Trump: “We’re At War, These People Are Sick”

Trump: “We’re At War, These People Are Sick”

Authored by Paul Joseph Watson via Summit News,

President Trump has accused Democrats of conducting a “coup” to remove him from office, commenting, “We’re at war, these people are sick.”

“As I learn more and more each day, I am coming to the conclusion that what is taking place is not an impeachment, it is a COUP, intended to take away the Power of the People, their VOTE, their Freedoms, their Second Amendment, Religion, Military, Border Wall, and their God-given rights as a Citizen of The United States of America!” tweeted Trump.

During separate comments that were made at a reception in New York City after the United Nations General Assembly, Trump also made clear that he was on a war footing.

“We’re at war. These people are sick, they’re sick and nobody’s called it out like I do. I don’t understand, people are afraid to call it out, they are afraid to say that the press is crooked, we have a crooked press, we have a dishonest media,” said Trump.

Democrats have become so unhinged in their efforts to remove Trump from office, Rep. Maxine Waters demanded that Trump not just be arrested, but placed in solitary confinement.

“I’m calling on the GOP to stop Trump’s filthy talk of whistleblowers being spies & using mob language implying they should be killed. Impeachment is not good enough for Trump. He needs to be imprisoned & placed in solitary confinement,” she said.

*  *  *

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.


Tyler Durden

Wed, 10/02/2019 – 09:14

Tags

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

Lira Slides As Erdogan Vows Syria Invasion & ‘Safe Zone’ To Come “Suddenly”

Lira Slides As Erdogan Vows Syria Invasion & ‘Safe Zone’ To Come “Suddenly”

After repeat threats over the past weeks, Turkey looks to finally make good on its threat to unilaterally invade Syria after its end of September deadline for the United States to assist in jointly establishing a ‘safe zone’ has passed. 

“We may suddenly arrive one night,” Erdogan told reporters after a speech to parliament in Ankara on Tuesday, referring to a possible cross-border offensive in northeast Syria. “We have tried every means, with great patience, to solve this problem together with our allies… Turkey doesn’t have a single day left to lose on this issue,” Erdogan said.

The Turkish lira weakened on the news for the second day ahead of the possible cross border offensive, which would inevitably lead to direct clashes with US proxy forces in Syria’s northeast, especially the Kurdish YPG arm of the Syrian Democratic Forces (SDF). 

Illustrative image via Reuters: Turkish tanks previously at the Syrian border. 

Last week at the UN General Assembly President Erdogan presented his plan to set up a massive 300 mile long ‘safe zone’ along the border, which would be almost 20 miles deep into Syrian territory, where with international support Turkey would resettle up to 2 million refugees. 

Turkey’s allies and foes alike, however, have immediately recognized the likely ethnic cleansing and dramatic demographic shift that would unfold under the Turkish plan. As Reuters has noted:

But Turkey’s new emphasis on the refugee transfer, which would move large numbers of Sunni Arab Syrians into a traditionally Kurdish heartland, could face resistance from allies opposed to changing the region’s demographic balance.

The Turkish and allied administered territory would be off limits to US-backed YPG/SDF, which Ankara sees as a terror arm of the PKK, something which has remained a key deal-breaker for Washington. 

Erdogan’s speech to the opening of the third legislative session of the Turkish parliament on Tuesday evening. Image source: AFP.

“Someone is trying to have us kneel down through terrorism and the burden of refugees,” Erdogan added during his Tuesday evening remarks. He said Turkey will never accept such a “fait accompli and blackmail” against it; however, Erdogan the one recently issuing public threats of blackmail.

Early last month he warned that if his plan weren’t implemented he would flood Europe with Syrian refugees: We will be forced to open the gates. We cannot be forced to handle the burden alone,” he said at the time, and has since repeated. 


Tyler Durden

Wed, 10/02/2019 – 09:00

via ZeroHedge News https://ift.tt/2owU6w8 Tyler Durden

Fed Takes $42BN In Second October Repo As Funding Pressures Ease

Fed Takes $42BN In Second October Repo As Funding Pressures Ease

One day after the Fed raised eyebrows when it accepted $55BN in collateral in its first repo operation after the notorious quarter-end liquidity crunch, an amount that was just higher than the first repo op the Fed concluded in mid-September after a 10+ year hiatus ($53.2BN) and which some saw as too high for a new month with $139BN still locked up in 2-week term repos, moments ago the Fed concluded the second overnight repo operation for October, one which confirmed that the recent repo turmoil appears to again be easing, as $42.05BN in collateral was submitted (and accepted) in the $75BN operation, a $13BN decline from the $54.85BN repoed yesterday.

The composition of the repo showed that while Treasury collateral declined from $50BN to $35BN, MBS actually increased modestly from $4.75BN to $7.05BN, with no Agency use again.

While the drop in total repo use was certainly an improvement from yesterday’s operation, the continued demand for reserves, even with $139BN in liquidity locked up in 2-week term repo which expire in the second week of October, suggests that the funding shortage is anything but a calendar event, and confirms that there is an acute reserve shortage, one which the Fed will have to address, most likely by resuming POMO operations to the tune of roughly $20BN per month… which for all the QE denialists, will be the same size as QE1.


