Month: June 2022

US futures advanced for the first time this week, as investors tentatively bought the dip and were cheered by a drop in oil prices. S&P 500 futures were 0.6% higher by 7:30 am in New York, while Nasdaq 100 futs gained 0.7%. Already light trading volumes are even lower, with UK markets shut for a long weekend holiday to mark Queen Elizabeth II’s Platinum Jubilee. Stocks slumped Wednesday after JPMorgan CEO Jamie Dimon’s warning to investors to prepare for an economic “hurricane”, reversing his cheerful comments from just one week earlier, and disagreeing with JPMorgan’s permabullish strategist, Marko Kolanovic, who expects stocks to rebound by the end of the year and the US to avoid recession. Treasuries held losses, with 10-year yields above 2.90%. The dollar slipped while the yen held near 130 per dollar after its recent decline on the prospect of widening interest rate differentials with the US.

Oil dropped on a rehashed report – this time from the FT which echoed an almost verbatim report from the WSJ one day earlier – that Saudi Arabia could pump more crude should Russian output drop substantially due to increasing sanctions over its invasion of Ukraine. It could, of course, but it won’t for various reasons we will discuss in a post shortly. In any case, OPEC+ meeting members are set to meet Thursday for their monthly gathering where no break up of OPEC+ is going to happen.

It seems that #OPEC+ will continue its current policy of monthly increases until September, after which, depending on the market conditions, production limits will be lifted.
In any case, we expect to see another lackluster meeting, as in previous months./3 #OOTT

— Reza Zandi (@R_Zandi) June 2, 2022

Oil’s decline helped to steady sentiment after US manufacturing activity and job openings data Wednesday fueled concern the Federal Reserve will need to get more restrictive to slow runaway price gains.

“There’s been a large correction in some stocks; those corrections led to valuations that are way more attractive that can benefit medium-to long-term investors, especially in Europe and the emerging-markets space,” Vanguard Asset Services Ltd. Investment Strategist Giulio Renzi Ricci said on Bloomberg TV, summarizing prevailing sentiment among the BTFD crowd.

In premarket trading, bank stocks are higher as the US 10-year Treasury yield rises for a third straight day to about 2.91%. Elsewhere, Repare Therapeutics will be in focus as shares soared 20% in postmarket after it announced a worldwide license and collaboration agreement with Roche for Camonsertib, while GameStop reported mixed results in the first quarter as it shifts to cryptocurrencies and non-fungible tokens. In corporate news, tech-bloated hedge fund Tiger Global Management’s losses for the year reached 51.8% amid turbulent markets. Here are some other notable premarket movers:

• Hewlett Packard Enterprise (HPE US) drops as much as 8.1% in US premarket trading on Thursday after the computer hardware and storage company lowered its adjusted earnings per share forecast for the full year.
• Chewy (CHWY US) shares are up 16% in pre- market trading after the online pet products retailer reported quarterly adjusted Ebitda and net sales that topped analysts’ expectations. Jefferies called the results “impressive.”
• NetApp Inc. (NTAP US) shares gained in extended trading Wednesday. Analysts remain cautious about the outlook for the cloud business after the storage hardware and software company reported adjusted fourth-quarter earnings that were higher than analysts’ expectations.
• C3.ai Inc. (AI US) tumbled 22% postmarket after the AI software company forecast revenue for fiscal 2023 that fell short of estimates. Piper Sandler’s analyst Arvind Ramnani cut his recommendation to neutral from overweight.
• Veeva (VEEV US)shares advanced 4.2% in postmarket trading Wednesday as it lifted its revenue forecast for the full year.

Investors have been on edge over when (not whether) the US central bank’s tighter policies will induce a recession. A chorus of Fed officials has fallen behind calls to keep hiking to counter price pressures. Mary Daly of the San Francisco Fed and her more hawkish colleague James Bullard of St. Louis both backed a plan to raise rates by 50 basis points this month, while Richmond’s Thomas Barkin said it made “perfect sense” to tighten policy.

“We do see the rise in probability of a recession in the second half of this year, potentially persisting into 2023 as the Fed continues to battle inflation,” Tracie McMillion, Wells Fargo Investment Institute head of global asset allocation strategy, said on Bloomberg Television.

In Europe, the Stoxx 600 Index advanced amid low session volumes with the London market closed in commemoration of the Queen’s Jubilee festivities. Here are some of the biggest European movers today:

• Remy Cointreau shares advance as much as 5.6% after the spirits company reported FY earnings that Morgan Stanley called “reassuring.” Peer Pernod Ricard also climb, as much as 3.1%.
• Calliditas Therapeutics rise as much as 16% after Pareto Securities initiated with a buy recommendation, calling the Swedish biotechnology firm “highly undervalued” and a potential acquisition target.
• European energy stocks underperformed as oil slipped following a report that Saudi Arabia is ready to pump more should Russian output decline substantially.

