Month: March 2024

US equity futures were flat after closing Friday at a new record high above 5,100 for the first time ever, and gaining for 16 of the past 18 weeks, while European shares extended gains to new all time highs after six weeks of gains, as investors waited for reassurances that central banks are on track to cut interest rates in the coming months. US equity futures traded in a narrow range with S&P futures trading down 0.1% while Nasdaq futures were modestly in the green. NVDA is +1.3% pre-mkt but the rest of Mag7 are flat or down; Apple was down more than 1% after it was hit Monday with a €1.8 billion ($2 billion) penalty from the European Union over an investigation into allegations it shut out music-streaming rivals. SMCI soared 16% after it was added to the S&P 500 index in the latest quarterly weighting change. Treasuries slipped, while commodities are mixed with ags higher and Energy lower; WTI falls below $80 even though OPEC+ extended production cuts through mid-year. Bitcoin topped $65,000, leading traders to bet the cryptocurrency will surpass the record price of almost $69,000, hit during the pandemic. With no US macro data today and only one Fedspeaker, we may see a low volume day as investors await the next batch of data, ISM-Srvcs (tmrw), JOLTS (Weds), Productivity (Thurs), and NFP (Fri). Earnings this week have AVGO and several Consumer/Retailer names which may help clarify the picture on the Consumer.

In US premarket trading, chipmakers continued their ascent, with Western Digital Corp., Micron Technology Inc. and Nvidia Corp. rising more than 1%. Tesla Inc dropped 1.7% on a drop in Chinese auto sales. Cryptocurrency-linked stocks also rallied after Bitcoin breached the $65,000 mark, extending gains to a second consecutive session. Here are some other notable premarket movers:

• Super Micro Computer soared 16% and Deckers Outdoor also rallied aboug 6% after the pair were added to the S&P 500 index in the latest quarterly weighting change.
• Dutch Bros rise 2.8% after the drive-through coffee chain was upgraded to overweight from neutral at Piper Sandler, which says it’s the right time to become more constructive on the stock.
• Lyft shares gain 5.2% after RBC Capital Markets speculates about a partnership between the ride-hailing service and food delivery firm DoorDash (DASH US), with the broker upgrading both to outperform.
• Toast shares gain 1.3% in premarket trading after the restaurant software company was initiated with an outperform recommendation at Evercore ISI, which also set a Street-high price target for the stock.
• Macy’s rose 16% after Arkhouse Management Co. and Brigade Capital Management boosted their offer for the department store operator by 14% after the company rebuffed a previous proposal.

The S&P 500 has now gained for 16 of the last 18 weeks, a run not seen since 1971, Deutsche Bank analysts pointed out. That rally was fanned further last week by US data that reinforced bets the Federal Reserve would be able to cut rates later this year. The earnings season, meanwhile, showed companies averaging 8% earnings growth.

“Better economic outlook, bullish investor sentiment and some better earnings have supported the equity markets,” Jefferies strategist Mohit Kumar wrote in a note. “Whether it’s the economic outlook or the central bank ‘put’ being back on the table, investors are very positive on risky assets.” While markets have broadly pushed Fed policy-easing expectations to July, from the previously anticipated May, Kumar still expects 75-100 basis points worth of rate cuts this year, according to Bloomberg.

Some hints could come this week from Fed Chair Jerome Powell’s congressional testimony, while the European Central Bank will hold a policy meeting on Thursday. A raft of economic data is also due, including US monthly payrolls figures on Friday.

Europe’s Stoxx 600 reversed earlier losses to trade up 0.3% to a new all time high with technology, health care and banks outperforming. Delivery Hero SE rose after announcing the launch of a financing transaction to amend and extend its financing facilities. Here are the biggest movers Monday:

• Delivery Hero rises as much as 6.9% after the German online food ordering services firm amended and extended its existing debt facilities, something Bernstein calls “overwhelmingly positive”
• Diasorin advances as much as 5.4% after the Italian biotechology firm said it’s Liaison Plex diagnostics platform received US FDA clearance, a very clear positive, analysts says
• Evonik rises as much as 4.5% after announcing job cuts and other measures that will reduce costs by €400 million annually by the end of 2026, with analysts positive on cost cuts
• Aryzta gains as much as 6.1%, the most since Jan. 19, after the Swiss industrial baker presented results that Stifel called “compelling” and fresh guidance which boosts confidence
• DS Smith shares rise as much as 2.1% to a one-year high, after Bloomberg reported late Friday that Mondi has increased its preliminary takeover offer for the rival packaging company
• BT Group advances as much as 2.7% as Berenberg upgrades the telecom operator to buy, saying the investment case should become much clearer and concerns seem overdone
• Henkel shares decline as much as 4.5% after the consumer-chemical producer posted in-line 4Q results. RBC flags company outlook for low-single-digit negative impact from M&A in 2024
• Comet tumbles as much as 7.9%, the most in more than four months, after the Swiss supplier of radio frequency tools to the semiconductor industry posted an outlook below expectations
• SoftwareOne falls as much as 3.3% after the firm’s founding shareholders move to dissolve the group acting in concert between them and Bain Capital and terminate an underlying agreement

