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The global risk off wave that started late on Monday as the full extent of the Chinese coronavirus scare became apparent to traders, accelerated overnight and global shares took a beating on Tuesday, wiping out all gains made at the start of the week as US equity futures, Asian stocks and European equities all slumped the red.

Authorities in China confirmed that a new virus could be spread through human contact, reporting 15 medical staff had been infected and a fourth person had died. Safe-haven bonds and the yen gained as investors were reminded of the economic damage done by the SARS virus in 2002-2003, particularly given the threat of contagion as hundreds of millions travel for the Lunar New Year holidays.

“I’m not an expert in the pandemics, but you can look at previous examples like the SARS outbreak which also originated from Asia,” said Cristian Maggio, Head of Emerging Markets Strategy at TD Securities in London.  Noting that China had initially downplayed the full extent of the SARS outbreak, he said “I think the market might be fearing something similar.”

The mood swing saw MSCI’s All-Country World Index slip 0.4%, wiping out gains made at the start of the week on Monday. Asian markets were hit particularly hard, with Hong Kong – which suffered badly during the SARS outbreak – stocks tumbling 2.8% following a rating downgrade and as the coronavirus panic was seen impacting real estate, casino and car stocks, and with Chinese New Year coming up the situation could get even worse. Indeed, the coronavirus outbreak from central China entered a new phase of severity as multiple medical workers were reported to have been infected. Four people have died.

For those who are still unfamiliar, an unknown virus started small in Wuhan, China, back in mid-December 2019 with the Chinese health authorities later saying that the virus was related to SARS. Initial expectations were muted and human-to-human transmission was not presumed, but yesterday Chinese authorities announced that human-to-human transmission had taken place between patient and health worker. In addition the number of infected people was on rise. The reaction function has been prompt with Hang Seng futures down 2.8% in today’s session led by real estate, casino and car stocks. While we don’t know the direction in equities from here related to the coronavirus, Rabobank’s Peter Garnry notes that there are many unknowns and that the initial reaction often fails to discount the true extent and warns that “short-term this could get much worse for Asian equities as the Chinese New Year means that millions of people will be traveling potentially spreading the virus fast over large areas.”

【令人恐惧的一句话】我刚从武汉回来！🙏🙏 pic.twitter.com/Zc94TlIySr

— 一叶一追寻 (@RaynardToddnay1) January 20, 2020

Markets, which for weeks ignored any geopolitical developments, were duly “shocked” to catch up to the newsflow out of China, and Asian stocks extended declines as risk-off sentiment dominated amid worries about China’s spreading coronavirus. The MSCI Asia Pacific Index dropped the most in two weeks, with three-fourths of its stocks trading in the red. As noted above, Hong Kong was the worst-performing market in the region, as its benchmark Hang Seng Index posted its worst decline in five months. Elsewhere, the Shanghai Composite Index sank the most since November, and Japan’s Topix completely erased Monday’s advance. “Safe-haven and defensive sectors might outperform the riskier assets in the days to come,” said Margaret Yang Yan, a market analyst at CMC Markets Singapore Pte. “Consumer discretionary, hospitality, retail, aviation and entertainment sectors are likely to suffer from a reduced number of social activities and outings.”

The chill in Asia carried over to European markets, where shares of luxury goods makers – which have large exposure to China – were among the biggest fallers. The French CAC 40 lagged peers, as luxury names weigh amid ongoing concern that the China virus will disrupt travel and spending. Sector-wise, mining stocks, household and personal goods, oil and banking names lead losses, with all Eurostoxx 600 sectors posting declines. Despite an initial dip, haven assets continue to be sought after.

Among the viral din, markets ignored the best German ZEW Economic Sentiment print in almost five years, since 2015, which ironically enough was just 5 months after the worst ZEW print in 8 years.

As stocks slumped, risk havens were in demand, and 10Y yields dropped below 1.80% again, while Germany’s 10-year government bond yield touched one-week lows. Bund, Treasury and Gilt curves all bull flattened and peripheral spreads widened to core with Italy the weakest link.