Earlier in the session, Asian markets were dragged lower by the technology sector, as strong US economic data bolstered the case for aggressive interest-rate hikes by the Federal Reserve. The MSCI Asia Pacific Index dropped as much as 1.2% as most sectors fell, with tech shares including TSMC and Alibaba among the biggest drags. South Korea led declines in the region as traders returned from a holiday, while China stocks eked out gains after authorities urged banks to set up a 800 billion yuan ($120 billion) line of credit for infrastructure projects.  An unexpected advance in US manufacturing activity and still-high job openings added to investor concerns about monetary tightening in the country and its impact on global growth. James Bullard of the St. Louis Fed urged policy makers to raise interest rates to 3.5% this year to try and curb inflation. The US policy outlook adds to pressure on Asian firms, whose earnings prospects have dimmed on higher costs and China’s economic slowdown. The MSCI regional benchmark is down 13% this year, largely tracking the S&P 500’s 14% loss.

“We do think near term it’s likely to be bumpy,” Sunil Koul, Apac equity strategist at Goldman Sachs, told Bloomberg Television. “This combination of quantitative tightening, raising rates, combined with some growth risks we are seeing and a stronger dollar is what is causing pain in the markets.”

Japanese stocks fell as the persistent risk of global inflation and the prospects of tighter monetary policy in the US damped sentiment.  The Topix closed 0.6% lower at 1,926.39 at the 3pm close in Tokyo, while the Nikkei 225 declined 0.2% to 27,413.88. Sony Group contributed the most to the Topix’s decline, decreasing 3.2%. Out of 2,171 shares in the index, 675 rose and 1,402 fell, while 94 were unchanged. “There are still worries over inflation in the US and rate hikes, so it will be quite hard for stocks to enter an upward trend,” said Hitoshi Asaoka, a senior strategist at Asset Management One. 

Stocks in India overcame concerns over hawkish central bank moves to snap two days of declines as a drop in oil prices and attractive valuations buoyed investors. The S&P BSE Sensex rose 0.8% to 55,818.11 in Mumbai, while the NSE Nifty 50 Index advanced 0.6%. Reliance Industries provided the biggest boost to the key gauges, surging 3.5%, followed by software majors Infosys and Tata Consultancy Services.  Of the 30 member stocks on the Sensex, 20 rose, while 10 declined. All but four of the 19 sectoral indexes compiled by BSE Ltd., rose, led by a measure of energy companies. Stocks in Asia were mostly lower after strong US economic data bolstered the case for aggressive interest-rate hikes by the Federal Reserve. However, the trend soon changed as investors assessed attractive valuations, while crude oil slid to $113 a barrel before the monthly OPEC+ meeting later today. “Nifty valuations are now at a sweet spot where they offer good potential returns,” DSP Mutual Fund said in note. About half of the NSE Nifty 500 Index’s members have corrected more than 30%, which creates selective opportunities, the asset manager said.

In Australia, the S&P/ASX 200 index fell 0.8% to close at 7,175.90, following US shares lower after Fed officials reinforced a hawkish stance and JPMorgan’s Jamie Dimon cautioned on the economy. Megaport led a drop in technology shares. Woodside was the top performer after a block trade. In New Zealand, the S&P/NZX 50 index fell 0.2% to 11,349.54.

In FX, the Bloomberg Dollar spot Index fell as the greenback traded weaker against all of its Group-of-10 peers. The euro snapped two days of losses and approached $1.07. One-week options in euro-dollar now capture the next ECB meeting, and implied volatility in the euro heads for its strongest close since mid-May. The pound retraced about half of Wednesday’s loss, with UK markets shut for a holiday. Australia’s bonds dropped amid speculation that the Reserve Bank of Australia will follow its Canadian counterpart and keep raising rates aggressively. The yen fell to a three-week low before reversing losses.

US Treasuries were flat in early US trading as equity futures rose for the first time this week. The 10Y Yield is trading unch at 2.91%, outperforming most euro-zone counterparts, with 2- to 5-year yields cheaper by 1bp-2bp with 10- to 30-year yields little changed, flattening 5s30s by ~2bp. IG dollar issuance slate empty so far; nine borrowers priced $14.6b Wednesday, largest daily total since May 17. European bonds posted modest losses after a steady start.

As noted above, crude oil slid on a report that Saudi Arabia is ready to pump more oil if Russian output declines. OPEC+ is scheduled to meet to discuss supply policy, where it is not expected to surprise anyone. At last check, Brent was trading just above $113, and although the benchmark lifted around $1/bbl off of its overnight troughs, this has marginally pulled back.

Looking at the day ahead, the economic data slate includes May Challenger job cuts (7:30am), ADP employment change (8:15am), 1Q final nonfarm productivity and initial jobless claims (8:30am) and April factory orders (10am). Fed speakers slated include Logan (12pm) and Mester (1pm).

