DoorDash Cites Risk It May Never Be Profitable In Filing For IPO

DoorDash Cites Risk It May Never Be Profitable In Filing For IPO

Tyler Durden

Fri, 11/13/2020 – 09:23

DoorDash, the leading food-delivery app in the US, has just filed its IPO prospectus with the SEC Friday morning, revealing some shocking – though not entirely unexpected – details about its financials that should make prospective investors nervous.

DoorDash reported $1.9 billion in revenue during the nine months prior to Sept. 9. That’s compared with just $587 million during the same period last year, before the COVID-19 pandemic led to a massive surge in demand for takeaway meals in the US, and around the world.

However, even after exhibiting such robust growth, it’s worth noting that the company’s loss only narrowed by $149 over the same period, despite the massive surge in orders, a clear sign that the company is still effectively subsidizing every meal that it delivers. In 2019, DoorDash’s financials reveal, the company reported a $533 million loss, meaning the company’s YTD loss is still north of $375 million. That’s certainly an improvement, but as the company outlines in a section of the filing called “Risk Factors” that it “may not be able to maintain or increase profitability in the future.”

We have a history of net losses, we anticipate increasing expenses in the future, and we may not be able to maintain or increase profitability in the future.

Although we generated net income of $23 million for the three months ended June 30, 2020, we have incurred net losses in each year since our founding, we anticipate increasing expenses in the future, and we may not be able to maintain or increase profitability in the future. We incurred a net loss of $667 million and $149 million in the year ended December 31, 2019 and the nine months ended September 30, 2020, respectively, and, as of December 31, 2019 and September 30, 2020, we had an accumulated deficit of $1.2 billion and $1.3 billion, respectively. We expect our costs will increase over time and our losses to continue as we expect to invest significant additional funds towards growing our business and operating as a public company. We have expended and expect to continue to expend substantial financial and other resources on developing our platform, including expanding our platform offerings, developing or acquiring new platform features and services, expanding into new markets and geographies, and increasing our sales and marketing efforts. These efforts may be more costly than we expect and may not result in increased revenue or growth in our business. Any failure to increase our revenue sufficiently to keep pace with our investments and other expenses could prevent us from maintaining or increasing profitability or positive cash flow on a consistent basis. If we are unable to successfully address these risks and challenges as we encounter them, our business, financial condition, and results of operations could be adversely affected.

Following the completion of this offering, the stock-based compensation expense related to our RSUs and other outstanding equity awards will result in increases in our expenses in future periods, in particular in the quarter in which the offering is completed. Additionally, we may expend substantial funds in connection with the tax withholding and remittance obligations that arise upon the initial settlement of certain of our RSUs. For more information, see “—The stock-based compensation expense related to our RSUs and other outstanding equity awards will result in increases in our expenses in future periods and we may also expend substantial funds to satisfy a portion of our tax withholding and remittance obligations that arise upon the initial settlement of certain of our RSUs, which may have an adverse effect on our financial condition and results of operations.”

If we are unable to generate adequate revenue growth and manage our expenses, we may continue to incur significant losses in the future and may not be able to maintain or increase profitability.

To be sure, DoorDash isn’t the first food-delivery company on the public market. GrubHub and Uber have both already gone public, even though GrubHub’s market share is less than half that of DoorDash’s.

In an introductory letter, DoorDash CEO Tony Xu really tapped into the zeitgeist with a story about his immigrant parents. He said his mother worked three service-industry jobs, including at a restaurant, to put food on the table, and that Xu had started the company to “DoorDash exists today to empower those like my Mom who came here with a dream to make it on their own.”

Now that California has passed Prop 22, Xu can continue to help people make it “on their own”, ie without any kind of formal employment arrangement (or offering the benefits to match).

Given the timing, with Prop 22 passed and the pandemic driving a massive surge in demand, it makes that DoorDash has picked now to move ahead with its IPO.

Source: WSJ

But in a series published last year by WSJ called “the Delivery Wars”, the paper’s reporters broke down why it has become so difficult to project a path to sustainable profitability for companies like DoorDash without hiking prices considerably.

Of course, until the market has a dominant player, prices probably won’t be going anywhere thanks to the extreme competitive pressure. But once a winner has been chosen, a virtually monopoly should give them far more wiggle room on pricing power.

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Elon Musk Says He May Have COVID, Calls Antigen Tests “Extremely Bogus”

Elon Musk Says He May Have COVID, Calls Antigen Tests “Extremely Bogus”

Tyler Durden

Fri, 11/13/2020 – 09:06

Elon Musk, whose very large brain once led him to the genius-level conclusion that there would be no new Covid cases by April 2020…

has just Tweeted out that he is among the over 100,000 positive Covid tests that are being counteddaily, in the United States.

It has now been 6 months since Musk’s “no new cases” estimate. May want to re-work the numbers on that one, Elon.  

Regardless, Musk disclosed the news in a Tweet he put out on Friday morning, where he said that “something extremely bogus” was going on because he had tested for Covid four times during one day, and the results were split, with two negative and two positive tests:

He said that he took a series of rapid antigen tests, which can produce results within 15 minutes. He’s waiting for the results from a more reliable polymerase chain reaction test to confirm whether or not he has Covid.

And while the far left mob – like “Senior Producer” Kyle Griffin at MSNBC – is already calling Musk “irresponsible” for saying his test may not have worked…

…Musk actually might be on to something. Recall, just days ago we wrote that both the FDA and several states were warning about “careless” antigen testing being used for asymptomatic Covid cases. 

The appeal of these tests is that they can be spread widely and cheaply, giving the illusion of control over the virus to individuals and organizations that use them for quick blanket testing.

But these tests could “miss some infections that can be picked up by costlier gold-standard assays, and can incorrectly return positive results,” we noted at the time.

Musk said he is experiencing “symptoms of a typical cold,” describing his symptoms as “nothing unusual so far”, according to Bloomberg.

At least Musk is in great physical shape…


 

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Rabo: “Nothing Lasts Forever”

Rabo: “Nothing Lasts Forever”

Tyler Durden

Fri, 11/13/2020 – 08:45

By Bas van Geffen of Rabobank

Nothing lasts forever

Let’s hope that the vaccine’s effects last longer than the positive mood that resulted from the news that Pfizer’s vaccine appears to be effective. Stocks were down following concerns that the virus spread is accelerating again in the US, after a rise in positive tests and hospitalisations resulted in new restrictions being imposed in cities like New York. The S&P 500 lost 1%, which also infected markets abroad with some pessimism.

