Month: October 2023

Shares of Caterpillar are tumbling more than 5% in premarket as investors fear the industrial bellwether’s latest report indicates machinery demand peaked. That, as Bloomberg’s Joe Deaux writes, “bodes ill for the economic outlook, already facing headwinds from the Fed’s aggressive tightening.”

A quick look at Q3 earnings, which actually were stronger than expected after Caterpillar posted better-than-expected revenue in its construction equipment business, while sales from mining as well as its energy and transportation businesses were weaker than analysts’ anticipated.

• Revenue $16.8BN, beating exp. of $16.59BN
• Adjusted EPS $5.52, beating exp. of $4.77

Analysts warned that sales in Caterpillar’s biggest business markets — construction and mining — would be a drag on third-quarter earnings, though they also suggested the weakness should be offset by stronger growth in energy and transportation. Helping damp the slowdown has been healthy end-market demand for Caterpillar and other machinery makers.

And while revenue and profit in the third quarter were better than expected…

… the industrial bellwether said in its earnings presentation slides that its order backlog plunged $2.6 billion from the prior quarter.

Not only did the backlog drop Q/Q, but it also slumped by $1.9 billion YoY, which is the first decline the company has reported since 2020 as it battled through global pandemic shutdowns. The collapsing backlog for the company – which is viewed as an economic bellwether because its machines dot construction, mining and energy sites around the world – is an ugly sign for future demand.

CAT shares tumbled 5% in premarket trading, underperforming the S&P by double digits and sending the company back in the red for the year.

CAT’s earnings presentation is below (pdf link)

Shares of JetBlue Airways Corp. slid 7% during premarket trading in New York. This drop came after the budget airline warned about increasing headwinds that are anticipated to result in a larger-than-anticipated loss for the fourth quarter. Additionally, the company fell short of Wall Street estimates for both loss and revenue in the third quarter. 

“While we faced challenges in the quarter, including significant weather-related impacts and rising fuel prices, our Crewmembers rose to the occasion, focusing on what we can control to mitigate these headwinds and provide our customers with great service,” Robin Hayes, JetBlue’s CEO, wrote in a statement, adding the airline is positioned for less turbulence “in 2024 and beyond.” 

JetBlue reported a loss of $153 million, equivalent to 46 cents per share, in the third quarter. This compares with the previous year’s third quarter when the airline had a net income of $57 million, or 18 cents per share. The adjusted loss for the recent quarter was 39 cents per share, exceeding the FactSet consensus estimate, which predicted a loss of 25 cents per share. Revenue also fell 8% to $2.35 billion, below FactSet consensus estimate of $2.38 billion. 

Third Quarter Results:

• Adjusted loss per share 39c, estimate loss/shr 28c

• Operating revenue $2.35 billion, estimate $2.37 billion

• Passenger operating rev. $2.20 billion, estimate $2.23 billion

• Adjusted net loss $129 million, estimate loss $91.7 million

• Adjusted Ebitda $32.0 million, estimate $64 million

• Available seat miles 17.36 billion, estimate 17.34 billion

• Revenue passenger miles 14.78 billion, estimate 14.65 billion

• Load factor 85.1%, estimate 84.4%

• Average passenger fare $201.73, estimate $198.16

• Operating expense per available seat mile $14.45, estimate $14.12 

• Yield per passenger mile 14.89c

Joanna Geraghty, JetBlue’s President and COO, said: 

“We continue to see healthy travel demand during peak periods and the fourth quarter holidays. However, industry capacity is outpacing domestic demand during off peak travel periods.

“For the fourth quarter, our growth will be driven primarily by international as we proactively work to manage our capacity and reduce schedules in off-peak periods.” 

 Fourth Quarter Forecast:

• Sees adjusted loss per share 35c to 55c, estimate loss/shr 21c

• Sees revenue -6.5% to -10.5%

• Sees available seat miles +0.5% to +3.5%

Year Forecast:

• Sees adjusted loss per share 45c to 65c, saw EPS 5.0c to EPS 40c, estimate loss/shr 35c (Bloomberg Consensus)

• Sees revenue +3% to +5%, saw +6% to +9%

• Sees available seat miles +5% to +7%, saw +5.5% to +8.5%

Besides JetBlue, several other airlines have warned about slowing US air travel demand: 

• Airline Stocks Hit Turbulence After Alaska Air Signals Slowing Demand
• JetBlue Joins Chorus Of Airlines Warning About Slipping Demand
• American Airlines Cuts Earnings Forecast As Headwinds Hit Airline Industry

Investors have dumped airline stocks since mid-July on souring demand outlooks from carriers. 

At the start of October, Morgan Stanley US equity strategist Michelle Weaver told clients to expect a “chilly season for travel” as headwinds mount for consumers. 

Futures were higher and European bourses were solidly in the green on the last day of the month, extending yesterday’s blistering rally which sent the S&P 1.2% higher and which took place after most of the mutual-fund year-end tax loss selling had exhausted itself during last week’s rout. As of 7:45am, S&P futures were higher by 0.2%, Nasdaq 100 futs gained 0.1%, while Europe’s Estoxx 50 outperforms, higher by around 1% on the day with materials sector outperforming. Treasury yields are lower after the US Treasury reduced its estimate for federal borrowing for the current quarter, citing stronger-than-expected revenue; the dollar was weaker against most major currencies, except the yen. Oil prices are edging higher after dropping in the prior session. Israel stepped up ground operations in Gaza and struck more targets in Lebanon and Syria overnight.

In premarket trading, Samsung Electronics profit beat expectations and it pointed toward a memory chip recovery, AB InBev also outpaced estimates and the performance of its peers, while Vans and North Face owner VFC plunged more than 6% after pulling its full-year guidance. Sarepta Therapeutics cratered 46% after saying results from its Embark Phase 3 study of Elevidys in patients with Duchenne muscular dystrophy between the ages of 4 through 7 years missed its main goal. Here are some other notable premarket movers:

• Amkor Technology drops 13% after the semiconductor packaging company’s net sales forecast for the fourth-quarter missed expectations.
• Arista Networks jumps 10% after the communications-equipment company reported fourth-quarter adjusted earnings per share and revenue that beat estimates.
• Caterpillar Inc. falls 4% after the machinery maker reported a sequential decline in its order backlog.
• Chewy rises about 4% as Morgan Stanley upgrades the pet products company to overweight, saying the 50% year-to-date selloff in the stock is overdone.
• Harmonic shares are down 11% after the communications equipment company cut its full-year forecast.
• JetBlue drops 7% after the low-cost carrier missed Wall Street’s earnings estimates and forecast a worse-than-expected loss this quarter.
• Lattice Semiconductor falls 15% after the chip maker’s 4Q revenue forecast fell short of analyst estimates.
• Lyft drops 3% after MoffettNathanson gives the stock a rare sell rating and set its price target at a Street-low.
• PetMed tumbles 28% after the pet pharmaceutical firm suspended its quarterly dividend and posted 2Q earnings that disappointed.
• Pinterest jumps 16% after the social-networking company reported third-quarter results that beat expectations.
• VF Corp. (VFC) falls about 6% after the apparel and footwear company withdrew guidance for the fiscal year.