Market Snapshot

• S&P 500 futures up 0.5%
• STOXX Europe 600 up 0.5%
• MXAP down 0.7% to 167.84
• MXAPJ down 0.8% to 552.13
• Nikkei down 0.2% to 27,413.88
• Topix down 0.6% to 1,926.39
• Hang Seng Index down 1.0% to 21,082.13
• Shanghai Composite up 0.4% to 3,195.46
• Sensex up 0.8% to 55,825.08
• Australia S&P/ASX 200 down 0.8% to 7,175.94
• Kospi down 1.0% to 2,658.99
• German 10Y yield up 2bps to 1.21%
• Euro up 0.4% to $1.0689
• Brent futures down 2.3% to $113.65/bbl
• Gold spot up 0.3% to $1,851.88
• U.S. Dollar Index down 0.3% to 102.23

Top Overnight News

• President Joe Biden is likely to visit Saudi Arabia later this month as part of an international trip for NATO and Group of Seven meetings, according to people familiar with the matter, with record high US gas prices weighing on his party’s political prospects
• The ECB must pare back stimulus as inflation is too strong and too broad, Governing Council member Francois Villeroy de Galhau said
• EU efforts to approve a partial ban on Russian oil imports hit an obstacle after Hungary raised new or already rejected demands, further slowing a push to clinch a deal, according to people familiar with the negotiations
• The pound is coming off the first positive month of 2022, but the mood in the market is as bleak as ever. Scorching inflation, an economy teetering on the edge of recession and a scandal-prone government are feeding into a view that the UK currency is vulnerable
• After years of pushing exports to China and building up energy links to Russia, Germany’s economy faces a poisonous cocktail of risks. Its heavy reliance on manufacturing makes it more vulnerable than European peers to war-related disruptions in Russian energy supplies and bottlenecks in trade. The upshot is risk of contraction and even higher prices squeezing unsettled consumers
• Beijing is turning to state-owned policy banks once again to help rescue an economy under strain, ordering them to provide 800 billion yuan ($120 billion) in funding for infrastructure projects
• Chinese officials have vowed to carry out a slew of government policies to stimulate growth following Premier Li Keqiang’s recent call to avoid a Covid- fueled economic contraction this quarter

A more detailed look at global markets courtesy of Newsquawk

Asia-Pac stocks followed suit to the subdued performance seen in global peers after the recent upside in yields and hawkish central bank rhetoric. ASX 200 was dragged lower by underperformance in tech and weakness in financials, with sentiment also not helped by frictions with China. Nikkei 225 lacked firm direction with automakers indecisive following sharp declines in their US sales last month. Hang Seng and Shanghai Comp traded mixed ahead of the Dragon Boast Festival tomorrow and with Hong Kong suffering from notable losses in property names and tech, while losses in the mainland were pared amid COVID-related optimism and after the latest support efforts in which Beijing announced CNY 800bln of increased credit quotas for state-owned policy banks to fund the construction of infrastructure projects.

Top Asian News

• China’s Ambassador to Australia said that Beijing is prepared to talk with Australia without preconditions but added that trade sanctions on Australia will not be removed until there is an improvement in the political relationship, according to AFR.
• China’s Global Times tweeted that Chinese Coast Guard vessels patrolled the territorial waters off the Diaoyu Islands (Senkaku Islands) on Thursday, which is a disputed territory with Japan.
• Japan’s Chief Cabinet Secretary Matsuno confirmed that the government wants to increase the average minimum wage to JPY 1000, according to Reuters.
• China’s Commerce Ministry, on the US considering adding additional firms to the blacklist, says they will adopt measures to protect Chinese firms.
• A group of nations are to make a request for an international labour organisation mission to China to probe alleged violation in Xinjiang at a meeting today, according to Reuters sources.
• Chinese Officials Vow to Carry Out Plans for Economic Stimulus
• Toshiba Reveals Buyout Bids as Privatization Chances Rise
• Hong Kong Quarantine Backtrack Stokes Fears of Covid Zero Return

European bourses are posting modest gains, Euro Stoxx 50 +0.6%, though volumes are lighter given UK Spring Bank Holiday. Stateside, futures are firmer across the board, ES +0.5%, with action similarly contained ahead of a busy PM docket featuring ADP and Fed’s Mester.

Top European News

• Deutsche Bank CEO’s Fixer Hoops Takes Another Leap as DWS Chief
• Ukraine Latest: Russia Ready to Settle Eurobond Payment Claims
• Euro Options Into ECB Meeting Are Now Most Overpriced in a Month
• Swiss Exchange Investigates Swissquote for Disclosure Delay

FX

• Pound pounces on Dollar downturn to reclaim 1.2500 handle as UK prepares for Platinum Jubilee celebrations.
• DXY sub-102.500 amidst broad bounce in index components led by Franc initially; USD/CHF reverses around 0.9600 axis in wake of Swiss inflation data showing bigger overshoot vs SNB targets.
• Euro eyes 1.0700, but capped by hefty option expiry interest from round number up to 1.0740.
• Kiwi and Aussie boosted by recovery in risk sentiment, but Loonie lags as WTI sags on reports of Saudi Arabia standing ready to cover any shortfall in Russian oil output; NZD/USD probes 0.6500, AUD/USD approaches 0.7200 and Usd/Cad 1.2650+
• Yen retrieves some losses as Greenback retreats and US Treasury yields slip from peaks ahead of busy pm agenda, USD/JPY circa 129.70 compared to 130.24 overnight peak.