Meanwhile, 10y Treasury yields are back down to 0.86%, after surpassing the 0.95% mark before the 11 November holiday. The virus’ concerns were one driver behind this move, but this was likely amplified by the inaction on the fiscal front.  Despite the virus’ resurgence in the United States, the White House and Congress have remained very quiet. In fact, Trump’s administration appears to have largely withdrawn from the stimulus bill talks, with Treasury Secretary Mnuchin leaving it to Senate Majority Leader McConnell to restart the talks with the Democrats, according to sources. This only makes it harder to see a stimulus deal being reached before the end of the year, with both sides of Congress entrenched in their positions and not ready to compromise.

Yet, fiscal stimulus remains “absolutely essential”, as FOMC Chair Powell warned earlier. And indeed, even though the heads of the major three central banks were all cautiously optimistic on the progress towards a vaccine in a panel discussion at the ECB’s annual forum, they warned against exuberance. As Bank of England Governor Bailey noted, this was mainly positive for the medium-term outlook. Powell specifically noted that the FOMC does see the economy continuing on a solid path of recovery, but further spread of the virus in the US is the main risk in the short term: “With the virus now spreading, the next few months could be challenging.”

After the Pfizer/BioNTech alliance released encouraging test results, Moderna may report initial results from its own Phase 3 trials soon. While another promising vaccine candidate could inject new optimism in markets, we continue to point out that it will take some time before these can be released to the public and a critical mass of the population has been inoculated.

UK Gilt yields, like those of Treasury notes, were down substantially yesterday, and the Gilt curve flattened noticeably. In addition to the continued concerns about Covid-19, Brexit remains a big headache for the market. The deadline for talks is currently set at 19 November, when the next EU summit is scheduled to take place. But yesterday afternoon, the BBC reported that EU diplomats were sounding more pessimistic about the negotiations than a few weeks ago: “Two weeks ago it seemed more positive. Now the only thing that is moving is time.” In fact, one diplomat suggested that a no deal might be a better start than a compromise, since this would avoid the countries starting off with a tense relation. However, certainly not everyone agrees with that view. BoE Governor Bailey looks at this very differently: he noted that if the UK and EU fail to agree on the terms for future trade, the impact would be bigger than just the costs of tariffs. It would also result in less cooperation and lower goodwill in solving other problems. Our UK strategist still expects the two sides to reach an agreement, albeit only at the eleventh hour.

And the news that PM Johnson will be losing two of his key allies suggests that Johnson’s position in the final and crucial stretch of these negotiations could be losing strength. Dominic Cummings, his special advisor and architect of the governments’ Brexit policy is said to be leaving before year-end. This followed the announcement earlier this week that Johnson’s Communications Director Lee Cain would step down.

Turning to the energy market, oil prices also saw the effects of the vaccine news fade somewhat. The abovementioned concerns about the economic outlook until such a vaccine is widely available weighed on prices, after the US reported another increase in stockpiles. The IEA added to this with a downbeat forecast, cutting its projections for Q4 global oil demand by 1.2 million barrels per day. That said, the price declines follow a few sharp increases, with the outlook of a virus becoming available still lending support to the medium-term outlook for economic activity.

Finally, the Bank of Mexico surprised a large part of the market, leaving the interest rate at 4.25%. While this is in line with our expectations of no move, our Banxico watcher had noted that it was indeed a flip-of-a-coin call whether they would or wouldn’t. The currency may have supported the case for a rate cut, but a majority preferred to hold the rate at 4.25% owing to the inflation outlook. That said, this decision to hold rates unchanged does not necessarily mean an end to the Bank’s easing cycle; Banxico called it a “pause”, which “provides the necessary room to confirm that the trajectory of inflation converges to the target.”

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Core Producer Price Growth Slows In October But Food Prices Surge

Core Producer Price Growth Slows In October But Food Prices Surge

Tyler Durden

Fri, 11/13/2020 – 08:39

After yesterday’s disappointing (for some) cooler-than-expected CPI, analysts also expect producer price growth to decelerate in October but it modestly beat expectations, rising 0.3% MoM (vs +0.2% MoM exp).

On a YoY basis, producer prices rise 0.5%, well below that of consumer prices…

Source: Bloomberg

In October, nearly 60 percent of the rise in the final demand index can be traced to a 0.5-percent increase in prices for final demand goods. The index for final demand services moved up 0.2 percent.

Source: Bloomberg

Core PPI disappointed expectations, rising just 0.1% MoM vs +0.2% exp.

In October, a major factor in the increase in prices for final demand goods was the index for fresh and dry vegetables, which rose 26.8 percent. Prices for gasoline, meats, chicken eggs, and thermoplastic resins and materials also moved higher.

In contrast, the residential electric power index fell 1.0 percent. Prices for light motor trucks, packaged fluid milk and related products, and passenger cars also decreased.

The index for final demand services rose 0.2 percent in October after advancing 0.4 percent in September.

Nearly 40 percent of the broad-based October increase can be traced to prices for final demand transportation and warehousing services, which moved up 1.1 percent. Over a quarter of the advance in the index for final demand services can be traced to prices for long-distance motor carrying, which rose 1.9 percent. The indexes for hardware, building materials, and supplies retailing; securities brokerage, dealing, and investment advice; automotive fuels and lubricants retailing; hospital inpatient care; and automobile retailing (partial) also moved higher. Conversely, margins for chemicals and allied products wholesaling fell 2.6 percent. The indexes for gaming receipts (partial) and physician care also decreased.

This is certainly not what an unhinged Fed wanted to see.

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Obama Warns Trump’s Election Fraud Claims Put US Democracy On “Dangerous Path”

Obama Warns Trump’s Election Fraud Claims Put US Democracy On “Dangerous Path”

Tyler Durden

Fri, 11/13/2020 – 08:26

Barack Obama has another book to sell, and so, after making a handful of comments in the press (and just a handful of actual appearances) in support of his former VP, Joe Biden, during the campaign, Obama is breaking what has been a long TV interview fast and sitting down with a lengthy feature interview with “60 Minutes”.

And as CBS News often does when it has a particularly big-name guest on America’s most widely watched “TV News Magazine”, teaser clips from the interview were leaked to the press.

In one clip, Obama, who was famously reticent about his successor for a while after Trump won, accused his successor of putting Democracy “on a dangerous path” with his “baseless” election-fraud claims. Obama said the whole story was the result of Republican leaders “who clearly know better” kowtowing to a “volatile” president who “doesn’t like to lose.”