Tyler Durden

Wed, 10/02/2019 – 08:53

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

“It’s A Wacky Race To The Bottom In Races To The Bottom… And The US Is Losing Badly”

“It’s A Wacky Race To The Bottom In Races To The Bottom… And The US Is Losing Badly”

Submitted by Michael Every of Rabobank

In monetary policy terms, this is now clearly a race to the bottom. The Fed have cut twice, and Evans’s comments from yesterday aside, are expected to cut far more (we say to zero); the ECB have reintroduced QE already, at EUR20bn a month for now; the BOJ are expected to stir at this month’s meeting; the PBOC are pledging to do what they can to get rates lower for firms; the RBNZ surprised a while back with a 50bp cut; and the RBA cut 25bp again to 0.75% yesterday, partly on the basis that ‘everyone else is doing it so how can we not?’ Moreover, that’s just a sample of broader trend to slash rates, which also runs right across emerging markets too.

Crucially, the US is losing this race, and badly. The Fed is hardly a leader in this rate cycle, and more likely to be a laggard as things stand. Cue yet more withering commentary from US President Trump about that relative lack of action and the impact it is having on the USD. Meanwhile, EUR and AUD, for example, are heading downwards at a pace that their respective central banks will be quite pleased about. Just don’t call it a race to the bottom, because that triggers nasty memories of periods of history that markets and politicians don’t like to recall.

In no way a coincidence, it’s also a race to the bottom in manufacturing PMIs. Over in the workshop of the world, China is at 49.8, which is bad; Japan at 48.9; South Korea at 48.0; and only India at 51.4 and booming Vietnam at 50.5. In Europe we have Germany at 41.7, which is shocking and heading towards June 2009 lows, and the UK at 48.3. Even Russia, isolated and proud, is at 46.3! And now in the US we have an ISM print of 47.8, meaning that even the US manufacturing sector is slumping (although Markit printed at a healthier 50.9). Yes, there are a few pockets of growth, but the general picture of a synchronised downturn in manufacturing across the global economy. Which is of course why we are going to see rates slashed and a race to the bottom in currencies; and that deflationary effect is going to reinforce the need to slash rates.

That’s all worrying enough. But then you have to ask two other questions.

First, is industry going to drag the services economic down, or can we all live on lattes and haircuts alone? (Or, more accurately, on housing markets and apps?) For now, it appears we can – otherwise this would be a global recession already. However, the historical track record is not good on that front. If we are going to start shedding manufacturing jobs globally, and not just in the West, that is going to knock demand for goods and for services, absent further consumer borrowing…and aren’t we close to being tapped out on that front? Or to painting ourselves into a corner if we do?

Second, how long until we get a sufficiently robust policy response? We know that there is much muttering of fiscal policy being used, and even of Modern Monetary Theory (MMT). Indeed, an interesting aside is that on a recent visit to see financial European clients, everyone was immediately familiar with the term MMT when in previous years this was not always the case. However, seeing the logical inevitability of the need for a new radical policy is one thing. Actually seeing it put in place in a way that helps the global economy is another. That’s because we seem to be on a race to the bottom in terms of politics as well.

Starting with Asia again, we can probably rely on China–which just celebrated the PRC’s 70th birthday in North-Korean-meets-Busby-Berkley extravaganza with a chorus-line of glittery nuclear missiles, even as Hong Kong saw serious unrest–to put in place more stimulus. In fact that’s a given. What isn’t a given is that this will sit alongside a stable CNY as capital flight is still evident in the balance of payments data. Moreover, stimulus to date is either not working or is being ring-fenced for the home market unless you sell raw materials: how else can one have an economy growing nearly 6% y/y in real terms and yet see flat or deeply negative y/y import growth from a swathe of countries, not just the US? Likewise, the track record says if the BOJ acts again that will mean a weaker JPY not a stronger market for foreign goods; the same is true for South Korea; and the rest of Asia just doesn’t offer enough heft to matter much, relatively.

In Europe, can we really expect self-flagellating hair-shirt governments to push for MMT when they have found it so incredibly hard to move the needle on any fiscal stimulus at all, even as populism raises its head across the continent? In particular, will Chancellor Merkel, in her twilight, suddenly reverse years of hoarding and instead start splurging…knowing that the splurge will be spent across Europe and not on German goods? Really? And even if Berlin does go that route, will it not see EUR fall and European net exports pick up anyway, meaning Europe is exporting global over-capacity rather than absorbing it? Europe would need to splurge globally to help matters globally, and that is just not on the cards.

The UK does appear to be about to embrace gun and butter and anything not nailed down fiscal activism under this new Tory administration…but then again it isn’t actually in power while it is in office, so talk is cheap; and given PM Johnson’s latest Irish backstop proposals, which are a major concession, are still being described by EU sources as being as palatable as “a bucket of cold sick”, we are soon going to get either a Hard Brexit that will hit the global economy harder, or a new caretaker rebel administration just to delay Brexit that will have no political ability to stimulate the economy at all. Excelsior!

And then we come to the US. President Trump has obvious proclivities towards spending vast amounts of money and taxing as little as possible, and the US is, despite popular misconception, still propping up global demand from everyone except China (which as noted, looks and smells mercantilist – and yet gets none of the public opprobrium for such). Yet the US political environment is once again focused on trying to impeach the president, or on stopping that happening. Grand economic schemes are not generally dreamed up in this kind of environment, and even if Trump were to pull one out of a hat, it seems highly unlikely Congress would want to give him the win when much of it is going for the kill (with “deep sadness”).

In short, it’s a wacky race to the bottom in races to the bottom. Choose yourself who is the Dick Dastardly in it all (Trump?); the Mutley (John Bolton?); the Rufus, Ruffcut, and Buzzsaw (populist voters?); the Peter Perfect (Biden?!); the Penelope Pitstop (Merkel?); the Luke and Blubber Bear (the rest of the EU?); the Ant Hill Mob (Australia?); the Professor Pat Pending (central banks?); and the Gruesome Twosome (China and Russia?). But it doesn’t matter who wins because as things stand we are all losing.