Fixed Income

• Bunds and Eurozone peers extend recent losing streak to set deeper cycle lows in futures/high yields, without Liffe support and despite steady US Treasuries.
• 10 year German benchmark down to 150.29 and 1.21%+ in cash terms.
• Multi-tranche Spanish and French issuance draw mixed covers irrespective of concession.
• T-note holds around par within 118-30+/18+ range awaiting slew of US data and more Fed speakers.

Commodities

• WTI and Brent remain pressured after overnight FT reports re. Saudi being prepared to pump more oil if Russian output declines.
• Though, the benchmarks have lifted around USD 1/bbl off of their respective overnight troughs at best; however, this has marginally pulled back.
• Reminder, the JMMC commences from 13:00BST/08:00ET with the OPEC+ event following ~30-minutes later.
• US Private Energy Inventory Data (bbls): Crude -1.2mln (exp. -1.4mln), Gasoline -0.3mln (exp. +0.5mln), Distillate +0.9mln (exp. +1.0mln), Cushing +0.2mln.
• Norway’s Hammerfest liquefied natural gas plant has restarted LNG production following a fire 20 months ago, according to Equinor (EQNR NO).
• Spot gold is bid but has failed to gain much additional traction after breaching USD 1850/oz and the 10-DMA at USD 1851.3/oz; base metals are bid ahead of the long Chinese weekend for Dragon Boat Festival.

US Event Calendar

• 8:15am: U.S. ADP Employment Change, May, est. 300k, prior 247k
• 8:30am: U.S. Initial Jobless Claims, May 28, est. 210k, prior 210k; Continuing Claims, May 21, est. 1340k, prior 1346k
• 8:30am: U.S. Nonfarm Productivity, 1Q F, est. -7.5%, prior -7.5%
• 10am: U.S. Durable Goods Orders, April F, est. 0.4%, prior 0.4%
• 10am: U.S. Factory Orders, April, est. 0.6%, prior 2.2%, revised prior 1.8%; -Less Transportation, April F, est. 0.3%, prior 0.3%
• 10am: U.S. Cap Goods Orders Nondef Ex Air, April F, est. 0.4%, prior 0.3%
• 10am: U.S. Cap Goods Ship Nondef Ex Air, April F, no est., prior 0.8%

DB’s Tim Wessel concludes the overnight wrap

Filling in while the UK is on holiday, I hope my use of “Z’s” and neglect of “U’s” does not prove jarring to regular readers. The start of the month was jarring to many asset holders, as bond and equities both sold off with more evidence that labor markets are historically tight while inflation remains well above target. Meanwhile, the Fed’s beige book provided anecdotes of slowing growth in some districts, while a majority of districts had respondents expecting growth to slow in the near future. St. Louis Fed President and Hawk Emeritus James Bullard joined San Francisco Fed President to echo previous Fed communications that policy would expeditiously get to neutral, while the CEO of J.P. Morgan gave the gloomy growth narrative his imprimatur. The mix drove policy pricing higher and all but one sector in the S&P lower. North of the border, the Bank of Canada hiked rates another +50bps, layering hawkish guidance into the statement such as “the risk of elevated inflation becoming entrenched has risen.” While in Europe, ECB Governing Council member Holzmann sang the virtues of a +50bp hike (in line with our Europe team’s updated ECB call, found here).

Stepping through the developments. The rate selloff began in earnest following the mid-morning data dump in the US, which included May ISM manufacturing and April JOLTS data. The ISM print surprised to the upside at 56.1 versus expectations of 54.5, while prices paid printed at 82.2 versus expectations of 81.0. Meanwhile, the JOLTS data across quits, hiring, and opening painted an historically tight labor market picture, with the vacancy yield (hires-per-job opening) hitting a record low. The March revisions also leaned tighter. The data re-emphasized that policy would need to get much tighter to do the work of actually bringing inflation down despite bubbling fears that the growth outlook was on shaky footing. The Treasury curve sold off and flattened, with 2yr yields gaining +8.5bps and the 10yr yield increasing +6.2bps, with real yields gaining +6.1bps in line with the tighter expected policy path.

Two of the more germane policy path questions – how to size the September hike and what is terminal – moved tighter, in turn. The odds of a +50bp September move reached a month-high 65%, while terminal pricing moved back north of 3.1%. Presidents Bullard and Daly, typically taking opposing corners in the ideological ring, both re-emphasized the need to tighten policy expeditiously to neutral in light of runaway inflation. While policymakers debate where neutral is and what to do once there, support to get there fast is robust; it is best to heed their harmonious message the next time growth fears or falling risk assets drive policy pricing lower. Balance sheet policy will augment tightening as June marks the start of the Fed’s balance sheet normalization process, or QT. For more details on what that entails, I published a playbook on QT in conjunction with US rates and economics colleagues, found here.