Earlier in the session, Asian stocks gained, lifted by the tech sector, as traders prepared for a slew of central bank events and China’s key political meeting this week. The MSCI Asia Pacific Index rose 0.6%, with chipmakers TSMC and Samsung Electronics among the biggest boosts: the world’s top chipmaker, Taiwan Semiconductor Manufacturing Co., rose to its highest-ever level.  Bets that the Federal Reserve will be able to cut rates as soon as June and Dell’s better-than-expected results provided support for tech shares. Taiwan’s Taiex jumped 2%, Korea’s Kospi rose more than 1% and Japan’s Nikkei 225 climbed above the key 40,000 level for the first time ever. The tech gains came on the heels of “the whole AI push again, especially in Taiwan,” said Xin-Yao Ng, an investment director at abrdn. “The AI thematic is very strong at the moment when themes like EV and renewables are facing issues.”

Chinese equities were steady ahead of the National People’s Congress, an annual gathering of the nation’s top officials that may offer trading cues from policy priorities and signals about fiscal stimulus. While recent “national team” buying has put a near-term floor on the market, some investors say more consistent policies and structural reforms are needed for fund flows to meaningfully return.

• Hang Seng and Shanghai Comp. were choppy with an early lacklustre mood after the PBoC’s liquidity drain, while China begins its Two Sessions meeting with the focus on the NPC tomorrow including Premier Li’s first government work report and the official GDP target.
• ASX 200 lacked conviction amid varied data releases and despite initially printing a fresh record high.
• Nikkei 225 resumed its uptrend and climbed above the 40,000 level for the first time.
• KOSPI outperformed as it played catch up on its return from a 3-day weekend.

In FX, the US dollar declined for a second day, in a quiet session with no US economic data due. The Bloomberg Dollar Spot Index is down 0.1% with muted moves across the G-10 currencies. The pound is the best performer, rising 0.2% versus the greenback ahead of the UK budget announcement on Wednesday. Sterling and euro outperformed developed-nation peers while most other currencies were down.

• USD/JPY rises 0.2% to 150.38, up for a second day
• GBP/USD also gains a second day to 1.2682, up almost 0.5% in two sessions
• EUR/USD climbs 0.2% to 1.0853
• USD/CHF rises 0.1% to 0.8843; the pair fell as much as 0.3% to session low 0.8806 after Switzerland’s Feb CPI rose quicker than estimated

In rates, treasuries fall, with US 10-year yields rising 2bps to 4.20%, underperforming core European rates. Treasury yields were cheaper by 2bp to 3bp across the curve with spreads broadly within 1bp of Friday’s close; 10-year yields trade around 4.21% with bunds and gilts outperforming by 3bp and 2bp in the sector. 2s10s and 5s30s spreads, little changed on the day, remain inside Friday’s sharp steepening ranges.Monday’s US session is expected to include at least 10 corporate bond offerings, while economic data slate is empty. Key labor-market indicators later this week include February jobs report Friday. The US IG dollar issuance slate empty so far, though syndicate desks are calling for roughly $30b of new IG sales this week and $130b in March

In commodities, oil prices are flat, with WTI trading near $79.90 after OPEC+ extended its oil supply cutbacks to the middle of the year. Spot gold is little changed.

Bitcoin continued to climb higher and rose more than 3% above 65,000, now just $4K away from a new all time high; price action which has lifted Crypto stocks such as Coinbase and Riot. Chinese state media warned against cryptocurrency trading as domestic interest surges amid the bitcoin rally, according to SCMP.