“I’m more troubled by the fact that other Republican officials who clearly know better are going along with this, are humoring him in this fashion,” Obama said. “It is one more step in delegitimizing not just the incoming Biden administration, but democracy generally. And that’s a dangerous path.”

Readers can watch the rest of the interview on CBS’s site.

Obama also stopped by CBS This Morning for a quick sit down with Gayle King, and told King that “when Donald Trump won, I stayed up until 2:30 in the morning, and then I called him and congratulated him.” Obama also complained about voter fraud allegations being “presented as facts” on right-wing talk radio.

Obama also waxed poetic about presidents being “servants of the people”, adding that “it’s a temporary job.”

He also told King that the GOP “obviously didn’t think there was any fraud going on” before Trump’s baseless claims, because “they didn’t say anything about it for the first two days.”

But if there isn’t any fraud, or anything to worry about, won’t these recounts and ballot audits simply help strengthen Americans faith in their democracy, and its ability to adapt to unseen situations?

Meanwhile, the first leaks from Obama’s new book have also hit, with Salon publishing a bit where Obama writes that Americans elected Trump because they “got spooked by a black man in the White House”. Obama also wrote that the GOP took its first step toward embracing the “dark spirits lurking on the edges of the modern Republican Party – xenophobia, anti-intellectualism, paranoid conspiracy theories, an antipathy toward Black and brown folks – were finding their way to center stage.”

It’s certainly an interesting theory. But when do we get to hear the bit about his feuds with the Clintons, and how Hillary Clinton was a historically weak candidate foisted upon the American people by a corrupt Democratic Party, which really tried to use Obama as a tool to ensure she could ride in on his coattails.

Just some food for thought.

via ZeroHedge News https://ift.tt/3ks9Sje Tyler Durden

Blain: From Meltups To Lockdowns

Blain: From Meltups To Lockdowns

Tyler Durden

Fri, 11/13/2020 – 08:12

Authored by Bill Blain via MorningPorridge.com,

“Friday the 13th is still better than Monday the whatever…”

Friday the 13th – never a good day to set out on a new voyage or project… but someone will probably be offered the job as Chief of Staff at Downing Street… Any takers? 

Back in the real world, it’s been an extraordinary week as markets settle into a new upside trend after the Vaccine news on Monday. It’s not quite a “it will be all over by Christmas” mood, but certainly the expectation is vaccine(s) mean the war against Covid is won. There is lots of talk about a “Melt-up”into the Christmas market slowdown. (All of which ignores the fact every stock ratio is screaming over-bought… but let’s not spoil the mood by being bearish…)

Yet yesterday we saw the market back in dip mode – pulled lower as markets stumbled on the deepening and immediate Coronavirus crisis as numbers continue to soar. Lockdowns and curfews are being imposed in US cities. The prospects for any form of economic stimulus from what still passes as government in Washington look to be zero. We had warnings from the big three central banks about the ongoing dangers of coronavirus lockdowns to economies: Powell Warns of US Economy Risk With Pandemic at Deadliest Yet. 

As I said yesterday; the war is won, but there are still battles to be fought. 

It’s beginning to look like the current infection curve in Europe has peaked – but there will still be a lag before that translates into falling hospital admissions and deaths. The numbers all show deaths are concentrated 80% among the very elderly, but no government can risk health systems being swamped – hence the ongoing lockdowns.

UK numbers yesterday saw a record strong 15.5% quarter recovery from the first lockdown – but the economy still massively lags the pace of recovery in other European nations. The UK is still 9.7% down on the year! 

The really important question is how bad recovery from a second lockdown be? Will it be swift on the basis the war will be won by the summer, and the Chancellor is preparing a new basket of market and job boosting goodies to stimulate and enhance recovery? Or will a second lockdown spell the end for many struggling businesses as balance sheets snap and the cascading effects of business stress and default roll through the economy? Year end, the cumulative economic destruction to the UK is likely to be in double digits…

Interesting comment about long-term Covid damage from the US yesterday – the head of the New York hotel association says “if half the city’s 640 hotels survive it will be a “great” outcome” – occupancy in NY is down 60% this year. It’s that scale of damage and what it means for the long-term health of companies – not immediate recovery – that matters in the long term. Markets focus on immediate news…

Or maybe it’s worth considering why the UK economy is proving so slow to recover compared to the US or Germany? Perhaps it’s the fact our economy is so slewed to services, or maybe its fear – that the population was so comprehensively terrified by the success of the media campaigns during the first lockdown… or maybe we are just lazy and feckless? Whatever, I’ve had enough of businesses that use Covid as an excuse. Yesterday I spend 40 minutes holding on the phone to get broadband sorted out.. listening to annoying messages about “Due to the pandemic it may take longer to deal with your inquiry..”… Why? Does Covid eat phones?

The other issue that concerns me is how little attention markets are paying to the background noise of politics. I’ve been told by one reader of the Morning Porridge that my daily musing are increasingly rubbish because I focus too much on politics – fair enough, but he still reads it everyday… 

I think that politics matter – they are a major influence on market sentiment – or, at least they once were…

For instance; a positive piece of political news may be the likely appointment of Lael Brainard as Biden’s Treasury Secretary. As a well-regarded Fed member, she may be able to knock heads together to create a workable stimulus package. Her credentials for the job are strong – and frankly I suspect stuffy Republican senators will listen to good sense from a clever and successful woman rather than another political hack. That should be a positive market tick – a highly regarded professional in a position to actually do stuff…

There was a time, many, many, many years ago when politics was a gentlemanly game played with the illusion of calm and that our elected leaders were following a well considered and carefully constructed plan. (Under the surface… who knew what torrid stab-in-the-backs, tensions, murders and incarnadine warfare was being fought out.) 

Politics had the capacity to move markets when it shocked us – for instance when government was forced to pull a nation out a currency union, or a surprise election result, or an unexpected resignation. If the government picked a fight with the unions, and the lights all went out, we accepted that was probably part of the grand plan. If we didn’t like it, we knew that the political process meant one set of earnest politicians might or might not be replaced by another set of similarly earnest politicians when the election came around. 

Politics was dull, boring and predictable. So many years ago…

Not anymore. The mystery has gone. The conflict is open and shocking. Populism, indecision and conflict are the new forces that make modern politics such a source of instability and uncertainty in current markets. 

If you think the current bluster, delay and bitterness in the US is likely to result in stronger reasons to favour the dollar and the US in future long-term investment decisions.. be my guest. 

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55% of White Woman Added to the Enemy List

Are you ready for this week’s absurdity? Here’s our Friday roll-up of the most ridiculous stories from around the world that are threats to your liberty, risks to your prosperity… and on occasion, inspiring poetic justice.

