report Thursday showing that more than 100,000 jobs in combustion engine production could be lost by 2025 if companies fail to reskill workers. 

“The transition to electromobility is a major challenge, especially for automotive suppliers, where medium-sized companies are dominant. It’s important to maintain highly skilled jobs in the remaining production of combustion engines and in electric vehicles without putting the brakes on structural change,” said Ifo President Clemens Fuest.

 Battery-driven cars require less assembly time than traditional petrol engine vehicles. The shift towards electric vehicles means German carmakers must address the risk of heightening unemployment in the coming years. 

Falck added: “The retirement of the baby boomers won’t fully cushion the transformation that can be expected in headcount. Since companies are already aware of this gap, they have the opportunity to take appropriate measures in good time, such as retraining and further training.”

The retirement of older line workers will not cushion the expected transformation in employment, the report showed. There’s also the risk of increasing automation and artificial intelligence embedded into production lines that will displace workers. 

Ifo estimated that 175,000 car jobs will be at risk by 2025 and that only 73,000 workers in petrol engine production would retire in the coming years. This means around 100,000 workers face employment risk if they’re not retrained. 

Germany has set out ambitious target bans on the sale of petrol fuel cars. BofA indicates that by 2030, Germany and a host of other countries plan to ban fossil fuel vehicles. 

Government policies appear to be rapidly accelerating the transition to electric vehicles, which means entire supply chains have to be reworked. There will be winners and losers, but around 100,000 people appear to have received the short end of the stick in Germany. 

While traveling aboard Air Force One for President Joe Biden’s visit to Louisiana on Thursday, White House deputy press secretary Karine Jean-Pierre bluntly stated that “we support” Ukraine’s ambition to join NATO.

When she was asked by a press pool reporter if the White House “supports Ukraine joining NATO” – the deputy press secretary responded with “We supported it… yeah” – but then quickly sought to clarify that certain “commitments” have to be met. She explained, “The Biden administration remains committed to ensuring that NATO’s door remains open to aspirants when they are ready and able to meet the commitments.”

“Secretary [of State Antony] Blinken is in Kiev right now to affirm our support for Ukraine’s sovereignty, territorial integrity, and independence. His trip also emphasizes the importance of Ukraine passing key legislation to advance rule of law, anticorruption and economic reforms that will strengthen Ukraine’s democracy and economy, and further Euro-Atlantic integration,” Jean-Pierre said.

“The Biden administration is committed to ensuring that NATO’s door remains open to aspirants when they are ready and able to meet the commitments and obligations of membership and contribute to security in the Euro-Atlantic area,” she later clarified.

Rarely has the White House answered the controversial question so directly, especially given NATO’s clear requirements for entry stipulating that a country engaged in territorial disputes with neighbors, including internal civil conflict, is not eligible for membership. This is because of the obvious reality that the inevitable quick invocation of NATO’s Article 5 would immediately result in war.

Last month’s renewed crisis and Russian troop build-up which thrust the Russia-Ukraine-Crimea dispute back in international headlines saw Kiev officials renew their vocal push for entry into NATO. Kiev had after the Maidan coup in 2014 cooled its NATO pursuit rhetoric given the obvious hurdles for entry and the conflict with Russian-backed separatists in the country’s east.

Crucially in the Thursday comments, which are sure to raise the alarm in Moscow, the White House spokeswoman additionally emphasized that the US “supports” Ukraine’s reforms (the very reforms which are meant to secure its future NATO membership) as well as “its border fight against Russia aggression.”

The NATO question will likely be raised by Vladimir Putin assuming the much anticipated Biden-Putin summit actually materializes in June. Russia has long considered Ukraine and Georgia’s NATO pursuits to be a “red line” which the Kremlin says would make war all but certain. 

Global inflation is headed into overdrive as the leading food price indicator that is the United Nations’ Food and Agriculture Organization’s food price index increased for an 11th consecutive month in April, hitting levels not seen since May 2014, with sugar prices leading the rise in the main index. 

The Rome-based FAO released data Thursday showing the food price index, which measures monthly changes for a basket of cereals, oilseeds, dairy products, meat, and sugar, surged 2 points from 118.9 points in March to 120.9 in April. 

That is a 30.7% YoY jump – the fastest rise since 2011…

The April surge was primarily led by price increases of sugar, oils, meat, dairy, and cereals. 

FAO’s cereal price index moved up 1.2% in April M/M and 26% Y/Y. Drought conditions in Argentina, Brazil, and the US increased corn prices by 5.7% last month, while wheat prices were flat. Global rice prices slipped last month. 

FAO’s vegetable oil price index rose 1.8% last month because of increasing soy, rapeseed, and palm oil prices, which offset lower sunflower oil prices.

Milk prices increased 1.2%, with surging demand from Asia, while the meat index rose 1.7%. FAO said there was “solid demand” for bovine and ovine meat in East Asia. 

The idiots at the Marriner Eccles building seemingly have no interest in reading the extensive literature in connecting higher food prices to periods of social unrest.  Indeed, you’ll notice from the chart below that the last big surge from the middle of 2010 to early 2011 coincided with the start of the Arab Spring, for which food inflation is regarded as a contributing factor.

While this is hardly new – we discussed it in “Why Albert Edwards Is Starting To Panic About Soaring Food Prices” and in “We Are Edging Closer To A Biblical Commodity Price Increase Scenario.”

DB’s Jim Reid reminds us that emerging markets are more vulnerable to this trend since their consumers spend a far greater share of their income on food than those in the developed world.

Inflation is always a monetary phenomenon, and this time is no different. Central bankers call transitory effects, but we beg to differ.