Steeper policy paths gripped north of the border and across the Atlantic as well. On the latter, Austrian central bank governor Holzmann said that “a 50 basis-point rise would send the necessary clear signal that the ECB is serious about fighting inflation”, leading OIS rates to price in +38bps by the July meeting. Longer-dated sovereign yields sold off in concert, with 10yr bunds (+6.4bps), OATs (+6.6bps) and BTPs (+8.5bps) hitting fresh multi-year highs. The spread of 10yr Italian yields over bunds also moved back above 200bps. The Bank of Canada hiked rates +50bps as expected, though weaved in restrictive guidance that gave the meeting a hawkish hue. Namely, the central bank warned they could be “more forceful” if needed, updating their statement to note that the economy was “clearly operating in excess demand”, which risked elevated inflation becoming yet more entrenched, as mentioned.

The daily stew got a dose of anecdotal growth fears with the release of the beige book and comments from the CEO of J.P. Morgan warning that an economic “hurricane” was on the horizon. The beige book had a majority of Fed districts with contacts reporting growth or recession fears. The impact was to bring 10yr yields around 5bps below their intraday highs. Those yields are less than a basis point higher from those levels as we go to press this morning.

The mixture drove equities lower on both sides of the Atlantic. The S&P 500 retreated -0.75% to start the month, with all but one sector in the red. The NASDAQ was in line, falling -0.72%, though mega cap growth FANG+ felt the impact of higher discount rates, falling -0.92%. In Europe, stocks underperformed as the continent countenances yet tighter monetary policy, with the STOXX 600 falling -1.04%.

Energy was the sole gainer in the S&P, though that outperformance may be short lived as the FT reported overnight that Saudi Arabia was primed to pump more oil onto the market should Russian exports be crimped by sanctions. Brent crude futures are -1.67% lower ahead of the OPEC+ meeting today.

Asian equity markets are trading lower following yesterday’s selloff. Across the region, the Hang Seng (-1.72%) is the largest underperformer after the local government decided to revive its toughest Covid-Zero measures as Covid variants flare. US stock futures are swinging between gains and losses with contracts on the S&P 500 (+0.04%), NASDAQ 100 (+0.07%) virtually unchanged.

Elsewhere, early morning data showed that Australia’s April trade surplus swelled to A$10.5 bn (v/s A$9.0 bn) from the A$9.7 bn.

In terms of yesterday’s other data, German retail sales fell by a larger-than-expected -5.4% (vs. -0.5% expected). Otherwise, the final manufacturing PMIs for May only diverged slightly from the flash readings. The Euro Area manufacturing PMI was revised up to 54.6 (vs. flash 54.4), but the US manufacturing PMI was revised down to 57.0 (vs. flash 57.5).

To the day ahead now, and data releases include the Euro Area’s PPI for April, as well as the US weekly initial jobless claims, April’s factory orders, and the ADP’s report of private payrolls for May. Central bank speakers include the ECB’s Villeroy and Hernandez de Cos, along with the Fed’s Mester.

Authored by Patricia Adams and Lawrence Solomon via The Epoch Times,

The global elites left Davos last week after grappling with solutions to the profound crises facing the world. They left as they arrived, unaware that the crises are entirely of their own making.

Take energy, where shortages have led to the highest gasoline prices in the U.S. and UK history and to fuel poverty affecting millions of people. If not for the specter of climate change—for decades one of the globalists’ central preoccupations—the world’s energy situation would be radically different.

Canada’s tar sands wouldn’t have been demonized and the country would have built the Keystone XL Pipeline and other pipelines to transport ever greater quantities of energy across the continent and beyond.

Liquefied natural gas facilities on the Atlantic and Pacific coasts of Asia, the Americas, and Europe would have been built to ship and receive plentiful natural gas.

“Net Zero” policies wouldn’t be crippling the financing of new fossil fuel facilities. Carbon taxes wouldn’t be making energy ever more expensive.

In the same way that the United States quickly became the world’s largest oil and gas exporter once the Trump administration scaled back crippling climate-related regulation, Europe would have been awash in energy had bans on fracking and offshore fossil-fuel development been lifted to allow development of its immense oil and gas reserves. Instead of fuel poverty, Europe would be experiencing fuel plenty.

The globalists pushing climate change policies tell us there is no choice if the planet is to be saved from catastrophe many decades if not centuries from now. What they don’t tell us is that their prophecies of doom are based on computer climate models, all of which have proven false to date.

Not a single claim—whether that the Arctic ice caps would melt or polar bear populations would decline or tornadoes would increase—have materialized. Reasonable people can dispute whether the prophecies of doom will materialize in the future. Reasonable people cannot dispute that the globalists’ past decisions to override the free market have created today’s energy crisis.

