Month: June 2017

As previewed last night, the jobs “whisper” risk was to the downside, and in what was a very disappointing print released moments ago by the BLS, the whisper was spot on with only 138K jobs added in May, far below the 185K estimate, and below the lowest estimate of 140K. Additionally, April’s big beat of 211K was revised substantially lower to only 174K, suggesting that any expectation the Fed may have had of “evidence” the recent economic slowdown was transitory was just crushed.

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Adam Crisafulli recaps what matters this morning as we head into today’s payrolls report, noting that “the inability of TSY yields to rise (along w/the dramatic multi-month curve flattening process) remains a cloud hanging over the equity rally but stocks obviously don’t seem to mind (for now).” Whether this changes will depend largely on one thing: today’s wage number – if it comes in above the expected, we may finally get some curve steepening, if not the divergence will continue…

Trading Update

 

Market update – the equity rally continues. What’s happening this morning? As far as incremental news is concerned, it was a very quiet evening. Stocks saw solid gains in Asia and Eurozone indices are bid higher too (US futures are up) as global markets react to the robust American close from Thurs. There still isn’t a specific fundamental “reason” for the US Thurs rally other than stocks are benefiting from ongoing upside momentum. Eco data in the US Thurs morning was solid although it would be nice to see this ostensibly brighter growth outlook ratified by Treasuries (instead, TSY yields ended Thurs flat and they are unchanged so far Fri morning). The inability of TSY yields to rise (along w/the dramatic multi-month curve flattening process) remains a cloud hanging over the equity rally but stocks obviously don’t seem to mind (for now).

 

The crude slump continues – some are trying to blame Trump’s Paris withdrawal (less environmental controls means more drilling according to this view) although that feels more like an excuse than an actual driver. Crude has been for sale ever since the OPEC decision was confirmed last week and ostensibly positive headlines on Thurs (including favorable API/DOE inventory and a Reuters article talking about the potential for further OPEC/Russia output cuts) couldn’t help halt the slide – it isn’t that markets doubt the resolve of OPEC/Russia but instead there is ongoing concern that those producers no longer control oil like they once did.

 

US jobs for May – the monthly labor reports have been stalwart, holding in strong while other economic figures lately have turned more mixed (thus a weak 6/2 release will have more market influence than a strong one as it would confirm the softening trend being witnessed elsewhere). Investors are looking for another relatively solid jobs release – the St print estimate is +180K (vs. +211K in Apr) although the robust ADP reading (+253K) has caused “whispers” to move to the ~200K range. Other Street estimates for May: 4.4% UR (unchanged vs. Apr) and wages +0.2% M/M and +2.6% Y/Y (vs. +0.3% M/M and +2.5% Y/Y in Apr). “Upside” on the adds front (anything up to ~250K) is unlikely to impress anyone or shift the growth narrative dramatically (investors think of monthly jobs the same way they look at auto sales – both are expected to weaken going forward and investors won’t be comfortable until the depth of the trough is revealed). Investors will be watching wages closely given the recent CPI shortfalls while another  tick lower in the UR would place more pressure on the Fed.

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• Strong U.S. job growth expected in May; wage rise seen moderate (Reuters)
• Trump’s Paris Exit Leaves Him Isolated From C-Suites to Capitals (BBG)
• Critics lament Trump climate move, supporters seek new deal (Reuters)
• Musk, Iger to quit Trump advisory councils after Paris accord decision (Reuters)
• Yuan Forecasters Getting It Wrong as China Jolts Markets (BBG)
• Commodity Rebound Evaporates as Slowing Demand Spells More Gluts (BBG)
• Mnuchin and Mulvaney at Odds as Trump Confronts Debt Default (BBG)
• Three lawmakers question Kushner Cos on concerns over White House tie (Reuters)
• EU, China united on climate, still divided over trade (Reuters)
• Putin Says Snowden No Traitor, But Leaking Information Was Wrong (BBG)
• General leading Philippine battle with Islamists relieved of command (Reuters)
• Denmark Is Killing Tesla (and Other Electric Cars) (BBG)
• World’s Biggest Wind-Turbine Maker Falls as Trump Drops Paris (BBG)
• Puerto Rican Exodus Is Speeding the Island’s Economic Collapse (BBG)
• Munich prosecutors expand Audi investigation (Reuters)
• Why Whistleblowers Get Paid in the U.S. but Not in Britain (BBG)
• Mattis says U.S. committed to Asia-Pacific as allies seek clear policy (Reuters)

 

