Watch Live: Draghi’s Farewell Party Featuring Merkel, Macron, Mattarella And, Of Course, Lagarde

Watch Live: Draghi’s Farewell Party Featuring Merkel, Macron, Mattarella And, Of Course, Lagarde

With just three days until ECB President Mario Draghi’s term draws to a close on 31 October, leaving in his wake a catastrophic legacy in which his successor Christine Lagarde is now effectively out of ammo just as Europe slides into recession, the ECB is throwing a modest shindig for the former Goldman banker.

Watch as Chancellor Angela Merkel (whose CDU just suffered a crushing defeat in Sunday’s Thuringia elections), French President Emmanuel Macron and Italian President Sergio Mattarella, and of course, Christine Lagarde who will now be left holding the (Berkin) bag, speak at a farewell event held in Draghi’s honor this afternoon.

Watch it live below.


Tyler Durden

Mon, 10/28/2019 – 10:16

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Trump Makes Baghdadi Death About Humiliation, not Human Rights

A U.S. raid in Syria has killed ISIS leader Abu Bakr al-Baghdadi. “U.S. Special Operations forces executed a dangerous and daring nighttime raid into Northwestern Syria to accomplish this mission,” according to a statement from the president. “He died like a dog. He died like a coward. The world is now a much safer place.”

Baghdadi “had been hunted for more than a decade, and the organization he had built was designed partly on the assumption this day would come,” notes The New York Times. ISIS relies on a largely decentralized leadership structure, so “the practical effects of his demise” will be lessened.

Which is to say: Don’t go getting up any hopes about this diminishing the imperative for U.S. troops and military action in the area.

President Donald Trump described Baghdadi’s death as a “demonstration of America’s relentless pursuit of terrorist leaders, and our commitment to the enduring and total defeat of ISIS!” He also said that it should serve as a “reminder that we will continue to pursue the remaining ISIS terrorists to their brutal end.”

George W. Bush said something similar upon the death of Abu Musab al-Zarqawi in 2006, and Barack Obama said much the same about Osama bin Laden’s killing in 2011, notes Spencer Ackerman at The Daily Beast. “These three fatal milestones all point to the strategic incoherence within a global war that has now lasted an entire generation,” Ackerman writes:

No one, not the Trump administration nor its critics, believes that the so-called Islamic State is finished because Baghdadi is dead. As proficient as U.S. special operators have become at manhunting these past 18 years, and as central as manhunting has been during that time, there is no campaign plan, not even a theory, by which the killings of jihadist leaders knit up into a lasting victory. Asking for one would require reckoning with the catastrophic failure represented by a war that only perpetuates itself.

There would have been no Abu Bakr al-Baghdadi had Bush not invaded and occupied Iraq in 2003. That war created an opportunity for a mass murderer, Zarqawi, to construct an al Qaeda franchise more bloodthirsty than even the one bin Laden created. Even after Zarqawi’s 2006 death, bin Laden could never rein in al Qaeda in Iraq, documents recovered after the 2011 raid on his Abbottabad compound showed, and he grew particularly dyspeptic over the offshoot’s clear desire to declare a caliphate….

Bin Laden did not believe the time was right for a caliphate. Baghdadi took advantage of both the Syrian civil war and Obama’s 2011 withdrawal from Iraq to make the caliphate a brutal fascist reality, complete with misogynist enslavement and opportunities for men to find meaning through sanctified violence. When al Qaeda and the elder generation of jihadist theorists opposed ISIS, Baghdadi’s organization—now an actual state, complete with an army, and a flag—had no problem attacking them. Baghdadi was less visible than bin Laden, rebuking the leadership style of a previous generation and signaling that the caliphate was more important than he was. The caliphate was ISIS’ triumph over bin Laden, whose children ate his revolution.

This history matters because it shows that the expansive war the U.S. launched does not fight against a static enemy. It generates enemies—the slain al Qaeda propagandist Anwar al-Awlaki is another example—and provides opportunities for new ones to arise.

Trump, for all his showy proclamations to the contrary, is simply carrying on Bush and Obama policy in the Middle East.

It’s really something to look side-by-side at the three presidents’ statements, though. After describing Zarqawi’s crimes, Bush commended the new Iraqi government and “the men and women of our armed forces” before laying out the next steps. He concluded, “May God bless the Iraqi people and may God continue to bless America.” While talking about bin Laden’s death, Obama conjured the 9/11 attacks and the U.S. war in Afghanistan before briefly describing the operation that killed bin Laden:

Today, at my direction, the United States launched a targeted operation against that compound in Abbottabad, Pakistan. A small team of Americans carried out the operation with extraordinary courage and capability. No Americans were harmed.  They took care to avoid civilian casualties. After a firefight, they killed Osama bin Laden and took custody of his body.