European stocks are also higher. The Stoxx 600 gains 0.7% with the real estate subindex the biggest outperformer, fueled by a continued retreat of bond yields. Swiss pharma giant Roche plunges on a disappointing drug study, pulling the sector lower, while fossil fuel giant BP slides after its third-quarter report missed expectations. Here are the most notable movers:

• Wartsila jumps as much as 19%, the most since October 2008, after the Finnish marine and energy equipment manufacturer reported a strong beat to third-quarter figures
• DSM-Firmenich gains as much as 8.8%, the most since its April listing, after the nutrition and chemicals company reported better-than-expected 3Q earnings, as well as reassuring guidances
• Real estate stocks rise for a fourth session on Tuesday, outperforming the broader market, as bond yields decline. The Stoxx Europe 600 Real Estate Index rises as much as 2.4%, the most in about three weeks
• Rolls-Royce gains as much as 6% to be best performer on FTSE 100 as Barclays upgrades the jet-engine maker to overweight, saying a fall over the past month presents a chance to buy
• Anheuser-Busch InBev rises as much as 4% after the brewer reported 3Q earnings ahead of estimates. In what was a challenging period for peers, the performance “stands out,” RBC said
• Spectris advances as much as 4.8% as the electrical engineering company says it expects full-year adjusted operating profit to come in toward the high end of a guided range
• Roche falls as much as 4% to the lowest in five years after a trial of the Swiss drugmaker’s gene therapy for Duchenne muscular dystrophy did not meet the main goal in a study
• BP declines as much as 5.5% after the energy company’s third-quarter profit fell short of estimates. Weak results in gas marketing offset a strong performance in oil trading
• AMS-Osram drops as much as 4.4%, to the lowest intraday since 2009. The chipmaker’s 4Q guidance missed estimates and analysts said 2024 comments were on the cautious side
• SES falls as much as 4.6% after the company said it’s delaying launches of five O3b mPOWER satellites, a move that will cause a mid-single digit percentage hit to 2024 sales and adj. Ebitda
• Carlsberg declines as much as 3.2%, reaching the lowest intraday level since 2022, after the brewer reported third-quarter revenue that missed estimates, driven by weak Asia numbers
• OMV slides as much as 4.3%, the most intraday since June, after Austrian refiner reported “slightly disappointing” 3Q clean CCS operating profit that missed estimates

And while stocks may struggle to keep their early gains, the biggest mover overnight was the Japanese yen which plunged the most in two months after the Bank of Japan made only minor changes to its policy settings, disappointing many who had expected more after the bank had leaked a far more bombastic report to the Nikkei. In its wishy-washy announcement, the BOJ halfheartedly ended YCC, saying the 1% cap on the 10Y would now be a reference rate, inviting bond bears to promptly test out how much higher yields will rise. Meanwhile, the implosion in the yen is sparking even more inflation which as noted below, is already crushing Kishida’s approval polling, and ensures that there will very soon be a major scandal between the Japanese government and the BOJ.

“This is the first critical test of whether Japanese officials care about the speed of JPY depreciation or specific levels,” said Simon Harvey, head of fx analysis at Monex Europe. “Thankfully for them lower Treasury yields are delaying any urgency for an answer, but any unexpected hawkish comments from Chair Powell tomorrow or a larger issuance in longer-date Treasuries could force the issue as soon as tomorrow.”

“It looks like loose monetary policy is likely to stay in place for some time to come,” he wrote in a note. “They are now in a corner and cannot afford to allow long-term bond yields to rise much further.”

The prospect of a weaker yen and negative interest rates means Japanese equities are in line for more gains, according to Charles-Henry Monchau, chief investment officer at Bank Syz. The Nikkei 225 added 0.5% on Tuesday, bringing its year-to-date rally to 18%.  Japan’s gains stood in stark contrast to the rest of the global equity market. The S&P 500 is on track for a 2.8% retreat in October, a third monthly loss.

Elsewhere in Asia, stocks dipped led by Chinese equities, after data showed the nation’s factory activity fell back into contraction in October.  The MSCI Asia Pacific Index slipped as much as 0.6%, erasing a small early advance after the China PMI figures, which also showed an expansion of the services sector unexpectedly eased. Consumer discretionary and materials were the worst performers. Earnings remain a big focus in what is the second-busiest week this reporting season for Asia.  China’s Ganfeng Lithium and Japan’s Panasonic were among the biggest losers on the regional gauge after their results.
Equities in Japan advanced after the central bank announced its decision to keep its easy monetary policy, making only minor changes to its yield-curve-control settings.

• The Hang Seng and Shanghai Comp were pressured following disappointing PMI data which showed China’s factory activity returned into contractionary territory for October, while there were also plenty of earnings releases including from the likes of Bank of China, BYD and PetroChina.
• Australia’s ASX 200 finished flat as strength in real estate, financials and the consumer sectors was offset by underperformance in mining stocks and after the weak factory activity data from Australia’s largest trading partner.
• Japan’s Nikkei 225 was initially choppy after Industrial Production and Retail Sales missed estimates although the index was later supported following the BoJ policy announcement in which the central bank announced a less aggressive than anticipated tweak to YCC.

In FX, the Japanese yen tumbled over 1% versus the dollar after the Bank of Japan tweaked its yield curve control policy but disappointed hawks by once again taking a more dovish way out, one which is sure to spark more inflation and lead to a collapse of the already extremely unpopular Kishida government.  The euro was is one of the best performing G-10 currencies meanwhile, rising 0.5%, despite euro-area CPI coming in below forecasts and GDP shrinking back into contraction!

