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Chinese rescue teams are in the midst of planning an escape route to help free trapped gold miners in the country’s Shandong province. 

The miners became trapped in the mine 10 days ago after an explosion. The rescue team has now drilled new holes and is preparing a passage to try and free the miners, according to Reuters.  

22 workers became trapped at the Hushan gold mine as a result of the blast on January 10th. Supplies have been delivered to 11 of the workers – one of whom is in a coma – in the interim. 

8 other workers are reported to be in “good health” while 2 are “unwell”, according to the official newspaper of the province. Another worker is believed to be injured and the whereabouts of 10 of the miners remain unknown. 

So far, the country has deployed 16 professional rescue teams and dozens of medics to try and save the miners. More than 80 medical personnel are on standby, “including nutritionists, neurosurgeons, trauma specialists and psychologists,” Reuters reported.

The miners were working at a depth of 600 meters during the explosion and an air ventilation shaft has been cleared to a depth of 350 meters. 

The new planned escape route entails drilling 10 channels with a 2.3 foot wide hole, which should be enough to lift the miners out of the mine. Rescuers said they are “in a race against time”. 

Authored by Jacob Hornberger via The Future of Freedom Foundation,

Somebody needs to get a memo to the FBI and the U.S. Attorneys in charge of arresting and prosecuting the people involved in the January 6 melee at the Capitol.

At this point, all I see is that these people are being charged with offenses like trespass, disorderly conduct, and theft.

Judging by what leftists are saying and what the mainstream press is reporting, these people should be charged with treason, insurrection, revolution, rebellion, invasion, terrorism, and an attempt to violently overthrow the government of the United States.

How come the Justice Department doesn’t realize that, at least not yet?

In fact, I’m surprised that leftists and the mainstream press aren’t insisting that all the protestors, including those on both the inside and outside of the Capitol, be charged with a gigantic conspiracy to violently overthrow the U.S. government. Maybe they’re concerned about being labeled “conspiracy theorists.”

One of the fascinating aspects of this supposed attempt to conquer the U.S. government is the small amount of bloodshed. In fact, only one person was shot during the melee.

That’s incredible. Wouldn’t you think that revolutionaries would enter the Capitol with all guns blaring, including M-16s, AK-47s, and Glock semiautomatic handguns?

Well, the left has an explanation for this phenomenon: Washington, D.C.’s, strict gun control laws. You see, the idea is that the reason that the revolutionaries didn’t commit a mass killing in the Capitol, like at Columbine, was because D.C.’s gun-control laws prohibit people from openly carrying guns.

Don’t believe me? Take a look at this article by one Kevin Cullen, a columnist for the Boston Globe. According to him, that’s the reason that the insurrectionists didn’t shoot people during what he calls “the putsch.” If that’s not a testament to what the government’s control over education does to people’s reasoning ability, I don’t know what is. 

What about the one person who was shot? That was a woman named Ashli Babbitt, a 14-year Air Force veteran from California. She was shot by a Capitol police officer as she was being hoisted up to the rim of a broken window inside the Capitol.

Babbit wasn’t armed, and she wasn’t assaulting anyone at the time she was shot dead. She wasn’t threatening anyone, including the person who shot her.

It’s standard law that law-enforcement officers are permitted to use deadly force only in very limited circumstances, primarily when they are in reasonable fear that their lives are being threatened. Offenses such as disorderly conduct, theft, and trespass don’t justify the use of deadly force (except trespass into one’s home).

Why did that Capitol policeman shoot Ashli Babbitt? We don’t know. And unfortunately, the left and the mainstream press are not demanding an explanation, much as they do, correctly, when an unarmed black person is shot and killed by the cops. That hypocritical indifference to Babbitt’s life could conceivably give rise to a wider use of the phrase among white nationalists, “White lives matter too.”

Two other people died in the melee from heart attacks.

That’s amazing. Wouldn’t you think that people who were set on a course of conquering the U.S. government would go and get a physical before attempting this monumental feat?

There was one police officer killed during the melee. He was killed when someone hit him in the head with a fire extinguisher. No doubt that person will be charged with murder. Time will tell whether he actually intended to kill the officer or whether he is guilty instead of manslaughter or negligent homicide.

The reason for the Capitol melee revolves around the protestors’ conviction that Joe Biden won the presidential race through massive fraud, a claim that the left and the mainstream media has pooh-poohed from the beginning.

Now, there is no doubt that Trump and his supporters have failed to produce the evidence of fraud that would be necessary to overturn the election. But what I have found fascinating is how the left and the mainstream press have jumped from that fact to a firm conclusion that there was no massive fraud.

How can they know that? It stands to reason that just because fraud hasn’t been discovered doesn’t mean that it didn’t occur. I think most everyone agrees that there were some very unusual anomalies in this election, ones that would raise anyone’s eyebrows. That doesn’t necessarily mean that there was fraud, of course, but it does mean that such anomalies require a careful scrutiny and examination to make sure that there wasn’t fraud.

This is where the mainstream press has failed America. In a genuinely free society, people depend on an independent press to investigate matters like this. Unfortunately, that’s not what happened here. Instead, the mainstream press simply repeated the same mantra — “Trump’s baseless claim of electoral fraud” — much like a flock of mockingbirds on a high wire singing the same tune in unison.