Investors had already been guarded after the International Monetary Fund trimmed its global growth forecasts, mostly due to a surprisingly sharp slowdown in India and other emerging markets, although there was some relief as U.S. President Donald Trump and French President Emmanuel Macron seemed to have struck a truce over a proposed digital tax. The two agreed to hold off on a potential tariffs war until the end of the year.

Trump also spoke at the World Economic Forum in Davos on Tuesday, with trade and tariffs on the agenda among more self-congratulatory remarks. In a tweet late on Monday, Trump said he would be bringing “additional Hundreds of Billions of Dollars back to the United States of America! We are now NUMBER ONE in the Universe, by FAR!!”

Also overnight the Bank of Japan issued its latest policy statement, which modestly lifted forecasts for economic growth. As widely expected, the BOJ maintained its short-term interest rate target at -0.1% and a pledge to guide 10-year government bond yields around 0%, by a 7-2 vote. Japan’s yen picked up a bid on the safe-haven move and the dollar dipped to 109.93 from an early 110.17. It also gained on the euro, leaving the single currency lower to the dollar at $1.1090.

Elsewhere in FX, the dollar rose alongside haven bids and the yuan dropped as investors assessed the implications of a deadly virus in China ahead of the Lunar New Year holidays. AUD was the weakest on the G-10 scoreboard, AUDUSD finding support around its 100DMA as the Australian dollar took a knock from the flu worries since it attracts large numbers of Chinese tourists, who tend to be big spenders over the Lunar New Year holidays. Australia said it would step up screening of some flights from Wuhan. The Chinese yuan, predictably, tumbled and suffered one of its worst sessions since August as USDCNH rose as high as 6.9128.

In commodities, spot gold hit a 2-week high of $1,568.35 per ounce, but traded 0.2% lower in early deals in London. Oil prices slid nearly 1%, having earlier gained on the risk of supply disruption in Libya.Brent crude futures fell 1% to $64.60 a barrel, while U.S. crude fell 0.92% to $58.09 a barrel.

To the day ahead now which is a quiet one for data, with no releases of note in the US; earnings highlights include Netflix, IBM, Halliburton, United Airlines and UBS.

Market Snapshot

• S&P 500 futures down 0.4% to 3,311.75
• STOXX Europe 600 down 0.7% to 421.08
• MXAP down 1% to 172.70
• MXAPJ down 1.4% to 563.53
• Nikkei down 0.9% to 23,864.56
• Topix down 0.5% to 1,734.97
• Hang Seng Index down 2.8% to 27,985.33
• Shanghai Composite down 1.4% to 3,052.14
• Sensex down 0.4% to 41,367.74
• Australia S&P/ASX 200 down 0.2% to 7,066.35
• Kospi down 1% to 2,239.69
• German 10Y yield fell 1.6 bps to -0.234%
• Euro down 0.06% to $1.1088
• Italian 10Y yield fell 2.2 bps to 1.184%
• Spanish 10Y yield fell 2.1 bps to 0.424%
• Brent futures down 1.2% to $64.41/bbl
• Gold spot down 0.3% to $1,555.85
• U.S. Dollar Index little changed at 97.62

Top Overnight News from Bloomberg

• Six people have died in China’s virus outbreak and more than 200 have been infected, including fifteen medical professionals. Health-care workers contracting the illness indicates that it is more easily transmitted than previously thought. That puts the disease — part of the coronavirus family — on a higher risk level, reminiscent of the Severe Acute Respiratory Syndrome, or SARS, pandemic in Asia 17 years ago that killed 800 people.
• Reports from BOE agents — a cross-country network that holds confidential conversations with businesses and community organizations — could be key for officials trying to judge whether economic sentiment has rebounded since December’s general election
• The Bank of Japan left rates unchanged Tuesday and painted a brighter picture of the economic outlook, offering a further indication that the likelihood of additional stimulus has receded
• Presidents Emmanuel Macron and Donald Trump agreed to a truce in their dispute over digital taxes that will mean neither France nor the U.S. will impose punitive tariffs this year, a French diplomat said
• The International Monetary Fund predicted the world economy will strengthen in 2020, albeit at a slightly weaker pace than previously anticipated amid threats related to trade and tensions in the Middle East
• Oil edged lower as plentiful global supplies offset the loss of exports from Libya, while Europe considered a military mission to help enforce an arms embargo and a potential cease-fire in the OPEC producer
• Senate Majority Leader Mitch McConnell plans to give House impeachment managers just two days to prosecute their case against President Donald Trump — a move that accelerates the timetable for a trial Republicans intend to end in a quick acquittal
• A panel of the Italian Senate voted to allow the start of prosecution of League party chief Matteo Salvini for refusing to allow stranded migrants to dock when he was interior minister, Ansa news agency reported
• President Vladimir Putin is likely to demote the man seen as the architect of the tight-budget policies that have made Russian bonds an investor favorite, fueling fears the Kremlin is planning a spending spree