And as such it is any wonder bond yields are starting to go that route again,…and that the USD is still holding its footing? US 10-year yields, and indeed most 10s, are still far above recent lows even if they are also above recent highs.


Tyler Durden

Wed, 10/02/2019 – 08:31

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

ADP Employment Disappoints, Suffers Drastic Downward Revisions

ADP Employment Disappoints, Suffers Drastic Downward Revisions

After May’s collapse, ADP employment gains have rebounded notably but were expected to slow once again in September (which makes some sense given the collapse in ISM/PMI employment indices).

But things were considerably worse – not only did September’s data miss (+135k vs +145k exp) but Augusts’s big jump of 195k was revised drastically lower to just 157k.

Source: Bloomberg

“The job market has shown signs of a slowdown,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute.

“The average monthly job growth for the past three months is 145,000, down from 214,000 for the same time period last year.”

Goods-producing jobs rose 8.2k and Services rose 126.7k – but both slowed down and also saw notable downward revisions…

Source: Bloomberg

Interestingly, internals are relatively solid with only mining losing jobs…

Source: Bloomberg

 

Full infographic:

Mark Zandi, chief economist of Moody’s Analytics, said, “Businesses have turned more cautious in their hiring. Small businesses have become especially hesitant. If businesses pull back any further, unemployment will begin to rise.”


Tyler Durden

Wed, 10/02/2019 – 08:21

via ZeroHedge News https://ift.tt/2nP9HXV Tyler Durden

UBS Chief Economist Paul Donovan Resumes Publication After “Chinese Pig” Scandal

UBS Chief Economist Paul Donovan Resumes Publication After “Chinese Pig” Scandal

Nearly four months after UBS chief economist Paul Donovan published a rather off-color, if hardly ill-meaning and career-ending joke about “Chinese pigs” which forced his employer to put his daily notes on hold following some high profile complaints from Beijing, the UBS strategist is back with his first note since June 13.

Without further ado, here is his just published bulletin, whose dry humor content is “just right”, even if understandably lacking in commentary on the catalysts for China’s surging food inflation (in retrospect, Donovan was right: Chinese pork prices just hit an all time high.

From Paul Donovan’s audio comment: “Worry, without overreacting”

  • Asian equities are lower after yesterday’s weak US ISM manufacturing sentiment poll. Globally, the gap between sentiment and reality is the widest since 2012. Trade taxes worry manufacturers. When asked, manufacturers say they are less than happy about life, but their actions are more positive. Investors should worry about trade taxes. They should not panic about sentiment.
  • Global bond yields rose yesterday. Some yield curves steepened. Do steeper yield curves predict an economic boom? They do not, any more than inversions predict a recession. Weaker bond markets reflected a poor Japanese auction. This reflected fewer “captive” investors (who buy for non-economic reasons). Such investors distort bond markets and bond market signals.
  • In the interminably tedious EU-UK divorce process, UK Prime Minister Johnson speaks at the Conservative Party conference. Exit proposals to the EU are expected. There is no certainty among investors about the proposals, if the EU will agree a deal, if the British Parliament will pass a deal, or if Johnson will remain as prime minister.
  • A trio of Federal Reserve speakers entertains us today, including New York Fed President Williams (an economist, not a lawyer – increasingly rare in central bank circles). Fed comments are likely to attract more attention than ECB comments.


Tyler Durden

Wed, 10/02/2019 – 08:04

via ZeroHedge News https://ift.tt/2otwQ2a Tyler Durden

Global Stocks Tumble, Futures Slide To One Month Low As Recession Fears Rise

Global Stocks Tumble, Futures Slide To One Month Low As Recession Fears Rise

Global markets slumped, S&P futures dropped and European bourses tumbled as the MSCI world index dipped 0.3% to its lowest since Sept. 5, after shedding 0.83% in the previous session, after the US manufacturing ISM tumbled to more than a decade low, sparking worries a recession may now be unavoidable as the fallout from the U.S.-China trade war spreads to the U.S. economy, whose slowdown would remove the last remaining bright spot in the global economy just as Europe is falling back into recession.

S&P index futures retreated with Asian shares as miserable manufacturing data from the world’s largest economy continued to reverberate around markets. The dollar advanced. The S&P Emini dropped to 2,920, the lowest level since September 4; one day earlier the S&P 500 lost 1.23% to hit four-week lows after a disastrous ISM print.

Markets had been expecting the index to rise back above the 50.0 mark denoting growth: “Historically, equity returns are worst when the ISM manufacturing drops from levels below the 50 threshold,” Patrik Lang, head of equity research at Julius Baer. “Uncertainty around the US-China trade war is obviously the main reason for the weakness, with companies exposed to global trade increasingly putting off investment decisions.”

European shares opened lower, with London stocks lagging the most on fresh Brexit drama. The pan-European STOXX 600 index was down almost 1 percent. 

European stocks tumbled, the Stoxx 600 sliding more than 1%, with all sectors in the red led by miners, construction and chemical producers, falling 1.4% or more. The gauge slid for a second day after reaching a one-year high on Monday. The Basic Resources Index (SXPP) dropped for a third day, losing as much as 1.8%, as sentiment continues to sour following the string of poor data released on Tuesday: diversified miners all fell with BHP Group -1.7%, Anglo American -1.7%, Rio Tinto -2%, and Glencore -1.4%. The FTSE 100 was among the worst performers after PM Johnson issued a hard Brexit ultimatum to the EU and  prepared to announce his final Brexit offer. Bunds drifted lower, peripheral spreads trade around the tightest levels of the week as curves continue to bear steepen.