Overnight Media Digest

WSJ

– President Donald Trump said on Thursday he will withdraw U.S. from the Paris climate accord in an effort to boost the nation’s industry and independence, making a dramatic shift in policy despite intense lobbying from business leaders and close allies. on.wsj.com/2qLfBon

– U.S. meal kit service Blue Apron Holdings has filed preliminary documents for an initial public offering. on.wsj.com/2rqWQc7

– Wal-Mart Stores Inc is testing a program in which store workers deliver some orders placed on Walmart.com or Jet.com, a sign of how the retailer hopes to use its 4,700 U.S. stores to its advantage in its battle against Amazon.com Inc . on.wsj.com/2sv6MR7

– Google has told publishers it will give them at least six months to prepare for a new ad-blocking tool the company is planning to introduce in its Chrome web browser next year, according to people familiar with the company’s plans. on.wsj.com/2stfH5y

– KKR & Co closed a $9.3 billion fund dedicated to private-equity investments across Asia Pacific, the largest such fund in the region, the U.S. private-equity company said on Friday. on.wsj.com/2qMEHn7

 

FT

President Donald Trump said on Thursday he will withdraw the United States from the landmark 2015 global agreement to fight climate change, a move that prompted widespread criticism from allies and business leaders as America became one of only three nations to oppose the Paris climate accord.

In the event of a “cliff-edge” Brexit, UK pharmaceuticals companies could have to set up some operations related to drug safety and approval within the EU to ensure their products comply with European requirements, the European Commission has warned.

British Police released more photographs of Manchester bomber Salman Abedi on Thursday as they try to discover his movements in the days the attack that killed 22 and injured more than 100.

Black workers with temporary jobs in UK increased between 2011 and 2016, while the proportion of white workers on these contracts held steady over the same period, according to analysis of official data by the Trades Union Congress.

 

NYT

– President Trump announced on Thursday that the United States would withdraw from the Paris climate accord. Trump said the landmark 2015 pact imposed wildly unfair environmental standards on American businesses and workers. He vowed to stand with the people of the United States against what he called a “draconian” international deal. nyti.ms/2qMSIRF

– Uber said last week that it had recently discovered an accounting error that had deprived New York drivers of tens of millions of dollars, and vowed to pay back drivers every cent, with interest. Now evidence has emerged suggesting that Uber and New York State regulators were aware of the improper deductions from drivers’ earnings as early as 2015. nyti.ms/2qMKRnh

– In a rare slowdown in one of the hottest areas of the entertainment business, attendance declined at 13 of 14 Disney theme parks around the world in 2016 compared with 2015, according to a report by Themed Entertainment Association and Aecom. nyti.ms/2qN1q2d

– Food kits delivery service Blue Apron filed on to go public, moving to become one of the most prominent consumer start-ups in recent years to pursue a stock listing. The size of Blue Apron’s offering has yet to be determined. The prospectus listed a $100 million fund-raising target. nyti.ms/2qMTk9V

 

Britain

The Times

PPG Industries Inc has walked away from pursuing a hostile 26.9 billion euros ($30.17 billion) offer for Akzo Nobel NV, the Dutch owner of Dulux paints, after weeks of fractious wrangling between the two companies. bit.ly/2qLWFGf

Britain may be back in the European Union in little more than five years if the common market radically reinvents itself, George Soros, the billionaire financier who once beat the Bank of England, has speculated. bit.ly/2qLKyJc

The Guardian

Willie Walsh, the chief executive of British Airways (BA)parent company International Consolidated Airlines Group SA , has praised BA bosses for “doing everything possible” after the IT meltdown that left 75,000 passengers stranded over the bank holiday weekend. bit.ly/2qLwUWC

Alphabet Inc’s Google has officially submitted plans for its new 1 million square feet “landscraper” London headquarters, with the intention of beginning construction on the building in 2018. bit.ly/2qM1VcP

The Telegraph

Lloyds Banking Group Plc has completed a 1.9 billion pounds ($2.45 billion) takeover of credit card issuer MBNA Ltd, significantly boosting its slice of the market just weeks after the Government sold its final shares in the lender. bit.ly/2qLx2FA

The UK pharmaceuticals sector has been told to prepare for a “crisis” Brexit scenario of drastically reduced access to European markets and hundreds of millions of pounds of restructuring costs unless a swift regulatory deal can be struck with Brussels. bit.ly/2qLSBFK

