In the Washington Post, there’s a long article that’s hard to suitably excerpt (and that’s unfortunately paywalled); but this should give you a sense of the matter:
A middle-aged white woman [went to Washington Post cartoonist Tom Toles’ 2018 Halloween party wearing] a conservative business suit and a name tag that said, “Hello, My Name is Megyn Kelly.” Her face was almost entirely blackened with makeup. Kelly, then an NBC morning show host, had just that week caused a stir by defending the use of blackface by white people: “When I was a kid, that was okay, as long as you were dressing up as, like, a character.”
Two other guests, one Hispanic and one black, confronted the woman and got into an argument with her (“You understand how offensive that could be to a person of color?” / “I’m Megyn Kelly — it’s funny!”) and on from there.
Nearly two years later, the incident, which has bothered some people ever since but which many guests remember only barely or not at all, has resurfaced in the nationwide reckoning over race ….
The Hispanic guest wrote in an e-mail that, “After the killing of George Floyd and the protests, I began reflecting more on this incident.” And of course, after the woman who wore the blackface “informed her employer, a government contractor, about the blackface incident and The Post’s forthcoming article, she was fired, she said.” Not even for what she did on the job, not even for what she did on television, but for a costume she wore at a party at a friend’s house; that, at least, is this incident, but next it will be for something someone said over dinner, or a joke in a conversation among acquaintances.
You might recall the circumstances of the famous “have you left no sense of decency?” response by Joseph Welch to Sen. McCarthy: McCarthy was trying to publicly damage the career of Welch’s associate (at the prominent Hale & Dorr law firm) for having been—about five years before—a member of the National Lawyers Guild, which had defended Communists, and which had Communists as some of its founding members. And that became, understandably, one of the great lines still remembered from the McCarthy era.
Also worth remembering from Welch’s response:
Little did I dream you could be so reckless and so cruel as to do an injury to that lad. It is true he is still with Hale & Dorr. It is true that he will continue to be with Hale & Dorr. It is, I regret to say, equally true that I fear he shall always bear a scar needlessly inflicted by you. If it were in my power to forgive you for your reckless cruelty, I would do so. I like to think I’m a gentle man, but your forgiveness will have to come from someone other than me.
There’s no particular individual figure in this story like Sen. McCarthy. But there is a broad segment of a broad social movement happy to use personal destruction as a weapon—a segment that is so focused on the evil of its core enemies (Communism and racism both serve well here) that recklessness, cruelty, and loss of a sense of decency naturally emerge, and directed at far more than the true Communists and racists. And there aren’t a lot of Joseph Welches who will stand by the people who work for them, and thus risk themselves and their enterprises likewise being targeted.
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[T]his is a putative class action lawsuit brought by players of DraftKings Inc. … fantasy baseball contests against certain major league baseball entities and teams. In February, defendants moved to dismiss for failure to state a claim plaintiffs’ First Amended Complaint (“FAC”), which asserted various claims of fraud, negligence, unjust enrichment, and violations of consumer protection laws. The Court granted the dismissal with prejudice, partially on the ground that the FAC failed to plausibly allege any actionable misrepresentation by the defendants that could support their various theories of liability.
Thereafter, plaintiffs moved for reconsideration of the Court’s conclusion that the complaint should be dismissed with prejudice. In support of this motion, plaintiffs submitted a proposed amended complaint (“PAC”) that they argued cured the FAC’s deficiencies. One of the primary ways in which the PAC did so, according to plaintiffs, was by alleging two new actionable misrepresentations by the defendants.
One such misrepresentation was allegedly made by MLB Commissioner Manfred in a September 15, 2017 press release relating to the results of an MLB investigation into possible misconduct by the New York Yankees …. Specifically, plaintiffs alleged that the 2017 Press Release falsely suggested that the investigation found that the Yankees had only engaged in a minor technical infraction, whereas, according to plaintiffs, the investigation had in fact found that the Yankees engaged in a more serious, sign-stealing scheme.
In support of this allegation, plaintiffs filed a letter sent from MLB Commissioner Robert Manfred to the General Manager of the New York Yankees (the “Yankees Letter”) discussing the same investigation, which plaintiffs argued proved Manfred’s duplicity. The Yankees Letter—which plaintiffs obtained from defendants during discovery—was filed under seal at the request of MLB and the third-party Yankees. In its memorandum order denying plaintiffs’ motion for reconsideration, the Court found it necessary to refer to the Yankees Letter. Despite the Court’s reference to the letter, MLB and the Yankees now seek its continued sealing….
The Yankees Letter is … a judicial document … to which a very strong presumption of public access attaches. “[T]he weight to be given the presumption of access must be governed by the role of the material at issue in the exercise of Article III judicial power and the resultant value of such information to those monitoring the federal courts.” Thus, the presumption is “at its zenith” where documents “directly affect an adjudication, or are used to determine litigants’ substantive legal rights,” and is at its weakest where a document is neither used by the Court nor “presented to the court to invoke its powers or affect its decisions.” Thus, for example, documents submitted to a court in connection with a granted summary judgment motion are entitled to a strong presumption of public access, while documents exchanged between parties during discovery and never presented to the Court are subject to a low presumption of access. In addition, a more weighty presumption of access attaches to where a document is of greater “value … to those monitoring the federal courts.”