Adding to investor anxieties, European companies are set for their worst quarterly earnings in three years as revenue drops for the first time since early 2018, according to the latest Refinitiv data.

“Our base case is that trade tensions will remain elevated, and we expect global growth to slow in 2020 to its slowest pace since the global financial crisis,” said Mark Haefele, chief investment officer at UBS Global Wealth. “We don’t rule out a worsening of the trade situation over the next six to 12 months.”

Earlier in the session, Asian stocks also dropped, with the MSCI ex-Japan Asia-Pac index dropping 0.8%, led by material and technology firms, as investors pared exposure to risk assets following dismal U.S. factory data and violent protests in Hong Kong. All major markets in the region were down, with Singapore and Indonesia leading declines, Australian shares falling 1.5% and South Korean shares shedding 1.95%. China markets are closed for a one-week holiday. Japan’s Nikkei slid 0.5% and the Topix dropped 0.4%, dragged by electronics makers including Keyence and Sony. Automakers also fell after weak U.S. auto sales in September.

While markets in China and India were closed for holidays, Hong Kong’s Hang Seng Index declined 0.2%, as Tencent Holdings and HSBC Holdings weighed. The index fell as much as 1.2% in early trade. On Tuesday, Hong Kong police shot a teenage protester, the first to be hit by live ammunition in almost four months of unrest in the Chinese-ruled city.  Protesters and police battled across the city in some of the most serious clashes since widespread unrest began in June. 

Adding to tensions in Asia, North Korea carried out at least one more projectile launch on Wednesday, a day after it announced it will hold working-level talks with the United States at the weekend.  Japanese Cabinet Minister Suga said the launch did not directly impact Japan but one North Korean ballistic missile landed inside the Exclusive Economic Zone (EEZ) and one outside. Japanese PM Abe condemned the North Korea launches and added that it violates UN resolutions. Further, Japanese PM Abe will hold a meeting of the National Security Council to decide how to respond to the projectile firings. In terms of details, South Korean Defence Ministry said the missiles launched by North Korea have a range of circa 1300km and was likely launched at a higher apogee to decrease range and could have been fired from a submarine. Japan has not yet determined whether North Korea’s missiles were Submarine-launched ballistic missile and notes it may have been one missile which split into two. The White House said it is aware of the launch and is monitoring the situation.

In rates, yesterday’s early hours Rates selloff is all but a distant memory now, as a disastrous US ISM print has again kicked-off another “global growth scare” that is rallying Bonds / havens, as Nomura’s Charlie McElligott writes. Eurozone bond yields inched up after another speech from outgoing ECB chief Mario Draghi calling for fiscal stimulus to boost the region’s sluggish economy.

The recent poor data lifted the Fed funds rate futures price sharply, with the November contract now pricing in about an 80% chance the U.S. Federal Reserve will cut interest rates on Oct. 30, compared to just over 50% before the data. Even so, the dollar rebounded to fresh two years highs after sliding in Tuesday’s session. The index that measures the greenback against a basket of peers was up 0.16%.

Elsewhere in FX, the yen rose to 107.7 from Tuesday’s low of 108.47. The euro fell 0.15% to $1.0915 EUR while the Australian dollar traded at $0.6693, having hit a 10-1/2-year low of $0.6672 the previous day after the Reserve Bank of Australia cut interest rates and expressed concern about job growth.

In commodities, gold rose to $1,479.13 per ounce from a two-month low of $1,459.50 hit on Tuesday on the back of a robust U.S. dollar. The weak U.S. data pushed oil prices to near one-month lows, although a surprise drop in U.S. crude inventories helped them to rebound. Brent crude futures rose 0.2% to $59.01 a barrel, after hitting a four-week low of $58.41 on Tuesday, while West Texas Intermediate crude gained 0.69% to $53.99 per barrel after hitting a one-month low of $53.05.

Expected data include mortgage applications and ADP employment change. Acuity Brands, Lamb Weston, Lennar, and Paychex are among companies reporting earnings.

Market Snapshot

  • S&P 500 futures down 0.4% to 2,926.50
  • STOXX Europe 600 down 1% to 383.94
  • MXAP down 0.6% to 155.99
  • MXAPJ down 0.8% to 497.74
  • Nikkei down 0.5% to 21,778.61
  • Topix down 0.4% to 1,596.29
  • Hang Seng Index down 0.2% to 26,042.69
  • Shanghai Composite down 0.9% to 2,905.19
  • Sensex down 0.9% to 38,305.41
  • Australia S&P/ASX 200 down 1.5% to 6,639.94
  • Kospi down 2% to 2,031.91
  • German 10Y yield rose 2.5 bps to -0.539%
  • Euro down 0.2% to $1.0914
  • Italian 10Y yield rose 3.4 bps to 0.518%
  • Spanish 10Y yield rose 1.5 bps to 0.167%
  • Brent futures down 0.3% to $58.73/bbl
  • Gold spot up 0.1% to $1,480.55
  • U.S. Dollar Index up 0.2% to 99.32