He went on to talk about efforts to “remain vigilant at home and abroad,” to thank U.S. forces involved in bin Laden’s capture, and to wax a little bit about American ideals and “liberty and justice for all.”

But Trump? After a paragraph of basic information about Baghdadi’s death, he offered the following:

No U.S. personnel were lost in the operation, while a large number of Baghdadi’s fighters and companions were killed with him. He died after running into a dead-end tunnel, whimpering and crying and screaming. The compound had been cleared by this time, with people either surrendering or being shot and killed. Eleven young children were moved out of the house un-injured. The only ones remaining were Baghdadi in the tunnel, who had dragged three children with him to certain death. He reached the end of the tunnel, as our dogs chased him down. He ignited his vest, killing himself and the three children. His body was mutilated by the blast, but test results gave certain and positive identification.

The thug who tried so hard to intimidate others spent his last moments in utter fear, panic and dread—terrified of the American Forces bearing down.

He went on to call the people associated with Baghdadi “losers,” to say we will “completely destroy…these savage monsters,” and to emphasize again that Baghdadi died like a “coward.”

Say what you will about Bush and Obama, but at least they tried to situate their actions in a framework of human rights. Trump described the operation like an action-movie sequence, focusing on lurid details and, especially, the humiliation America (and by extension Trump) supposedly meted out to a powerful terrorist leader. It reads like the kind of statements put out by authoritarian rulers, designed not to provide us with a vision of our highest ideals but about Donald Trump, his might and power, and the retribution enemies will face for crossing him.


FREE MINDS

The suburbs are changing. “The political dividing line in America used to be between cities, which were mostly Democratic, and suburbs, which had long been Republican,” write Sabrina Tavernise and 

today it runs through the very center of the suburbs themselves, between a densely populated inner ring that is turning blue and a more spacious outer ring that is becoming ever more red.

Part of this can be explained by more college-educated white people moving or sticking to the suburbs, they write, but it’s also a matter or “rising racial diversity” in the suburbs:

Nearly 60 percent of all black people now live in suburbs. African-Americans, Hispanics and Asians together make up nearly one-third of the suburban population.

More here.


FREE MARKETS


QUICK HITS

  • U.S. Rep. Katie Hill (D–Calif.) is resigning:

  • Trump was not treated to a warm reception at the Nationals game last night:

  • Charles Kupperman, deputy to former Trump advisor John Bolton, was supposed to testify before the House impeachment investigators today. After being forbidden by the White House from doing so, Kupperman told investigators as much but also filed a lawsuit in federal court seeking to know whether he “should comply with the House’s subpoena or with the President’s assertion of immunity and instruction that he not appear and testify.”
  • Read Cato’s Gene Healy on impeachment:

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Pento: “The Fed Is Panicking To Stop A Depression”

Pento: “The Fed Is Panicking To Stop A Depression”

Via Greg Hunter’s USAWatchdog.com,

Economist and money manager Michael Pento says the recent Federal Reserve about-face in policy with cutting rates and new QE (money printing) means only one thing.

Pento explains, “So, the Fed changed their mind, panicked, the Fed panicked…

“They not only stopped raising rates, they now cut rates twice, and they are going to cut rates again at the end of this month. They are also fully back in a massive QE. They have a $130 billion revolving repo facility shoving $130 billion every night, rolling it over, trying to re-liquefy the banking system and back into QE–$60 billion per month. At the peak, it was $85 billion. So, they are almost back to the peak of QE (during the Great Recession). They did not scale in, the Fed went to $60 billion right away.”

Why the sudden burst of money printing when we are being told the economy is fine?

Pento says the Fed is panicking to stop a “depression.” That’s right, a depression. Pento contends,

“I am on record saying given the extent of the asset bubbles that we have today . . . household debt is at a record high. Corporate debt is at a record high, up 60%. The national debt was $9 trillion prior to the Great Recession and is now $23 trillion. Total non-financial debt is now $53 trillion, and it was $33 trillion prior to the Great Recession…

Given all these imbalances and deformations, the Fed knows we are not going to have some mild recession. If they don’t re-liquefy the money markets, the same thing that happened back in 2008 would happen today, only the stock market was only a 100% of GDP and today it is 150% or one and a half times the economy. So, the plunge in the stock market would be huge and from a much higher level. Back in the Great Recession, unemployment claims spiked. We had millions of people laid off, and the same thing would happen today only it would be much worse.”