Inquisition Targets White Women for Their WrongThink

The magazine Teen Vogue (yes, I’m serious) recently published a nasty rebuke of people who voted for the current president. And they specifically called out white women:

“White women have to answer for backing the Republican nominee yet again.”

Bear in mind, Teen Vogue is a magazine that primarily caters to children. And what a fantastic lesson for young people! Let’s teach kids to hate other people who have ideological differences!

Teen Vogue, of course, is the same magazine that recently published an in-depth (no pun intended) anal sex guide for its teenage audience. And when parents complained, the publisher accused them of being ‘homophobes’.

Clearly Teen Vogue possesses both the journalistic professionalism and moral authority to preach ideological hate to young people.

Click here to read the full story.

Children’s Author Cancels Himself Over “Racially Insensitive” Illustration

A children’s author has asked people not to buy his first book, because of a racially insensitive illustration he was not aware of until the book went on sale.

The offensive image which the author said “made me sick,” was a Japanese girl dressed in a kimono, with her hair in a bun.

The Horror!!!!!

This illustration was a tiny part of a single page which showed the main character of the book, a little girl, imagining other cultures.

It’s like Where’s Waldo or I Spy for the woke mob– if you look really hard, try your best, and use your imagination, you can find something that will offend you.

Click here to read the full story.

Rhode Island drops “and Providence Plantations” from its official name

The official name of Rhode Island, from it’s settlement in 1636, through its founding as a state in 1790, and all the way up until last Tuesday, was “Rhode Island and Providence Plantations.”

But the word plantation has connotations of slavery, and therefore must be edited out of history– just like the statues of any historical figures who don’t conform to today’s woke standards.

So in a ballot initiative last week, Rhode Island voters approved chopping “and Providence Plantations” from the state’s official name.

That is very woke of them. But when Rhode Island was founded by Roger Williams, the term “plantation” was used as a synonym for “settlement.” It was a place where God planted his people.

And at the time, there was no slavery in Rhode Island. Williams was even friendly with the Native Americans, and objected to them being viewed as savages.

But let’s not allow history to get in the way of wokeness.

Click here to read the full story.

CBS Announces Racial Quotas for Reality TV Shows

CBS has announced that from now on, people of color will receive at least 50% of the slots on all of the channel’s reality TV shows, such as Survivor, Big Brother, and Love Island.

CBS can do whatever it wants, so good for them, that’s some great virtue signalling.

But will they also make sure to be representative of transgender Native Americans in wheelchairs?

What about Asian-American representation on the channel?

Or are Asians already considered people of color?

In fact, where exactly is the line for a person of color? Do Spaniards or Sicilians count?

Surely CBS will be consistent and unprejudiced in their determinations– maybe they’ll even administer racial purity tests before accepting applicants.

Click here to read the full story.

Is The Mandalorian problematically racist towards a fictional race of space people?

The Disney show The Mandalorian, is set in the fictional Star Wars universe.

One recent episode featured a classic Western plot, where the main character rides into an oppressed village, and helps the townspeople fight an existential threat.

But before they can defeat the giant sand dragon, the Mandalorian has to convince the townfolk to team up with their usual enemy, the Tusken sand people of Tatooine.

Clearly, according to one woke news article, the writers cast the Tuskens in the role Native Americans played in old Western films.

The Tuskens are portrayed as dangerous, barbarian outsiders. One of their deaths is even used as comic relief!

Therefore, Native Americans should be offended.

It took a little mental gymnastics, but we finally found something to be offended about. Now the woke mob can attack.

Click here to read the full story.

California Voters are Pro-Gig Economy

In January, a California law went into effect classifying most freelancers and independent contractors as employees who deserve all sorts of government mandated benefits.

The left-leaning media company Vox celebrated the win for workers, and then fired 200 of its California freelance writers so that they wouldn’t have to pay the benefits. Victory!

California realized it had gone overboard, and in September, the state exempted a bunch of gig-workers from the new law. However Uber and Lyft drivers, who the law was originally aimed at, were not given an exception.

But a ballot question in California asked voters if these and other delivery drivers should be allowed to work as contractors, free to set their own hours and schedule.

The answer was a landslide: “Yes”. So that’s a nice win for economic freedom.

Click here to read the full story.

Source

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Futures Rebound As Markets Look Beyond Surge In Covid Cases

Futures Rebound As Markets Look Beyond Surge In Covid Cases

Tyler Durden

Fri, 11/13/2020 – 07:55

US equity futures rebounded and European stocks were mixed as shares of Disney and Cisco jumped after both reported solid earnings, but investors remained cautious as many U.S. states imposed restrictions to curb the relentless surge in coronavirus cases. Treasury yields reversed an earlier rise and the dollar slipped.

S&P futures rose 0.8%, or 27 points to 3,560 while Eupope’s Stoxx 600 Index erased an earlier decline, with tech and banks among the winning sectors after Joe Biden was projected to win the battleground state of Arizona, cementing his win for the office. The projection by Edison Research dealt another blow to President Trump’s effort to overturn the results of the Nov. 3 presidential election.

Today’s gains come a day after US markets fell 1% as the US braced for more lockdowns with New York preparing for the possibility of school closures and Chicago urged residents to shelter at home, fueling fears about the recovery, with investors also weighing how fast an effective vaccine would be rolled out.

Cisco Systems and Walt Disney were the top gainers among the Dow components trading before the bell. Futures tracking the blue-chip index were 0.9% higher. The network gear maker jumped 7.7% premarket as it gained from work-from-home driven surge in demand, while Disney rose 4.3% as its rapidly growing streaming video business and a partial recovery at its theme parks limited its quarterly loss.

Today’s gains which followed a surge to an all timehigh on Monday following positive vaccine news from Pfizer which unleashed a record growth-to-value rotation, put S&P 500 and Dow on track for weekly gains. However, the tech-heavy Nasdaq is headed for a weekly loss as investors booked profits in market-leading tech stocks, which have benefited from a stay-at-home environment.

Investors took in stride warnings from three of the world’s top central bankers on Thursday that the prospect of a vaccine isn’t enough to put an end to the economic challenges created by the pandemic. Fed Chair Jerome Powell said on Thursday during a discussion with other central bankers that progress in developing a coronavirus vaccine was welcome news but that near-term economic risks remain as infections accelerate, underscoring the likely need for additional government stimulus.