Top Overnight News from Bloomberg

  • Boris Johnson is poised to issue an ultimatum to the European Union on Wednesday: negotiate Brexit on his terms within the next nine days, or face a no-deal divorce. A key EU player has already rejected the prime minister’s plan
  • The ECB began its official transition to a new benchmark short-term interest rate Wednesday, as global regulators move away from tainted Libor gauges. The new rate, known as ESTR, which reflects overnight borrowing costs of banks in the monetary bloc, fixed at -0.549% for Oct. 1, the central bank said on its website
  • Germany’s five leading research institutes slashed their forecasts for economic growth, as manufacturers in Europe’s biggest economy struggle with waning global demand and lingering trade disputes. GDP will expand by 1.1% in 2020, they predicted, down from 1.8% forecast in April
  • Japan’s struggling government bond market shows just how vulnerable it can be to the whim of the central bank. JGBs generated the smallest return among all 46 sovereign debt markets tracked by Bloomberg in the third quarter, gaining less than 0.6% amid a global bond rally. They lost 1.1% in September
  • North Korea fired what appeared to be a ballistic missile designed for submarines, testing President Donald Trump’s tolerance for weapons tests just hours after agreeing to restart stalled nuclear talks with the U.S.
  • European Union governments have discussed giving the U.K. a major concession on Brexit by possibly time-limiting the contentious backstop mechanism for the Irish border, two people familiar with the matter said. A time limit would only be on offer if the U.K. accepted a backstop which would keep Northern Ireland in a customs union with the bloc
  • Brazilian President Jair Bolsonaro’s proposal to overhaul Brazil’s pension system and rein in public debt passed a first of two votes on the senate floor late on Tuesday.
  • North Korea fired what appeared to be a submarine-based ballistic missile off its eastern coast Wednesday in an escalation that came just hours after saying it would resume stalled U.S. nuclear talks
  • The European Central Bank begins its official transition to a new benchmark short-term interest rate Wednesday, as global regulators move away from tainted Libor gauges
  • Ukrainian President Volodymyr Zelenskiy said he never met or talked by phone with Donald Trump’s personal lawyer Rudy Giuliani, whose contacts in Ukraine are part of an impeachment inquiry in Washington

Asian equity markets took the cue from the negative lead on Wall Street where the major indices declined on the first day of Q4 after US ISM Manufacturing PMI contracted to its worst level since June 2009. Losses in ASX 200 (-1.5%) accelerated after NAB shares tumble 3% amid an additional AUD 1.2bln charge relating to increased provisions for customer-related remediation, whereas upside in the Nikkei 225 (-0.5%) was limited by the unfavourable currency flow, whilst Toyota shares slumped due to poor North American vehicle sales and Sony remained near the bottom of the index after cutting streaming prices ahead of Google’s Stadia launch. Elsewhere, the Hang Seng (-0.2%) climbed off lows after returning from a long weekend, albeit oil giants remained pressured after Norway’s Sovereign Wealth Fund received the green light to sell USD 6bln worth of oil and gas stocks, meanwhile upside in the index was capped by the ongoing situation in Hong Kong as protestors vowed to step up action after a police officer shot a teenager yesterday. Meanwhile, South Korea’s KOSPI (-2.0%) was pressured after North Korea fired short-ranged projectiles towards the East Sea. As a reminder, Mainland China and Indian markets were closed today due to public holidays.

Top Asian News

  • U.K. Protests Slows Down Mainland Visitor National Day Arrivals
  • Israel Plans to Boost Supply in Landmark Gas Deal With Egypt
  • Bears Retreat From Turkey Stocks as Real Returns Draw Buyers
  • SoftBank Debtholders Hope For More Caution After WeWork Woes

Major European Bourses (Euro Stoxx 50 -1.3%) are firmly lower, amid a lack of fresh bearish fundamentals, as the region more takes its cue from a negative AsiaPac lead; sentiment was downbeat overnight following Wall Street underperformance after bad US ISM Manufacturing data, the latest missile test launch out of North Korea and ongoing tensions in Hong Kong. Looking ahead, at 15.00 BST the WTO is expected to announce its decision on the US’ right to retaliate to against the EU over their Airbus (-0.8%) subsidies, a potential source of impetus. Prior reports have suggested the ruling will allow the US to impose tariffs on roughly USD 8bln of EU imports on a wide range of products. Sectors are also firmly in the red; Materials (-2.1%), Industrials (-1.7%) and Energy (-2.0%) (despite slightly higher crude prices) are leading the sectors lower while Consumer Staples (-0.9%), Telecoms (-0.8%) and Utilities (-1.0%) hold up comparatively better. In terms of individual movers; Flutter Entertainment (+18.4%) shot higher on the news of the co.’s merger with Stars Group, pulling other betting names higher such as William Hill (+4.3%) higher in tandem. Nestle (-0.2%) shares are being supported by the Co.’s sale of its Skin Health unit. Tesco (+0.6%) managed to reverse early losses and now trades higher, after the co. released decent earnings premarket, but its CEO resigned. Pernod Ricard (+0.7%) is higher after being upgraded at Jefferies. Luxury names including LVMH (-2.0%) and Richemont (-2.1%) underperformed the market, with bad retail data out of Hong Kong (the largest decline on record) weighing.