Pento predicts the debt bubble will implode at some point, and it will be felt everywhere on the planet. Pento says,

When this thing implodes, we are all screwed. On a global scale, we have never before created such a magnificent bubble. These central bankers are clueless, and they have proven that beyond a doubt. All they can do is to try to keep the bubble going

I am going to make sure my clients are going to be protected and may have a chance to profit from this chaos because it is coming, and it is going to be brutal.”

Join Greg Hunter as he goes One-on-One with money manager and financial expert Michael Pento of Pento Portfolio Strategies.

To Donate to USAWatchdog.com Click Here


Tyler Durden

Mon, 10/28/2019 – 09:55

via ZeroHedge News https://ift.tt/2onF787 Tyler Durden

On Spanish people and affirmative action

I’ve always wondered why no one has challenged government ethnic/racial preference programs on the grounds that the categories used by the government are incoherent. Why, for example, do light-skinned people whose ancestors came to the U.S. directly from Spain qualify for affirmative action, but darker-skinned Arabs, Greeks, Turks and so on do not? It turns out that there is an Eleventh Circuit opinion on this very issue, Peightal v. Metropolitan Dade County, 940 F.2d 1394 (11th Cir. 1991). Unfortunately, in upholding the use of the very broad “Hispanic” category, the court ultimately failed to address why, given strict scrutiny that’s applied to racial and ethnic classifications, a program that includes people of purely European dissent while excluding darker-skinned non-Europeans is even rational, much less how it is narrowly tailored to serve a compelling interest:

The crux of Peightal’s argument on appeal is that the Plan is both over-and-under-inclusive in its preferential treatment of Hispanics. Peightal maintains that the Dade County minority preference program is over-inclusive because it favors white European Spaniards with no significant cultural or linguistic discernability from non-Hispanic white persons. In addition, Peightal argues that the Plan is under-inclusive because the class of persons qualifying for preferential treatment as “Hispanics” fails to include other national and ethnic groups that are susceptible to similar discrimination.
The EEOC definition of “Hispanic,” as applied by Metro Dade, includes: “All persons of Mexican, Puerto Rican, Cuban, Central or South American, or other Spanish culture or origin, regardless of race.” Peightal asserts that this definition is over-inclusive because it includes persons who can trace their ancestry to Spain, irrespective of language or culture, but would preclude favorable treatment to persons with Portuguese heritage, for example. According to Peightal, since white European Spaniards with no visibly discernable “Hispanic” characteristics have not been subjected to past or present discrimination, it violates the narrowly tailored prong of the strict scrutiny prong to include them in the favored group called “Hispanics.”
While it may seem anomalous to grant employment preferences to a light-skinned descendant of Spanish grandparents who speaks no Spanish and has no individual cultural ties to an American Spanish community or to Spain, (while denying such preferences to the Portuguese-speaking offspring of Portuguese parents), such a situation would not arise under the Metro Dade Plan, because the Plan adopts the EEOC requirement that a person’s claim of identification with a certain racial or ethnic group “should accompany strong visible indication that the person culturally and linguistically identifies with the group he or she claims.” (emphasis in original). [NOTE: Federal preference programs, which include people of Spanish and Portuguese origin in the “Hispanic” category, have no such limitations.]
As for the Plan’s alleged under-inclusiveness, Peightal argues that it excludes, and therefore discriminates against, members of European national origin, Middle Eastern national origin, and Slavic/Russian national origin, while benefitting those of Spanish origin. Peightal claims that Greeks, Italians, Portuguese, Jews, Israelis, Iranians, and others, are all culturally and linguistically discernable and subject to discrimination in the work place as a result of their ethnic characteristics. However, since these groups are not benefited by the Department’s minority preference program, Peightal argues that the Plan is therefore unconstitutionally under-inclusive.
However, it is well established that the Equal Protection Clause does not require public employers to institute affirmative action goals for each and every ethnic group that may exist in a community. In adopting an affirmative action plan an employer may rationally limit its application to those minority groups in the local work force that are most in need of remedial efforts.

I am currently working on a related project, and have learned that how the “Hispanic” category was invented is rather arbitrary. The short version is that “Chicanos”(Mexican Americans) and Puerto Ricans, being dark-skinned (and thus suffering race discrimination) and having poor socio-economic indicators, were analogized to African Americans. When Nixon became president, he demanded that Cubans also be included, because they vote Republican. The early wave of Cuban immigrants primarily looked, and thought of themselves as, “white”. And once white Cubans of primarily European origin were included in affirmative action programs, the relevant category could not reasonably exclude anyone else of “Hispanic” origin.