Sky News

Film Finances Inc, a movie financing company with credits including the Hollywood hits La La Land and Nocturnal Animals is plotting a blockbuster premiere on the London stock market that will value it at several hundred million pounds. bit.ly/2qLRaHy

Some of the world’s biggest buyout firms have walked away from potential bids for Shop Direct, the online retailer, amid concerns about its reliance on revenues from a vast consumer credit arm. bit.ly/2qLQYbb

The Independent

Workers’ union Unite has branded the Bank of England “arrogant and out of touch” after some staff at the bank on Thursday started voting in an industrial action ballot over pay. ind.pn/2qLRFkZ

 

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• Trump pulls out of Paris Climate Accord

Why trusting in the bigger picture gives you trust in gold

• Gold pauses ahead of non-farm payrolls data
• In Gold We Trust 2017 released
• Reports on the ‘Everything Bubble’
• On average gold is up 5.88% ytd, since start of 2017.
• Trump ‘was the trigger of the sudden reverse thrust of the gold price’
• Reorganization of the global monetary order considered a ‘grey swan’

Trump’s announcement late yesterday that the US would be pulling out of the landmark 2015 Paris climate accord saw gold prices retreat. Markets are now awaiting the release of the non-farm payroll data. General consensus is that 210,000 new positions were added in May. However, this could be an underestimation given the stronger ADP number yesterday.

The Paris climate deal, jobs numbers, elections and terrorist attacks are all important ingredients in the tale of an economy. But they should not be considered individually when considering the gold price or gold investment. They all come together to form a far more complex story, which is the global financial and geopolitical system.

Yesterday Incrementum’s widely respected In Gold We Trust report was released. The authors do a stellar job of considering not only the wider picture but also what we can learn from history. This is refreshing in an age when many mainstream, day-to-day analyses look for individual bullish and bearish signs for gold, when in reality all the signs need to be considered together.

The report covers a multitude of angles and considers even more economic, financial and political factors. As we often conclude, investors should not focus on small events but rather look at what they all point to and why they are happening. This is in contrast to the mainstream media who often can’t be considered to do this. Perhaps we should not be surprised by this, an academic study released last month found journalists have ‘a lower than average ability to regulate emotions, suppress biases, solve complex problems, switch between tasks, and think flexibly and creatively.’ Oh dear!

Perhaps we can now understand a little better why we fail to spot much coverage in the mainstream of the underlying dangers in the financial system and how investors and savers can protect themselves. With this in mind we suggest you enjoy the highlights of the In Gold We Trust Report, below and continue to take the mainstream financial media with a pinch of salt.

Frustrated with gold? Blame Trump

The gold price was having a great time in the first half of last year. Long-term we believe we know where it is headed and it looked like, in 2016, that it was well on its way. Then something happened and it changed its mind. Why? Incrementum’s authors Ronald-Peter Stoeferle and Mark Valek argue that ‘ironically’ Trump ‘was the trigger of the sudden reverse thrust of the gold price.’

Ironic on account of Trump’s anti-Wall Street rhetoric and the seeming mutual distrust between the then President-elect and the financial industry. However Trump won by giving new hope to ‘ a class of society that had lost its trust in the economic system and political institutions.’

As a result of this new found euphoria in the US and global economy, ‘stocks received another boost, and the increase in the gold price was (temporarily) halted… A fantastic first half [for the gold price] was followed by a disastrous second half, where the newly won confidence was brutally destroyed. Gold bulls were being tested again, with the market turning into a “pain maximiser”.’

‘The big caesura in the performance had to do with the election of Donald Trump.’

Trump is merely one character in this play, he came to the stage when the story had already been laid out – an economy of bubbles, inflationary monetary policy etc etc. Trump could be seen as someone merely hurrying along the inevitable. Stoeferle and Valek both recognise this and consider the other characters, props and scene changes in what may well turn out to be a tragedy.

The Everything Bubble

One of the major areas that was inevitable no matter who is in the White House is the US Equity market. Rarely do you hear gold investment advocates recommend the classic investment portfolio which ‘calls for shares to satisfy the risk appetite and bonds as safety net.’ When people invest in gold it is not to get rich quickly, it is to diversify their portfolio, hold some financial insurance and to own a safe haven with zero counterparties.

The authors of the In Gold We Trust believe the classic investment portfolio ‘must be critically questioned’ on account of a bubble which reaches beyond individual areas. Renowned analyst Jesse Felder calls this the “Everything Bubble.”