Asian equity markets weakened across the board following a non-existent handover from their peers on Wall St, while further reports of coronavirus cases added to the subdued tone. ASX 200 (-0.2%) pulled back from record highs amid broad sector weakness and with BHP pressured after quarterly iron ore production fell short of analyst estimates, while Nikkei 225 (-0.9%) retreated below 24k as Japanese exporters suffered from safe-haven flows into the domestic currency. Elsewhere, Hang Seng (-2.8%) and Shanghai Comp. (-1.4%) also declined with the former reeling after Moody’s downgraded Hong Kong’s sovereign rating by 1 notch to Aa3, and amid heightened concerns surrounding the ongoing coronavirus outbreak which has spread to more Chinese cities with 224 cases confirmed so far resulting to 4 deaths. Finally, 10yr JGBs rose back above the 152.00 level as the risk averse tone spurred similar strength in T-notes, while prices largely ignored the BoJ policy announcement in which the central bank kept all policy settings unchanged as widely expected and reaffirmed its forward guidance but suggested that overseas risks somewhat eased.

Top Asian News

• BOJ Raises Growth Forecast, Maintains Key Policy Settings
• China Sentences Ex-Interpol Chief Meng to 13.5 Years in Prison
• Saudi Arabia Returns to Eurobond Market as Gulf Tensions Ease
• Toshiba Machine Vows to Battle Activist With Poison Pill

European equities post losses across the board [Eurostoxx 50 -0.8%] following on from a similar APAC lead, with subdued sentiment also attributed to the ramifications of the spreading coronavirus, with Taiwan now the latest country to report its first case. UK’s FTSE 100 (-1.2%) lags its peers amid unfavourable currency effects induced by the UK Labour Market Report. Meanwhile, the SMI’s losses are somewhat cushioned by earnings from Lonza (+4.0%) – providing some support to the Swiss healthcare names which in total accounts for 37.5% of the index. Sectors are all in the red with defensives lower to a lesser extent when compared to cyclicals. Consumer discretionary names are hit on the back of dampening demand expectations on the back of the China virus outbreak, with LVMH (-2.7%), Kering (-3.7%), Swatch (-2.5%) and Richemont (-3.4%) among the worst hit. In terms of other individual movers, UBS (-5.0%) shares fell despite topping net expectations and announcing a share buyback alongside a sale of its stake in UBS Fondcenter – amid lower 2022 CET1– forecast at 12-15%, down from 2021’s 17%. On the flip side, Hugo Boss (+5.6%) shares rose to the top of the Stoxx 600 after earnings topped forecasts, with the company noting that FY19 targets were achieved.

Top European News

• Lagarde Prepares to Modernize ECB With a Plan for the 2020s
• BP’s New Generation Takes Control as CFO Announces Retirement
• U.K.’s Javid Says He Wants Comprehensive EU Free-Trade Agreement
• EU Financial Tax Faces New Trouble as Austria Threatens to Quit

In FX, GBP/JPY/EUR/CHF – The Pound has regained some poise thanks to the latest UK jobs and earnings report that beat consensus almost across the board and came with a healthy revision to the previous claimant count in contrast to the recent run of sub-forecast/BoE rate cut supportive macro releases. Cable has reclaimed 1.3000+ status after flirting with 1.2955 early January lows only yesterday and Eur/Gbp is eyeing 0.8500 from 0.8550+ at one stage on Monday, even though the Euro has also gleaned some traction via an encouraging German/Eurozone ZEW survey to retest 1.1100 and offers above vs the Dollar. Meanwhile, the Yen is back in favour and over 110.00 after another dead rubber BoJ policy meeting as the YUAN pares more gains amidst the spread of China’s coronavirus that has claimed more lives and reached Australia, with safe-haven demand also returning to the Franc within a 0.9668-89 range.