Despite the globalists’ climate change policies, carbon dioxide in the atmosphere—now at 400 parts per million—have reached record levels. This has been a boon for the planet because CO2—also known as nature’s fertilizer—has produced a bounty of bumper crops. Australia reports record wheat, barley, and canola crops and near-record sorghum crop. India, the world’s second-largest producer of wheat, expects record exports this year. Brazil expects record corn. Russia, with another record crop, will be the world’s largest wheat exporter.

A combine harvests wheat in a field near the village of Suvorovskaya in Stavropol region, Russia, on July 17, 2021. (Eduard Korniyenko/Reuters)

Nevertheless, starvation is on the increase. The United Nations warns that we’re in the midst of a “global food crisis” in which “44 million people in 38 countries are at emergency levels of hunger.” Here, too, the responsibility rests with globalist policies that make food unaffordable.

A dominant contributor to the famine is the supply chain disruptions caused by the globalists’ decision to abandon traditional responses to pandemics in favor of an experimental lockdown of much of the world’s economy. The chaos and costs from this decision by governments to apply their COVID-19 lockdown theory upended the world’s food distribution systems and soared the cost of food. The inflation created when governments printed money to support industries and individuals sidelined during the lockdowns then made food prices even more prohibitive.

Exacerbating the supply chain disruptions was the globalists’ decision to perpetuate the Russia-Ukraine war by providing Ukraine with billions in armaments, a departure from the past norm of pressuring combatants to resolve their differences through negotiations. As a result, agricultural production in Ukraine, once known as the breadbasket of Europe, collapsed, with wheat production falling by 44 percent and corn by 39 percent.

Reasonable people can dispute whether Western governments were wise to implement and fund the lockdowns, or to perpetuate the Russia-Ukraine war, but they cannot dispute that their actions spurred the increase in famine that the world is experiencing today.

The globalists may believe that the world needs their new world order. But they also exemplify the adage that the road to hell is paved with good intentions.

After years of being critical of “ESG” investing and how appending the label to literally any company immediately caused a misallocation of capital in its direction, it looks like the buzzword investing scam is starting to unravel in real time. 

First, the Securities and Exchange Commission said this month that it was planning on cracking down on misleading ESG claims. New rules “would specify disclosures to be made by investment funds when they mention terms like ‘ESG’, ‘low-carbon’, or ‘sustainable’ in their names,” Bloomberg reported last week. 

Regulators are also looking at “ESG funds marketing and how environmental, social and governance is incorporated into investing along with these funds voting at companies’ annual meetings,” the report says.

It was then reported on Wednesday that ESG equity funds had their worst month of outflows on record.

Recall, we first noted back in September 2021 that the SEC was on the case looking at companies that claimed to be ESG. 

As the pace of growth in terms of assets dedicated to “ESG” funds started to accelerate, we also started to notice that the assets being stuffed into these ESG funds didn’t really look all that different from a typical equity fund. Just take a look at a list of the most popular holdings from 2020:

Now, take a look at the top holdings for ESGG, one of the top ESG-focused ETFs.

Stocked with blue-chips, these funds don’t exactly scream environmentally friendly and socially responsible. One industry insider confirmed as much when he shared a new term: “green washing”.

Since then, we have run at least a half dozen reports about abuses in the ESG space:

• The Fraud That Is ESG Strikes Again: Six Of Top 10 ESG Funds Underperform The S&P500
• Behold The “Green” Scam: Here Are The Most Popular ESG Fund Holdings
• Nation’s Largest ESG Fund Has No Direct Renewable Holdings
• Top Carbon-Credit-Seller Launches Internal Probe After Selling “Worthless” Offsets To JPMorgan, Disney
• The ESG Threat
• ESG Investing – The Great Wall Street Money Heist
• The Gigantic Holes In Anti-Oil ESG Activism
• More ESG Fraud: BofA Finds That Tech Is One Of The Dirtiest Industries

Authored by Michael Snyder via TheMostImportantNews.com,

All of a sudden, just about everyone is upset about inflation.  It would have been nice if everyone would have been this upset back when our leaders were making the exceedingly foolish decisions that resulted in this crisis.  In May 2012, the federal government was 15 trillion dollars in debt.  Now we are 30 trillion dollars in debt, but our politicians continue to spend money as if tomorrow will never come.  Meanwhile, the Federal Reserve has pumped trillions of dollars that they created out of thin air into the financial system in recent years.  For a very long time, I passionately denounced what our leaders were doing, because I knew what would happen.  Now a day of reckoning has arrived, and millions upon millions of Americans are absolutely desperate for things to return to normal. 

Unfortunately, that simply is not going to happen.

In May 2020, the average price of a gallon of gasoline in the United States was less than two dollars.

Today, the average price of a gallon of gasoline in the United States reached a brand new record high of $4.62, and we are being warned that it could soon go to “$5 a gallon or more”…

The national average for unleaded gas hit another new high of $4.62 per gallon Tuesday, according to AAA data. Prices are up more than 50% compared with last year.

Analysts say gasoline prices usually peak by mid-May, but this year prices at the pump could continue to rise into July and reach about $5 a gallon or more.

Most of the time, the vast majority of the population doesn’t pay much attention to economics.