The Yankees Letter represents the kind of document to which the strongest presumption of access applies. It was submitted to the Court in connection with a motion for reconsideration of the Court’s grant of a motion to dismiss, the Court’s final adjudication the parties’ substantive legal rights. Moreover, the Yankees Letter formed one of the primary bases for the plaintiffs’ motion for reconsideration, and was thus squarely “presented to the court to invoke its powers or affect its decisions.” … [T]he Court’s very discussion of both the 2017 Press Release and the Yankees Letter [in the decision denying the motion for reconsideration] demonstrates that both letters were integral to the Court’s reasoning in this case. As a result, a member of the public—or perhaps the substantial putative class on whose behalf plaintiffs acted—seeking to understand the Court’s reasons would require access to these letters. This renders the Yankees Letter of significant “value … to those monitoring the federal courts,” further reinforcing the Court’s determination that the presumption of access is at its strongest….
[B]oth MLB and the Yankees argue that their privacy interests in avoiding disclosure of the letter outweigh the presumption of access. The privacy interests of MLB and the Yankees, however, are modest at best, and not nearly strong enough to overcome the robust presumption of access that attaches to the Yankees Letter…. Both MLB and the Yankees assert that the Yankees Letter, as the product of an internal investigation that has not previously been shared beyond these two parties, is a traditionally private document to which a significant privacy interest attaches. The 2017 Press Release, which publicized the results of the same investigation discussed in the Yankees Letter, however, contradicts this notion. While the parties may not wish to publicize the particular wording included in the Yankees Letter, its substance, as MLB itself argued in its motion for reconsideration briefing, is already public. Thus, the Yankees Letter is not a particularly private affair.
Furthermore, neither MLB nor the Yankees has pointed to a particularly significant injury that will result from disclosure. MLB primarily argues that it will be injured by the disclosure of the Yankees Letter because such disclosure will undermine its ability to conduct internal investigations in the future by undermining teams’ faith in their confidentiality. As indicated above, however, this argument is undermined by the MLB’s own 2017 Press Release, as well as other MLB press releases, which demonstrate that MLB regularly releases the results of internal investigations as a matter of course….
The Yankees argue that they have a strong privacy interest because public disclosure of the Yankees Letter would cause the Yankees significant reputational injury…. [But] embarrassment on the part of MLB or the Yankees about the precise contents of the letter is not particularly weighty, and the privacy interests of any individuals mentioned in the letter may be remedied by minimal redaction….
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All Group of Seven (G-7) foreign ministers on June 17 issued a joint statement calling on Beijing to reconsider imposing the Chinese Communist Party’s (CCP’s) so-called “national security” legislation on Hong Kong.
Beijing’s rubber-stamp congress bypassed Hong Kong’s local legislature in late May to enact the legislation that would criminalize activities connected to subversion, succession, terrorism, and foreign interference.
The proposed law is seen as a major blow to the city’s autonomy. It has attracted condemnation both inside and outside Hong Kong and brought protesters back to the streets. It will be implemented in the territory once the National People’s Congress Standing Committee (NPCSC) drafts details of the legislation.
As an international community we all have a stake in 🇭🇰success & prosperity. With my @G7 colleagues 🇨🇦🇫🇷🇩🇪🇮🇹 🇯🇵🇺🇸🇪🇺we reiterated our grave concern at China’s decision to impose the national security law. HK’s autonomy & rights & freedoms must be protected https://t.co/tmab1jYfd3
The foreign ministers expressed their “grave concern regarding China’s decision to impose a national security law on Hong Kong,” noting that it would violate Beijing’s international commitments and breach Hong Kong’s Basic Law, which guarantees that the International Covenant on Civil and Political Rights can remain in force in the territory.
“The proposed national security law would risk seriously undermining the ‘One Country, Two Systems’ principle and the territory’s high degree of autonomy,” the foreign ministers of the United States, Canada, France, Germany, Italy, Japan, and the United Kingdom said in a joint statement with the EU’s High Representative.
Under the Sino-British Joint Declaration, which set the terms of Hong Kong’s transfer to Chinese rule, the regime agreed to grant the city autonomy and freedoms not enjoyed in the mainland, under the formula of “one country, two systems.”
The statement came just hours before the National People’s Congress standing committee was set to convene in Beijing, although it was not clear whether the legislation would be discussed.
It also came on the heels of an announcement from veteran pro-Beijing politician Tam Yiu-chung, who sits on the NPCSC. He said that the proposed legislation could allow extraditions from Hong Kong to mainland China, AFP reported.
“If the central government thinks it is necessary to do so, not to be handled in Hong Kong courts, then that is an option,” he told Radio Television Hong Kong (RTHK) in an interview Wednesday when asked whether Hong Kongers could be extradited for trial.
“I believe some cases would touch on foreign affairs given the proposed law would regulate the foreign forces that have meddled in Hong Kong affairs,” he said. “This is clearly a matter that needs to be handled by the central government.”
People lay down flowers to mourn the death of a local protester, near the Pacific Place mall in Admiralty, Hong Kong, on June 15. 2020. (Song Bilung/The Epoch Times)
Deng Zhonghua, deputy director of the Hong Kong and Macau Affairs Office—Beijing’s agency for handling those territories’ policies—said on Monday that China’s central authorities should have the power to exercise jurisdiction over “most serious national security cases” in Hong Kong under the national security law.
The G-7 ministers said in their statement that the proposed law “would jeopardize the system which has allowed Hong Kong to flourish and made it a success over many years.”
“We are also extremely concerned that this action would curtail and threaten the fundamental rights and freedoms of all the population protected by the rule of law and the existence of an independent justice system.
“We strongly urge the government of China to reconsider this decision,” the statement concluded.
In response, China’s top diplomat Yang Jiechi said in talks with Secretary of State Mike Pompeo that Beijing “firmly opposes” the statement from the foreign ministers, and that China is determined to push forward the legislation for Hong Kong.
China “urges the U.S. to earnestly respect China’s sovereignty,” Yang told Pompeo, China’s foreign ministry said in a statement on Thursday.