• AUD/CAD/NZD/NOK – All weaker against their US counterpart, and especially the Aussie given closer links to China and the reported case of the potentially fatal illness in Brisbane noted above. Aud/Usd has retreated further towards sub-0.6850 troughs not seen since mid-December (0.6849 and 0.6838) and is only just holding above the 100 DMA (0.6844) ahead of Thursday’s labour data that forms one of the last major inputs for the RBA next month. Similarly, the Loonie and Kiwi are trading defensively into Canadian manufacturing sales and the NZ GDT auction, with the latter also wary about Q4 CPI in 2 days time and its implications for the RBNZ in February. Usd/Cad is meandering between 1.3044-77, as Nzd/Usd straddles 0.6600 and Aud/Nzd slips back below 1.0400. Elsewhere, the Norwegian Crown is underperforming against the backdrop of receding oil prices and pre-Norges Bank caution in wake of a marked downturn in industrial sentiment, with Eur/Nok up above 9.9400 at the peak and through decent 9.9300 option expiry interest (680 mn).
• USD – The DXY has drifted back down from MLK day peaks largely due to the aforementioned recoveries in G10 currency peers, like Sterling and the Euro on positive fundamentals and the Yen and Franc due to risk-off positioning/hedging. The index is pivoting 97.500 after peering above key chart levels yesterday, but not sustaining bullish momentum.
• EM – Although the Greenback has conceded ground to several major rivals, risk aversion is keeping regional currencies suppressed, with the Rand extending declines towards it 200 DMA (14.6000) before clawing back amidst more SAA flight cancellations to cut costs, while the Lira fell below 5.9300 after remarks from Turkey’s Economy Minister expressing a desire for a more competitive Try.

In commodities, commodities are lower on the day, with the energy market dampened more-so on sentiment – with the outbreak of the coronavirus playing a part. Brent Mar’20 futures reside just under USD 64.50/bbl, having taken out its 50 DMA at ~USD 64.50/bbl ahead of the 200 DMA at USD 64/bbl. Meanwhile, WTI front-month futures dipped below the USD 58/bbl mark with eyes on its 200 DMA at USD 57.60/bbl and 100 DMA at USD 57.25/bbl. Elsewhere, spot gold gravitates back to 1550/oz as a firmer USD weighs on the precious metal. Finally, base metals declined amid the aforementioned negative sentiment – with copper prices diving from around USD 2.8350/lb to sub-2.80/lb levels.

US Event Calendar

• Nothing major scheduled

DB’s Jim Ried, live from Davos, concludes the overnight wrap

Morning from Davos and the highest city in Europe. The good news is that the sun has been shining and that my apartment is right next to the golf course. So after I press send this morning I’ll be off to play a quick 9 before breakfast. Oh… just been told it’s under 2 meters of snow. Shame! A reminder that DB will be talking all things growth related (especially the side effects and the need for sustainability) here at Davos and our piece we published ahead of this can be found here.

In terms of what’s on in Davos today, the highlight will be an early address from Mr Trump (11am CET) which will no doubt attract plenty of headlines. Apparently for security, snippers are on the rooftop so I’ll be wearing my bullet proof bobble hat. Away from Mr Trump, Greta Thunberg’s lunchtime panel will attract interest. Later BoE Governor Carney will be speaking on a panel which may also be interesting ahead of a delicate interest rate decision next week and the U.K. leaving the EU a few days later. He is going to be the climate finance adviser to the U.K. government ahead of the COP 26 summit in Glasgow in November so he may have things to say on that, especially given the focus in Davos this year.