‘The valuation level of the US equity market is nowadays ambitious, to put it mildly – both in absolute numbers and in terms of the economic output. This prompts the conclusion that the U.S. is caught up for the third time within two decades in an illusionary bubble economy created by money supply inflation and equipped with an expiry date. In comparison with the earlier two bubbles, however, the excess is not limited to certain sectors (technology in 2000, credit in 2008), but it is omnipresent and includes various asset classes, especially also bonds and (again) property.’

The Everything Bubble means very little remains untouched by the excess in the system. It means there is heightened risk and very little chance of the bubble deflating without drama. Whilst the gold price might appear unresponsive at present, gold investors with segregated, allocated gold should feel assured that they are holding one of the few assets that cannot vanish as a result of a bubble imploding.

Mainstream is wrong about recession

“It is widely acknowledged that a US recession represents one of the greatest extant risk factors for international investors. In our opinion, financial market participants currently display a suspiciously pronounced degree of complacency.”

The authors identify five key measurements that point towards a likely recession, despite mainstream opinion.

1. Rising interest rates
2. Artificial asset price inflation
3. Consumer debt and slowing credit expansion
4. The duration of the current upswing
5. Stagnating tax revenues

For obvious reasons, a recession is positive environment for gold but it is also the fear of a recession which will send the price higher:

‘Upcoming recession fears resulting in a U-turn by the Fed, and the consequential depreciation of the US dollar would probably finalise the entry into a new age of inflation. This will be the moment in which gold will begin to shine again.’

Look out for Grey Swans

We know all about white swans and we know all about black swans (or we don’t, that’s the whole point) but Incrementum introduce us to the concept of grey swans. Grey swans are events which have ‘strong potential to become relevant at some point.’

The main grey swan considered is stagflation, as caused by a US recession, this would have a positive affect on gold. The authors consider the following grey swans and their impact on both the US Dollar and gold:

On a lighter note…beer

Each In Gold We Trust features a look at the “beer purchasing power” of gold. Whilst it may seem a light bit of fun, it is in fact a fantastic way to measure real inflation given official government measures are often misleading. Just by using this simple measure one can quickly appreciate the fake value in fiat money and where the real value lies – gold (and beer, of course).

‘While a liter of beer (a “Maß” in German) at the Munich Oktoberfest in 1950 cost the equivalent of EUR 0.82, the average price in 2016 was EUR 10.55 .The annual price inflation of beer since 1950 thus amounts to 4.2%. If one looks at the price of beer relative to the gold price, then one ounce of gold could buy 111 liters of beer in 2016. Historically the average is 87 liters – thus the “beer purchasing power” of gold is currently slightly above the long-term average. The peak was however reached in 1980 at 227 liters per ounce. We believe it is quite possible that similar levels will be reached again.’

So, good news for those who own gold and enjoy a pint or litre or two, as ‘Beer drinking gold aficionados should therefore expect the metal’s beer purchasing power to increase.’

Conclusion

There is a huge amount of information and analysis in this report, all of which is vital to understand the outlook for gold. Gold demand, the gold price and the overall outlook for the metal cannot be fairly considered without an extensive viewpoint.

Unsurprisingly, reports such as this and well-researched commentary such as our own point to a lot of ‘what if’ scenarios. These should be considered by all readers and those considering any kind of investment. Ultimately the conclusion is the same – we don’t know where this will end up or what the final act will even look like. For these very reasons, gold serves as an excellent form of financial insurance in your portfolio.

Luckily educated and balanced research will use not only a number of ‘what if’ scenarios but it will also base a lot of its recommendation and conclusion on history, maths and overall experience. This is the difference between well-informed, critical research and the policies and reports of the mainstream today. Because of this major difference investors are advised to hold gold and silver as we face unknown outcomes, with very few options that will allow us to protect ourselves before reality strikes.

News and Commentary

Gold slips as US data lifts dollar, boosts rate hike prospects (Reuters)

Fed’s Powell Has an Eye on Inflation as He Calls for Rate Hikes (Bloomberg)

Gold steadies as U.S. private-sector jobs data bolsters dollar (Reuters)

Trump to Withdraw U.S. From Climate Accord to Seek Better Deal (Bloomberg)

U.S. factory activity edges up; private payrolls surge (Reuters)

66-year chart of beer vs gold price may lead to (heavy) drinking (Mining.com)

Deutsche Bank Calculates The “Fair Value Of Gold” And The Answer Is…(ZeroHedge)

Hedge Funds Pile Into Gold At Fastest Pace Since 2007 (ZeroHedge)

Want to Know Where Gold Is Headed? Keep an Eye on the Japanese Yen (Bloomberg)

Perth Mint’s monthly gold, silver sales rise in May (Times of India)

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Below we excerpt some of the latest observations from BofA’s Michael Hartnett, who nearly a year ago first penned the “Icarus trade” concept – i.e., the final push in the US stock market to its all time highs –  and who has been expecting a “blow off top” to stocks, before it all comes crashing down. How far are we away from this “blow off top” target of 2,620 (at which point the US stock market cap as a % of GDP hits an all time high)? As of this moment, it is less than 200 points.