To be sure, investor focus remained on covid as more than a dozen U.S. states reported a doubling of new COVID-19 cases in the last two weeks with Chicago’s mayor issuing a month-long stay-at-home advisory on Thursday.  The U.K. also reported record infections despite a tightened lockdown, and hospitalization rates set a new high in France.

In Europe, the Stoxx 600 Index erases earlier declines of as much as 0.4% and traded little changed as technology and banks lead gains among sectors while miners, energy and food & beverage slipped. Among the biggest individual advancers: Rolls-Royce +4.2%, Banco de Sabadell +3.9%, Nork Hydro +3.8%, Engie +3.7%, while the biggest drops included LPP -6.8% and  Salmar -3.2%.
Earlier in the session, Asian shares eked out gains on Friday and U.S. stock futures turned higher

Earlier in the session, MSCI’s broadest index of Asian shares outside Japan edged up 0.1%, reversing earlier losses. For the week it rose about 0.7%. But apart from a 0.71% gain in Seoul’s Kospi, most major regional indexes were lower on Friday: Japan’s Topix and China’s Shanghai Composite both fell. Japan’s Nikkei 225 fell 0.57% and the Topix lost 1.3%, with Toyota and Keyence contributing the most to the move. The Shanghai Composite Index retreated 0.9%, driven by Kweichow Moutai and China Life. Australian shares lost 0.2%, the Hang Seng was 0.48% lower and Chinese blue-chips slumped 1.57%, dragged lower by the Trump administration’s decision to ban U.S. investments in firms linked to the Chinese military, and by a series of high-profile bond defaults by state-owned enterprises.

Some investors saw a buying opportunity in the market weakness: “My view is this is the dark just before dawn,” said Michael Frazis, portfolio manager at Frazis Capital Partners in Sydney. “You’ve got the second wave of coronavirus, new sets of shutdowns, clear problems around the world, travel dropping off again… But at the same time, we have the strongest possible evidence that we do have a vaccine…”

“We think this is all actually very positive and it’s actually a good time to be investing in markets,” he said. adding that many risks nevertheless remained for short-term traders amid ongoing uncertainty over issues such as fresh U.S. stimulus. On Thursday, top Democrats in the U.S. Congress urged renewed negotiations over a multitrillion-dollar coronavirus aid proposal, but the top Republican immediately rejected their approach as too expensive, continuing a months-long impasse.

In rates, Treasury yields are back within a basis point of Thursday’s closing levels after erasing Asia-session declines as U.S. stock futures climbed.  10-year yields hovered around 0.88%, near middle of the 0.80%-0.97% weekly range and ~6bp higher on the week; curve spreads were little changed. Bunds, gilts outperformed with U.K. stocks lower. U.S. yields remain higher on the week after Monday’s surge sparked by positive vaccine trial results. Italian bonds led light euro-area gains ahead of an expected pricing of a 5-year dollar BTP

“Bond yields, which had been flirting with the 1.0% level in terms of the U.S. 10Y Treasury, have … snapped back sharply in terms of yield,” Rob Carnell, Asia Pacific head of research at ING said in a note. “That move most likely got a further nudge from the softer-than-expected U.S. inflation data for October which were released yesterday, and which tally with a weaker economic reality.”

In FX, the Bloomberg Dollar Spot Index extended losses in European hours as U.S. equity futures and most European stock markets reversed earlier losses. The dollar weakened against most Group- of-10 peers and the euro advanced after a brief dip to 1.1799 in the Asian session. On the other side, the pound led gains amid hopes for a Brexit trade deal while the yen came off highs as haven bids waned.

In commodities, an unexpected rise in U.S. crude stockpiles exacerbated virus-linked economic fears in commodity markets, pushing U.S. crude 1.85% lower to $40.36 per barrel. Brent crude dropped 1.47% to $42.89.

Looking at the day ahead, there’s the October PPI reading and the preliminary November reading of the University of Michigan’s consumer sentiment index. From central banks, we’ll hear from BoE Governor Bailey, as well as the BoE’s Cunliffe and Tenreyro. From the ECB, we’ll hear from Weidmann and Rehn, while Fed speakers include Williams and Bullard.

Market Snapshot

  • S&P 500 futures up 0.8% to 3,561.25
  • STOXX Europe 600 up 0.1% to 385.65
  • MXAP down 0.2% to 184.68
  • MXAPJ up 0.4% to 612.70
  • Nikkei down 0.5% to 25,385.87
  • Topix down 1.3% to 1,703.22
  • Hang Seng Index down 0.05% to 26,156.86
  • Shanghai Composite down 0.9% to 3,310.10
  • Sensex up 0.3% to 43,478.75
  • Australia S&P/ASX 200 down 0.2% to 6,405.22
  • Kospi up 0.7% to 2,493.87
  • Brent Futures down 0.8% to $43.17/bbl
  • Gold spot up 0.06% to $1,877.96
  • German 10Y yield fell 0.2 bps to -0.538%
  • Euro up 0.04% to $1.1811
  • Brent Futures down 0.9% to $43.16/bbl
  • Italian 10Y yield fell 5.4 bps to 0.573%
  • Spanish 10Y yield fell 0.6 bps to 0.126%
  • U.S. Dollar Index down 0.04% to 92.93

Top Overnight News from Bloomberg

  • State and federal election officials, along with experts in the private sector, said they had “utmost confidence in the security and integrity” of the Nov. 3 vote, as President Donald Trump continues to make unfounded claims of fraud and key security officials involved in protecting elections leave the administration or expect to be fired
  • China congratulated Joe Biden and Kamala Harris on winning the U.S. presidential election, ending days of speculation about when Beijing would formally acknowledge the victory
  • The ECB should put ultra-cheap loans at the core of its next stimulus package being prepared for December, Governing Council member Madis Muller said; Governing Council member Olli Rehn said the next ECB decision is about deciding which instruments, in which scale and duration, will best serve the purpose of supporting the European economy
  • Another week of Brexit negotiations — one that was supposed to be decisive — will end Friday with little progress made in the main areas of disagreement, according to three EU officials familiar with the situation. While both sides can see what a final agreement would look like, Brussels officials insist that reaching one will require the U.K. prime minister to move first, a stance their British counterparts reject
  • Joe Biden’s election is serving up a rude reality check for U.K. Prime Minister Boris Johnson’s desire to quickly close a trade deal with the U.S., a project that has until now depended heavily on the whims of President Donald Trump
  • Italy, which is Europe’s second most-indebted nation, is aiming to sell securities maturing in 2026, following a global investor call for its first dollar issue in over a year. While it’s a chance for Italy to diversify an investor base still dominated by domestic buyers, the nation will pay considerably more to raise cash