Ahead of the shindig, the Bank of International Settlements published an interesting paper saying that climate change threatens to provoke “green swan” events that could trigger a systemic financial crisis unless authorities act against such risks. The paper said that “traditional approaches to risk management consisting of extrapolating historical data and on assumptions of normal distributions are largely irrelevant to assess future climate-related risks” while adding that green swans are different from black swans because there is some certainty that climate change risks will one day materialise, which could endanger humanity more than financial crises, and they threaten even more complex and unpredictable chain reactions. Whether you agree with this or not such reports and views are only going to grow over time. As we said last week, this will be the topic of our age. Meanwhile, the Bank of France Governor Francois Villeroy de Galhau said in an introduction to the paper that “in order to navigate these troubled waters, more holistic perspectives become essential,” and advocated two solutions which the ECB could discuss in its upcoming strategy review: integrating climate change in all economic and forecasting models, and overhauling the collateral framework to reflect climate-related risks. The ECB President Lagarde is expected to announce the strategic policy review of monetary policy at its meeting on Thursday.

Also ahead of Davos the IMF trimmed its global growth forecast for 2020 to 3.3% versus a forecast of 3.4% made back in October. It also cut the 2021 forecast from 3.6% to 3.4% although both forecasts would mark an improvement on the 2.9% growth achieved last year. The report did highlight that risks are now “less skewed” but the list of downside risks still includes geopolitical tensions, most notably between the US and Iran, as well as intensifying social unrest, trade relations worsening and deepening economic frictions.

A rare 2020 risk off move is dominating Asia this morning with equities down while gold (+0.34%) and the Japanese yen (+0.19%) are up. The Nikkei (-0.87%), Hang Seng (-2.30%), Shanghai Comp (-1.11%) and Kospi (-0.91%) are all lower. Impacting sentiment is the outbreak of a deadly virus which originated in central China and entered a new phase of severity as evidence has shown that it can be transmitted by humans. Also, as the Lunar New Year holidays approach there is a growing concern amongst market participants that China won’t be able to control the spread of the virus as its citizen travel within and outside the country. There are already 217 confirmed cases of the coronavirus in China with 7 more suspected. Additional cases have already been detected in Japan and Thailand. In addition, the Hang Seng is leading the declines as Moody’s downgraded the country’s long term rating by one notch to Aa3 from Aa2, with a “stable” outlook citing that “The absence of tangible plans to address either the political or economic and social concerns of the Hong Kong population that have come to the fore in the past nine months may reflect weaker inherent institutional capacity than Moody’s had previously assessed.” As for Fx, the onshore Chinese yuan is down -0.37% to 6.8925 and briefly went over the 6.9 mark. Elsewhere, futures on the S&P 500 are down -0.40% after yesterday’s holiday and yields on 10y USTs are down -2.9bps this morning.

This morning we’ve also had the BoJ meeting where the central bank kept its monetary policy toolkit unchanged and raised the growth projections for FY 2020 (+0.9% yoy from +0.7% yoy earlier) and FY 2021 (+1.1% yoy from +1.0% yoy) on the back of the government’s earlier announced stimulus. Meanwhile the inflation projections for both FY 2020 and FY 2021 were revised down by one tenth to +1.0% yoy and +1.4% yoy respectively. On risks, the BoJ said that even as overseas risks have reduced somewhat they still remain significant and reaffirmed that it wouldn’t hesitate to take additional easing action if risks increased.

With US markets shut, yesterday was always likely to be a bit of slow moving day. The majority of European equity markets posted small losses on well below average volumes, with the STOXX 600 in particular ending -0.14%. The CAC (-0.36%), IBEX (-0.23%) and FTSE MIB (-0.57%) also closed lower although the DAX (+0.17%) did manage to stay onside, just. The FTSE 100 also retreated -0.30% as Sterling hovered just below $1.30 following Chancellor Javid’s comments over the weekend that the U.K. would not seek alignment with the EU in many areas. Bond markets weren’t much more exciting with yields a shade lower. Indeed 10y Bunds ended at -0.221% and -0.4bps on the day. Yields have essentially moved sideways for four days now. Credit was also slightly weaker – iTraxx Crossover 1bp wider – while in commodities Oil swung around with Brent crude touching as high as $66.00/bbl overnight before dropping back towards $65.00/bbl during the European session. This morning it’s down -0.51% to $64.87.