What is the catalyst for the last dash surge to end? “Icarus continues until Wall St. bubble (not Main St. recovery) forces Fed to tighten aggressively.”

As for the catalysts, BofA sees three: “Chinese credit crunch (note China corporate bond market down in 2017 – Chart 2); Italian political risk and spread widening (see Rome muni bonds vs. New York – Chart 3); stronger US wages (consensus tomorrow’s May AHE = 2.6%) needed to rein-in the QE monster and ease Fed’s growing panic at breakdown of Phillips Curve.“

More below:

* * *

Ain’t No Stopping Me Now: another “risk-on” week of flows…$13.7bn inflows to equities, $6.0bn inflows to bonds, $0.1bn inflows to gold.

Growth, Europe, EM winning: largest inflows to US growth funds in 24 weeks ($1.1bn); 10th consecutive week of inflows to Europe equities; 18th straight week of inflows to EM debt.

The Late Rotation & the Great Woe-tation: YTD inflows to stocks ($141bn) pacing bonds ($168bn); but no end to woe for active equity investors, i.e., big rotation from active ($58bn outflows YTD) to passive equity funds ($199bn inflows YTD) continues.

The Passive Bias & Beta of Private Clients: ETFs rising quickly as share of GWIM debt (9.6%) and equity holdings (11.4% – Chart 9); beta of BofAML GWIM top 10 stock holdings not yet dangerously high enough (0.9 today, albeit higher than 0.65-0.85 range that persisted 2008-2014 – Chart 10) to signal “Big Top”.

Tick-tock: BofAML Bull & Bear index stable at 7.1 as hedge funds trim futures exposure and pace of EM inflows eases; BB index needs to surpass 8 for sell-signal.

Icarus targets: SPX at 2822…bull market becomes largest ever; SPX at 2620…US stock market cap as % GDP hits all-time high (Chart 1);

“Asset Class Quilt” (Table 3) shows big 2017 returns normally seen in post-recession years (e.g. 2003 or 2009); we forecast big risk asset “overshoot”, best played via barbell of tech & gold/resources/banks.

Janet & Icarus: massive central bank liquidity supernova inciting Wall St. bull to flare higher, led by uber “growth” (EM internet stock returns annualizing 125%,) and uber “yield” in fixed income (US CCC HY bonds annualizing 18%)….   Icarus continues until Wall St. bubble (not Main St. recovery) forces Fed to tighten aggressively.

3 Grey Swans: Chinese credit crunch (note China corporate bond market down in 2017 – Chart 2); Italian political risk and spread widening (see Rome muni bonds vs. New York – Chart 3); stronger US wages (consensus tomorrow’s May AHE = 2.6%) needed to rein-in the QE monster and ease Fed’s growing panic at breakdown of Phillips Curve.

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As an ISIS-inspired insurgency rages in the country’s south, Philippines’ authorities are assuring the public that an attack on a luxury resort in Manila that left more than three dozen dead wasn’t an act of terrorism, but was, in fact, a robbery.

A gunman armed with a "baby armalite" rifle burst into the Resorts World Manila casino on Friday and started firing off shots and setting gaming tables alight on Friday, authorities said, before making his way to the back of the casino where he stole several million dollars' worth of gambling chips. Most of the dead suffocated on the thick smoke, according to Reuters. However, despite authorities assurances, the high death toll and brazen nature of the attack suggest that terrorism may have been the underlying motivation. US terrorism monitor the Site Intelligence Group said an Islamic State-linked Filipino operative claimed “lone wolf soldiers” of ISIS were responsible for the attack, according to the Guardian.

"All indications point to a criminal act by an apparently emotionally disturbed individual," Ernesto Abella, a spokesman for Duterte, told a news conference. "Although the perpetrator gave warning shots, there apparently was no indication that he wanted to do harm or shoot anyone."

The gunman killed himself in his hotel room after being shot and wounded by resort security, police and Resorts World management said. A second "person of interest" who was in the casino at the time was cooperating with the investigation, Reuters reported.