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Futures Slide, Dollar Spikes Ahead Of Jobless Claims Tyler Durden
Thu, 06/18/2020 – 08:11
S&P futures slumped on Thursday alongside European stocks as investors weighed the latest reports about fresh outbreaks of the coronavirus in China and America ahead of a weekly jobless claims report. A resurgence in coronavirus cases has upended bets of a swift post-pandemic economic recovery, with the S&P .SPX and the Dow snapping a three-day winning streak on Wednesday.
Carnival fell 3.6% in premarket trading after reporting a quarterly net loss of $4.4 billion and projecting a loss for the rest of the year after the pandemic brought its cruise business to an effective standstill. Royal Caribbean Cruises and Norwegian Cruise Line Holdings dropped 2.2% and 3.2%, respectively. Despite a surge in new infections in several U.S. states including Texas, Florida and Oklahoma, Trump said late on Wednesday that the United States would not close businesses again.
At the same time, in an attempt to ease fears over a second wave in China, the chief epidemiologist of China’s Center for Diseases Prevention and Control said Beijing’s latest coronavirus outbreak had been brought under control, helping futures briefly turn green.
On the economic front, after the latest data showed a record rise in U.S. retail sales and a surprise addition in jobs in May, investors will now look to the Labor Department’s weekly jobless claims report, for confirmation of continued improvement in the economy. The number of Americans filing for state unemployment benefits is likely to fall for the eleventh straight week, but still remain elevated following mass furloughs and layoffs during the nationwide lockdowns.
Politics is back in the picture too, after newspapers published leaked summaries of a John Bolton book critical of President Donald Trump.
In Europe, the Stoxx Europe 600 ticked lower, with German payments firm Wirecard AG slumping as much as 67% after it delayed publication of annual financial results for the fourth time because $2.1 billion was missing.
In Asia, stocks also edged modestly lower, with communications rising and materials falling, after rising in the last session. Markets in the region were mixed, with Jakarta Composite and Australia’s S&P/ASX 200 falling, and India’s S&P BSE Sensex Index and Taiwan’s Taiex Index rising. The Topix declined 0.3%, with Furukawa Battery and NTN falling the most. The Shanghai Composite Index rose 0.1%, with Chongqing Iron & Steel and Tianjin Tianyao Pharmaceutical posting the biggest advances
In rates, Treasuries came off highs and the dollar spiked around 8am without a clear cause.
Elsewhere in FX, the pound held most of its decline after the Bank of England expanded its quantitative easing program. Norway’s krone rose against all G-10 peers and rallied to a one-week high versus the euro after Norges Bank raised projections for growth and inflation for this year, and lifted its rate path by up to 65bps through the end of 2023, from earlier path which was flat at zero. The Swiss franc barely budged even after the Swiss National Bank pushed back against currency appreciation caused by the coronavirus pandemic, saying aggressive foreign exchange interventions remain its main tool; demand for the franc still rose in the options market. Australian and New Zealand dollars recovered as risk sentiment improved in the European session; the Aussie earlier slipped and sovereign curve flattened after disappointing jobs data while the Kiwi earlier fell after 1Q GDP contracted, sending the country into its first recession in 10 years.
In commodities, WTI and Brent crude futures recouped overnight losses heading into the OPEC+ JMMC meeting later today after yesterday’s JTC which reportedly made no recommendations for further cuts. Eyes will nonetheless remain on compliance and any enforcement mechanisms touted to ensure 100% or more compliance.
Today’s data highlights include the weekly initial jobless claims, along with June’s Philadelphia Fed business outlook and the leading index for May.
Market Snapshot
S&P 500 futures up 0.2% to 3,123.00
STOXX Europe 600 up 0.1% to 366.53
MXAP down 0.01% to 158.86
MXAPJ up 0.02% to 511.64
Nikkei down 0.5% to 22,355.46
Topix down 0.3% to 1,583.09
Hang Seng Index down 0.07% to 24,464.94
Shanghai Composite up 0.1% to 2,939.32
Sensex up 1.3% to 33,950.44
Australia S&P/ASX 200 down 0.9% to 5,936.47
Kospi down 0.4% to 2,133.48
German 10Y yield rose 0.2 bps to -0.39%
Euro up 0.05% to $1.1250
Italian 10Y yield rose 1.8 bps to 1.287%
Spanish 10Y yield unchanged at 0.559%
Brent futures up 0.4% to $40.89/bbl
Gold spot up 0.6% to $1,736.71
U.S. Dollar Index down 0.1% to 97.04
Top Overnight News
Boris Johnson and Emmanuel Macron will meet Thursday, the U.K. prime minister’s first bilateral with a European leader since calling for fresh momentum to secure a post-Brexit trade deal with the EU
A coronavirus outbreak in Beijing that has swelled to more than 150 cases has been contained, a top Chinese expert said
The ECB reached another trillion-euro milestone in its fight to bolster economies damaged by the coronavirus pandemic. An offer for its ultra-cheap, three-year loans was taken up by 742 banks for a total of 1.31 trillion euros on Thursday. That’s in line with predictions of 1.2 trillion to 1.5 trillion euros
Figures due Friday are forecast to show the U.K. budget deficit jumped about 50 billion pounds ($63 billion) in May as the government continued its extraordinary interventions to support the economy through the coronavirus pandemic. That would take the total for Britain’s finance minister Rishi Sunak’s first full three months to well in excess of 125 billion pounds
Sweden’s Finance Minister Magdalena Andersson now expects GDP to contract by 6% this year compared to a previous forecast of about 7% amid signs of a recovery following the country’s softer lockdown approach
Asian stocks traded mostly negative with investor sentiment dampened by concerns regarding a resurgence of coronavirus cases stateside and as participants digested the latest bout of weak data from the region, as well as ongoing US-China tensions. ASX 200 (-0.9%) and Nikkei 225 (-0.4%) were lower with Australia pressured by losses in nearly all sectors including early underperformance in the top-weighted financials and with disappointing employment data adding to the soured mood, while exporters in Japan buckled under the strain of a firmer currency. Elsewhere, Hang Seng (U/C) and Shanghai Comp. (+0.1%) were both subdued amid ongoing US-China tensions as China responded to President Trump’s recent signing of the Uighur human rights legislation which it firmly opposed and warned the US to correct its mistakes or it will resolutely respond with the US to bear the consequences. However, losses were cushioned in the mainland after the PBoC conducted open market operations to inject liquidity in which it utilized 14-day reverse repos for the first time since February and lowered the respective rate by 20bps to 2.35%, while JD.com was among today’s success stories in which the Co. shares rose about 6% at the open of its Hong Kong debut. Finally, 10yr JGBs were higher with prices underpinned in tandem with upside in T-notes and amid the broad negative risk tone in the region, although some of the gains were retraced after weaker results at the 5yr JGB auction.