In rates, treasuries rallied along with bunds and gilts. US 10-year yields fall 8bps to 4.82%, bull-flattening with futures near top of day’s range into early US session, with yields richer by 3bp to 8bp across the curve. Treasuries were well supported overnight, following the Bank of Japan’s modest policy tweak, saying the 1% level for JGB 10-year yields is now a reference point and adopts a flexible bond-buying stance, disappointing investors who expected a clearer policy signal. Core European rates lag Treasuries, while bunds held gains after Euro-area inflation eased to its lowest level in more than two years. US yields richer by up to 8bp across long-end of the curve, flattening 5s30s spread by 1.8bp on the day — 2s10s spread tightens over 4bp vs. Monday close with front-end underperforming; US 10-year yields around 4.82%, richer by 7.5bp on the day and outperforming bunds and gilts by 3.5bp and 0.5bp in the sector.

In commodities, oil prices rebounded after a steep drop yesterday as investors tracked developments in the Middle East. Israel struck more targets in Lebanon and Syria overnight, while stepping up its ground operations in Gaza. West Texas Intermediate rose 1% to near $83 a barrel. Spot gold climbed 0.1%.

Bitcoin was flatish on the session, holding around the $34.5k mark, with action contained and very much rangebound thus far as we await key US catalysts including the ECI before the week’s main Tier 1 events begin from a US perspective.

US economic data includes 3Q employment cost index (8:30am), August FHFA house price index, S&P Case-shiller house prices (9am), October MNI Chicago PMI (9:45am), consumer confidence (10am) and Dallas Fed services index (10:30am)

To the day ahead now, data releases include the Euro Area flash CPI release for October, as well as the Q3 GDP release, both of which came below expectations, with GDP once again contracting. Over in the US, there’s the Employment Cost Index for Q3 (8:30am), August FHFA house price index, S&P Case-shiller house prices (9am), October MNI Chicago PMI (9:45am), consumer confidence (10am) and Dallas Fed services index (10:30am). From central banks, there are several ECB speakers including Vice President de Guindos, and the ECB’s De Cos, Visco, Muller and Nagel. Lastly, today’s earnings releases include BP, Pfizer and Caterpillar.

Market Snapshot

• S&P 500 futures little changed at 4,182.25
• STOXX Europe 600 up 0.3% to 432.21
• MXAP down 0.5% to 151.20
• MXAPJ down 0.7% to 472.75
• Nikkei up 0.5% to 30,858.85
• Topix up 1.0% to 2,253.72
• Hang Seng Index down 1.7% to 17,112.48
• Shanghai Composite little changed at 3,018.77
• Sensex down 0.2% to 63,978.37
• Australia S&P/ASX 200 up 0.1% to 6,780.68
• Kospi down 1.4% to 2,277.99
• German 10Y yield little changed at 2.79%
• Euro up 0.2% to $1.0634
• Brent Futures up 0.9% to $88.25/bbl
• Gold spot up 0.0% to $1,996.79
• U.S. Dollar Index little changed at 106.14

Top Overnight News from Bloomberg

• China’s NBS PMIs fall short of expectations, with manufacturing coming in at 49.5 (down from 50.2 in Sept and below the Street’s 50.2 forecast) and non-manufacturing at 50.6 (down from 51.7 in Sept and below the Street’s 52 forecast). RTRS
• President Xi Jinping underscored his concerns — and more conservative social views — about China’s shrinking population in a speech calling on a key women’s organization to help bolster the nation’s birthrate by promoting a “culture” of childbirth. BBG
• Nvidia’s $5 Billion of China Orders in Limbo After Latest U.S. Curbs. Tech company had been pushing to make chip shipments for next year before new restrictions came into effect. WSJ
• The yen fell below 150 after the BOJ made only minor tweaks to its yield-control strategy. Governor Kazuo Ueda said the 1% cap on 10-year JGB yields is now just a “reference,” but doubts they’ll rise much higher. BBG
• Euro-area inflation eased to its lowest level in more than two years as the bloc’s economy unexpectedly shrank following an unprecedented ramp-up in interest rates. CPI rose 2.9% in October — down from 4.3%. GDP fell 0.1%, missing estimates for stagnation. BBG
• Israel struck more targets in Lebanon and Syria, while stepping up its ground operations in Gaza. The UN warned that the situation in Syria is “at its most dangerous for a long time.” Iran’s foreign minister will visit Qatar today to discuss the situation in Gaza. BBG
• Russia has restricted western companies that sell their Russian assets from withdrawing the proceeds in dollars and euros, imposing additional de facto currency controls in an effort to shore up the weakening rouble. FT
• Central banks have loaded up on more gold than previously thought this year, offering crucial support to prices. Purchases for the first nine months totaled 800 tons, driven mainly by China, Poland and Singapore — more than the same period last year, which ended with record demand. BBG
• VFC pulled its guidance for its current fiscal year, slashed its dividend and said it will replace the president of its Vans brand. VF has come under pressure from activist investors this month. Shares fell nearly 9% premarket. WSJ
• Commercial real-estate lending has slowed sharply, threatening a rise in defaults on expiring debt and a sharp decline in new construction…

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded mixed amid a deluge of data releases at month-end including disappointing Chinese official PMIs, while participants also digested a slew of earnings releases and the conclusion of the BoJ’s live meeting. ASX 200 finished flat as strength in real estate, financials and the consumer sectors was offset by underperformance in mining stocks and after the weak factory activity data from Australia’s largest trading partner. Nikkei 225 was initially choppy after Industrial Production and Retail Sales missed estimates although the index was later supported following the BoJ policy announcement in which the central bank announced a less aggressive than anticipated tweak to YCC. Hang Seng and Shanghai Comp were pressured following disappointing PMI data which showed China’s factory activity returned into contractionary territory for October, while there were also plenty of earnings releases including from the likes of Bank of China, BYD and PetroChina.

Top Asian News

• China’s Foreign Minister Wang met with the French Foreign Affairs Adviser to the President and the sides had friendly, in-depth exchanges regarding China-France and China-EU relations, as well as international and regional issues. Furthermore, Wang said he hopes the EU will adopt a more pragmatic and rational attitude in cooperation with China and avoid external interference, ensure mutual openness and promote stable bilateral relations.
• US is to send its strongest-ever delegation to the China import expo amid improving relations, according to SCMP.
• China interbank overnight repo rate rate jumps to as high as 50%, via official data.