Top European News

  • ECB Begins Transition of Benchmark Short-Term Interest Rate
  • German Fiscal Stimulus Already Creeping In, Whatever Merkel Says
  • Lenders Selling Loan Exposures to Thomas Cook at 90% Discount
  • Metro Bank Founder Hill to Leave Board Early as Stock Slides

In FX, the Dollar has clawed back some losses following yesterday’s abrupt U-turn from new 2019 highs in the DXY with the index bouncing firmly ahead of 99.000 towards 99.420, as attention switches to NFP via ADP and hopefully better news from the services side of the US economy after the more pronounced ISM manufacturing activity slowdown. However, the Greenback is also benefiting from renewed weakness in rival currencies and general risk aversion awaiting the WTO ruling on the extent that the US can counter EU subsidies for Airbus and repercussions in Brussels after UK PM Johnson delivers his latest/last Brexit proposal.

  • CHF/GBP – The clear G10 underperformers, with the Franc deflated on weak Swiss CPI grounds, further SNB guidance from Maechler expounding the virtues of NIRP allied to direct FX intervention and the KOF cutting growth and inflation estimates, while the Pound has been hit by a dire UK construction PMI and the ongoing political/Irish border wrangling. Consequently, Usd/Chf is back up near parity and Cable has recoiled from 1.2300+ towards Tuesday’s low only a few pips away from the big figure below, with the focus turning to Johnson’s appearance at the Tory Party conference from noon.
  • NZD/AUD – The Aussie and Kiwi are also unwinding/reversing post-US ISM manufacturing gains, as Aud/Usd returns to ytd lows circa 0.6670 and Nzd/Usd retests bids protecting 0.6200 alongside YUAN depreciation in holiday-thinned trade.
  • EUR/CAD – Holding up a bit better than most major counterparts, but some way off best levels vs the Buck as the single currency failed to sustain momentum through 1.0950 and Loonie could not breach 1.3200 amidst confirmation of more German GDP forecast downgrades and a downturn in crude prices.
  • JPY – Bucking the broad, if not overall trend, safe-haven demand/positioning has kept the Yen elevated between 107.90-55 against the Dollar, and from a chart perspective the 100 DMA in Usd/Jpy (now around 107.76) remains pivotal.
  • EM – Rand in the spotlight ahead of ANC judgment on the latest SA growth plan and following the SARB’s semi-annual MPR, with some technical support coming from a pull-back from 1 month peaks in Usd/Zar around 15.4000 to almost 15.3000 at one stage.
  • Goldman Sachs economists say the RBA’s internal economic model suggests the Central Bank will need to release a USD 200bln QE programme to achieve its unemployment and inflation targets. (AFR)

In commodities, the crude complex is mixed, giving away the majority of overnight gains, where the complex bounced from post US ISM Manufacturing data lows helped by a bullish headline API print, as risk sentiment took a turn for the worse at the European open. WTI and Brent currently sit just below the USD 54.00/bbl and USD 59.00/bbl levels respectively. To the downside technicians will be eyeing the USD 53.00/bbl handle in WTI; yesterday’s low and the late August/early September base. After yesterday’s choppy session, which saw Gold price swings of north of USD 40/oz, the precious metal is lacklustre and seemingly awaiting further macro drivers in the form of today’s ADP employment report, ISM Non-manufacturing tomorrow and NFP on Friday. In fitting with fragile risk sentiment, Copper remains under pressure as global growth concerns linger, albeit the red metal is off yesterday’s post ISM Manufacturing data lows.

US Event Calendar

  • 7am: MBA Mortgage Applications, prior -10.1%
  • 8am: Fed’s Barkin Speaks at a Conference on the Rural Economy
  • 8:15am: ADP Employment Change, est. 140,000, prior 195,000
  • 9am: Fed’s Harker Speaks at Community Banking Conference
  • 10:50am: New York Fed’s Williams Speaks in San Diego

DB’s Jim Reid concludes the overnight wrap

The warning signs that we got from the Chicago PMI data on Monday turned out to be correct with yesterday’s shocking ISM manufacturing print being the talk of the town in markets. Indeed the headline was the decade-low September print of 47.8, a 1.3pt decline from August and also well below expectations for a 50.0 reading. In fact it was below even the lowest economist’s forecast on Bloomberg. The details were arguably even more concerning though. New orders (47.3 vs. 47.2 previously), employment (46.3 vs. 47.4) and production (47.3 vs. 49.5) all either remained soft or deteriorated further.Only 3 of the 18 industries in the survey reported growth, the lowest figure since 2009. In addition, the leading indicator new exports component slumped to 41.0. The last time it was lower was during the depths of the GFC in March 2009, and if we look at the full 380 months’ of history, this index has only been lower than it is right now on 6 occasions.

We updated our simple equity versus PMI model last night following the latest slug of data and unsurprisingly the equity markets in Europe and the US now appear overvalued on this metric. This is most severe in Germany (20%), Italy (16%) and the Eurozone (14%) as a whole. The S&P 500 is 6% overvalued relative to the latest ISM however interestingly it’s the reverse in Asia where the Nikkei and Shanghai Comp are actually 8% and 13% cheap respectively. For Europe it’s worth noting that current equity market pricing imply PMIs around 50 while the S&P 500 implies an ISM of 50.4. So pricing bad news but not this bad. Although this analysis is based on the historical relationship between PMIs/ISMs and equities it’s fair to say that rarely has there been such a long standing and wide gap between manufacturing and services. So there is still hope if services buck the historical trend and hold up but there have been cracks of late. So all eyes on tomorrow’s services readings.

What is hard to argue with is that the global manufacturing sector is now very much in a recession. This now makes an already important Fed meeting later this month even more of a crucial risk event. With that in mind it’s worth noting that there are only 20bps of cuts priced in for this month’s meeting, albeit up from 14.5bps on Monday. Markets do seem to be having a somewhat hard time pricing in a more dovish Fed, though the pricing could also reflect expectations for another IOER adjustment. Our US economists do expect a cut this month.