Top Asian News
G-7 Warns China’s Moves in Hong Kong Jeopardize City’s Success
India Stocks Advance as Reliance Industries Leads Gain
Indonesia Cuts Rates, Signals More Easing as Growth Weakens
European equities kicked the session off in an uninspiring manner but kept grinding higher in earlier trade before received further impetus on headlines that Beijing has controlled the second outbreak in the city. Stocks have since given up some of its recent gains and meander around the unchanged mark with a better performance seen in UK’s FTSE 100 (+0.1%) as exporters benefit from a softer Sterling ahead of the BoE policy decision. Broader sectors are mixed with no clear risk-reading to be derived as cyclicals and defensives remain a broken compass. The sectoral breakdown however trade saw a more cyclical bias early trade as Healthcare lost its earlier top-spot and traded at the bottom of the pile, whilst Travel & Leisure clawed its way from the bottom to one of the top performers, alongside Insurance, Chemicals, Banks and Tech, albeit the picture has turned more mixed since early morning with Oil & Gas now the laggard. Individual stock focus has been on DAX-listed Wirecard (-46%), who’s shares tanked over 60% at one point as expectations for a results being released today were again dashed due to indications of presentation of spurious balance confirmations. The group said it will announce a revised date for the release in due time but if certified annual and consolidated financial statements cannot be made available until June 19, 2020, loans made to Wirecard AG amounting to approximately EUR 2 billion can be terminated. Elsewhere, Carnival (-2.4%) shares failed to catch tailwind from the recovery in the broader Travel & Leisure amid a broker downgrade at Berenberg, althought the group’s earnings, which were released during the session, provided little by way of share price action despite missing on both top and bottom line. UBS (+1.0%) and Credit Suisse (+0.6%) were buoyed by the SNB stating the banks are robust enough to weather the pandemic.
Top European News
Norges Bank Signals Crisis Rates May Be Lifted in Two Years
SNB Warns Markets It’ll Keep Up Fight Against Franc Strength
Sweden Raises Forecast for Economy as Recovery Starts to Pick Up
German Move to Counter Foreign Takeovers Set for Final Approval
In FX, it’s 2 down and 1 to go in terms of today’s EU Central Bank bonanza, with the SNB and Norges Bank both sticking to the script by leaving benchmark rates on hold at -0.75% and zero respectively. However, the former formally upgraded its assessment of the Franc to highly valued from even more highly valued in March in acknowledgement of its softening since the previous quarterly policy review, while the latter delivered a more upbeat economic outlook based on a faster recovery than envisaged at its prior meeting in May. In response, Usd/Chf and Eur/Chf remain largely rangebound around 0.9500 and sub-1.0700, but Eur/Nok has fallen sharply towards 10.6250 from circa 10.7500 highs also in recognition of the revised depo rate path flagging a rise after 2022. Conversely, the Pound has been apprehensive and under pressure awaiting the BoE at noon amidst expectations of at least Gbp 100 bn additional QE, but no change in the Bank rate, with Cable testing stops through Wednesday’s low (1.2510) and Eur/Gbp back up near 0.9000 from 0.8950 at one stage. Note, a full preview of the MPC policy decision and minutes can be found in the Research Suite or via the Headline Feed.
USD – Beyond the divergent moves noted above, the Dollar and major counterparts are still relatively restrained between recent/familiar boundaries and exemplified by the DXY hardly deviating from 97.000 and not even tempted to stray far on a knee-jerk rise in broad risk sentiment amidst reports that Beijing has managed to get the latest COVID-19 outbreak under control. Ahead, US weekly claims alongside Philly Fed may prompt a bit more price action.
CAD/EUR/JPY/AUD/NZD – All narrowly mixed vs the Greenback, as the Loonie pares losses from sub-1.3600 towards 1.3520 in the run up to Canadian new house price and wholesale trade data before a speech by BoC’s Schembri, while the Euro is holding off yesterday’s lows and close to decent option expiry interest between 1.1245-60 (1.3 bn) after little reaction to the latest ECB monthly bulletin or TLTRO take-up near the upper end of the forecast range. Elsewhere, the Yen is meandering from 106.71-107.07 following a modest climb overnight when markets were somewhat more jittery, but still marginally outperforming the Kiwi and Aussie that have both been hampered by disappointing data (GDP and jobs). Indeed, Nzd/Usd and Aud/Usd have retreated from circa 0.6900 and 0.6480 respectively, albeit off worst levels under 0.6840 and 0.6425.