European bourses are in the green, Euro Stoxx 50 +0.8%, following a mixed APAC handover and solid US lead with the region unreactive to the latest CPI & GDP metrics. APAC trade was mixed on account of numerous data points including soft Chinese official PMIs. Sectors are mostly firmer though Energy lagging given benchmark pricing and a poorly received update from BP while Healthcare slips after a disappointing drug update from Roche. At the other end of the spectrum, Chemical names outperform given cost-cutting measures from BASF. Stateside, futures are modestly firmer and have been moving directionally with European peers ahead of US data and a handful of earnings, ES +0.3%. Caterpillar Inc (CAT) Q3 2023 (USD): EPS 5.52 (exp. 4.79), Revenue 16.8bln (exp. 16.59bln), Financial Rev 822mln (exp 766mln), Adj. Operating Income 3.50bln (exp 3.09bln).

Top European News

• UK insolvency service Q3 insolvencies in England and Wales total 6208; after seasonal adjustment, the number of company insolvencies in Q3’23 was 2% lower than in Q2’23, but 10% higher than Q3’22.
• ECB’s Visco says ECB needs to be cautious in coming months after hiking rates so much and so quickly; EZ inflation is falling as expected and demand seen further contained in coming months due to delayed impact of rate hikes. A reason for recent rises in Italian bond spreads is probably that investors doubt Italy’s economic growth potential and control of public finances. Fears of a wage-spiral in EZ and unanchored inflation expectations have sharply diminished.

FX

• Hawkish sources set Yen up for steep fall as BoJ sticks to dovish guidance after fixing flexible YCT ceiling at 1%, USD/JPY rebounds from 149.03 to 150.75 alongside Yen crosses.
• Euro boosted by breach of 160.00 in EUR/JPY as EUR/USD reclaims 1.0600+ status and and leans on the DXY, Dollar index retreats from 106.45 to 105.89
• Kiwi encouraged by upbeat ANZ business survey, with NZD/USD probing 0.5850 and AUD/USD cross reversing through 1.0900.
• Aussie hampered with Yuan after disappointing Chinese PMIs, AUD/USD capped around 0.6350, USD/CNY above 7.3100 and USD/CNH over 7.3300.
• PBoC set USD/CNY mid-point at 7.1779 vs exp. 7.3024 (prev. 7.1781)

Fixed Income

• Bonds firmly underpinned approaching month end.
• Gilts and T-note pick up the baton from EGBs to hover towards upper end of respective 93.51-09 and 106-19/02 ranges.
• Bunds off best levels between 129.33-128.65 parameters and BTPs regroup within 110.70-15 bounds in relief post-Italian month end supply.

Commodities

• Crude futures consolidated overnight after settling lower by USD 3.23/bbl and USD 2.85/bbl respectively on Monday, paring all of Friday’s gains and more after an unwind of some of the geopolitical risk.
• Currently, WTI Dec resides just under USD 83/bbl (in a USD 82.29-83.17/bbl range) while Brent Jan trades around USD 87/bbl (in a USD 86.30-87.22/bbl parameter).
• Spot gold is flat after seeing a similar unwinding of geopolitical premia while base metals are mixed but with modest gains given the risk tone; Dalian** iron ore** bid on Chinese optimism and as the likes of ING highlight potential strike action in Australia.

BOJ

• BoJ maintained NIRP at -0.10% and the 10yr JGB yield target at 0% but widened the reference range to 100bps up or down from the target from 50bps and made YCC more flexible with the decision on YCC made by 8-1 vote in which board member Nakamura dissented. BoJ said it will regard the upper bound of 1% for the 10yr JGB yield as a reference in market operations and will guide market operations nimbly, while it will flexibly increase JGB buying, fixed-rate operations and collateral fund-supplying operations. Furthermore, it will determine the offer rate for fixed-rate JGB buying operations each time by taking into account market rates and other factors.
• BoJ Governor Ueda says will patiently continue monetary easing with decided new measures; Will not hesitate to take additional easing measures if necessary; Getting gradually closer to achieving price target. Closely working with government and monitoring the situation on FX.** FX could affect policy if it impacts price outlook. Next spring’s wage talks will be an important factor**. Click here for more detail.
• Japanese PM Kishida says excessive FX moves are not desirable; weak JPY has various reasons including yield differentials.

Geopolitics

• White House National Security Adviser Sullivan met with the Saudi Defence Minister and confirmed President Biden’s commitment to support the defence of US partners against threats from state and non-state actors including those backed by Iran.
• Drone intercepted over the Red Sea reportedly launched from Yemen, according to Walla News’ Elster; “drone launched by Yemen’s Houthi rebels have been intercepted by the IDF over the Red Sea”, according to Faytuks News.
• Yemeni Houthis claim launch of drone towards Israel, according to Sky News Arabia citing AFP.

US Event Calendar

• 08:30: 3Q Employment Cost Index, est. 1.0%, prior 1.0%
• 09:00: Aug. S&P/Case-Shiller US HPI YoY, est. 1.78%, prior 0.98%
• 09:00: Aug. S&P CS Composite-20 YoY, est. 1.75%, prior 0.13%
• 09:00: Aug. S&P/CS 20 City MoM SA, est. 0.80%, prior 0.87%
• 09:45: Oct. MNI Chicago PMI, est. 45.0, prior 44.1
• 10:00: Oct. Conf. Board Consumer Confidence, est. 100.5, prior 103.0
• 10:00: Oct. Conf. Board Expectations, prior 73.7
• 10:00: Oct. Conf. Board Present Situation, prior 147.1
• 10:30: Oct. Dallas Fed Services Activity, prior -8.6

DB’s Jim Reid concludes the overnight wrap

On Halloween, the Bank of Japan (BOJ) has decided not to scare markets too much this morning and has only tweaked its yield curve control settings marginally by allowing 10yr Japanese government bond yields to increase above 1% – redefining it as a loose “upper bound” rather than a rigid cap. The central bank’s modest policy shift has led to a decline in the yen, slipping as much as -0.76% to 150.17 per dollar as investors were pricing in the risk of a greater change in the BOJ’s accommodative monetary policy stance. The Nikkei (+0.49%) is seeing gains as weakness in the yen is helping provide an additional boost. Meanwhile, yields on 10yr JGBs reached 0.957% early in Asia trading (from 0.89% at the previous close) before paring back slightly to 0.942% as we type and ahead of the press conference. Inflation forecasts have been increased but it still feels to us that the BoJ are very optimistic about the likelihood of hitting the 2% target so if we’re correct the YCC will be abandoned soon.