This especially applies to reporters in the mainstream press. Their job is to report the news, not render their own opinions. Yet, every mainstream reporter I read refers to Trump’s “baseless” or “false” claim of electoral fraud. Now, it’s one thing to say, “President Trump has alleged electoral fraud but so far he has not provided any evidence of it.” It’s quite another thing to exclaim, “President Trump’s baseless claim of electoral fraud.” In the first sentence, the reporters are simply reporting the facts. In the second sentence, they are giving us their personal opinion.

And yet, again, how can they be certain that there wasn’t fraud, especially when they haven’t investigated the matter?

I think the mindset of the mainstream press revolves around the concept of inconceivability. They simply cannot conceive of the possibility that a Democrat candidate would engage in fraud and, therefore, they feel comfortable in reporting that any claim of fraud is “baseless” or “false.” In fact, I think their deep hatred for Donald Trump gives them a blind spot on the issue of potential fraud.

Yet, that flies in the face of facts that are contrary to their mindset of inconceivability. I have written in the past about the electoral fraud that enabled Lyndon Johnson to win the 1948 U.S Senate race in Texas. At the time that fraud was being committed, people said the same thing they are saying today — that the charges of fraud were “false” and “baseless.” The courts, including the U.S. Supreme Court, refused to overturn the election result, finding that Johnson’s opponent, Gov. Coke Stevenson, had failed to prove his case. For decades, Johnson’s apologists claimed that he won fair and square.

But he didn’t. In 1990 Robert Caro published his second biographical volume on Lyndon Johnson, entitled Means of Ascent. In that book, Caro proved beyond a shadow of a doubt that Johnson had in fact won the 1948 senate race through fraud. That was more than 40 years after the fact! It was obviously too late to do anything about it. Moreover, many of the people in 1948 who had claimed that Stevenson’s charge of fraud was “false” and “baseless” were now dead.

Thus, while it would be accurate to assert that Trump hasn’t proven his case, it would be inaccurate to assert that that it is simply inconceivable that a Democrat (or Republican) politician would engage in electoral fraud.

Kathleen Parker of the Washington Post weighs in by saying that for massive fraud to occur, it would be implausible or impossible for people to keep it a secret, given the large number of people who would have to be involved in the scheme. “The more people who know a secret, the greater the likelihood of a leak. Life has taught us this much,” she writes.

Really? There are lots of people within the bowels of the deep state who knew about the secrets that Julian Assange and Edward Snowden revealed. Nobody revealed them at the time they originated or occurred. If Assange and Snowden had not revealed them later, the chances of anyone else doing so were virtually non-existent. After all, how many other people have come forward and divulged more secrets, knowing what the deep state has done to Assange and Snowden. In fact, that’s why Director of National Intelligence James R. Clapper Jr. felt comfortable lying to Congress about the mass secret surveillance of Americans — he was totally convinced that the massive number of people who knew about the surveillance would continue keeping it secret.

And don’t forget that Johnson’s fraud in the 1948 race was kept secret for more than 40 years! When people are engaged in crime, it usually doesn’t behoove them to reveal their complicity in the fraud, especially given what their fellow criminals might do to them if they talk.

Was there fraud in the 2020 presidential election? Maybe, maybe not. If there was, it would have been so highly sophisticated that it could never be uncovered in a short period of time with just a cursory investigation. Maybe Americans 40 years from now will discover there was. What we do know today is that the mainstream press, by failing to aggressively investigate the matter while, at the same time aggressively attempting to silence people into acquiescence, let the country down, which only contributed the anger that led up to the Capitol melee.

With just hours to go before his swearing-in, Joe Biden and his team have already started Wednesday with a blitz of announcements for Executive Orders that will be issued immediately.

Following at least a week’s worth of media leaks teasing all the Biden “Day One” action items (Rejoin the Paris Accords! Keystone Pipeline! Halt the departure from the WTO! But mostly the massive immigration package that could create paths to citizenship for millions of illegal migrants), Biden is moving ahead with no fewer than 17 executive actions targeting Trump’s policies on immigration,stop border-wall construction, the climate, the Keystone Pipeline stuff and halting US withdrawal from Paris Accords and the WHO.

CNN reports there will be a total of 17 executive actions, at least 15 of those will be executive orders targeting a range of issues, while Biden pushes his immigration package and a raft of immigration legislation. Of these 17 actions, 9 will involve reversals of Trump-era policies.

And after holding a COVID victim’s memorial event on Tuesday evening, timed to maximally undermine Trump, who was at a private farewell ceremony at Joint Base Andrews

The FT reports that the barrage of orders also includes a “100-day masking challenge” to promote the wearing of face masks across the US, with a guest appearance by Dr. Anthony Fauci, who will (shocker of the century) serve as the media face of the challenge.

The US health official who was often at odds with Mr Trump over the coronavirus response, will participate in this week’s executive board meeting at the WHO as head of the US delegation.

As expected, Biden will also roll back the Trump travel ban citizens of certain Muslim countries introduced at the very beginning of the Trump Administration.

“It was rooted in xenophobia and religious animus and president-elect Biden has been clear that we will not turn our back on our values with discriminatory bans on entry to the United States,” Jake Sullivan, the incoming national security adviser, said of the Muslim ban in a briefing with reporters.

And as we have previously reported, Biden plans to accompany his slate of EOs with a comprehensive immigration package that will be sent to Congress straightaway, where it will need to be passed by the (Democrat-controlled) House and Senate.

Authored by Zachary Stieber via The Epoch Times,

Senate Majority Leader Mitch McConnell (R-Ky.) should condemn the fresh effort to impeach President Donald Trump, Sen. Lindsey Graham (R-S.C.) said late Tuesday.