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Key Events In This Extremely Busy Week: FOMC, Payrolls, GDP, PMIs, And Peak Earnings

Key Events In This Extremely Busy Week: FOMC, Payrolls, GDP, PMIs, And Peak Earnings

With global markets facing a bumper week ahead, let’s dive right in to the key events of the coming days.

As DB’s Jim Reid lays out the main highlights, first and foremost we have the FOMC meeting on Wednesday where the Fed are expected to cut 25bps, a first look at Q3 GDP in the US (also on Wednesday) and the Euro-area (Thursday) are due and China (Thursday) and the RoW PMIs and US ISM (Friday) will be closely watched before US payrolls ends the week with a bang on Friday. Earnings season will also continue apace as a number of major global companies report on both sides of the pond.

Some more detail on a few of these:

Ahead of this Wednesday’s Fed meeting, a 25bps rate cut is just about fully priced now. Given the lack of pushback against that pricing by the recent parade of Fedspeak, it’s a relative safe prediction that they deliver another cut to take the fed funds target range to 1.50-1.75%. Looking forward though, the focus will be around the tone in the policy statement and in Chair Powell’s press conference. The statement could have some dovish-leaning edits, consistent with the deterioration in data since the September policy meeting. As for Powell, he’ll likely want to maintain his optionality moving forward, committing to neither another cut nor a halt to the cutting cycle. Wall Street economists think that he will emphasize that another cut would require further deterioration in the data, which however will likely materialize over the next few months, as opposed to a flatlining in conditions.

The Bank of Canada is also meeting that same day, though no change in policy is expected by markets. The Bank of Japan will be meeting the following day although it is expected to simply extend the period of its forward guidance and forego genuine easing action such as a deepening of its negative interest rate policy, as per DB. Staying with central banks, this Friday sees former IMF managing director Christine Lagarde succeed Mario Draghi as ECB President, with his 8-year term coming to a close the day before.

As for Brexit, this afternoon we are set to see a vote in Parliament on the Government’s motion (under the FTPA) for a general election on December 12th with added time until a potential dissolution of Parliament on November 6th to debate the Government’s Withdrawal Agreement Bill (WAB). Opposition parties have so far indicated they won’t vote for this and over the weekend the Lib Dems and the SNP have proposed a counter proposal to hold an election three days earlier as long as the Brexit extension to January 31st is legally cast iron. This follows overnight news that the EU would agree to an extension, including French support. The opposition Labour Party’s position on an election continues to confuse and they are now the only main party that doesn’t have an election act or bill to put in front of Parliament or indeed support one. We’ll see if that changes today. The Government’s plan requires a 2/3rds majority (very very unlikely if reports are to be believed) but the Lib Dem/SNP plan only a simple majority but is potentially subject to amendments so could be seen as a trap to the Government. According to No. 10 sources, if their plan fails the Government would “look at all options to get Brexit done, including ideas similar to that proposed by other opposition parties”. So they might still find a way to support it.

Elsewhere this week, the first look at Q3 GDP in the US sees expectations of 1.6%, which would be the slowest pace so far this year. Indeed, since President Trump’s election we’ve only seen one quarter of growth at a rate below 2%, and analysts will be looking out for what this might mean for the economy heading into next year’s election. Turning to Europe Q3 GDP, consensus expects just +0.1% growth, which would be the weakest quarterly growth since Q1 2013. The expectation is for the year-on-year pace to fall to +1.1%, which would also be the weakest since Q4 2013. So an interesting welcome to Lagarde on Friday.

The October US jobs report on Friday, sees a +90k consensus following the previous month’s +136k increase. If realised, that would be the weakest pace of monthly jobs growth since May but the recent GM strike complicates the analysis with a 46k hit expected from this. There is also a government census employment issue so private payrolls will be perhaps more closely watched (+83k expected). Later that day, we’ll also get the ISM manufacturing report, which fell to 47.8 last month, the weakest since June 2009 and below all analysts’ estimates. So Friday’s going to be an important day as markets assess the outlook for the US moving into November with the added interest of the final ISMs from around the globe.

It’s another big week for earnings this week, with 164 S&P 500 companies scheduled to report. In terms of releases to watch out for, today we have Alphabet, AT&T and HSBC (just out and missing expectations). On Tuesday, there’s Mastercard, Nomura, BP and General Motors. Wednesday sees releases from Apple, Bayer, Facebook, Total, Sony, Volkswagen, Airbus, Santander, General Electric and Credit Suisse. On Thursday there’s Royal Dutch Shell and BNP Paribas, while on Friday there’s Exxon Mobil, Chevron, AIG and Alibaba.