By the end of the session yesterday, the S&P 500 was down -1.23%, off -1.75% from its pre-ISM highs. The NASDAQ (-1.13%) and DOW (-1.28%) were down similar amounts. In Europe the STOXX 600 (-1.31%) turned in its worst performance in six weeks. The domestic PMI revisions hardly made for any more comfortable reading on the continent (more on those below).

Meanwhile the trend in rates prior to the ISM was for yields to move higher following the big sell-off in JGBs just over 24 hours ago. That quickly reversed once the data was out with 2y and 10y Treasuries closing down -7.8bps and -2.9bps respectively, and -13.4bps and -12.0bps off the intraday highs. President Trump tweeted shortly after the data came out and called the Fed “pathetic” and that “they don’t have a clue” however that didn’t move the dial in markets. The curve steepened +5.5bps to 8.9bps last night and sits at 10.4bps this morning while in Europe Bunds retraced a +6.1bps selloff to end the session just +0.7bps higher. Elsewhere, the end result in credit was for US HY spreads to widen +8bps while the risk off helped Gold (+0.55%) and safe haven currencies like the Yen (+0.36%) and Swiss Franc (+0.55%).

Separate from the macro news, stock markets were also jolted yesterday by the announcement by Charles Schwab Corp (-9.74%) that they will eliminate online trading commissions for stocks, ETFs, and options. The prominent brokerage is locked in a price war with its main competitors as more and more assets shift toward lower-fee and passive investment strategies. E*Trade Financial (-16.43%) and TD Ameritrade (-25.83%) both saw steep selloffs in response.

This morning in Asia equity markets have followed the US lower, with the Nikkei (-0.65%) and the Hang Seng (-0.54%) both losing ground. South Korea’s KOSPI (-1.35%) was one of the worst performers, which came as the country’s military said that it detected a North Korean missile launch that flew 450km. It comes just hours after North Korean state media said that they would start further denuclearization talks with the US this weekend. Meanwhile 10yr JGBs are down -1.9bps at time of writing, 10yr USTs back up +2.5bps, with S&P futures up +0.20%.

Onto Brexit where there’s been a lot of developments over the last 12 hours with more likely today. A Bloomberg story as London went home caused a bit of a stir yesterday, which suggested that the EU is considering accepting a time limit on the Irish backstop, though it did later emphasise that the deliberations have only been between EU capitals, not with the UK. An EU spokesperson later said that the EU are not considering this, while an Irish government spokesman said it hadn’t been discussed.

Mr. Johnson will give a key speech today at the Conservative Party conference where more Brexit news will follow. It’s expected firm Brexit proposals will be sent to the EU soon after the conference ends – possibly within 24 hours. So a potentially big couple of days ahead. The overnight reporting suggested that he will offer a plan which will include “two borders for four years;” with a time-limited backstop for Northern Ireland that is separate from the UK. If so and as mentioned above, it is unlikely that the EU will agree to such a plan, which would require customs checks between Northern Ireland and the Republic of Ireland. The Irish finance minister has already been quoted as saying that if this is the plan then “that in itself is bad faith”. So today could be the beginning of the end for any hopes of a deal ahead of the EU council meeting in two weeks.

Back to the data yesterday, where the PMIs in Europe where little changed at the final revision. Indeed the Eurozone reading was nudged up 0.1pts to 45.7 with Germany revised up 0.3pts to 41.7 but France revised down 0.2pts to 50.1. The countries outside of Germany and France were within the margin of error of what was implied by the flash PMIs while the US reading was revised up 0.1pts to 51.1 and contrasting with the more widely followed ISM equivalent. Overall we counted a total of 35 manufacturing PMIs/ISMs around the globe yesterday and 18 were below 50 with the unweighted average being 48.9. Award for the highest reading went to Greece! And the lowest South Africa.

Away from the data and on to the policy front, where there was a slew of speeches from Fed and ECB officials yesterday, but almost no new substantive information. In the US, Vice Chair Clarida and Governor Bowman both spoke but avoided talking about the economy or rates. Chicago President Evans reiterated his recent (surprising) hawkish shift by repeating that he expects policy to be on hold “for some time.”

As for the ECB, outgoing President Draghi spoke again about the need for fiscal support and cited an argument we used in our long term study that fiscal is much more powerful when monetary policy is close to the effective lower bound (see pages 47-51 of the note here ). Meanwhile Bundesbank President Weidmann pushed back against the Draghi’s recent call for unanimity. Last week, Draghi had said in testimony that “the form in which dissent is made known is very important (…) in order not to undermine the effectiveness of our decisions.” Weidmann yesterday criticised that argument, albeit without singling Draghi out by name, saying that “intensive discussions” regarding policy, including QE, are “absolutely necessary.” Incoming President Lagarde will have her hands full when she inherits the Presidency next month.

To the day ahead now which is a very quiet one for data releases with the only print due this morning being the September construction PMI in the UK, while in the US the September ADP employment change is due. The consensus for the latter is for a 140k print, following a 195k reading in August. Away from the data we’ve got scheduled comments from the Fed’s Barkin, Harker and Williams this afternoon.


Tyler Durden

Wed, 10/02/2019 – 07:38

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

Pompeo Admits He Participated In Controversial Call Between Trump And Ukainian President

Pompeo Admits He Participated In Controversial Call Between Trump And Ukainian President

Following a WSJ report earlier this week that claimed he had been on the July 25 call between President Trump and Ukrainian President Volodymyr Zelensky, Secretary of State Mike Pompeo admitted on Wednesday that he was, in fact, on the call.