In other news, the French and the US agreed a ceasefire over digital taxation and neither side will impose tariffs on each other this year as a result. Another Trump agreement that will take us past the 2020 election. Maybe this will continue to be a theme where he postpones battles and is interesting in light on the ongoing US/EU trade tensions. On tax the hope will be that the OECD can come up with a global solution to the global taxation issue. This will be an interesting story this year.

Finally, it’s worth highlighting that at a company level yesterday CNBC reported that Boeing had secured borrowing of at least $6bn from banks and is in further talks about borrowing $10bn in total. This of course follows two fatal 737 Max crashes and very weak orders data last week which was the worst in decades. The stock price has also failed to get a bump from the US/China trade deal having declined another -1.75% last week.

To the day ahead now which is a quiet one for data. With no releases of note in the US the focus will be firstly on the November and December labour market data in the UK. With the market increasingly pricing in a BoE rate cut, the consensus expects no change in the unemployment rate of 3.8% and earnings to dip to 3.4%. Following that we’ll get the January ZEW survey in Germany which is expected to show further improvement. Finally, earnings highlights include Netflix, IBM and UBS.

Now that the Chinese government has finally confirmed that the coronavirus outbreak that originated in Wuhan can be spread between humans, international investors are grappling with the worst-case scenario: Another global SARS-like outbreak that could leave hundreds dead around the world.

As millions of Chinese prepare to travel for the Chinese New Year holiday on Saturday, deaths are piling up at a steady but alarming rate from the virus, which claimed its sixth victim on Monday, according to the mayor of Wuhan, the central-Chinese city where the virus was initially detected, before spreading to Shanghai, Beijing and elsewhere around the country.

As of Tuesday morning in the US, nearly 300 cases of the coronavirus have been confirmed, according to Reuters.

As the Communist Party leaders panic, an edict has been handed down from Beijing warning local officials that, when it comes to this virus, the usual corruption, fraud and dissembling endemic to China’s political system will not be tolerated.

According to the South China Morning Post, Beijing on Tuesday warned party functionaries not to lie about the spread of the coronavirus, warning that anyone caught withholding information would be severely punished and “nailed on the pillar of shame for eternity.”

Chang An Jian, the official social media account of the Central Political and Legal Affairs Commission – Beijing’s top political body responsible for law and order – ran a commentary on Tuesday telling cadres not to forget the painful lessons of Sars and to ensure timely reporting of the current situation.

More than 700 people were killed around the world by the severe acute respiratory syndrome outbreak in 2002-03, which originated in China.

“Anyone who puts the face of politicians before the interests of the people will be the sinner of a millennium to the party and the people,” the commentary read.

“Anyone who deliberately delays and hides the reporting of [virus] cases out of his or her own self-interest will be nailed on the pillar of shame for eternity,” it added.

The official party edict came straight from President Xi Jinping himself. Xi said on Monday that the virus must be “resolutely contained,” and that the Party must make “the safety of people’s lives and their physical health” the top priority. It stressed that transparency remained the best defense against rumors and public panic.

It might sound strange coming from Xi, considering that the Communist Party is one of the least transparent ruling parties in the world, and Chinese media is constantly subjected to government-mandated manipulation, but the president insisted that “transparency” is the best way forward.

“Only by making information public can [we] reduce [public] fear,” it said. “People don’t live in a vacuum and [we] will only provide a breeding ground for rumours to grow if we keep them in the dark and strip them of their right to [know] the truth.”

Beijing has already learned hard lessons about the coronavirus family’s potential for devastation (SARS killed some 800 people around the world). Ultimately, the biggest threat to the regime’s credibility would be failing to contain the controllable natural disaster.

“Deceiving ourselves will only make the epidemic worse. It will turn a controllable natural disaster into an extremely costly man-made disaster,” the commentary said.