Courtesy of Deutsche Bank, here is a day by day calendar of upcoming events

Monday

  • Data: Euro Area September M3 money supply; UK CBI October distributive trades survey; US September Chicago Fed national activity index, preliminary September wholesale inventories, October Dallas Fed manufacturing index. Central Banks: BoE’s Tenreyro speaks.
  • Politics: UK House of Commons votes on holding an early general election.
  • Earnings: Alphabet, AT&T, HSBC

Tuesday

  • Data: UK October Nationwide house prices, September consumer credit, September mortgage approvals; France October consumer confidence; Italy September PPI; US October Conference Board consumer confidence; Japan September retail sales.
  • Earnings: Mastercard, Nomura, BP, General Motors.

Wednesday

  • Data: Australia Q3 CPI; France preliminary Q3 GDP; German October unemployment change and preliminary October CPI; Italy October consumer confidence index, manufacturing confidence, economic sentiment; Euro Area final October consumer confidence; US weekly MBA mortgage applications, October ADP employment change, Q3 advance GDP, core PCE; South Korea September industrial production; Japan preliminary September industrial production.
  • Central Banks: Policy decisions from the Federal Reserve, Bank of Canada and Banco Central do Brasil; ECB’s Lautenschläger, Rehn speak.
  • Earnings: Apple, Bayer, Facebook, Total, Sony, Volkswagen, Airbus, Santander, General Electric, Credit Suisse.

Thursday

  • Data: UK October GfK consumer confidence; China October manufacturing PMI, non-manufacturing PMI, composite PMI; Japan August vehicle production, September housing starts, September jobless rate; France preliminary October CPI; Italy preliminary September unemployment rate, preliminary October CPI, preliminary Q3 GDP; Euro Area September unemployment rate, Q3 GDP, October CPI estimate, preliminary October core CPI; US Q3 employment cost index, September personal income, personal spending, weekly initial jobless claims, October MNI Chicago PMI; Canada August GDP; South Korea October CPI
  • Central Banks: Bank of Japan policy decision.
  • Earnings: Royal Dutch Shell, BNP Paribas.

Friday

  • Data: South Korea October trade balance; Japan October vehicle sales; October manufacturing PMIs from Japan, South Korea, Indonesia, China, India, Russia, Turkey, South Africa, UK, Brazil, Canada, US, Mexico; US October nonfarm payrolls, unemployment rate, average hourly earnings, ISM manufacturing, September construction spending
  • Central Banks: Christine Lagarde succeeds Mario Draghi as President of the ECB; Fed’s Clarida, Quarles and Williams speak.
  • Earnings: Exxon Mobil, Chevron, AIG, Alibaba

Here is a visual recap of the key US events this week, courtesy of Bank of America:

And here are the key global events to keep an eye on, courtesy of Goldman Sachs:

  • Wednesday, October 30: USA, FOMC Meeting Decision. Fed funds target rate (mid-point): GS 1.625%, consensus 1.625%, last 1.875%. As discussed in our FOMC preview, we expect the FOMC to deliver its third and final 25bp cut to the funds rate at the October meeting. We expect only minor changes to the FOMC statement’s growth characterization, as participants focus on the policy outlook section of the statement (as well as in the post-meeting press conference). We expect a somewhat hawkish rewording as the Committee likely replaces the “act as appropriate to sustain the expansion” clause.
  • Wednesday, October 30: USA, GDP (Q3 Advance). GS +1.6%, consensus +1.6%, last +2.0%, all %qoq ar. We estimate a 1.6% increase in the initial release of Q3 GDP (qoq ar). We expect strength in personal consumption (+2.7%), but a decline in equipment and structures investment as well as a drag from inventories.
  • Wednesday, October 30: Canada, BoC Meeting. GS 1.75%, consensus 1.75%, last 1.75%. We expect the BoC to keep the policy rate unchanged as solid domestic data will likely continue to outweigh external downside risks. The Autumn Business Outlook Survey showed a slight improvement in business sentiment and rising investment spending expectations. Taken together with domestic labor market strength, firm inflation data, and post-election prospects for modest fiscal stimulus, the BoC is likely to remain constructive on the baseline domestic outlook, continue to monitor external risks, and communicate a wait and see approach.
  • Wednesday, October 30: Japan, Industrial Production (Sep P). GS +0.3%, consensus +0.4%, last -1.2%, all %mom. We expect a limited rise in production of +0.3%mom in September (August: -1.2%mom) in line with METI’s bias-adjusted estimate (+0.3%), with September real exports rising only +0.2%mom.
  • Wednesday, October 30: Australia, CPI Inflation (Q3). GS +0.6%, consensus +0.5%, last +0.6%, all %qoq. We expect headline consumer prices to rise +0.60%qoq in 2019Q3, with the annual rate edging up to +1.75%yoy. Compositionally, price growth is expected to be supported by the annual re-indexing of excise duty on tobacco products, as well as drought-related increases in food prices. But looking through seasonal and volatile components, we expect underlying price pressures to remain soft, with the key trimmed mean measure expected to rise +0.35%qoq (+1.55%yoy) in 2019Q3 – well below the RBA’s 2-3% inflation target.
  • Thursday, October 31: Euro Area, HICP Inflation (Flash) (Oct). Core HICP inflation: GS +1.02%, consensus +1.0%, last +1.0%, all %yoy. We expect Euro area headline HICP inflation of 0.71%yoy in October, 12bp lower than in September. We look for a 1bp increase in core inflation to 1.02%yoy. Across countries, we expect energy price inflation to continue to weigh on the headline rate, but we do not look for large changes in core inflation rates across the Euro area.
  • Thursday, October 31: Euro Area, GDP (Flash) (Q3). GS +0.1%, consensus +0.1%, last +0.2%, all %qoq. We expect the preliminary flash estimate of Euro area Q3 GDP to show that the area-wide growth rate was 0.1%qoq (non-annualised). Underlying this aggregate forecast is an expectation that moderate growth in France and Spain was offset by a contraction in Germany, and flat output in Italy. Three of the four major Euro area economies publish preliminary estimates this week, with the German estimate published on 14 November.
  • Thursday, October 31: USA, PCE Inflation (Sep). Core PCE Inflation: GS +0.12%, consensus +0.1%, last +0.14%, all %mom. Based on details in the PPI, CPI, and import price reports, we forecast that the core PCE price index rose 0.12% month-over-month in September, or 1.74% from a year ago. Additionally, we expect that the headline PCE price index increased 0.08% in September, or 1.42% from a year earlier. We expect a 0.2% increase in personal income in September and a 0.3% increase in personal spending.
  • Thursday, October 31: USA, Employment Cost Index (Q3). GS +0.7%, consensus +0.7%, last +0.6%, all %qoq. We estimate that the employment cost index rose 0.7% in Q3 (qoq sa). Average hourly earnings data have been mixed, but we see scope for a rebound in benefits growth.
  • Thursday, October 31: Canada, GDP (August). GS +0.3%, consensus +0.3%, last flat, all %mom. We expect GDP to rise by +0.3% (mom) in August. Our forecast reflects a likely rebound in the mining sector, which subtracted three tenths from overall GDP growth in the prior month following maintenance shutdowns.
  • Thursday, October 31: Japan, BOJ Policy Meeting Decision. GS -0.1%, consensus -0.1%, last -0.1%. The BOJ will hold its Monetary Policy Meeting (MPM) on October 30-31. Our base case scenario is that the BOJ will refrain from taking its short-term rate target deeper into negative territory, while extending the timeframe for maintaining its ultra-low interest rate policy from “at least through around spring 2020” to “until at least around the end of 2020”.
  • Friday, November 1: USA, ISM Manufacturing (Oct). GS 49.6, consensus 49.0, last 47.8. Our manufacturing survey tracker rose by 1.3pt to 51.9 in October, following stronger regional manufacturing surveys on net. After six straight declines, we expect the ISM manufacturing index to rebound by 1.8pt to 49.6 in October.
  • Friday, November 1: USA, Employment Report (Oct). Nonfarm payrolls growth: GS +75k, consensus +85k, last +136k. We estimate nonfarm payrolls increased 75k in October, reflecting a 46k drag from the General Motors strike and weakness in service-sector business surveys. We also note that the payroll seasonal factors may have evolved to fit the post-hurricane rebounds of October 2017 and 2018, which would argue for a softer reading in the upcoming report. Also, September tariff escalation may have weighed on hiring in the manufacturing, retail, and transportation sectors. On the positive side, we expect a boost from very low jobless claims and labor supply constraints, which may have incentivized firms to pull forward some hiring into October.

Source: Deutsche Bank, Goldman, BofA.


Tyler Durden

Mon, 10/28/2019 – 09:39

via ZeroHedge News https://ift.tt/349T8FW Tyler Durden

S&P Opens At New All-Time Record Highs

S&P Opens At New All-Time Record Highs

Mission Accomplished?

Trump’s comments on the market “having a good day” cemented the overnight gains and the S&P 500 has opened for trading at new all-time record intraday highs…

  • S&P Prior Record Closing High 3025.86 (3027.98 intra)

As a side note AMZN is down and MSFT up on the JEDI deal…

And if you’re wondering how this is possible given the record level of uncertainty in the world…

Source: Bloomberg

It’s simple really…

Source: Bloomberg

What happens next?