“What we need right now is Sen. McConnell to unequivocally say the second impeachment of Donald Trump after he leaves office is not only unconstitutional, it is bad for the country,” Graham, the chairman of the Senate Judiciary Committee, said during a virtual appearance on Fox News’ “Hannity.”

“Stand up and fight back,” he added.

McConnell’s office didn’t respond to a request for comment.

The House of Representatives impeached Trump last week over alleged incitement of insurrection. Democrats and some Republicans claim Trump incited the Jan. 6 breach of the U.S. Capitol during his speech that day on The Ellipse. Trump has called his remarks “totally appropriate” and a timeline showed violence at the Capitol started before Trump finished speaking.

Graham is a leading voice in the Republican wing condemning the new impeachment. He said Tuesday that America “needs to heal,” adding, “A second impeachment of Donald Trump after he leaves office won’t heal the country, it will further divide the country.”

“As to the Republican Party, if we throw in the towel, or are perceived to having thrown in the towel, and not fighting against this impeachment, the Republican Party, as Rand Paul said, will ‘crack up,’” he said.

Senate Majority Leader Mitch McConnell (R-Ky.) walks on Capitol Hill in Washington on Jan. 6, 2021. (Manuel Balce Ceneta/AP Photo)

Sen. Rand Paul (R-Ky.) last week said Republican senators backing a conviction of Trump would destroy the Republican Party.

“If Republicans go along with it, it will destroy the party,” Paul said. “A third of the Republicans will leave the party.”

A conviction requires a supermajority; the Senate will soon be 50 Republicans and 50 Democrats. The Senate voted last year to acquit Trump on the first impeachment charges.

McConnell has said the Senate will hold an impeachment trial and that he may vote to convict Trump.

“While the press has been full of speculation, I have not made a final decision on how I will vote and I intend to listen to the legal arguments when they are presented to the Senate,” McConnell wrote last week in a letter to colleagues, part of which was made public by the senator’s office.

The Republican didn’t agree to pressure from Democrats to start the trial on Jan. 13, saying a “fair or serious trial” couldn’t conclude before Trump leaves office on Jan. 20.

The trial can’t start regardless until the House transmits the article of impeachment. It has still not done so, Senate President Pro Tempore Chuck Grassley (R-Iowa) said Tuesday.

Concluding the big banks flurry of Q4 updates, this morning Morgan Stanley reported results for the final quarter of 2020 and in it will probably not be a big surprise that, just like Goldman yesterday, they were a blowout: the big bank reported Net Income of $3.39BN, up 50% from $2.24BN a year ago resulting in adjusted EPS of 1.92 (the company used a 23% effective tax rate vs 15.7% a year ago) smashing estimates of 1.27, on blowout revenue of 13.6BN, up 26% Y/Y and more than $2BN above the consensus estimate of 11.54BN.

The impressive quarter was driven by stellar results in the bank’s core Institutional Securities (i.e., sales & trading and ibanking) division, which smashed expectations:

• Equities sales & trading revenue $2.50 billion, +30% y/y, estimate $2.15 billion
• FICC sales & trading revenue $1.66 billion, +31% y/y, estimate $1.51 billion
• Institutional Investment Banking revenue $2.30 billion, estimate $1.64 billion, as equity underwriting more than doubled from a year earlier.

Some more details:

Investment Banking revenues up 46% from a year ago:

– Advisory revenues increased from a year ago “driven by higher M&A completed transactions.“

– Equity underwriting revenues increased from a year ago “driven by higher revenues on IPOs, blocks and follow-on offerings.“

– Fixed income underwriting revenues decreased from a year ago “as lower volumes contributed to a decline in bond revenues, partially offset by higher event driven activity.“

Sales and Trading net revenues up 32% from a year ago:

– Equity sales and trading net revenues increased from a year ago “reflecting strong performance across products and geographies driven by increased client activity, with particular strength in derivatives.“

– Fixed Income sales and trading net revenues increased from a year ago “reflecting strong performance across businesses, benefitting from strong client engagement and market volatility, with notable strength in foreign exchange and credit products.”

Other sales and trading net revenues increased from a year ago reflecting gains on investments associated with certain employee deferred compensation plans.

Curiously, within Institutional Securities, and similar to Goldman yesterday, compensation expense decreased from a year ago driven by lower discretionary compensation, partially offset by increases in the fair value of deferred compensation plan referenced investments. At the same time, non-compensation expenses increased from a year ago driven by higher volume related expenses, higher litigation expense, and an increase in the provision for credit losses on unfunded lending commitments.

The same was not true for the bigger bank in general, with compensation expenses rising 4.2% to $5.45 billion, and above the estimated $5.08 billion, while non-compensation expenses $3.76 billion, +30% y/y, estimate $3.26 billion.

Morgan Stanley’s iconic wealth management group also posted an impressive quarter, with net revenue of $5.68 billion rising +24% y/y, and also beating estimates of $5.01 billion. The firm leans on managing money for affluent individuals and other clients for more than half its revenue every quarter, a business being boosted by the takeovers of Eaton Vance Corp. and E*Trade Financial Corp.

The blowout quarter helped Morgan Stanley deliver its best year on record, generating $48.2BN in revenue and just under $11BN in net income. As Goldman notes, ten years into Gorman’s tenure atop the firm, it has carried out two of the largest deals by a top Wall Street bank. That’s been accompanied by record earnings and a stock surge which has lifted the firm’s market capitalization to more than $135 billion — effectively ending Morgan Stanley’s reputation as Wall Street’s smallest big bank.