In what appears to be a PR stunt meant to calm the public, Beijing said it had appointed Dr Zhong Nanshan, the same doctor who led the fight against SARS 17 years ago, to lead the charge against the virus that originated in Wuhan.

Still, the virus, which was first detected in December before being officially identified earlier this month, appears to be spreading rapidly. Chinese provinces reported a combined 77 new cases of the virus to the National Health Commission on Jan. 20, according to the government.

As the Chinese New Year holiday travel season begins, the international community has finally taken notice: As we noted last night, fears about a repeat of the SARS disaster ushered in a risk-off mood in markets around the world, with equities in Asia and Europe sinking into the red, and stock futures indicating a lower open in the US.

Airports in the US and Australia have already implemented screening practices for the virus. For investors hoping to capitalize on disaster, one WSJ reporter highlighted a ‘predictable’ pair trade: shorting Chinese transport stocks while buying healthcare stocks.

I can hardly crow here since I didn’t think of it, but it’s interesting to think how predictable this trade should have been, given the broad view that the Chinese govt was almost certainly lying about the extent of the contagion.

— Mike Bird (@Birdyword) January 21, 2020

Coronavirus impact in Chinese markets: short transport stocks, long healthcare stocks pic.twitter.com/Ge3YrbTaty

— Mike Bird (@Birdyword) January 21, 2020

Though Trump Administration officials are already trying to jawbone it higher. Unfortunately, a handful of positive trade headlines simply can’t compare to hysteria surrounding the possibility of a deadly global plague-like pandemic.

Especially as more videos like this one appear on social media.

Surreal video out of China pic.twitter.com/Qqi5Z8OzQu

— Hipster (@Hipster_Trader) January 21, 2020

A Swedish politician says that the government has ‘lost control’ after new figures reveal a 60% rise in bombings in 2019 over the previous year, amid what Reuters reports as “a surge in drug-linked gang-violence.”

“Unfortunately, this government has lost control of what is happening in Sweden. Now in the morning, we woke up again to news of bombs and explosions, this time in Stockholm’s inner city and in central Uppsala,” wrote Moderate Party leader Ulf Kristersson in a recent Op-Ed for Aftonbladet.

Approximately 257 bomb attacks were reported to police last year, up from 162 in 2018, according to the country’s National Council for Crime Prevention. No details were given as to the most frequent type of explosive, however Swedish media has reported the heavy use of bombs crafted from vacuum flasks packed with explosive material, according to Reuters.

SWEDEN BOMBING CRISIS🇸🇪

We now have the statistics for explosions in 2019.

– A whopping 257 bombings.

That is a 60% increase from the year before.

This is actually INSANE.

This is like a war zone.

Please share – Why isn’t this bigger news???

😩😩😩

— PeterSweden (@PeterSweden7) January 19, 2020

Kristersson’s comments come after a blast rocked Stockholm more than a week ago, considered to be one of the most powerful in recent memory according to police area manager Erik Widstrand – who added that it was “pure luck” that nobody had been injured, according to Breitbart.

And while we don’t have a breakdown as to the type of explosives, what we do know is that the use of grenades in Sweden has been on the rise.

The grenades — dubbed ‘apples’ by criminals — are smuggled into the country from former Yugoslavia. They are plentiful in the black market for weapons after the wars in the Balkans and are sold cheaply, or even handed out as freebies upon purchase of assault rifles. Stockholm police recently put a figure on it: less than £890 can buy you five automatic weapons and ammunition with 64 hand grenades as a sweetener. The grenades can, of course, be sold on. The street price in Sweden is about £100. –Spectator

According to the report, “It’s widely known that gang members are mainly first- and second-generation immigrants, and problems are rampant in what police euphemistically refer to as ‘vulnerable areas’,” adding “Thus the gang wars serve as a constant reminder of Sweden’s failed migration and integration policies.”

In order to combat the increased violence, the government has boosted spending to fight organized crime.

“The government has provided extra resources and the police are taking concerted measures now against gang violence,” said Mikael Damberg, Minister for Home Affairs in a comment to Rueters, adding “With the efforts we are making, I am convinced that we can turn this around. Society is stronger than these criminal gangs.”