In commodities, WTI and Brent crude futures have recouped overnight losses heading into the OPEC+ JMMC meeting later today after yesterday’s JTC which reportedly made no recommendations for further cuts. Eyes will nonetheless remain on compliance and any enforcement mechanisms touted to ensure 100% or more compliance. On that front, sources stated Iraq, Kazakhstan to present plan for oil production cuts and compensation for overproduction at the meeting. Saudi and Russia will lead a presser after the meeting, although leaks are anticipated (Full Primer available here). Futures were also bolstered higher in early trade amid comments from a Chinese CDC expert who deemed the Beijing outbreak contained – providing impetus to overall risk appetite and pushing WTI July north of USD 38/bbl (vs. low 37.11/bbl) and Brent August above USD 41/bbl (vs. low 40.06/bbl). Meanwhile, spot gold piggy-backed on the softer USD and built on gains above USD 1730/oz having had an uneventful overnight session. Copper prices meanwhile remain little changed on the day despite the rise in stocks whilst iron ore prices fell below USD 100/t after Vale was given the green light to reopen its Itabira complex following coronavirus measures.
US Event Calendar
8:30am: Philadelphia Fed Business Outlook, est. -21.3, prior -43.1
8:30am: Initial Jobless Claims, est. 1.29m, prior 1.54m; Continuing Claims, est. 19.9m, prior 20.9m
10am: Leading Index, est. 2.4%, prior -4.4%
DB’s Jim Reid concludes the overnight wrap
The best news I’ve had over the last 24 hours is that after 6 days, someone at Chill Acoustic reset their system and we’re back to normal. Expect my productivity to rocket. Actually a client did a very nice thing for me and tracked down the founder and got in contact with him. He was a bit nonplussed by the attention and just said he’ll switch servers. Thanks also to all those who spotted what the picture was in my WFH setup in our new video series ( link here straight to the video again). There were a number of honest scholars who got it right and quite a few that I suspect used “Google lens”, which I only learnt about yesterday after an honest client informed me. It allows you to identify pretty much everything from a photo/your camera. My wife has been dying to know what flowers were in our garden from the previous owner and I was able to impress her last night by informing her. I didn’t tell her how but she was very impressed. That’s our little secret now.
Unfortunately Google Lens couldn’t tell me which way markets are going next so I’ll have to continue with the lucky coin I have. Yesterday was a duller day in comparison with the action-packed Tuesday. S&P 500 volumes can attest to that after being roughly 17% below the one-month average. The same themes dominated though as we weighed the importance of the rising caseloads across US states versus the continued huge liquidity in markets.
By the end of the session, the S&P 500 had snapped a run of 3 successive gains since last Thursday’s large drop to close down -0.36%, as energy stocks dragged the index lower on the back of lower oil prices. Fed Chair Powell’s second day testimony was a bit of a non-event but we’ll detail more about it below. Outside of Energy (-3.28%), Banks (-2.69%) and Autos (-1.97%) were the worst performers as cyclicals lagged behind. The overall index traded in a roughly 30pt range all day, tighter than over the last week or so, and finished at the bottom of that range. Volatility also remained elevated, even with the VIX index closing down -0.2pts at 33.5pts. This is still above the vol levels in the second half of May when the narrative turned more positive. Tech stocks outperformed, however, with a +0.15% rise for the NASDAQ, which was its 8th increase in the last 9 sessions. European equities did well too, with the STOXX 600 up +0.74%, with the DAX, CAC 40 and FTSE 100 all advancing as well.
Elsewhere, yields on 10yr US Treasuries fell by -1.5bps to 0.738%, while peripheral bonds slightly tightened with BTPs (-1.6bps), Spanish (-0.9bps) and Greek (-0.1bps) all gaining late in the session. Similar to equities, Brent crude also ended a run of 3 successive increases, with a -0.61% decline to $40.71/bbl yesterday, while WTI also fell -1.09% to $37.96/bbl.
In terms of the latest on the coronavirus, there was a continued divergence in the health metrics between different US states yesterday. On the positive side, New York reported only 17 deaths yesterday, down from 25 the day before, while the number of patients hospitalised fell below 1,500. Indeed, Governor Cuomo said that New York City was on track to enter the second phase of reopening on Monday, while the rest of the state will be in phase 3. The picture wasn’t so good elsewhere though, with Texas seeing the number of hospitalisations rise by 11% in the last 24 hours, while Florida saw the number of cases rise by 3.3% yesterday, compared with an average of 2.8% over the previous 7 days. The other worrying metric out of Florida is that the positive test rate rose to 10.3% yesterday from 7.4% at the start of the week. It has been over 2 months since the rate was that high. Cases in California rose by 3.4%, higher than the 7-day average of 2.1% as the state continues to struggle suppressing its overall case growth. We have highlighted how discriminative Covid-19 is based on age, and Nate Silver (famously of fivethirtyeight.com) brought attention to how different the coronavirus spread has been in NYC and Texas, “In NYC, 24% of known cases are among people 65+, while in Texas, it’s 16%”. It could be that the elderly in Texas have been able to separate themselves better than in NY, which may limit the damage of risking case numbers.
Over in Europe, which has pursued a much harsher lockdown in general, a meatpacking plant in Germany was shut after hundreds of workers were found to have tested positive for the coronavirus. Now we officially know what helped cause case numbers on Tuesday to jump by 570, the largest one-day rise in the country since May 29 on both an absolute and percentage basis. The 0.3% rise was relatively significant given the 7-day average of 0.1%. Cases rose by 0.2% (352 in absolute terms) yesterday, but we will need to see how cases develop over the next week to see if that event has ripple effects. There were also worrying signs of a deterioration in Iran again, which was one of the earliest affected countries, as the number of deaths rose for a 4th day running to 120, the highest number in over 2 months. See “view report” at the top for the usual case and fatality tables from around the world and the main US high profile states.