“The firm produced a very strong quarter and record full-year results, with excellent performance across all three businesses and geographies,” Morgan Stanley CEO James Gorman said in a statement Wednesday.

And judging by the stock reaction, the market agreed, with MS shares rising as much as 3% premarket after the latest blowout quarter from the bank.

 

 

At 0800ET on Wednesday, President Trump is set to leave the White House for the final time.

Watch it live below.

President Trump attended a private farewell ceremony Tuesday evening at Joint Base Andrews.

S&P futures rose with European stocks on Wednesday, buoyed by earnings and hopes for more stimulus as Joe Biden prepared to take charge as US President at his inauguration, while Netflix soared after reporting a surge of subs in Q4 and saying it will no longer need to borrow billions of dollars to finance its TV shows and movies. The dollar edged lower alongside Treasuries.

At 0700 am ET, Dow E-minis were up 33 points, or 0.11% and S&P 500 E-minis were up 12.5 points, or 0.33%. Nasdaq 100 E-minis were up 104.5 points, or 0.8%. Shares of Netflix surged 13% in premarket trading, helping boost futures tracking the broader Nasdaq 100 index which was up 0.8%, also boosted by chipmaker ASML Holding NV. Procter & Gamble Co. jumped in pre-market trading after boosting its sales and profit outlook on at-home demand. UnitedHealth Group Inc slid 0.3% after the health insurer’s quarterly profit slumped nearly 38%, weighed by costs related to its programs to make COVID-19 testing and treatment more accessible for its customers. Boeing added 1% after Berenberg upgraded the stock to “hold” from “sell”, saying the worst has passed and believes restarting of 737 MAX aircraft deliveries in December marked a turning point towards planemaker’s financial recovery.

Stocks ended higher on Tuesday after Treasury Secretary nominee Janet Yellen urged lawmakers to “act big” to save the coronavirus-ravaged U.S. economy and worry about debt later.  At her confirmation hearing on Tuesday, Yellen said the benefits of a big stimulus package to counter the coronavirus pandemic were greater than the expenses of a higher debt burden.Pandemic relief would take priority over tax increases, she said, calling for corporations and the wealthy – both winners from Republican tax cuts in 2017 – to “pay their fair share”.

Yellen – who could be confirmed as soon as Thursday – said that help for the unemployed and small businesses would provide the “biggest bang for the buck.” She urged lawmakers to act in efforts to rescue an economy battered by the coronavirus. She also said the U.S. is prepared to take on China’s “abusive” trade and economic practices, and that the Biden administration won’t pursue a weak dollar.

“They realised that there is some limits to what monetary policy can do to effect change in the real economy,” said Shaniel Ramjee, senior investment manager at Pictet Asset Management. “The Fed will continue buying bonds issued by the U.S. Treasury in order to fund the fiscal programs.”

With earnings season ramping up, S&P 500 earnings are expected to rise by 24% in 2021 after falling 15% in 2020, according to Refinitiv data. With stock market valuations sitting close to a 20-year high, investors are hoping corporate results and profit outlooks will help them determine to what degree the valuations are justified.

On the political front, Joe Biden, due to take over as the 46th President of the United States just after noon on Wednesday, will waste little time trying to turn the page on the Trump era, advisers said, signing a raft of 15 executive actions on issues ranging from the pandemic to the economy to climate change.

The MSCI world equity index, which tracks shares in almost 50 countries, was last up 0.1%. In Europe, the Stoxx 600 gained 0.5%, with the DAX and FTSE MIB rising a similar amount. Italy’s benchmark FTSE MIB index gained as much as 0.6%, outperforming other major western European markets, after Italian Premier Giuseppe Conte secured the support of 156 senators in a confidence vote on Tuesday.  The FTSE 250 rallied over 1.2%, trading at the week’s best levels. Miners, autos and tech names lead relatively broad-based strength with only utilities in the red.

Earlier in the session, Asian stocks continued to set records with benchmarks surging in Hong Kong and Indonesia. The MSCI Asia Pacific Index was set for its 15th gain in 19 sessions dating back to Christmas.

Chipmaker TSMC and online gaming giant Tencent provided the biggest boosts while Alibaba shares jumped after Jack Ma reappeared after a 3 month absence amid escalating scrutiny over his internet empire. Hong Kong shares extended recent gains, with the Hang Seng Index hovering just under the 30,000-point level as mainland traders continued to flood the market with cash. Indonesia stocks rose as the government readied removing restrictions on foreign investment in the energy, communications and tourism sectors. Financial stocks led gains in Malaysia after the central bank kept its benchmark interest rate unchanged. Japanese stocks fell after signs that their recent rally had become too stretched. Vietnamese shares swung between gains and losses after dropping more than 5% Tuesday, their worst decline since July

In rates, Treasury futures were lower in early U.S. session, yields cheaper vs Tuesday’s close by 1bp-2bp from belly to long end. The 10-year yield is higher by 1.2bp at 1.10% with front-end anchored, steepening 2s10s, 2s5s by around 1bp each; U.K. 10- year keeps pace with German 10-year little changed, outperforming. The Treasury Department plans $24b reopening of 20-year bond at 1pm ET, one hour after presidential inauguration. Fixed income in Europe traded in a narrow range: German curve bear steepens slightly with 30y supply comfortably absorbed. Cash USTs bear steepen, short end recovers after early flattener interest. Long end gilts trade ~2bps cheaper to bunds, with U.K. 5s30s at session steeps. Peripheral bonds are mixed: Italy reverses an early tightening move with 10y BTP/Bund back above 110bps. Italian 10-year bond yields dropped to their lowest since Jan. 11 – before Conte lost his majority – at 0.533%, down 2 basis points on the day.