Police have identified around 60 deprived areas, mainly in and around larger cities, where unemployment is high, incomes low and where drugs and gangs have gained a firm foothold.

In November, they set up the task force to fight violent crime following the death of a 15-year-old boy in Malmo when a gunman open fire on a pizza restaurant.

At the time, the police said the task force would focus on getting criminals off the streets, reducing access to guns and explosives and increasing the police presence in affected areas. –Reuters

“Löfven, you have lost control of Sweden,” Kristersson wrote in September in another Aftonbladet Op-Ed criticizing Prime Minister Stefan Löfven.

“Last year, 306 shootings occurred and 45 people were shot dead. According to the police, the number of people killed has doubled since 2014. During the same period, the number of people who have been subjected to sexual abuse has tripled according to BRÅ [the Swedish Crime Prevention Council],” he added.

At the same time, we have an integration crisis: More than half of all the unemployed are born outside of Sweden. In our exclusion areas, [utanförskapsområden] there are schools where not even half of the students pass all subjects… Many children born in Sweden hardly speak Swedish, and there is extensive repression [in the name of] honor culture. Here too we have called for reforms, but the Social Democrats say no.

“Integration and immigration are connected. Therefore, a long-term and strict immigration policy is required. Temporary residence permits and requirements of financial self-sufficiency for family reunification should be the main rule.

“Requirements for knowledge of Swedish and financial self-sufficiency [should be conditions] for a permanent residence permit.” –Ulf Kristersson

In June, 20 people were wounded when a bomb in southern Sweden exploded on a residential street in Linkoping.

It’s another wonderful case of Elon Musk telling the world “do as I say, not as I do”…

Emboldened by the success of Tesla’s Gigafactory 3 in Shanghai (i.e. it caused a short squeeze in the stock), the company is now pushing non-stop to get its Gigafactory 4, which will be located in Gruenheide, outside of Berlin, Germany, up and running.

The company is taking a direct swipe at major German auto manufacturers like BMW and Volkswagen with the decision to put its factory in Germany.

Juergen Pieper, a Frankfurt-based analyst with Bankhaus Metzler said: “Elon Musk is going where his strongest competitors are, right into the heart of the global auto industry. No other foreign carmaker has done that in decades given Germany’s high wages, powerful unions and high taxes.”

The company hopes that the site could churn out as many as 500,000 cars per year and employ 12,000 people. 

The plant is slated to include a pressing plant, paint shop and seat manufacturing in a building that will be 2,440 feet long. Musk announced the news that the plant would be coming to Germany at a ceremony in Berlin last November. 

Local Mayor Arne Christiani told Bloomberg: “It gives young people with a good education or a university degree the possibility to stay in our region—an option that didn’t exist in past years.”

The “investment” in the area has turned the town of 8,700 people into a major attraction, with proposals for U.S. style shopping malls and apartment buildings coming across the desk of local officials every day. Many people hope that the factory will help the area develop things like public transit.

Ask Tesla’s Buffalo factory how that worked out for them. 

However, in a strange twist of irony, to build the factory Tesla needs to clear “thousands of trees”.

So much for saving the environment…

In fact, the company has to clear so much forest space to put up its factory that dozens of protesters recently organized a gathering known as a “Forest Walk” to protect against Tesla’s tree removal activities at the site, according to Teslarati. 

The protesters were dressed in yellow vests, replicating the “Yellow Vest Movement” in France and are also concerned about what the deforestation may do to the drinking water in the area. 

Some members of the group said they would return the following week and that they may begin to take legal action against the company. 

“We will also raise objections to Tesla’s environmental impact assessment in the normal legal way,” one protester said. 

Group spokesperson Nadine Rothmaier said: “I think every citizen here has his own topic. For some, it is nature and the forest or people. The factory will also emit pollutants that pollute the region.” 

Tesla says it has to relocate numerous species of animals in the area to avoid harming them. The company “plans to accelerate the initial deforestation activities in the area so as not to interrupt bird breeding that begins in early March” and says it intends on replacing the trees it cuts down.

We won’t hold our breath waiting for that.