A quick look at global markets courtesy of NewsSquawk

Asian equity markets weakened on spill-over selling from Wall Street, where all major indices declined as participants continued to fade the reflation trade and with increases in virus cases denting the recent vaccine optimism, which saw the DJIA lead the downturn and briefly give up the 29k level. ASX 200 (-0.2%) was dragged lower by notable losses in the energy sector following similar underperformance stateside as rising infections and restrictions weighed on the demand outlook, while Nikkei 225 (-0.5%) was pressured as exporters felt the brunt of currency inflows and with earnings in focus as Rakuten shares slumped after its 9-month net loss widened five-fold. Conversely, Nissan shares were in top gear despite posting a H1 net loss of JPY 330bln as the Co. reduced its annual operating loss forecast by 28% and Sony was also among the notable gainers after it began PlayStation 5 sales in several major markets. KOSPI (+0.7%) rebounded from early losses with the index helped by resilience in tech stocks and with Asiana Airlines soaring on potential M&A reports after Korean Air Lines was said to be in discussions to acquire the airliner. Hang Seng (U/C) and Shanghai Comp. (-0.9%) conformed to the broad downbeat tone despite a firm liquidity effort by the PBoC, as sentiment remained subdued after China’s further clampdown on Hong Kong freedoms which triggered an uproar globally, with the UK said to be considering sanctions, while tensions remained a headwind after the White House confirmed an executive order prohibiting US investments in Chinese firms owned or controlled by the Chinese military. Finally, 10yr JGBs marginally extended above the 152.00 level following the bull flattening in USTs and with upside helped by the glum picture across risk assets, although the upside was capped amid the absence of the BoJ from the market today and ahead of key data beginning with Q3 GDP early next week.

Top Asian News

  • Hong Kong Sees GDP Contraction Near Low End of Forecast Band
  • World’s Biggest Cork Maker Eyes Next Step in the Spirits Market
  • Trump’s Taiwan, Hong Kong Support Poses Early Test for Biden
  • China’s Oil Giant Eyes New Supertankers to Shrink Fuel Glut

Major European bourses have largely nursed the mild losses seen at the cash open (Euro Stoxx 50 +0.4%) following on from a mostly downbeat APAC handover. The European day kicked off with a continuation of the growth to value rotational pause, reflected by sectors at the open alongside US equity futures performances at the time. However, despite a distinct lack of fresh fundamental news-flow, sentiment picked up pace whilst the rotational dynamics somewhat decoupling. European sectors at the open saw Oil & Gas, Autos and Banking names at the foot of the index whilst Tech and Healthcare fared better, whilst US equity futures at the time saw NQ outpacing the ES and RTY. However, as things stand, Tech retains top spot whilst Banks and Autos also reside towards to top of the pile. Oil & Gas has trimmed losses towards the unchanged mark whilst Healthcare tumbled, and Travel & Leisure ebbed lower towards the bottom of the pack. This decoupling is also reflected in US equity futures’ performance as NQ, ES and RTY are all posting gains in proximity to 0.8%. Back to Europe, UK’s FTSE 100 (-0.3%) underperforms regional peers as a firmer Sterling weighs on exporters, whilst gains in the SMI (Unch) are capped by a lacklustre performance in pharma-giants.

Top European News

  • U.K. Prime Minister’s Top Aide Quits, Will Leave By End of 2020
  • U.K. Fund Liquidity Rule Breaches Soared in Covid Early Days
  • East Europe’s Fleeting GDP Bump Bracketed by Virus Lockdowns
  • Rosneft’s Return to Net Loss Undermines Dividend Prospects

In FX, little sign of Sterling succumbing to any Friday 13 phobias, thus far, and some observers are suggesting that the latest rebound in Cable from the low 1.3100 area may be due to impending departure of UK PM Johnson’s SPAD Cummings. However, Eur/Gbp has also retreated from a double top just above 0.9000 and the Pound’s bounce could be more technical and consolidative given no positive developments on the Brexit front. Conversely, the Lira’s impressive revival can be put squarely if not solely down to Turkish President Erdogan’s economic epiphany in terms of pursuing more orthodox monetary and fiscal policies after sacking another CBRT President, with Usd/Try extending its sharp reversal from record peaks to test support below 7.6200 ahead of next week’s rate meeting.

  • NZD/AUD – The Kiwi has fallen further from post-RBNZ highs above 0.6900 towards 0.6800 vs its US counterpart and 1.0700+ against the Aussie to sub-1.0600 at one stage in wake of rather downbeat remarks from RBNZ Governor Orr overnight, caveating forecasts for the economic recovery to continue with a big ‘IF’, and backed up somewhat by a slowdown in October’s NZ manufacturing PMI. Meanwhile, Aud/Usd is hovering around 0.7260 as the Foreign Ministry’s Deputy Secretary states a readiness to engage with China on trade relations that have been strained of late.
  • DXY/EUR/CAD/JPY/CHF – Aside from all the deviations noted above, G10 currencies remain relatively rangebound and pretty much epitomised by the Dollar index holding within a narrow 93.007-92.767 band within wtd extremes (93.210-92.129), albeit easing amidst an upturn in broad risk sentiment. Indeed, the Euro and Loonie are gradually firming up as the Greenback slips to retest offers/resistance into 1.1850 and 1.3100 respectively. No obvious reaction to Eurozone data, but another decent option expiry interest may keep Eur/Usd contained between 1.1840-50 and 1.1795-1.1800 given 1.4 bn on either side and the BoC’s Senior Loan Officer Survey may offer the Cad some independent impetus in advance of Canadian CPI and retail sales next week. Elsewhere, the Yen and Franc are both meandering from 105.15 to 104.87 and 0.9158 to 0.9137, with the latter largely ignoring slightly less deflationary Swiss import and producer prices.
  • SCANDI/EM – Not quite all change, but the Swedish Krona has slipped after holding up better than its Norwegian peer on Thursday and it looks like 10.2000 is proving sticky for the Eur/Sek cross, but the Mexican Peso is deriving some protection from softer crude prices on the back of Banxico’s unexpected decision to stand pat on rates with only one dissenter chiming with consensus for a 25 bp ease, as Usd/Mxn probes 20.5000.