Tyler Durden

Mon, 10/28/2019 – 09:31

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

We Now Have Mass Public Unrest In France, Spain, Algeria, Iraq, Lebanon, Egypt, Hong Kong, Venezuela, Chile, Ecuador And Bolivia

We Now Have Mass Public Unrest In France, Spain, Algeria, Iraq, Lebanon, Egypt, Hong Kong, Venezuela, Chile, Ecuador And Bolivia

Submitted by Michael Every of Rabobank

Ages and Ages of Rage

Monday morning and we here we go again for another “dramatic week”. There are going to be monthly PMIs to look at in particular: will we see any further deterioration, or will growth start to pick up as an early Christmas present? And there are of course rate meetings for the Fed, and the BOJ, and the BOC: the former will cut, with the real issue being if they will signal more soon or not given they are already deep in Repo Madness; and will the giant BOJ wake up from slumber like a giant Kaiju and start throwing markets into turmoil again?  

Plus there is the Brexit circus. Will the EU grant the UK an extension until end-January 2020, or a more flexible date, or will France veto that and insist on a very short extension? Almost certainly they will insist that the newly reopened Withdrawal Agreement is this time firmly shut – so if the British Parliament then decides to merrily reopen it from its end and unilaterally start ramming amendments into it, it will not be doing so with EU approval. As such, and just as pertinently, will PM BoJo get his December election or not? The greater likelihood is not, as Labour appears to be desperate for an election – just not now – although the Lib Dems may be prepared to allow one given they see this as a way to prevent any further movement towards Brexit in the short term. (Though what do they think the election campaign will be about? The price of cheese?) Note that the latest opinion poll for the Observer has the Tories on 40% (+3 on the week), Labour unchanged on 24%, and the Lib Dems on 15% (-1), with the Brexit Party on 10% (-2).

In Europe, we have just seen the AfD surge to second place in state elections in Germany’s Thuringia with 24% of the vote, double what it got last time, putting it 1ppt ahead of Chancellor Merkel’s CDU, with the Far Left Die Linke in first place. The AfD are nowhere near power as nobody will co-operate with them, but that 24% outcome is all the more remarkable given an attack on a synagogue and neo-Nazi death threats through the campaign.

In China, Chairman Xi Jinping will be presiding over the long-expected Communist Party Plenum, which is usually looked to for policy guidance. Market expectations this time are that all the focus will be on politics and control, and none will be on market-based reforms. Tellingly, this weekend saw China disband a three-year old Global Forum on Steel Excess Capacity after nobody has been prepared to cut back on capacity: China is claiming it alone has, but this somehow overlooks that its net steel output is up on three years ago, at a record high, and still growing.

On Ukraine-Gate the US impeachment wagon continues to trundle along, with supporters claiming it is laden with damning evidence, and opponents arguing it has exactly as much weight as Russia-Gate did. Perhaps the apparent elimination of IS leader Abu Bakr al-Baghdadi by US special forces will tip the Washington political balance slightly back towards consensus…but perhaps not, as the Washington Post (“Truth Dies in Darkness”) changes its headline description of al-Baghdadi–who presided over torture, mass murder and rape, slavery, and genocide–from “Terrorist-in-chief” to “Austere Religious Scholar” and then finally to “Extremist Leader”. Could they not perhaps have settled on “populist?”, he wondered sarcastically?

Enough minutiae about Fed policy: our house view remains they are going all the way back to zero. Enough minutiae about PMIs: it is obvious that broad swathes of the economy are slowing down.

The global backdrop remains of slowing growth, increased financial vulnerability in places, and yet an institutional architecture that is either in denial or has no firm idea of what policy mix to use to stop this happening. And, crucially, global populations that are not content to just sit and wait for something better to turn up eventually.

Indeed, consider that we now have mass public unrest (on and off) in: France, Spain, and that 24% AfD vote in Germany, and Brexit in the UK; Algeria; Iraq: Lebanon; Egypt; Russia; Hong Kong; Venezuela; Chile; Ecuador; and Bolivia. Plus deepening polarisation in the US – and one could add the middle-class disruption of Extinction Rebellion in Australia, Canada, and others.

In short, there isn’t a continent that isn’t seeing unrest in some form, and as Branko Milanovic notes today, one wonders if this isn’t all a little 1968-ish.