Back to markets, and a fairly non-eventful overnight session has seen most bourses in Asia post modest losses, albeit off their lows for the session. Indeed the Nikkei (-0.32%), Hang Seng (-0.22%), ASX (-0.80%) and Kospi (-0.13%) are all down while Chinese bourses are trading flattish. Meanwhile, yields on 10y USTs are down a further 3bps and futures on the S&P 500 are down -0.63%. The outperformance for China may reflect a Bloomberg report suggesting that the country will reduce the reserve requirement ratio and use its relending policy to keep liquidity ample citing a State Council meeting chaired by Premier Li Keqiang.
Yesterday Fed Chair Powell gave a testimony before the House Financial Services Committee after speaking in front of the Senate’s counterpart the day before. He stuck to the same general talking points. We highlighted the Fed Chair’s statements on the Secondary Market Corporate Credit Facility yesterday and he followed it up by saying that the Fed will eventually move away from ETF purchases and focus on buying bonds primarily. As Craig mentioned yesterday the risk to credit is perhaps that the Fed is pulling back from using anywhere near as much firepower as was thought. If so Powell is perhaps concluding that there is no pressing need to over commit in a market that’s functioning. However, how much of that market functioning is down to expectations that the Fed was going to buy significantly more than it is perhaps signalling to now? An interesting one to follow.
In terms of geopolitical updates, matters calmed down somewhat yesterday following the clashes between Indian and Chinese troops, with the two countries’ foreign ministers and senior military commanders talking by phone to de-escalate tensions. Over on the Korean peninsula, however, following North Korea blowing up a liaison office on their side of the border earlier in the week, they said yesterday that they would be sending troops to border areas, from where the two sides had previously agreed to remove troops. So certainly worth keeping an eye on escalating tensions there.
Attention today will turn to the Bank of England, who’ll be announcing their latest monetary policy decision later. In terms of what to expect, our economists are forecasting that the BoE will join the ECB in announcing a further expansion to their post-pandemic QE program, with a £125bn expansion, though the risks to this are tilted to the upside as the MPC could surprise with a stronger response. The decision today will follow yet another drop in CPI inflation, with data yesterday showing it fell to +0.5% in May as expected, the slowest annual inflation rate since June 2016, and some way below the BoE’s 2% target. Core inflation was stronger, though even that fell to +1.2% (vs. +1.3% expected).
Yesterday’s housing data from the US underwhelmed somewhat, with the number of housing starts in May coming in at 974k on an annualised basis (vs. 1.1m expected). That said, it does mark a rebound from April’s upwardly-revised 934k reading. Building permits also underperformed, rising to 1.220m (vs. 1.245m expected), though again this was a rebound from April’s 1.066m reading. Over in Europe, there was something of a rebound in EU27 new car registrations. They were “only” down -52.3% on the previous year, compared with -76.3% in April.
To the day ahead now, and central banks will be on the agenda today as monetary policy decisions come from the Bank of England, the Swiss National Bank, the Norges Bank and Bank Indonesia. In addition, the ECB will be publishing their Economic Bulletin, while the Fed’s Mester and the BoE’s Broadbent and Tenreyro will be speaking. Data highlights include the weekly initial jobless claims from the US, along with June’s Philadelphia Fed business outlook and the leading index for May.
via ZeroHedge News https://ift.tt/3hM0Eyr Tyler Durden
Atlanta PD Calls Out Sick En Masse As Former Officer Charged With Murder In Killing Of Rayshard Brooks Tyler Durden
Thu, 06/18/2020 – 07:54
In the hours after the Fulton County DA charged a former Atlanta Police Department officer with murder – and another with aggravated assault – after he shot and mortally wounded 27-year-old Rayshard Brooks following a stop, the Atlanta Police Department reported that it experienced a “higher than usual” volume of officer call-outs.
Apparently, the department received enough complaints claiming cops were just walking off the job that its social media department had to tweet out a clarification: “The department is experiencing a higher than usual number of call-outs with the incoming shift. We have enough resources to maintain operations and remain able to respond to incidents.”
Earlier suggestions that multiple officers from each zone had walked off the job were inaccurate. The department is experiencing a higher than usual number of call outs with the incoming shift. We have enough resources to maintain operations & remain able to respond to incidents.
— Atlanta Police Department (@Atlanta_Police) June 18, 2020
The department is currently operating without a full time police chief since Erika Shields resigned in the wake of the Brooks’ fatal shooting, despite the praise she received for her handling of the George Floyd protests.
Earlier on Wednesday, Fulton County District Attorney Paul Howard announced 27-year-old Garrett Rolfe, who was fired Saturday after shooting Brooks twice in the back during a scuffle outside a Wendy’s restaurant, will face felony murder and 10 additional charges, and could receive the death penalty if convicted of the murder charge. Devin Brosnan, 26, the other officer who responded, will face three charges, including aggravated assault, and will testify against Rolfe.
Keep in mind, the “assault” Brosnan is being charged with is related to the struggle both officers had with Brooks as he resisted arrest.
via ZeroHedge News https://ift.tt/2BgRZTG Tyler Durden
World Sees Record Jump In New COVID-19 Cases, Deaths As Fatalities Near 450k: Live Updates Tyler Durden
Thu, 06/18/2020 – 07:41
Summary:
Global case total tops 8.3 million
Deaths top 447,000
Tokyo reports 41 infections
World reports record jump in new cases, deaths
Beijing top epidemiologist says outbreak in the city has been contained
India reports record jump in new cases (12k+) as Fitch cuts outlook
Cali reports record 4k jump in new cases
Indonesia reports record jump, surpassing Singapore’s case total
* * *
As VP Mike Pence plays down the threat of a ‘second wave’ of SARS-CoV-2 sweeping across the US, the WHO revealed Thursday that an accounting of the total case numbers and deaths recorded on Tuesday (48 hours ago) amounted to 140,000 new cases, the highest number since the outbreak began. Another 6,800 deaths were also reported, the highest number since April, Nikkei Asian Review reports.