The national police chief, Ronald dela Rosa, said security footage showed the gunman going straight to the casino after ignoring a guard who tried to question him at the complex’s entrance. He stuffed a backpack with gambling chips, fired an assault rifle at TV screens and set gambling tables on fire by pouring gasoline on to them from a two-liter bottle, Dela Rosa said, according to The Guardian.

It was not clear how he smuggled the gasoline and rifle into the crowded casino. The bag of high-value gambling chips was found in a toilet. Dela Rosa described the gunman as white, about 6 ft. tall and English-speaking.

However, there’s no evidence linking the attack to fighting a fierce 10-day battle that has been raging in the city of Marawi, about 500 miles south of Manila. Last week, the Philippine president Rodrigo Duterte imposed martial law across the southern region of Mindanao, arguing it was necessary to root out the insurgents, Reuters reported.

In Marawi, the army has deployed helicopter gunships and artillery fire to try to dislodge the gunmen, but they have held a large section of the city, according to the Guardian. Security forces have been deployed to other cities in Mindanao province, concerned that the militants may attempt to launch attacks outside Marawi.

The clashes started after security forces tried to capture Isnilon Hapilon, an ISIS-endorsed Islamist militant leader who is the subject of a $5 million reward offered by the FBI.

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Four months after threatening he would take his immigration travel ban all the way to the Supreme Courty, Trump’s administration did just that on Thursday night when it asked SCOTUS to revive his plan to temporarily ban travelers from six Muslim-majority nations after it was blocked by lower courts that found it was discriminatory.

“We have asked the Supreme Court to hear this important case and are confident that President Trump’s executive order is well within his lawful authority to keep the nation safe and protect our communities from terrorism,” Justice Department spokeswoman Sarah Isgur Flores said in a statement.

The American Civil Liberties Union, one of the legal groups challenging the ban, tweeted in response: “We’ve beat this hateful ban and are ready to do it again.”

The administration filed emergency applications with the nine high court justices seeking to block two different lower court rulings that went against Trump’s March 6 order barring entry for people from Iran, Libya, Somalia, Sudan, Syria and Yemen for 90 days while the U.S. government implements stricter visa screening, Reuters reported. The move came after the Richmond, Virginia-based 4th U.S. Circuit Court of Appeals on May 25 upheld a Maryland judge’s ruling blocking the order. The administration also filed a separate appeal in that case.

Among other considerations, the nine supreme court justices are set to weigh whether Trump’s harsh election campaign rhetoric can be used as evidence that the order was intended to discriminate against Muslims. Previously, the government had argued that the court should not take into account Trump’s comments during the 2016 U.S. presidential race since he made them before he took office on Jan. 20. But the appeals court rejected that view, saying they shed light on the motivations behind Trump’s order.

The SCOTUS decision will also be a test of the ideological sway of Trump’s recent conservative bench appointee, Neil Gorsuch. At least five votes are needed on the nine-justice court in order to grant a stay. The court has a 5-4 conservative majority, with Justice Anthony Kennedy – a conservative who sometimes sides with the court’s four liberals – the frequent swing vote. If the government’s emergency requests are granted, the ban would go into effect immediately.

Some more details from Reuters:

The court first has to act on whether to grant the emergency applications, which could happen within a fortnight. Then, the justices will decide whether to hear the government’s full appeal. The Supreme Court is not required to hear the case but is likely to due to its importance and the fact that the request is being made by the U.S. government.

 

The Justice Department has asked the court to expedite the case so that the justices could hear it at the beginning of their next term, which starts in October. That means, if the court allows the ban to go into effect, the final decision would be issued long after the 90 days has elapsed.

 

In the court filings, Acting Solicitor General Jeff Wall highlighted the unprecedented nature of courts second-guessing the president on national security and immigration. “This order has been the subject of passionate political debate. But whatever one’s views, the precedent set by this case for the judiciary’s proper role in reviewing the president’s national-security and immigration authority will transcend this debate, this Order, and this constitutional moment,” he wrote.

During the campaign, Trump campaign called for a “total and complete shutdown of Muslims entering the United States.” His administration has argued that the travel ban is needed to prevent terrorism in the United States.

Federal courts in both Maryland and Hawaii issued rulings suspending key parts of the ban. The appeals court in Virginia upheld the Maryland ruling. A San Francisco-based appeals court is currently considering the Hawaii case. The administration is asking the Supreme Court to throw out the injunction imposed in both cases.

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