In FX, the Bloomberg Dollar Spot Index fell a third day following Janet Yellen’s testimony to the Senate Finance Committee, which reinforced expectations of more spending to revive growth. The greenback was lower versus most of its Group-of-10 peers, amid a rally that was led by commodity currencies and the pound, however it traded off the lows. The pound advanced a second day against the dollar, rising to a two year high above 1.37 and benefiting from broad weakness in the greenback; U.K. inflation remained subdued in December, picking up 0.6% from a year earlier, slightly higher than economists’ forecast of 0.5%. Sweden’s krona inched lower after central bank’s first deputy governor Cecilia Skingsley said the bank’s experience of negative policy rates “was on the whole benign.”

“We remain bearish U.S. dollar, and expect the downtrend to resume as U.S. real yields top out,” said Ebrahim Rahbari, FX strategist at CitiFX.

Emerging-market assets rose after U.S. Treasury Secretary nominee Janet Yellen said that low interest rates offered scope for a large stimulus plan. MSCI Inc.’s index of developing-nation stocks jumped 1% to a new record, with investors shifting their focus to president-elect Joe Biden’s inauguration on Wednesday for hints of more stimulus to fight the pandemic. The South African rand, Mexican peso and Turkish lira — often seen as barometers of risk appetite — led developing-nation currency gains as the dollar declined

In commodities, crude futures extended Asia’s gains; WTI rallies 1% to $53.50 before stalling, Brent runs into resistance around $56.50. Spot gold comes off best levels having printed highs of $1,852/oz so far, gaining as the dollar eased following commentary on the U.S. currency, the merits of massive stimulus, and the outlook for trade from President-elect Joe Biden‘s cabinet nominees. Base metals traded well with LME copper rallying over 1%, outperforming after breaching Monday’s highs.

Looking at the day ahead, and the highlight later will be Joe Biden’s inauguration as US President. There are also an array of earnings releases, including Procter & Gamble, UnitedHealth Group, Morgan Stanley and BNY Mellon. Data releases include the December CPI readings from the UK and Canada, as well as the NAHB housing market index for January from the US. Finally from central banks, the Bank of Canada will be deciding on rates, and Bank of England Governor Bailey will be speaking.

Market Snapshot

• S&P 500 futures up 0.4% to 3,804.00
• Stoxx Europe 600 up 0.5% to 409.86
• MXAP up 0.5% to 212.31
• MXAPJ up 0.9% to 716.00
• Nikkei down 0.4% to 28,523.26
• Topix down 0.3% to 1,849.58
• Hang Seng Index up 1.1% to 29,962.47
• Shanghai Composite up 0.5% to 3,583.09
• Sensex up 0.9% to 49,844.40
• Australia S&P/ASX 200 up 0.4% to 6,770.40
• Kospi up 0.7% to 3,114.55
• Brent futures up 0.8% to $56.34/bbl
• Gold spot up 0.8% to $1,854.49
• U.S. Dollar Index little changed at 90.45
• German 10Y yield unchanged at -0.525%
• Euro down 0.07% to $1.2121
• Italian 10Y yield fell 4.3 bps to 0.477%
• Spanish 10Y yield fell 0.3 bps to 0.066%

Top Overnight News from Bloomberg

• The ECB is buying bonds to limit the differences between yields for the strongest and weakest economies in the euro zone, according to officials familiar with the matter, with one person saying the central bank has specific ideas on what spreads are appropriate. An ECB spokesman declined to comment
• President-elect Joe Biden plans to begin immediately unwinding President Donald Trump’s policies on immigration, climate and other issues on Wednesday with at least 15 executive actions, including moves to reverse U.S. withdrawals from the Paris Agreement and the World Health Organization, and stop construction of a border wall
• Pfizer Inc. and BioNTech SE built the case that their Covid-19 vaccine will protect against the new variant of the coronavirus that emerged in the U.K. with results of another lab trial
• Donald Trump granted clemency to dozens of people on Wednesday, including his former strategist Steve Bannon, the rapper Lil Wayne and former Detroit Mayor Kwame Kilpatrick, in one of his final official acts as president
• BOE chief economist Andy Haldane, who has been the most publicly optimistic of the central bank’s rate-setting committee, said the economy may be growing quickly enough by the second quarter to absorb the 1 million people who lost their jobs in the coronavirus crisis