Nearly half of these new cases were recorded in Latin America, where Brazil, Mexico, Chile, Ecuador, Peru and other countries are all struggling with a surge of infections in the region as decisions by Brazil and Mexico to not take the outbreak seriously have apparently come back to haunt the entire region.
Circling back to Thursday, Tokyo reported 41 infections on Thursday, up from 16 a day earlier, while South Korea saw 34 new cases, down from 37 a day ago, not exactly a sign of another outbreak.
As the worldwide count of COVID-19 infections surpasses 8.25 million (JHU reported 8,320,288 as of early Thursday morning, along with 447,628 deaths), the death toll is on the cusp of passing 450k. Following a brief spat, the US and China have struck an agreement to allow four weekly flights between the two countries, easing a standoff over travel restrictions as Beijing blames travelers from abroad and imported seafood for some of the latest outbreak. Delta will resume passenger flights between Shanghai and Seattle next week, via Seoul, and once-a-week flights from Seattle and Detroit in July.
In more local news, as Beijing tightens restrictions on movement – to leave the city, one requires a clean bill of health showing no infection, and residential compounds have faced ‘partial’ lockdowns – party officials on Thursday announced a new initiative to improve cleanliness and hygiene at the city’s markets. A major wholesale market in Beijing’s Fengtai District has been blamed as the epicenter of the latest outbreak in the city, which has purportedly spread to the surrounding area.
“The epidemic is a mirror that not only reflects the dirty and messy aspects of wholesale markets but also their low level management conditions,” the Central Commission for Discipline Inspection says.
In other news, after testing hundreds of thousands of people in Beijing alone over the past week, city officials discovered just 21 cases on Wednesday. The Chinese CDC’s chief epidemiologist said after that Beijing’s outbreak has been brought under control, although new cases could emerge over the next few days.
A China CDC chief epidemiologist said that Beijing’s outbreak has already been brought under control, but warns that new cases will continue to emerge over the next two days. Wu Zunyou, the chief epidemiologist, explained Thursday during a press briefing that the appearance of new cases doesn’t necessarily mean they’ve just been infected. For example, the cases confirmed on Wednesday were likely infected a week ago, on June 12, he said.
Despite these reassurances, Chinese officials have continued to blame food imports for the latest outbreak, which they initially attributed to ‘European’ salmon (because the viral strains found in Beijing resembled strains from Europe, allegedly). After customs officials ramped up testing of imported food samples this past week, the government confirmed Thursday that all 32,174 samples of imported seafood, meat, vegetables, fruit and other related products had tested negative, according to a statement from China Customs.
Moving on to the major hotspots, India reported 12,881 new cases on Thursday, another record jump, bringing the country’s tally to 366,946. The total includes 12,237 deaths, up 334 from Wednesday morning. Ratings agency Fitch cut its outlook for India to “negative” from “stable” on Thursday based on the view that “the coronavirus pandemic has significantly weakened India’s growth outlook for this year and exposed the challenges associated with a high public-debt burden” – putting the world’s second-most populous country at risk of a junk rating.
Elsewhere in Asia, Indonesia reported another record jump, with 1,331 new coronavirus infections, taking its total number of cases to 42,762, surpassing Singapore. Health Ministry official Achmad Yurianto said 63 more deaths were also reported, bringing the nationwide total to 2,339, the highest coronavirus death toll in East Asia outside of China.
While the surge in new cases around the world is alarming, and justifiably so, Russia reported just 7,790 new cases on Thursday, its lowest daily rate of new infections in six weeks, bringing the nationwide total to 561,091. Another 182 people died over the last 24 hours, according to Russia’s coronavirus crisis response center, bringing the official death toll to 7,660, Al Jazeera reports.
California reported 4,000 new cases last night, a record total for the state, landing it back on the NYT’s list of states where cases are increasing. To be sure, the list has shrunk by just 20 states on Thursday, down from 23 earlier in the week, as Tennessee, Mississippi, Missouri and Kentucky moved to the list of states where cases are mostly the same.
But as the US struggles with a rebound that – as Dr. Scott Gottlieb pointed out earlier – is geographically limited in scope…
New Covid cases vary by region of the country, with hardest hit parts now showing biggest declines, while other regions expand. This probably reflects, in part, greater precautions being taken by people in regions with the worst, early impacts like New York. h/t @COVID19Trackingpic.twitter.com/FDUc5bLFH0
— Scott Gottlieb, MD (@ScottGottliebMD) June 18, 2020
…it’s important to remember that although the US has the most cases by far, the outbreak in Europe was much worse when adjusted for population density.
Coronavirus deaths worldwide per one million population as of June 18, 2020, by country
Bank Of England Announces Only £100BN QE Expansion In Unexpectedly Hawkish Statement Tyler Durden
Thu, 06/18/2020 – 07:37
The Bank of England voted unanimously to keep the Bank Rate at 0.1%, as expected, however in a disappointment to some who were looking for an £200BN increase in the asset purchase program, the bank announced that in an 8-1 to vote it expanded its bond buying program by only £100BN, with chief economist Andy Haldane dissenting on additional QE, favoring no change. In a further hawkish surprise, the BOE also said it now expects the £745 billion asset purchase program to be completed around turn of the year even as the U.K. economy takes some time to recover.