Moving on to other Asian equities, markets are mostly trading lower this morning after the latest batch of PMI data from China showed economic momentum continuing to wane in the world’s second biggest economy at the beginning of fourth quarter (more on this below). In terms of specific index moves, the Hang Seng (-1.77%) is leading losses across the region with the KOSPI (-1.32%), the CSI (-0.66%) and the Shanghai Composite (-0.38%) also trading in the red. S&P 500 (-0.38%) and NASDAQ 100 (-0.57%) futures are moving lower after a strong day yesterday. Yields on 10yr USTs (-2bps) are slightly lower at 4.87% as I type .

Coming back to China, the official manufacturing PMI unexpectedly contracted to 49.5 (50.2 expected) in October from 50.2, signalling renewed weakness in the sector. At the same time, the non-manufacturing PMI also dropped to 50.6 (52 expected) from 51.7 in September. The disappointing data suggests that the economy is still struggling despite better-than-expected Q3 GDP data reported recently. This might partly explain the stimulus package last week. Elsewhere, retail sales in Japan rose +5.8% y/y in September (v/s +5.9% expected), softening after four straight months of accelerating growth. It follows an expansion of +7.0% in August. Meanwhile, industrial output shrank -4.6% y/y in September and worse than expectations of -2.3% whilst the jobless rate dropped to 2.6% as expected in September from 2.7% previously.

Before the Bank of Japan announcement, risk assets saw a solid rally yesterday as investors grew hopeful that a material escalation in the Middle East would be avoided for now, particularly relative to concerns last Friday. That helped drive a major decline in oil prices, with WTI Crude (-3.78% to $82.31/bbl) erasing its rise since Hamas’ attack on Israel on October 7. Moreover, the Israeli shekel (+1.09%) saw its best daily performance in that time against the US Dollar, whilst gold (-0.42%) also lost ground, having closed above $2,000/oz on Friday for the first time in months. So in terms of the assets most sensitive to an escalation, it was one of the largest moving days since the current conflict began.

That backdrop helped support a recovery in global equities, with the S&P 500 (+1.20%) putting in its strongest session in two months after losing ground in 8 of the 9 previous sessions. However, it was fixed income that saw some of the more interesting moves, since yields on 10yr Treasuries were back up another +5.8bps to 4.89% ahead of the Fed’s decision and the Treasury refunding announcement tomorrow. Yields briefly rallied by c. 3bps after the Treasury reduced its net borrowing estimate for the current quarter to $776bn from the $852bn it had expected back in late July. However, this estimate was close to our rates strategists’ expectations, and bonds more than reversed the move by the close.

The 2s10s Treasury curve steepened another +0.8bps to close at -16.2bps. That’s the steepest that the 2s10s curve has been since July 2022, and means that the curve has steepened by over 60bps in just over a month. Clearly we’ve still got a bit further to go before the curve has a positive slope again, but if we did get back into positive territory, that would end the longest sustained period of inversion for the 2s10s yield curve since 1980. Remember from my CoTD last week here that every recession in the last 70 years has followed an inversion that had steepened up considerably from the most inverted point.

Over in Europe, sovereign bonds outperformed after the flash October CPI prints for Germany and Spain both surprised on the downside. In Germany, CPI fell to 3.0% on the EU-harmonised measure (vs. 3.3% expected), which is the lowest it’s been since June 2021. And in Spain, it came in at 3.5%, which was two-tenths higher than the September figure, but still beneath the 3.8% expected by the consensus. So that was some good news ahead of the Euro Area-wide CPI print today, which our European economists now see tracking at 3.0% for headline and 4.1% for core (vs BBG consensus at 3.1% and 4.2%, respectively). The data helped yields fall across the Euro Area with those on 10yr bunds (-0.9bps), OATs (-1.7bps) and BTPs (-6.9bps) all coming down on the day. The 10yr BTP-Bund has declined by a sizeable 11bps in the three sessions since last week’s ECB meeting.

Alongside the inflation data, we had the latest growth numbers out of Germany, which showed Q3 GDP only contracted by -0.1% (vs. -0.2% expected), and the Q1 and Q2 figures were revised upwards as well. But even with the better-than-expected news, this is hardly showing a booming economy, and our German economists point out that GDP has still stagnated over the last 18 months. They keep their full-year growth forecast for 2023 at -0.5% (link here) with 2024 at +0.3%, expecting growth to remain around stagnation in Q4-23 and Q1-24.

With all that in mind, equities put in an strong performance yesterday, with the S&P 500 (+1.20%) and Europe’s STOXX 600 (+0.36%) both moving higher on the day. The NASDAQ rose by +1.16%. It was broad-based advance for US equities, with 23 of 24 S&P industry groups rising on the day. The one exception was autos (-4.09%), which were weighed down by a -4.79% decline for Tesla on concerns over Chinese competitors, UAW agreements elsewhere in the sector, and production cuts from battery maker Panasonic which hinted at softer EV demand. The small cap Russell 2000 underperformed the broad rally (+0.63%) after hitting its lowest level since November 2020 on Friday. As my CoTD showed here yesterday, the Russell 2000 is now at levels in real price terms that it first surpassed in 2015. So beneath the surface and without the Magnificent Seven, US equities continue to correct from very high valuation with inflation helping in that process.

Elsewhere yesterday, the UK housing market showed little sign of a revival, as mortgage approvals in September fell to an 8-month low of 43.3k (vs. 44.5k expected). Furthermore, the latest M4 money supply data showed a year-on-year contraction of -3.9%, which is the fastest decline since August 2012. The releases come ahead of the Bank of England’s policy decision on Thursday, where they’re widely expected to keep rates on hold at 5.25%.

To the day ahead now, and data releases include the Euro Area flash CPI release for October, as well as the Q3 GDP release. Over in the US, there’s the Employment Cost Index for Q3, the Conference Board’s consumer confidence for October, the MNI Chicago PMI for October, and the FHFA house price index for August. From central banks, there are several ECB speakers including Vice President de Guindos, and the ECB’s De Cos, Visco, Muller and Nagel. Lastly, today’s earnings releases include BP, Pfizer and Caterpillar.

After the BoJ’s malarkey overnight, it was Europe’s turn to make economic headlines this morning and sure enough it did not disappoint (well it did, but vol traders were excited).

In the third quarter the Eurozone economy contracted by 0.1% compared to the second quarter, below expectations of 0.0%. This is the first decline since Q2 2020 (amid the COVID lockdowns).