A quick look at global markets courtesy of Newsquawk

Asian equity markets were mostly positive as the region partially sustained the momentum from the tech-led gains on Wall St, where participants reflected on earnings results and sentiment was underpinned by stimulus hopes as Treasury Secretary nominee Yellen asserted the need for fiscal support, while she also suggested focus is on providing relief not raising taxes and that although President-elect Biden will tweak the 2017 tax cuts, it would not be a complete repeal. ASX 200 (+0.4%) was higher with gains led by tech after similar outperformance stateside and with miners lifted including BHP which reported higher quarterly iron ore output, record HY iron ore shipments and raised its FY iron ore production guidance. Nikkei 225 (-0.4%) failed to hold on to opening gains with the index pressured by currency effects as the JPY reverses some of the recent outflows and KOSPI (+0.4%) was choppy despite reports policymakers were considering extending the short-selling ban by 3 months and with Kia Motors advancing by around 9% on news that the Co. could build the Apple self-driving car at its Georgia plant. Hang Seng (+1.0%) and Shanghai Comp. (+0.4%) were kept afloat after the PBoC boosted its liquidity efforts and maintained its Loan Prime Rates for a 9th consecutive month as expected, with Alibaba shares also boosted after its founder Jack Ma made his first appearance since October through a video conference which dispelled concerns he may have been detained. However, the upside in Chinese stocks was restricted after comments from US President-elect Biden’s Secretary of State Blinken which suggested the incoming administration is likely to maintain its pressure on China as he noted that the US must ensure it does not import goods made with forced labour from China’s Xinjiang and agreed with the White House’s determination of ‘genocide’ regarding China’s repression of Uighur Muslims. Finally, 10yr JGBs traded higher following on from the short-covering in USTs and as Japanese stock markets lagged against, with the BoJ also present in the market for nearly JPY 1.3tln of JGBs with 1yr-10yr maturities

Top Asian News

• As Thailand’s Troubles Grow, the King Moves to Bolster His Image
• Malaysia Holds Key Rate Amid Lockdown to Curb Virus Surge
• Turkey Stock Investors Say Rally Not Over, It’s Just Slowing
• Done With Day Trading, China’s Stock Investors Turn to Funds

European stocks kicked the mid-week session off with respectable gains across the board (Euro Stoxx 50 +0.6%), after the region picked up the baton from a mostly positive APAC session, and as markets brace for a pick-up in earnings and eye the inauguration of President-elect Biden and VP-elect Harris – with sentiment underpinned on stimulus hopes and Europe also supported by prospects of a fruitful relationship with the US. That being said, US equity futures vary in terms of performance, with the tech-led NQ (+0.8%) outperforming vs the value cyclical-driven RTY (-0.1%) – with some citing potential “sell the news” play, albeit the breadth of price action is still somewhat contained. The outperformance in the NQ could also be attributed to tailwinds from post-earnings Netflix (+12% pre-market) whose shares soared after-hours on a strong rise in subscriber growth and the prospect of share buybacks. Meanwhile, State-side earnings today include updates from the likes of UnitedHealth Group (+0.8% pre-market post-earnings) – the largest weighted Dow component with a 7.5% weighting as of yesterday, alongside Procter & Gamble (12:00GMT/ 2.8% DJIA weighting) and Morgan Stanley (12:30GMT). Note – some banks have a tendency to report earlier than expected. Back to Europe, sectors are mostly firmer and portray more of a cyclical bias, with IT the stand-out outperformer amid Netflix’s earnings coupled with numbers from ASML (+4.2%) whereby revenue topped estimates, 2020 dividend increased by 15% and the group also expects “another year of growth driven by strong Logic demand and continued recovery in Memory”. Auto names also reside among the winners in light of an update from Volkswagen (+2%) in which it expects China’s overall car market sales to exceed 2019 levels and the Co’s own sales will see “substantial growth”. On the flip side, Oil & Gas resides towards the bottom of the pile due to a modest pullback in oil prices. In terms of individual movers, Hugo Boss (+5.8%) is bolstered on reports that Fraser Group’s (+0.6%) Mike Ashley has increased his stake in Hugo Boss to 15.2% (prev. 5.1%) through stocks and derivatives. Elsewhere, Burberry (+5%) trade with firm gains post earnings, whilst Danone (-1.0%) is pressured after French Finance Minister Le Maire stated that France needs to be vigilant regarding the Co’s situation, referring to the Bluebell Capital Partners’ call for Danone to replace its CEO Faber following what it said has been a period of “disappointing” share price performance.

 

Top European News

• ECB Is Capping Bond Yields But Don’t Call It Yield Curve Control
• Germany Posts Highest Daily Death Toll as Infection Gauge Eases
• ASML Beats Estimates, Grapples With Chip Supply Shortage
• Hugo Boss Jumps After Mike Ashley Firm Increases Stake to 15%

In FX, the Dollar continues to retreat on a mixture of broad risk factors and US specifics following confirmation that Treasury Secretary-in-wating Yellen favours bold fiscal stimulus and market forces when it comes to the Greenback’s value, while she also intimated that increased spending should not necessarily raise the tax burden for businesses extortionately (or proportionately). The index is trying to keep tabs on the 90.500 level having declined to 90.272 and hold above support ahead of 90.000 via the 21 DMA that comes in at 90.141 today. Conversely, Sterling is back in the ascendency, and across the board as Cable sets sights on 1.3700+ again and Eur/Gbp tests bids into 0.8850 amidst reports of heavy selling interest after the cross breached 0.8900. Firmer than forecast UK inflation metrics may have prompted some upside, but the Pound’s revival appears more corrective and positional in advance of another speech from BoE Governor Bailey.