In commodities, WTI and Brent front-month futures trade remain pressured but have been drifting off worst levels during early European hours in lockstep with price action across equity markets. News flow for the complex has been light on Friday morning and thus the cue is taken from overall market sentiment. In terms of the fundamental environment, rising COVID-19 cases across the globe continues to weigh on the demand side of the equation, with an effective vaccine unlikely to see a mass rollout in the near-term, whilst supply side is still uncertain as OPEC+ producers gear up to for its non-policy confab next week. On that note, profit-taking in the crude complex cannot be ruled out ahead of the weekend given the respectable gains in the benchmarks this week. WTI Dec trades just under USD 41/bbl (vs. low 40.16/bbl) whilst Brent Jan edges higher above USD 43/bbl (vs. low 42.67/bbl). Elsewhere, spot gold and silver eke mild gains as the precious metals coat-tail on the recent USD softness, albeit remain contained within recent ranges. Finally, LME copper gleans support for the softer Buck and recovery in stocks.

US Event Calendar

  • 8:30am: PPI Final Demand MoM, est. 0.2%, prior 0.4%; PPI Final Demand YoY, est. 0.4%, prior 0.4%
  • 8:30am: PPI Ex Food and Energy MoM, est. 0.2%, prior 0.4%; PPI Ex Food, Energy, Trade MoM, est. 0.2%, prior 0.4%
  • 9am: Bloomberg Nov. United States Economic Survey
  • 10am: U. of Mich. Sentiment, est. 82, prior 81.8; Current Conditions, est. 88.3, prior 85.9; Expectations, est. 79.1, prior 79.2

DB’s Jim Reid concludes the overnight wrap

It’s strange to wake up to see that my school golf partner of two years and in countless pairs competitions is currently leading the US Masters. So good luck to Paul Casey this weekend although I suspect he’s not reading this unless he was keen to hear what the super committee of central bankers thought about the world economy last night.

On this in the latter half of yesterday’s US session we heard from Fed Chair Powell, ECB President Lagarde and BoE Governor Bailey at a panel hosted by the European Central Bank. They all shared similar concerns that a potential Covid-19 vaccine would not end the economic challenges of the pandemic. Powell highlighted near-term risks saying that “the main risk we see to (the economy continuing on a solid path of recovery) is clearly the further spread of the disease here in the United States.” Lagarde cautioned that she didn’t want to be “exuberant” in light of the vaccine possibilities, while Bailey called the news “encouraging.” On the need for further accommodation in light of the near term risks, Powell expects that the Fed “will need to do more, and Congress may need to do more as well on fiscal policy.”

So no major surprises from this important trio, and even before they’d started speaking, yesterday saw a notable decline in sovereign bond yields on both sides of the Atlantic, with US Treasuries ending the session -9.4bps at 0.882% as they reopened following the previous day’s holiday. There was also a notable flattening in yield curves across numerous countries, with the 2s10s Treasury curve flattening -8.8bps as it came off a near 3-year high. Over in Europe, 10yr gilt yields (-6.5bps) saw the largest declines, though yields on 10yr bunds (-2.9bps), OATs (-2.6bps) and BTPs (-5.4bps) also lost ground. 2yr Greek yields went negative for the first time on Wednesday and fell slightly further yesterday.

With investors moving out of risk assets, global equity markets fell back from their recent highs amidst further negative news on the coronavirus. There were also reports that the Trump administration would be stepping away from stimulus negotiations and leaving that to Congress, something the market took negatively given that Senate Majority Leader McConnell was looking to pass a far smaller package than the White House. By the close, the S&P 500 was down -1.00%, with nearly 90% of the index moving lower. Energy (-3.39%) and Autos (-2.59%) stocks led the declines, but Bank stocks (-2.08%) were not far behind thanks to the notable fall in sovereign bond yields. Tech stocks outperformed their cyclical counterparts slightly with the NASDAQ falling a smaller -0.65%. Europe also suffered, with the STOXX 600 down -0.88% in its worst day for over two weeks, as other indices across the continent similarly moved lower. The selling was also widespread in Europe as 19 of 20 STOXX 600 sectors fell, led by Euro Bank stocks (-1.93%) and Consumer Products (-1.85%) as Technology (+0.79%) was the only sector to rise.

Asian markets have followed the US lower overnight, with the Nikkei (-0.99%), the Hang Seng (-0.55%), and the Shanghai Comp (-0.75%) all moving lower. The moves came as President Trump signed an executive order that would prohibit US investments in Chinese firms linked to the country’s military. The one exception to this downward move was the KOSPI however, which has moved +0.60% higher. Meanwhile in the US, S&P 500 futures are down a marginal -0.04%, and yields on 10yr Treasuries this morning have moved a further -1.3bps lower .

On the negative coronavirus developments, yesterday saw the number of new cases here in the UK reach a record 33,470 after a good two to three weeks of stability in the 20-30k range, while Italy reported a further 37,978. Covid-19 hospitalisations in France are now above the highs reached in mid-April as French Prime Minister Castex acknowledged that the country may tighten lockdown restrictions further. And in the US, infections recorded another record high with fatalities rising to their highest daily level since May. Nevertheless, Dr Fauci struck an optimistic tone on a potential vaccine, saying that “it’s not going to be a pandemic for a lot longer, because I believe the vaccines are going to turn that around”.

Sterling weakened further yesterday, falling -0.79% against the US dollar, as there were more negative noises on the state of the trade negotiations between the EU and the UK. We’re now in the crunchpoint of the talks, which have already been pushed beyond a number of previous informal deadlines, and comes with just weeks left before the transition period concludes at the end of this year. There wasn’t much of substance out yesterday, but the BBC’s Europe editor Katya Adler tweeted that “EU diplomats sounding pessimistic about EU-UK negotiations.” We then got another tweet from the EU’s Michel Barnier which said he “Went looking for level playing fields…” with a picture of a football field in the backdrop, so not the most positive tweet regarding what has proven one of the most contentious points in the negotiations. A key moment next week will be the EU leaders’ meeting on Thursday, which is taking place via videoconference, though given the lack of concrete progress so far, it’s not obvious there’ll necessarily be a deal on the table ready for them to actually discuss.

On the data front, there were some positive figures from the US, where the weekly initial jobless claims for the week through November 7 fell to a post-pandemic low of 709k (vs. 731k expected). Incidentally, that brings them to just 14k above the pre-Covid record of 695k back in 1982. Meanwhile, the continuing claims for the week through October 31 also reached a post-pandemic low of 6.786m (vs. 6.825m expected). Nevertheless, there were some soft CPI readings from the US for October, with the month-on-month figures for both CPI and core CPI unchanged, and the year-on-year CPI figure fell back to 1.2%, which is the first time the reading has declined since May. Finally in Europe, the UK GDP reading for Q3 showed a record +15.5% expansion (vs. +15.8% expected), which follows a record -19.8% contraction in Q2. Nevertheless, with many restrictions having been reimposed again, our UK economist expects there to be another contraction in Q4.