There is wide dispersion in the growth figures published so far for individual member states, ranging from -2.5% q/q in Lithuania to +0.5% q/q in Belgium.

Among the largest member states, Spain (+0.3% q/q) and France (+0.1 q/q) managed to grow, while Europe’s biggest weak spot is also its largest economy, Germany, which revealed Monday that output shrank by 0.1% in the third quarter.

Additionally,  Euro-area inflation eased to its lowest level in more than two years as the bloc’s economy shrank following an unprecedented ramp-up in interest rates.

Consumer prices rose 2.9% in October – down from the previous month’s 4.3% and better than the 3.1% median estimate in a Bloomberg survey analysts.

Rabobank economists wrote in a note this morning after the data that they believe the Eurozone will enter a mild recession, followed by a period of sluggish growth.

Although it is rather difficult to precisely estimate the exact effect, undoubtedly, higher interest costs should put a lid on growth. Meanwhile, the labour market will likely loosen somewhat, but we expect that it remains structurally tight.

This both puts a floor under an economic contraction (since consumers can uphold their consumption) and a lid on economic growth as companies struggle to find qualified workers.

Foreign demand is unlikely to be able to substantially lift the Eurozone growth figure, as we expect a struggling Chinese economy and a US recession in 23Q4-24Q1.

However, they warn that there are some serious risks to this rather benign outlook :

The most obvious one being a further escalation of the war in the Middle-East, which could lead to seriously higher energy prices.

The economic impact of higher energy prices could be bigger than it was last time around. Governments no longer have the same fiscal firepower to cushion the blow, due to the increased cost of borrowing, whilst at the same time most consumers can’t rely anymore on a glut of pandemic savings. Indeed, in most countries, household savings adjusted for inflation are close to their pre-pandemic level.

Meanwhile, companies are also in a worse position to handle a new energy price shock. They already face (or are about to face) significantly higher financing costs and increasing labour costs, whilst the slowing economy likely means that they can’t fully charge those higher costs to their customers.

The economic price of a renewed energy shock could therefore be larger.

The GDP reading stands in stark contrast to the US, which last week reported bumper growth between July and September, while also managing to bring down inflation, but after all that… the euro is rallying against the dollar…

Source: Bloomberg

Why is the euro rallying?

Bloomberg’s Simon White has some thoughts.

GDP disappointed slightly to the downside, as did CPI, although expectations were skewed to the downside by softer-than-expected German inflation data on Monday.

GDP and especially CPI, though, are lagging economic indicators, and give us little insight about what is going to happen.

Leading data for inflation and growth have shown nascent signs of turning higher in Europe, which would indicate a re-acceleration in inflation and less negative economic growth than is currently anticipated.

On top of that, the ECB will be concerned about wage growth, which in real terms is positive and rising quickly.

Euribor futures are basically unchanged after the data, which makes sense given it is only telling us what has already happened. But the cuts priced in for next year are looking vulnerable if leading data maintains its momentum.

Simply put, leading data (not the lagging data released today) for the eurozone showed early signs of stickier inflation and a stabilization in the economic outlook. If sustained, that would mean market expectations for a rate cut by June are premature.

Authored by Tom Ozimek via The Epoch Times (emphasis ours),

Newly minted House Speaker Mike Johnson (R-La.) said President Joe Biden lied about his involvement in his family’s business affairs and engaged in a coverup, with the Louisiana Republican vowing that the impeachment inquiry into the president would continue as he now wields the power of the gavel.

Mr. Johnson made the remarks in an Oct. 26 interview with Fox News’ Sean Hannity, in which he said that removing President Biden from office is a real possibility in light of the evidence that has emerged suggesting that the president may have engaged in bribery.

“We have the receipts on so much of this now,” Mr. Johnson said, referring to evidence that includes bank records showing tens of millions of dollars paid to various shell corporations linked to Biden family members, including the president’s son, Hunter Biden.

While President Biden has denied any involvement in his son’s business affairs, the GOP-led House Oversight Committee has released over 20 examples of evidence tying the president to Hunter Biden’s business dealings.

“It’s a real problem,” Mr. Johnson told Mr. Hannity, adding that the evidence that has emerged thus far is the reason the Republicans launched an impeachment inquiry into President Biden in mid-September.

“That’s the reason that we shifted into the impeachment inquiry stage on the president himself because if, in fact, all the evidence leads to where we believe it will, that’s very likely impeachable offenses,” he said. “That’s listed as a cause for impeachment in the Constitution—bribery and other high crimes and misdemeanors.“

“Bribery is listed there,” he continued, adding that the evidence the GOP has collected so far “looks and smells a lot like that.”

At the same time, Mr. Johnson threw cold water on the idea that Republicans would push for impeachment before all the evidence has been thoroughly vetted and a solid case is in place.

“I know people are getting anxious, and they’re getting restless, and they just want somebody to be impeached,” he said. But “we don’t do that, like the other team,” he said. “We have to base it upon the evidence and the evidence is coming together, we’ll see where it leads.”

“We’re going to engage in due process, because, again, we’re the rule-of-law party,” Mr. Johnson said.

Mr. Johnson told Mr. Hannity that he believes the evidence that has emerged thus far shows that the president “lied directly multiple times about his involvement and knowledge of his son’s business dealings. We all know that now,” before adding that President Biden “has been involved in covering it up.”

The foundation of the president’s repeated denials has been shaken by a growing pile of evidence, however. First, there were the explosive revelations of the contents of the Hunter Biden laptop. Then, there were statements made by Hunter Biden’s former business associate Tony Bobulinski, and more recently a series of bombshell disclosures made by Devon Archer, former business partner of the president’s son.

A readout of some of Mr. Archer’s key revelations from July 31 closed-door testimony before Congress include that Hunter Biden put his father, who was then vice president, on speakerphone during business meetings over 20 times and that the elder Biden was put on the call to sell “the brand.” While Republicans saw Mr. Archer’s testimony as proof that the president lied when he denied involvement in his son’s business dealings, the president’s supporters insisted the conversations amounted to “casual” small talk and that, at most, Mr. Hunter Biden had peddled the “illusion of access” to his father rather than the real deal.

The White House downplayed the significance of Mr. Archer’s testimony, with spokesperson Ian Sams saying it failed to provide the kind of bombshell evidence of wrongdoing that Republicans claimed.

“It appears that the House Republicans’ own much-hyped witness today testified that he never heard of President Biden discussing business with his son or his son’s associates or doing anything wrong,” Mr. Sams said in a statement at the time.