The admission could make it more difficult for Pompeo to push back against House Committees that have subpoenaed him and several other State Department officials as part of their impeachment investigation. Because he participating in the call, Pompeo could be considered a “fact witness.”

 


Tyler Durden

Wed, 10/02/2019 – 07:37

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

Even More Frightening Videos And Photos Surface Of Tesla’s “Smart” Summon Feature

Even More Frightening Videos And Photos Surface Of Tesla’s “Smart” Summon Feature

Updated 10/2/2019

With Tesla releasing V10 of its vehicle software earlier this week, owners were chomping at the bit to get their hands on the long touted “Smart Summon” feature, which is supposed to allow drivers to summon their vehicles to them in parking lots using their cell phones. 

But, as things go with Tesla, the idea of the idea was worlds away from the actual implementation of it. In fact, early customer videos and reports of the “feature” are making Smart Summon look extremely dangerous and nothing short of a complete disaster. 

As soon as the software update pushed to drivers, videos began popping up on social media showing a litany of negative consequences of everyday users beta testing Smart Summon in real life. 

Tesla says that with Smart Summon “customers who have purchased Full Self-Driving Capability or Enhanced Autopilot can enable their car to navigate a parking lot and come to them or their destination of choice, as long as their car is within their line of sight. It’s the perfect feature to use if you have an overflowing shopping cart, are dealing with a fussy child, or simply don’t want to walk to your car through the rain.”

Tesla claims that “customers who have had early access to Smart Summon have told us that it adds both convenience to their trips and provides them with a unique moment of delight when their car picks them up to begin their journey.”

Let’s compare Tesla’s description of the feature with the real world results.

There’s this video of another vehicle backing into a Model 3 while it was being summoned in a crowded parking lot. 

There’s these photographs, posted to Twitter on Tuesday, showing damage after summon drove a Tesla into a parking structure pole.

…and this photo of a Tesla that appears to have hopped the curb due to summon.

There’s this video from Monday of this week, showing summon almost hit another car in a very un-crowded parking lot, causing its owner to exclaim, “Holy shit!”:

…another Tesla that drove up a curb…

Then there is exceptionally alarming video where a driverless Tesla pulls across a lane of live traffic, forcing another driver to slam on their brakes. 

This video was released on Monday morning, showing a Tesla’s “embarrassing” attempt to navigate a Walmart parking lot:

There’s also been adamant warnings from Tesla owners that summon “isn’t safe or production ready”. 

There was also this drone footage of two failed attempts in a crowded parking lot, one of which shows a Tesla pointing itself at oncoming traffic and causing a traffic jam. 

There was this wildly inefficient drive in a completely empty parking lot…

And this photo showing a Tesla grinding against the outside of a garage…

…and this video of a Tesla pointing directly at parked cars and driving over white lines in a crowded parking lot.

And while there’s been outrage by members of the Tesla community – it has been because other Tesla owners are actually sharing their experiences.

As usual, FinTwit summed things up the best…

…and arrived at the one simple, obvious question about the feature that we’re all asking:

 


Tyler Durden

Wed, 10/02/2019 – 07:09

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

Manhattan Home Prices Down 8% In Q3 – Largest Slump Since 2011

Manhattan Home Prices Down 8% In Q3 – Largest Slump Since 2011

New York City’s housing market was already struggling with a historic mismatch involving a flood of luxury inventory and a shortage of buyers looking for housing in that price-range (instead, the city has continued to suffer from a shortage of housing affordable to its workforce), when the city adopted a new transfer tax on properties valued over $2 million.

It’s believed the new ‘mansion’ tax (which comes on top of President Trump’s tax-reform plan that eliminated the SALT deduction) pushed sales forward earlier this summer.

Instead, the market is growing accustomed to more sobering data points like this one: Sales on previously owned coops and condos in Manhattan continued what has become a multiyear slump during the third quarter. Prices on apartments sold slumped 8%, the largest YoY decline since 2011, Bloomberg reports.

According to another set of data from Douglas Elliman and Miller Samuel, the drop was even larger: The average sales price declined by 14% during Q3, which would make it the biggest drop since the financial crisis, according to a story from CNBC.

It’s just the latest sign that buyers are demanding more concessions – not that they have a choice. NYC is one of the most unaffordable cities in the world, where the median income is just $50,711, and even a small condo can fetch at least $600,000.

Since the housing market peaked in 2014, sellers have apparently accepted the fact that the best way to cement a sale in what has become a buyer’s market. Which is perhaps why during Q3 2019, 93.6% of all condo and coop purchases were finalized at, or below, the last asking price, the second-highest share since the end of 2011.

And much of the inventory had already been marked down at least once. 

Still, a report from the brokerage Core revealed that the average home sold during the quarter spent 192 days on the market. Moreover, there’s still a significant mismatch between the inventory available and what buyers want: 29% of Manhattan’s inventory is priced over $3 million, yet during the last quarter, only 9.7% of closings were in that range.

Bottom line: the number of apartments for sale climbed for an 8th straight quarter to 7,352 as of the end of September, or 6.2% more than a year earlier, according to Miller Samuel and Douglas Elliman, which suggests the decline in prices will continue.


Tyler Durden

Wed, 10/02/2019 – 07:02

via ZeroHedge News https://ift.tt/2mV63vp Tyler Durden