To the day ahead now, and data highlights include the second release of the Euro Area’s Q3 GDP, while from the US there’s the October PPI reading and the preliminary November reading of the University of Michigan’s consumer sentiment index. From central banks, we’ll hear from BoE Governor Bailey, as well as the BoE’s Cunliffe and Tenreyro. From the ECB, we’ll hear from Weidmann and Rehn, while Fed speakers include Williams and Bullard.

via ZeroHedge News https://ift.tt/3ltZhWq Tyler Durden

US Governors On Edge As Biden Team Downplays ‘National Shutdown’ Talk: Live Updates

US Governors On Edge As Biden Team Downplays ‘National Shutdown’ Talk: Live Updates

Tyler Durden

Fri, 11/13/2020 – 07:41

Last night, the US notched a new milestone: 150k new cases for the first time, a new record. As cases climb in Europe, even Japan is starting to feel uneasy, as cases increase by 1,685 over the last 24 hours, a second straight daily high.

In India, which has seen case numbers fall in recent weeks, the state of Delhi, home of the Indian capital New Delhi, has reported a record daily high of 104 new deaths and 7,053 new infections. Countrywide, deaths increased by 547 to 128,668 in the past 24 hours. Total infections,  meanwhile, rose by 44,789. Tokyo reported 374 new infections, down slightly from 393 a day earlier, but the third consecutive day of more than 300 confirmed cases, adding to fears of a “third wave”.

As we await more data out of the US, Europe has already seen some tough numbers this morning, with Switzerland reporting a new record-high 6,700 cases. In China, 33 new cases were reported, up from 28 a day earlier. Of the new cases, 32 were imported, according to authorities. The local case, reported in Tianjin, hit a cold storage worker, who had reportedly handled frozen pork, purportedly from Germany, helping China to revive the narrative about the virus now being shipped into the country via mean producers.

Yesterday’s record tally was 153,496, bringing the total to 10,555,435 in the US. In Europe, meanwhile, another 219,509 new cases were reported according to figures from JH and Bloomberg.

Here’s a more comprehensive view of US cases vs. tests.

Source: mSightly

As Americans suffer from so-called adherence fatigue involving COVID-19 restrictions, Elon Musk on Thursday night tweeted that he had taken several rapid COVID-19 tests, and “two came back positive, two came back negative.

He added that he would soon deliver an update after getting to the bottom of the situation. “If it’s happening to me, it’s happening to others,” he said.

Finally, in the US, as the backlash to another mandatory lockdown intensifies, a member of Biden’s COVID-19 transition team happened to let slip during a talk with reporters that she didn’t actually think a national lockdown described by another Biden transition-team official would actually happen.

“With all due respect to Dr. Osterholm, that doesn’t necessarily represent the entire advisory board or what the Biden-Harris transition team is planning to do,” Gounder said on CNN. She said that “perhaps there are some places where you need to be more draconian, but I really don’t think that’s a national policy.”

And there you have it, folks: Team Biden’s first lockdown walk back.

Here’s some more COVID-19 news from overnight and Friday:

The American Clinical Laboratory Association, which represents large laboratories such as Laboratory Corp. of America Holdings and Quest Diagnostics Inc., warned that surging demand for Covid-19 tests could push some labs to or beyond capacity, delaying test results (Source: Bloomberg).

Australia will not allow foreign students to return as Canberra prioritizes the return of citizens stuck overseas, Prime Minister Scott Morrison says. Although the government had hoped to slowly allow overseas students to return in 2021 and began trials earlier this year, Morrison says, “There is a queue, and Australians are in the front of the queue.” Australia has since March closed its borders to all noncitizens and permanent residents.

Global cases have reached 52,629,906, according to Johns Hopkins University in Baltimore. The worldwide death toll has hit 1,291,837.

Indonesia hits a new daily record with 5,444 new coronavirus infections in the past 24 hours, up from 4,173 the day before, and 104 deaths. This brings the country’s total to 457,735 cases, including 15,037 fatalities (Source: Nikkei).

German government spokesperson says Germany cannot talk about a turnaround in COVID infections just yet, no easing of restrictions is possible (Newswires).

South Korea begins fining people who fail to wear masks in public as it reports 191 new cases and as new daily infections creep higher. The tally is up from 143 a day ago, marking the biggest daily rise in two months and bringing the country total to 28,133, with 488 deaths. People caught without masks in nightclubs, malls, theme parks, hair salons and other public places face fines of up to 100,000 won ($89.75) (Source: Bloomberg)

Wisconsin’s daily cases exceeded 7,000 for a third consecutive day, adding urgency to Governor Tony Evers’s call for residents to curb on social activity and stay home (Source: Bloomberg).

Ohio is at a record for new infections, total hospitalizations and intensive-care patients, Governor Mike DeWine said as he warned, “we don’t want another shutdown” but we can only avoid one “if we are very careful” (Source: Bloomberg).

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British Lefties Celebrate Dominic Cummings’ Departure As PM Boris Johnson’s Top Advisor

British Lefties Celebrate Dominic Cummings’ Departure As PM Boris Johnson’s Top Advisor

Tyler Durden

Fri, 11/13/2020 – 06:13

In an announcement that rocked the world of British politics despite breaking in the wee small hours of the morning (last night in the US) Boris Johnson’s senior advisor Dominic Cummings has affirmed that he will be leaving as Johnson’s senior advisor/alter ego by Christmas.

The decision wasn’t entirely unexpected: Cummings said back in January that he wanted to make himself “largely redundant” by the end of 2020, according to the BBC. He almost didn’t make it, having nearly been pressured to quit after he was seen breaking London’s impossibly complex lockdown rules, inciting a furious backlash from the Tories political opponents (who were no doubt still incensed from their electoral drubbing back in December, when Johnson solidified his position). 

Some speculated that Cummings’ departure is tied to the ouster of former director of communications Lee Cain, who stood down amid reports of internal tensions at Downing Street. But Cummings denied these rumors when asked by the BBC.

In her “analysis” of the news, the BBC’s Laura Kuenssberg seemed to push back against this, citing some insiders who called Cummings’ exit a “blessing”. However, there’s still no denying his role in helping to build the Tories’ Commons majority.

Left-wing newspapers in Britain are already celebrating Cummings’ departure, with the Guardian reporting that Cummings leaves a “legacy of bullying, deception, hypocrisy and hubris” in a reaction piece quoting various Labour Party politicians.

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