But later, in an interview with Tucker Carlson, Mr. Archer said that President Biden’s claims of having no involvement in his son’s business dealings are “categorically false.”

“He was aware of Hunter’s business. He met with Hunter’s business partners,” Mr. Archer said. He insisted that the claim that the president was in no way involved in his son’s business affairs is “not factually right.”

More recently, congressional investigators found evidence of a $200,000 “direct payment” to President Biden from family members, with some Republicans saying this is further evidence of the president’s alleged involvement in his family’s business affairs.

“We know that bank records show that nearly $20 million in payments were directed to the Biden family members, and associates, through various shell companies. The Treasury Department alone had more than 150 transactions involving the Biden family and other business associates that were flagged as suspicious activity by U.S. banks,” he added.

During the first impeachment hearing on Sept. 28, witnesses said that evidence uncovered thus far suggests misconduct on the part of the Biden family, though more is needed to support impeaching the president.

“While I believe that an impeachment inquiry is warranted, I do not believe that the evidence currently meets the standard of a high crime and misdemeanor needed for an article of impeachment,” Jonathan Turley, a law professor at the George Washington University Law School, testified.

In a memorandum to Republicans released ahead of the first hearing, GOP leaders noted that they’ve gathered evidence that the Biden family and their associates received more than $24 million from 2014 to 2019. President Biden served as vice president until early 2017.

The money was transmitted “through an exceedingly complex chain of transactions that made it difficult to track the flow of these funds,” they said in the memo.

ChatGPT maker OpenAI has signed the largest office building deal in San Francisco in five years, following comments from CEO Sam Altman earlier this year that remote work or hybrid work for startups is malarkey. 

The San Francisco Chronicle reported that OpenAI closed a deal with Uber to lease two of its buildings from its Mission Bay headquarters – 1455 and 1515 Third St, representing 486,600 square feet. This is the largest office lease deal in the crime-ridden metro area since 2018. 

“We are glad that in a competitive office real estate market, our employee-friendly, award-winning and sustainable buildings clearly stood out,” Uber’s spokesperson told the Chronicle.

The spokesperson continued, “By right-sizing our space needs we can bring our teams closer together, exercise rigorous cost management, and bring more foot traffic to the businesses of Mission Bay. This is a win-win-win.”

OpenAI spokesperson Hannah Wong told the newspaper, “We are leasing two buildings from Uber in Mission Bay, which will provide the space needed for our growing team and are thrilled to continue scaling our company in San Francisco.”

Earlier this year, at an event in San Francisco, Altman told attendees that the idea of remote work becoming the norm has faded: 

“I think definitely one of the tech industry’s worst mistakes in a long time was that everybody could go full remote forever, and startups didn’t need to be together in person and, you know, there was going to be no loss of creativity. 

“I would say that the experiment on that is over, and the technology is not yet good enough that people can be full remote forever, particularly on startups.” 

Altman’s move to expand operations in San Francisco’s beleaguered office market won’t save it as the vacancy rate has topped a record high 35%. 

Mayor London Breed, who had to recently reverse failed progressive policies – after sparking a violent crime wave – applauded OpenAI’s “major investment” in the city. 

The irony here is that AI could displace millions of jobs, especially those in white-collar industries, and force many of them from remote working jobs back into the office. 

 

 

 

Authored by Tom Ozimek via The Epoch Times (emphasis ours),

IRS Commissioner Danny Werfel faced a grilling by lawmakers on Capitol Hill this past week, where he hinted that there’s a chance that the agency will—contrary to its repeated pledges—increase tax audits of Americans earning under $400,000.

The question of whether the IRS will use some of the $80 billion or so funding boost to increase tax enforcement of people making less than $400,000 has been a contentious issue.

IRS and Treasury Department officials have pledged not to increase audit rates for this group of Americans, while Republicans and others have argued that this pledge is either false or wishful thinking.

Treasury Secretary Janet Yellen has directed the IRS not to raise audit rates above historical levels for this group of taxpayers, while Mr. Werfel has repeatedly made the same pledge.

But a watchdog recently cast doubt on this promise, warning that Americans making less than $400,000 could inadvertently get caught in an enforcement dragnet because the IRS doesn’t have a clear definition of “high-income” and its enforcers use an outdated $200,000 high-income threshold as their default.

Meanwhile, the latest data on the tax gap (the difference between taxes owed and paid to the government) show that it has jumped from $601 billion to $688 billion, putting pressure on the IRS to ramp up enforcement and bring in more money for all the Biden administration’s big spending plans.

At the Oct. 24 hearing on Capitol Hill, Rep. Gary Palmer (R-Ala.) pointed out that former IRS Commissioner John Koskinen once testified that increasing tax audits as a way to reduce the tax gap was not an advisable strategy.

“One of your predecessors, John Koskinen, testified before this committee in 2015, and he said it would not be advisable to audit your way out of the tax gap, yet that’s exactly what you’re trying to do,” Mr. Palmer said.

In a bid to increase tax collections, the IRS has vowed to increase tax enforcement on corporations and high-income filers in a “sweeping, historic” crackdown on what it says are wealthy tax evaders.

In his line of inquiry, Mr. Palmer implied that the IRS’ appetite to boost collections would mean some lower-earning Americans could get caught up in that effort.

Mr. Werfel said he had instructed staff at the IRS not to raise audit rates for lower-earning Americans but hinted that there’s some chance this could (inadvertently) happen, and only time will tell.

“The so-called Inflation Reduction Act gave the IRS an additional $80 billion in funding. I think we can all agree that that’s an incredible amount of money. Even after Congress trimmed this amount down to nearly $60 billion in the Fiscal Responsibility Act, how many new agents does the IRS plan to hire?” she asked.

Mr. Werfel sought to deflect by focusing on all the other hires that the IRS is planning.

“We’re hiring not just agents. We’re hiring customer service reps, accountants, agents,” he said. “We have published our three-year view of staffing, which I’m very confident on because I can make key assumptions about needs and market trends. We are at 90,000 today, and I think over the next three years, we should be over 100,000, but not much over 100,000.”

Asked how many tax enforcement agents there would be among this figure, Mr. Werfel replied: “We should be hiring about 8,000 total by the end of 2025.”

“You are guaranteeing that you will not increase the number of audits of people making less than $400,000 a year?” Ms. Foxx then asked.