But this is where the rubber meets the road, and two recent polls show very clearly that Americans are becoming increasingly frustrated…

An NBC News poll released earlier this month found that 33 percent of Americans approve of Biden’s handling of the economy, while 23 percent approve of his handling of the cost of living.

A Washington Post-ABC News poll in early May found that more than 9 in 10 Americans are concerned, at a minimum, about the rate of inflation, which has been at a 40-year high for months. That included 44 percent who say they are “upset” about the problem.

In addition, Gallup’s Economic Confidence Index has now fallen to the lowest reading that we have seen since the end of the Great Recession…

Gallup’s Economic Confidence Index measured -45 in May, down from -39 in each of the previous two months. It is the lowest reading in Gallup’s trend during the coronavirus pandemic, and likely the lowest confidence has been since the tail end of the Great Recession in early 2009.

When things go bad, who are people going to blame?

More than anyone else, people are going to blame the guy in the White House.

And right now the Biden administration is absolutely desperate “to contain the political damage caused by inflation”…

The White House launched a new push Tuesday to contain the political damage caused by inflation after President Biden complained for weeks to aides that his administration was not doing enough to publicly explain the fastest price increases in roughly four decades.

Aiming to demonstrate to the public that it is responding to its concerns, Biden met with Federal Reserve Chair Jerome H. Powell in the Oval Office, wrote an op-ed in the Wall Street Journal about inflation and sent top aides across major networks to push the administration’s economic message.

What is Biden’s “economic message” exactly?

I have been sitting here pondering that question, and I honestly cannot answer it.

Every day, the story seems to change.  A while back, Biden promised to do all that he could to lower gasoline prices, and he foolishly released a million barrels from the Strategic Petroleum Reserve.

That didn’t work.

So what now?

One insider told Politico that high gasoline prices are “a really difficult issue to message around”, because “you can’t deny the reality”…

The White House’s focus on gas prices is bred from two sobering political conclusions top officials have made. The first is that they have little control over the problem. The second is that as prices rise at the pump, so do Democrats’ odds of a midterm wipeout — especially as the average U.S. gallon of gas hits fresh record highs.

“There really isn’t one silver bullet,” said one person familiar with the discussions. “It’s a really difficult issue to message around when you can’t deny the reality.”

If Joe Biden asked me what he should do in order to reduce gasoline prices, the first thing I would say would be to stop doing things that are counterproductive.  The following comes from a recent editorial by Marc A. Thiessen…

If the Biden administration cared about high gas prices, they would be doing everything in their power to increase domestic production. After a federal judge invalidated an offshore oil and gas lease sale in January, the administration chose not to appeal and has since canceled three transactions in the Gulf of Mexico and off the coast of Alaska — taking millions of acres off the auction block. The Post called the move “a victory for climate activists intent on curbing U.S. fossil fuel leasing,” which “effectively ends the possibility of the federal government holding a lease sale in coastal waters this year.” Worse, the administration is about to let the nationwide offshore drilling program expire next month without a new plan in place.

Moving forward, we need to remove mountains of regulations that have made it extremely difficult to build and operate new refineries in the United States.

And we need far more exploration and far more drilling as soon as possible.

Of course the truth is that this isn’t just a U.S. problem.

Energy prices are out of control all over the world, and they are actually much higher in Europe than they are here.

In fact, soaring energy prices are a big reason why inflation in the European Union just hit a brand new record high…

Following Germany’s post-Weimar record high inflation print, the European Union’s consumer price inflation data this morning surged to a record high at +8.1% YoY (notably hotter than the +7.8% YoY expected).

Most Americans don’t realize this, but Europe is actually much closer to a full-blown economic meltdown than we are.

I expect the euro to fall below parity with the dollar in the not too distant future.

And I expect a nightmarish energy crunch in Europe as supplies from Russia are restricted or cut off completely.  Unless something changes, next winter is going to be a really challenging time for many European nations.

We have entered the worst energy crisis in modern history, but what we have experienced so far is just the beginning.

Much worse is ahead, and the American people will become increasingly frustrated as prices just keep going higher and higher.

*  *  *

It is finally here! Michael’s new book entitled “7 Year Apocalypse” is now available in paperback and for the Kindle on Amazon.

After 70 years on the throne, the British public considers Queen Elizabeth II to be the best of the Royal bunch, according to a new poll from Ipsos.

45 percent of respondents said that she was their favorite member of the family. The second favorite was Kate, the Duchess of Cambridge, who was named by 34 percent of respondents, followed by William, the Duke of Cambridge and likely future King, with 31 percent.

It may come as no surprise that Prince Andrew, who was embroiled in the Jeffrey Epstein sex scandal, followed in last place, with a lowly 2 percent of mentions.

As Statista’s Anna Fleck shows in the infographic below, Prince Harry and his wife Meghan, the Duchess of Sussex, both fell down the rankings since March 2021, losing 12 percentage points and 5 percentage points, respectively.