• AUD/CAD/NZD – All extending recent recovery rallies vs their US counterpart, with the Aussie eyeing 0.7150 before top tier data in the form of jobs and retail sales, while the Loonie is pivoting 1.2700 awaiting Canadian CPI and the BoC and Kiwi is close to 0.7150, but losing a bit more ground to its Antipodean peer below 1.0800 towards 1.0850. Note, 1.1 bn option expiry interest in Usd/Cad from 1.2700 to 1.2715 looks more influential than 1 bn expiries in Aud/Usd between 0.7690-0.7700 at this stage.
• JPY/EUR/CHF – The Yen has eked further gains through 104.00 against the Buck even though risk sentiment remains buoyant and the BoJ is widely expected to stand pat on all policy elements at the end of its 2-day meeting that kicked off today pending the results of a framework review due in March. However, the Euro and Franc seem to be losing momentum after the former failed to sustain gains beyond 1.2150 and latter revisited Tuesday’s best around 0.8865. Indeed, Eur/Usd is now in the low 1.2100 area and Usd/Chf back up near 0.8900, with Eur/Chf hovering just under 1.0800 in wake of Italian PM Conte surviving the 2nd and more challenging Senate confidence vote.
• SCANDI/EM- Another upturn in oil prices may be fuelling the Nok, but relative Sek underperformance could well be down to tentative signs of divergence in Norges Bank vs Riksbank policy leanings ahead of Thursday non-MPR convene in Norway and after more talk about returning to NIRP in Sweden, this time courtesy of Skingsley. Elsewhere, the Zar is carving climbing further beyond 15.0000 vs the Usd alongside Xau on a break above Usd 1850/oz, with little reaction to in line SA inflation data, while the Mxn has overcome key technical resistance at 19.6600 (200 WMA) on the way to a 19.5900+ peak

In commodities, WTI and Brent futures remain firm in early European trade in a continuation of the upward price action seen overnight on the inauguration day of US President-elect Biden, with some positive omens emanating from reflationary hopes, whilst a weaker Buck also underpins the complex. That being said, the short-term outlook for crude prices remain somewhat clouded amidst the tightening of COVID-related restrictions – with Germany extending its lockdown yesterday and Beijing entering a partial lockdown more recently. That being said, the ramp-up in vaccinations (barring delays) and OPEC+ support help to keep prices elevated. Brent Mar holds its USD 56/bbl status (low USD 55.88/bbl) whilst its WTI counterpart trades around USD 53.50/bbl (vs low USD 53.07/bbl). In terms of forecasts, Goldman Sachs maintained its positive outlook for oil in 2021/2022 and expects demand to recover this year, while Standard Chartered sees WTI averaging USD 49/bbl in 2021 and USD 56/bbl in 2022, while it forecasts Brent to average USD 51/bbl in 2021 and USD 59/bbl in 2022. Elsewhere, spot gold sees constructive gains as the yellow metal made its way above its 200 DMA (c. USD 1845.50/oz) and then the USD 1850/oz psychological mark as it sets its sight on its 50 DMA, 21 DMA and 100 DMA at USD 1859/oz, USD 1875/oz and USD 1883/oz respectively. Some base metals meanwhile remain supported by the reflationary play with LME copper trading on either side of the USD 8,000/t mark. Finally, mining giant BHP forecasts record annual iron ore output of 244-253mln tonnes as it resumed production at the Samarco plant.

US Event Calendar

• 7am: MBA Mortgage Applications, prior 16.7%
• 10am: NAHB Housing Market Index, est. 86, prior 86

DB’s Jim Reid concludes the overnight wrap

After what have been an incredibly eventful 4 years in the US, today marks the end of the Trump presidency as Joe Biden is inaugurated at 12pm EST. With the pandemic still raging and an economic crisis overlaid on top of that, Biden’s presidency will begin with a pretty full in-tray, and the policy measures can be expected to come thick and fast as the new administration aims to hit the ground running. Indeed it’s already been trailed that today will see a number of Executive Orders signed by Biden, including the re-entry of the US into the Paris climate change agreement, the extension of a ban on evictions and foreclosures thanks to the pandemic, a federal mask mandate that will require the wearing of masks in federal buildings and on inter-state travel, as well as the reversal of President Trump’s travel ban on a number of Muslim-majority nations. On top of this, Biden has of course already unveiled a $1.9tn stimulus proposal that’s a first basis for negotiation but one that he wants to pass quickly through Congress, as well targeting 100m vaccinations within his first 100 days in office.

Ahead of all that, risk assets turned higher yesterday and the reflation trade appeared to be back on, thanks to helpful comments from Biden’s nominee for Treasury Secretary Janet Yellen, as well as the Italian government’s survival in a confidence vote. Indeed by the close, US equities had resumed their upward march, with the S&P 500 (+0.81%), the NASDAQ (+1.53%) and the Dow Jones (+0.38%) all moving higher, with growth and cyclical stocks leading the way in the US at the expense of defensives such as consumer staples (-1.33%) and real estate (-0.54%). Energy stocks (+2.08%) were stronger on the back of higher oil prices, while semiconductors (+2.87%) and media (+2.30%) stocks were the other outperformers. After the close, Netflix reported earnings, indicating that it no longer needed to rely on debt to fuel growth. The streaming service also announced that it passed 200 million subscribers and the company’s shares rose +12.3% after the bell. Elsewhere in earnings yesterday, US bank stocks were flat (-0.02%) as Bank of America’s (-0.73%) fourth-quarter sales and trading revenue missed estimates and as Goldman Sachs shares fell -2.28% despite record profits fuelled by equity-underwriting.

Meanwhile Treasuries and the dollar (-0.29%) weakened as investors moved out of traditional havens, with 10yr yields up +0.5bps to 1.089%. 10yr US breakevens hit a fresh 2-year high of 2.11% after 12 days of stalling at the previous post Georgia election highs.