“That is my marching order to the IRS,” Mr. Werfel replied before adding that “if we fall short of that, I will be held accountable for it,” hinting that, even with the best of intentions, there’s a chance that the IRS might fail to make good on this promise, much like the watchdog has warned.

“But we will publish those rates,” Mr. Werfel added, referring to tax audit rates for Americans earning less than $400,000, suggesting that time will tell how closely the agency’s growing army of tax enforcers will follow his orders.

The watchdog report includes scathing criticism of the IRS for lacking a clear definition of “high-income” earners—despite the very same watchdog asking the IRS to look into developing a better definition years ago.

“The IRS does not have a unified or updated definition for individual high-income taxpayers,” the watchdog said in the report, which notes that the IRS uses different definitions of “high-income” depending on context as various IRS programs address different compliance issues across different parts of the filing population.

“The high-income terminology is being used loosely inside the IRS with no common understanding of what the term means,” the watchdog said.

The watchdog recommended in 2015 that the IRS reevaluate the appropriate income thresholds for its high-income and high-wealth strategy.

But despite its recommendation to the IRS nearly a decade ago to reevaluate its income thresholds, the IRS “made no changes,” the watchdog said, noting that the tax agency cited “internal data analysis results and resource constraints.”

Further, the IRS continues to rely on old tax examination activity codes adopted half a century ago with the Tax Reform Act of 1976, which used a $200,000 threshold to measure high-income returns.

“This amount is equivalent to more than $1 million in 2023, but the IRS still uses $200,000 as the default high-income threshold,” the watchdog said, adding that the $200,000 threshold is “no longer a reasonable standard for high earners given inflation since 2005.”

The IRS disagreed with the watchdog’s recommendation. It asserted in a statement included in the report that a “static and overly proscriptive” definition of high-income taxpayers for audit purposes “would serve to deprive the IRS of the agility to address emerging issues and trends.”

The watchdog commented on the IRS’ pushback, saying that the definition need not be “static” and income thresholds should be adjusted based on economic and complexity factors—otherwise, there’s a risk that the agency will break its pledge not to audit more Americans earning less than $400,000.

“When the high-income thresholds are set too low, the result can be higher numbers of inefficient examinations,” the watchdog said. “When the definition is too low, the base of taxpayers earning those incomes is wider so that the IRS does many more audits in that category in order to achieve desired audit coverage.”

The watchdog said that, under the circumstances of a lack of a clear definition of “high-income,” the IRS would not only be conducting more audits on lower-earning Americans (contrary to its pledge not to), but it would also be less effective in its stated goal of closing the tax gap.

The watchdog also said that the IRS’s lack of action in response to the TIGTA recommendation in 2015 to reevaluate its income thresholds means that the IRS is in a difficult position if it hopes to meet its pledge not to raise audit rates above historical norms for Americans earning less than $400,000.

Currently, “there is no way to identify the complete population of taxpayers that meet the criterion of $400,000 or more specified by the current Treasury Secretary,” the watchdog added.

The IRS partially agreed with the watchdog’s recommendation to refine its examination activity.

“The IRS agreed to identify the best method to identify and track high-income examinations as part of the work being undertaken to implement the Treasury Secretary’s directive to not increase audit rates for households making less than $400,000 and small businesses,” the IRS said in a statement included in the report.

But the watchdog responded by saying this isn’t good enough.

“The IRS’s partial agreement and planned corrective action will not satisfy the intent of our recommendation, and additional actions are needed,” TIGTA said in a comment.

“The IRS should establish examination activity codes for additional TPI increments, which will help the IRS identify noncompliance at different income levels,” the watchdog added. TPI stands for “taxpayer profile increment.”

When The Epoch Times asked the IRS for comment on the watchdog’s rejection of the IRS’s response to its recommendation, the tax agency pointed to its original response included in the report.

Thanks to Hunter Biden’s laptop, we learned in 2021 that while serving as vice president, Joe Biden used several private email accounts from which he would sometimes forward or receive government correspondence.

Now we know that three of them in particular, pseudonyms robinware456@gmail.com, JRBWare@gmail.com, and Robert.L.Peters@pci.gov, sent or received 82,000 pages worth of emails, according to the National Archives – far more than the 33,000 emails former Secretary of State Hillary Clinton illegally deleted from her private server.

The reason we know this is because the Archives refused to provide the information, and was sued via the Freedom of Information Act by the conservative nonprofit organization Southeastern Legal Foundation.

The emails themselves, which span an eight-year period, will purportedly take a considerable amount of time to produce due to the “scope” – and as such, “the volume of potentially responsive records is necessarily large.”

“NARA has completed a search for potentially responsive documents and is currently processing those documents for the purpose of producing non-exempt portions of any responsive records on a monthly rolling basis,” reads a Monday filing in the lawsuit.

That said, according to the filing, NARA and the plaintiffs are searching for ways to narrow the request for records in order to get copies of the emails out in a more timely manner (like, before the 2024 election?).

Government officials use of private email for official business is discouraged under the law, and officials like Biden are required to preserve all government-related emails conducted on their private accounts under the Federal Records Act. The fact that NARA has such a large collection suggests Biden gave those emails to the nation’s history-preserving agency.

The total revealed by the Archives, however, is stunning in size, even dwarfing the total from the most infamous private email scandal in American history involving former Secretary of State Hillary Clinton, which also involved government business on Obama’s watch. -Just the News

There is no indication thus far from the National Archives that any of Biden’s emails contain classified information, however he is under investigation by Special Counsel Robert Hur related to the removal an improper storage of classified documents from his days as VP.

The stunning admission also comes as Republicans are seeking records related to the Biden family dealings in Ukraine and other countries, raising the specter of possibility that some, or many, of the 82,000 emails will bolster various Congressional corruption investigations.

Republicans have asked NARA for an un-redacted document that indicates that then-Vice President Biden took a call with the president of Ukraine, Petro Poroshenko, on May 27, 2016.

Republicans say the document was emailed to ‘Robert L. Peters’ with Hunter Biden copied.

At the time, top Ukrainian prosecutor Viktor Shokin was investigating oil company Burisma Holdings for corruption – the same company that Hunter was a sitting board member of.

Their demands come after Hunter Biden’s ex-business partner Archer testified before the House Oversight Committee earlier this month that Joe Biden’s ‘brand’ protected Burisma because ‘people would be intimidated to mess with them.’ –Daily Mail

Could these emails contain the smoking gun?

They’re about to arrest Trump again https://t.co/dBuFqJJvBJ

— zerohedge (@zerohedge) October 31, 2023