Of course, one can’t usually join dots that simply, but if this is 1968-redux then consider the historical echoes. The Prague Spring was violently crushed by Soviet Tanks and the West was powerless to prevent it. Meanwhile, student uprisings in the West produced social reforms and a policy swing to the Left. Along with the Vietnam War, that contributed to the end of the USD peg to gold and the first phase of the global Bretton Woods order – and then to very high inflation in the 1970s, which was ultimately ended by the Volcker Fed and the current phase of deflationary neoliberal globalisation that is once again pushing people out onto the streets.

In short, regardless of what the Fed does this week, or the BOJ; and whatever the PMIs print at; and whatever the EU or Boris give and get, we still face Ages and Ages of Rage in a market that is still largely pricing for the calm of the status quo ante.


Tyler Durden

Mon, 10/28/2019 – 09:10

via ZeroHedge News https://ift.tt/2No6cjY Tyler Durden

Stocks Jump After Trump “Expects A Good Day In Market Today”

Stocks Jump After Trump “Expects A Good Day In Market Today”

For the second time in two weeks, President Trump has put on his wealth adviser hat and suggested to the world that he expectes “today will be a good day in the stock market,” adding for for good algo-driven excitement that “the China deal is moving forward ahead of schedule.”

And US equity futures jumped…

This surge will ensure that the S&P will open at a new all-time record high.

But, as a reminder, the last time Trump promised a good day in stocks, they tumbled…

Trade accordingly.


Tyler Durden

Mon, 10/28/2019 – 08:55

via ZeroHedge News https://ift.tt/2q260yM Tyler Durden

Wholesale Inventories Tumble In September, Confirm GDP Growth Slowdown

Wholesale Inventories Tumble In September, Confirm GDP Growth Slowdown

Thanks to a plunge in inventory stacking for non-durable goods (which sounds admittedly oxymoronic), wholesale inventories slumped 0.7% MoM in September – the biggest decline since

 

Source: Bloomberg

This reversal mimics the hangover after 2013/2014’s inventory-stacking surge…

Source: Bloomberg

Not exactly a good sign for Q3 GDP revisions (or Q4…)

 


Tyler Durden

Mon, 10/28/2019 – 08:48

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

China Tech, Bitcoin Soar After Xi Confirms Zuck’s Warnings: Will Accelerate Blockchain Adoption

China Tech, Bitcoin Soar After Xi Confirms Zuck’s Warnings: Will Accelerate Blockchain Adoption

Bitcoin soared almost 40% over the weekend, one of its biggest daily rises in history and a massive surge given the recent break of technical support levels.

Source: Bloomberg

While many had ideas on the catalysts for the move, it appears the biggest driver came from China’s President Xi Jinping confirmed Facebook CEO Mark Zuckerberg’s big warnings to Congress last week, calling for China to accelerate its adoption of blockchain technologies as a core for innovation.

As CoinTelegraph reports, Xi made the comments at a Politburo Committee session on blockchain technology trends on Oct. 24.

Blockchain adoption promotes innovation

Xi stressed that the implementation of integrated blockchain technologies is key in promoting technological innovation and transforming industries. He told the committee:

“We must take blockchain as an important breakthrough for independent innovation of core technologies, clarify the main directions, increase investment, focus on a number of key technologies, and accelerate the development of blockchain and industrial innovation.

But, it’s Blockchain, not Bitcoin

Xi’s push for greater blockchain adoption comes against the backdrop of China’s long-standing aversion to – and a crackdown on — cryptocurrencies. Authorities in the country first banned ICOs in 2017, quickly followed by cryptocurrency exchanges.

image courtesy of CoinTelegraph

There have even been reports that at least one government agency is considering a ban on cryptocurrency mining.

Digital currency arms race

Unsurprisingly, the one cryptocurrency that the Chinese government doesn’t seem to have an issue with is its proposed central bank digital currency (CBDC). Despite reports throughout the summer that the launch of this was imminent, officials from China’s Central Bank last month said that there was no timetable for the launch of the CBDC.

Xi’s commitment sparked a surge in China tech stocks – the biggest jump since February…

Source: Bloomberg

“Most of these companies, especially those that are just beginning to state their connection with blockchain today, are trying to take advantage of the hype,” said Li Shiyu, fund manager at Guangdong Xiaoyu Investment Management Co.

“It shows how much excitement can be triggered by something stressed as a priority by the top man himself.”

Meanwhile, Facebook’s Mark Zuckerberg has been referencing the threat of Chinese superiority in the digital currency space in an attempt to sell U.S. lawmakers his plans for the Libra stablecoin.

China is moving quickly to launch a similar idea in the coming months. We can’t sit here and assume that because America is today the leader that it will always get to be the leader if we don’t innovate,” he argued in an official statement. 


Tyler Durden

Mon, 10/28/2019 – 08:30

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