At this meeting, the MPC judges that a further easing of monetary policy is warranted to meet its statutory objectives. The Committee agreed to increase the target stock of purchased UK government bonds by an additional £100 billion in order to meet the inflation target in the medium term. The Committee expects that programme to be completed, and the total stock of asset purchases to reach £745 billion, around the turn of the year.
Commenting on the decision, the BOE minutes said that “with liquidity conditions having stabilised, purchases could now be conducted at a slower pace than during the earlier period of dysfunction. Should conditions worsen materially again, however, the Bank stood ready to increase the pace of purchases to ensure the effective transmission of monetary policy.” As noted above, the BOE sexpect the program to be completed “around the turn of the year”.
More importantly for those expecting NIRP in the UK, the outlook was not nearly as negative as expected, and there is no mention of negative rates nor TSFME rate change.
Adding to the hawkish read, the BOE said that “the emerging evidence suggests that the fall in global and UK GDP in 2020 Q2 will be less severe than set out in the May Report. Although stronger than expected, it is difficult to make a clear inference from that about the recovery thereafter. There is a risk of higher and more persistent unemployment in the United Kingdom. Even with the relaxation of some Covid-related restrictions on economic activity, a degree of precautionary behaviour by households and businesses is likely to persist.”
That was not all: as Pantheon’s Sam Tombs points out, the BoE pace of monetization is sharply lower, as the bank will now be buying £6B gilts a week until the end of the year, well down from current £11B pace, “much less than most analysts had assumed.”
My quick calcs suggest the BoE will be buying c.£6B gilts a week until the end of the year, well down from current £11B pace
As FX strategist Viraj Patel adds, the “Bank of England’s £100bn QE to year-end means that weekly gilt purchases will slow down to around 40% of current pace. A relatively hawkish move compared to other central banks. Obviously BoE can front-load these purchases but $GBP higher as on a not so aggressive BoE QE move.”
Bank of England’s £100bn QE to year-end means that weekly gilt purchases will slow down to around 40% of current pace. A relatively hawkish move compared to other central banks. Obviously BoE can front-load these purchases but $GBP higher as on a not so aggressive BoE QE move pic.twitter.com/44j6ZrzkZH
Combined with the smaller than expected QE amount, the statement was generally more hawkish than consensus expected, which explains the spike in cable, which has however since faded much of the gains.
As Bloomberg’s Marcus Ashwroth notes, the 10-year gilt yield’s up on the reduced weekly pace of BOE buying to about 9 billion pounds from 13.5 billion pounds. “Adding to this is Haldane’s dissent on any increase in QE. Although the BOE stressed it could always increase the pace of bond purchases again, the reduction to just two rather than three buying operations sends a clear message that the pandemic response is tapering.“
What happens next? while the bank did not provide much detail on what precise action the central bank could take next should its assessment prove overly optimistic, they made clear officials are ready to do more:
“The MPC will continue to monitor the situation closely and, consistent with its remit, stands ready to take further action as necessary to support the economy.”
As UBS economist Dean Turner writes, “we don’t believe the Bank will take rates lower this summer, let alone into negative territory. We may, however, see some evolution in the funding schemes for banks, to support lending to the economy. This could raise a few eyebrows, but has the potential to be more successful in increasing the flow of credit than cutting base rates alone.”
via ZeroHedge News https://ift.tt/2Ck7tqA Tyler Durden
Wirecard Shares Plunge 60% As Auditors ‘Unable To Verify’ $2 Billion In Cash On Its Books Tyler Durden
Thu, 06/18/2020 – 06:36
Once again, it looks like the bears and the skeptics were right all along.
German payments company Wirecard delayed publication of its 2019 annual report, resulting in shares plunging by more than 50% and its bonds due in 2024 dropping 23 cents to around 58 cents on Thursday, as auditors failed to account for more than $2 billion cash balances that the company had previously reported, according to Reuters.
After having already delayed the report three times, Wirecard was set to finally release it on Thursday. However, in a not-entirely-unexpected admission, the company revealed that its auditor, Ernst & Young, was unable to verify €1.9 billion euros ($2.1 billion) in cash balances – or about a quarter of its balance sheet.
“There are indications that spurious balance confirmations had been provided” that created “a wrong perception of the existence of such cash balances or the holding of the accounts for to the benefit of Wirecard group companies,” the statement read. “The Wirecard management board is working intensively together with the auditor towards a clarification of the situation.”
Wirecard warned if there were no certified annual and consolidated statements by Friday, it would result in a 2 billion euro ($2.25 billion) loan being terminated.
As we’ve previously noted, German regulators have bent over backwards to accommodate Wirecard, even going so far as to discourage short sellers from targeting the stock, and launching an investigation into an FT reporter who published the first allegations about fraud within the fast-growing digital payments company.
Wirecard shares fell 60% on Thursday, erasing nearly 2/3rds of their value.
Unsurprisingly, the FT journalist who faced a vicious attack on his credibility by both the company and German financial regulator BaFin is having the last laugh on twitter after the company, its army of goons, the German government and even some sell-side analysts attacked his reporting.
Wirecard was down 5 per cent at the open, recovered a bit since.
For background on Wirecard collapse today, these are the two key stories.
In October, we wrote that sales and profits appeared fraudulently inflated. https://t.co/8RKd75oGeT
In December, we wrote that “trustee accounts” were included in cash balances. https://t.co/UWIrIRpqnm
Wirecard says €1.9bn of cash is missing, indications auditors deceived, €2bn of loans could be terminated if accounts not published tomorrow.
Stock down two-thirds, FT story imminent