You will find more infographics at Statista

The same survey found that only 22 percent of Brits said abolishing the monarchy would be an improvement, versus 46 percent who believed that getting rid of the royal traditions would be worse on the whole for Britain in the future. Older people who voted Tory in the 2019 election were more likely than other groups to be against abolishment, at 68 percent, while the biggest group that was pro abolition was the 18-34 year olds, at 31 percent.

Brits have seemingly become more interested in the Royals as time goes by, with 56 percent of people saying they were interested in news about the British Royal Family in February 2022, versus 51 percent in March 2021, and 45 in March 2018.

Authored by Tim Hakki via Decrypt.co,

A new proposal would give England’s central bank regulatory oversight over stablecoin issuers should they pose a risk to financial stability…

The Bank of England yesterday announced it would intervene to direct and oversee collapsing stablecoins should the British central bank decide that a stablecoin issuer “has reached systemic scale fail [sic].” 

The news came via a document prepared by the HM Treasury in response to a cryptocurrency consultation that began in January 2021 and concluded in April this year. 

The British government proposes to amend the UK’s Financial Market Infrastructure Special Administration Regime to bring crypto within the jurisdiction of the British central bank while giving the institution the reins in the event of a collapsing stablecoin.

One proposed amendment also includes broadening the legal definition of a “payment system” to include crypto, providing the central bank with regulatory powers under Part 5 of the 2009 Banking Act. 

The government clarified that the central bank will only step in during “systemic” collapses, which it defines as any “deficiencies in [a system’s] design or disruption to its operation may threaten the stability of the UK financial system or have significant consequences for businesses or other interests.”

The exact powers given to the central bank under the amended Special Administration Regime are largely unclear, though the document mentions “direction” and “oversight” and provides an example:

“[The Bank of England] must approve the administrator’s proposals from the outset (and on a continuous basis) and has powers to direct the administrator to take or refrain from taking specified actions.”

The central bank will be required to consult the Financial Conduct Authority (FCA) before requesting a special administration order. 

The UK and Crypto 

Like the United States, the British government has so far taken a largely hands-off approach to cryptocurrencies, but the market’s undeniable growth since the 2021 bull run has gradually introduced the topic of regulation into Britain’s political conversation. 

In April 2021, The Bank of England and HM Treasury launched a CBDC task force to explore the prospect of a central bank-issued digital currency (CBDC). A CBDC is essentially a state-issued stablecoin, so in the Bank of England’s case, the CBDC would be a digital sterling. 

Around 100 countries are currently exploring CBDCs, according to Kristalina Georgieva, managing director at the IMF.

In April 2022, the British government also announced plans to become a “crypto asset technology hub.” 

So far, Westminster has taken baby steps to this end, but has confirmed that stablecoins will be “brought within regulation” so as to have them used “in the UK as a recognized form of payment.” 

The government will issue an NFT this summer in collaboration with the Royal Mint too. 

Last month Sarah Pritchard, the executive director of FCA told Bloomberg that British crypto regulations will need to take into account Terra’s historic stablecoin collapse. 

“Innovation lasts if it works well, and clearly, we’ve seen the consequences and some of the issues that can arise,” she said.

Business cycles and skyscraper construction usually correlate. The construction of tall buildings tends to begin during economic booms and is finished or stopped during bust phases. 

The latest example is Saudi Arabia, planning to build a megacity with the world’s largest buildings in an unpopulated part of the country, according to Bloomberg, citing people familiar with the matter. 

Sources say Saudi Crown Prince and de facto ruler Mohammed bin Salman is the architect behind the proposed half-trillion-dollar megacity development with twin skyscrapers towering 1,640 feet that extend horizontally for tens of miles. The skyscrapers would begin on the Red Sea coast and continue into the desert. The plan is to fill the buildings with residential, retail, and office space.

First announced in 2017, Neom is Prince Mohammed’s dream of transforming the Saudi economy from primarily fossil fuel to a high-tech hub, attracting foreign investment and talent to spark a new technological innovation wave. 

Neom will be a futuristic, sustainable community joined together by The Line, a smart linear city without cars, joined by underground hyper-speed rail systems. 

“The Line is an out-of-the-box idea. What we will present when we are ready to will be very well received, and will be viewed as revolutionary,” Neom CEO Nadhmi al-Nasr said.

Saudi Arabia is already home to Jeddah Tower, the world’s tallest building, measuring 2,192 feet tall (planned 3,300 feet). Construction on the building began in 2013 and has yet to be finished. 

Andrew Lawrence, a property analyst, created the Skyscraper Index shows business cycles and tower construction correlate: Tall buildings often begin during an expansion and are completed after or before a recession.

Jeddah Tower is still unfinished as global central banks furiously hike interest rates to tame inflation as a stagflationary environment morphs into what could soon be a global downturn. Goldman Sachs has quietly published a “Recession Manual” (available to professional subscribers) for wealthy clients. 

The question is if unfished Jeddah Tower signals recession ahead and if the funding of the Prince’s mega-project Neom signals a future trough.