Incoming Treasury Secretary Janet Yellen had her confirmation hearing before the Senate Finance Committee yesterday and laid out her top priorities and concerns in what was a very highly anticipated appearance. The three-hour hearing covered a broad range of important topics. On the incoming administration’s dollar policy, Yellen noted that “the United States does not seek a weaker currency to gain competitive advantage and we should oppose attempts by other countries to do so.” The dollar index slid in the early US morning ahead of Yellen’s remarks before trading rather flat during them. She advocated and defended Democratic initiatives in a way that was unseen during her time as Fed chair. She defended President-elect Biden’s plan to raise the minimum wage to $15 – citing economic literature on the experiment in individual states – as well as tying the threat of climate change to the risks it creates in the financial system.

On China, she said the second largest economy “is clearly our most important strategic competitor,” and that the US needs “to take on China’s abusive, unfair and illegal practices.” Her comments highlight the fact that while Biden may offer a different tone and approach to the US-China relationship than his predecessor, the adversarial nature will continue. Yellen received a quite a few questions on the incoming administration’s tax policy. She emphasised that tax reform would not be an immediate priority, with focus remaining on the economic recovery as we get out of the pandemic. She went on to say that Biden does not intend to reverse the entirety of the 2017 tax cuts, but that eventually parts of that bill will be repealed, and cited that she would work with OCED on what the appropriate corporate tax rate should be. Lastly, when asked about the possibility of a 50yr Treasury bond, Yellen said she would examine the possibility of one and left the door open to super long duration paper.

A quick refresh of our screens this morning shows that Asian markets are mostly trading higher outside of the Nikkei (-0.50%). The Hang Seng (+0.63%), Shanghai Comp (+0.05%) and Kospi (+0.37%) are all posting gains. Futures on the S&P 500 are trading up +0.13% while those on the Nasdaq are up +0.42% on the back of the buoyant earnings from Netflix mentioned above. In Fx, the US dollar index has continued to decline this morning (-0.15%). Elsewhere, spot gold prices are up +0.47% overnight.

In other overnight news, Bloomberg has reported that the ECB is buying bonds to limit the differences between yields for the strongest and weakest economies in the euro zone while adding that the central bank has specific ideas on what spreads are appropriate. This is not new news but confirmation of what market participants already thought was happening. Another piece of news that is doing the rounds this morning is that suggesting outgoing US President Trump is floating the idea of forming a new party with several aides and other people close to him (per Bloomberg). It is said to have a working title of the “Patriot Party.” So there is still some room left for substantial shifts in the US political landscape. This could have quite substantial implications if it materialises. Even if such a party captures a small amount of the GOP vote it could dramatically enhance the Democrats subsequent election chances.

Meanwhile in Europe, sentiment was buoyed yesterday by the Italian government’s survival, with the Senate voting 154-140 in the government’s favour – there were 27 absences or abstentions. This means that Prime Minister Conte will be allowed to try and consolidate power. Bloomberg reported yesterday that a group of senators have indicated that they will back him later today. Our economists have put out a Q&A on the implications overnight. See it here for more. Ahead of the vote, the spread of 10yr Italian BTP yields over bunds narrowed by -4.3bps, reflecting investors’ expectations that the government was likely to win the vote. However, the gains for BTPs weren’t seen elsewhere, with yields on 10yr bunds (+0.1bps) and OATs (+0.1bps) both holding steady. In addition, equity indices fell across the continent, with the STOXX 600 (-0.19%), the DAX (-0.24%) and the FTSE 100 (-0.11%) all moving lower on the day.

In terms of the latest on the coronavirus, the German lockdown was extended from the end of January until February 14, amidst rising concern over the spread of new variants. The extension comes along with some tightening of measures as Chancellor Merkel announced closures to non-essential businesses and increased movement restrictions in the hardest hit regions. Merkel also warned of border closures if neighbouring nations can’t coordinate their efforts. Elsewhere, according to their Health Minister, the Netherlands will announce further lockdown measures later today that will last until at least Feb 9, which could include a curfew and a limit on the number of visitors to one’s home. Furthermore, the UK sadly reported a record number of daily Covid-19 deaths, at 1,610, albeit spread over a number of dates. However, the recent reductions in case numbers should mean that deaths should also begin to fall soon, with the number of new cases falling yesterday to a 3-week low of 33,355. Finally in New York City, concern grew over vaccination supply, with Mayor de Blasio saying that the city could have to close vaccination sites if they didn’t get more supply. In our case and fatality table in the pdf we’ve now included Israel so we can track over time if the impressive vaccine roll out there starts to reduce these numbers. Although we mostly track larger countries, Israel will be key to follow with evidence already that it’s making a difference even if it’s top on current case numbers. See below for the vaccine table.

On the data front, there weren’t a great amount of releases yesterday, though the German ZEW survey surprised to the upside, with the expectations reading rising to 61.8 (vs. 59.4 expected), while the current situation reading also eked out a slight increase to -66.4 (vs. -68.3 expected). Elsewhere, the pandemic’s impact was showcased in the number of EU car registrations in 2020, which were down -23.7% compared with the previous year.

To the day ahead, and the highlight later will be Joe Biden’s inauguration as US President. There are also an array of earnings releases, including Procter & Gamble, UnitedHealth Group, Morgan Stanley and BNY Mellon. Data releases include the December CPI readings from the UK and Canada, as well as the NAHB housing market index for January from the US. Finally from central banks, the Bank of Canada will be deciding on rates, and Bank of England Governor Bailey will be speaking.