Looking at today’s calendar, the US economic data slate is empty for the session; ahead this week are S&P Global US services PMI, factory orders, ISM services, ADP employment, JOLTS and jobs report. Fed speakers scheduled include Harker at 11am; Barr, Powell, Daly, Kashkari, Mester and Williams are scheduled to appear later this week

Market Snapshot

• S&P 500 futures little changed at 5,142.25
• STOXX Europe 600 little changed at 498.06
• MXAP up 0.4% to 174.83
• MXAPJ up 0.7% to 531.07
• Nikkei up 0.5% to 40,109.23
• Topix down 0.1% to 2,706.28
• Hang Seng Index little changed at 16,595.97
• Shanghai Composite up 0.4% to 3,039.31
• Sensex up 0.2% to 73,938.36
• Australia S&P/ASX 200 down 0.1% to 7,735.79
• Kospi up 1.2% to 2,674.27
• German 10Y yield little changed at 2.40%
• Euro up 0.1% to $1.0848
• Brent Futures little changed at $83.61/bbl
• Gold spot up 0.0% to $2,083.89
• U.S. Dollar Index little changed at 103.84

Top Overnight News

• In the early 2000s, the U.S. and the global economy experienced a “China shock,” a boom in imports of cheap Chinese-made goods that helped keep inflation low but at the cost of local manufacturing jobs.  A sequel might be in the making as Beijing doubles down on exports to revive the country’s growth.  Propped up by cheap, state-directed loans, Chinese companies are glutting foreign markets with products they can’t sell at home. Some economists see this China shock pushing inflation down even more than the first. China’s economy is now slowing, whereas, in the previous era, it was booming. As a result, the disinflationary effect of cheap Chinese-manufactured goods won’t be offset by Chinese demand for iron ore, coal and other commodities. WSJ
• Beijing is expected to resist growing market pressure for much stronger stimulus to spur China’s economic recovery at its flagship annual political event this week, analysts have said, as President Xi Jinping focuses on turning the country into an advanced manufacturing superpower. FT
• Japan is considering calling an end to deflation in the wake of rising prices, Kyodo news reported, a move that would turn a new page for the world’s fourth-largest economy after decades of economic stagnation scarred a generation of workers and investors. RTRS
• Israel has “basically signed on” to a six-week ceasefire that would be used to facilitate a second round of swaps of Israeli hostages for Palestinian prisoners, a senior US administration official said. FT
• OPEC+ extended its oil supply cutbacks to the middle of the year in a bid to avert a global surplus and shore up prices. The curbs — which on paper total roughly 2 million barrels a day — will remain in place until the end of June, according to delegates who asked not to be identified because the information isn’t public. Group leader Saudi Arabia accounts for half of the pledged reduction. BBG
• US real estate inflation is much cooler/tamer than the official gov’t data would suggest as rents ease amid a jump in supply and a downtick in demand (economists insist it’s only a matter of time before the CPI/PCE start to reflect reality). WaPo
• SMCI (Supermicro) and DECK (Deckers) will replace WHR (Whirlpool) and ZION (Zions Bancorp) in the S&P 500 prior to the open of trading on Mon March 18. WSJ
• Arkhouse and Brigade increase their bid for Macy’s from $21/shr. to $24/shr. and identify additional information about their financing for the deal. RTRS
• President Biden is struggling to overcome doubts about his leadership inside his own party and broad dissatisfaction over the nation’s direction, leaving him trailing behind Donald J. Trump just as their general-election contest is about to begin, a new poll by The New York Times and Siena College has found. With eight months left until the November election, Mr. Biden’s 43 percent support lags behind Mr. Trump’s 48 percent in the national survey of registered voters. NYT
• The recent rally has driven the share of market cap in stocks with extremely high valuations to levels similar to those reached during the euphoria of 2021. But the prevalence of extreme valuations today looks far less widespread than in 2021 after adjusting for market concentration. In contrast with 2021, the cost of capital (WACC) is much higher today and investors are focused on margins rather than “growth at any cost.” These headwinds from a higher WACC have also weighed on small-caps. Quality is expensive and will tactically underperform when confidence in the inflation outlook improves. However, a higher WACC means valuations of small and unprofitable growth stocks are unlikely to return to their 2021 highs. GIR

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded mixed amid a tentative mood ahead of an event-packed week. ASX 200 lacked conviction amid varied data releases and despite initially printing a fresh record high. Nikkei 225 resumed its uptrend and climbed above the 40,000 level for the first time. KOSPI outperformed as it played catch up on its return from a 3-day weekend. Hang Seng and Shanghai Comp. were choppy with an early lacklustre mood after the PBoC’s liquidity drain, while China begins its Two Sessions meeting with the focus on the NPC tomorrow including Premier Li’s first government work report and the official GDP target.

Top Asian News

• China NPC spokesperson said the 2024 annual parliamentary meeting will close on March 11th and they will make new laws to deepen economic reform including financial institutional reform to promote private companies, while the spokesperson said Premier Li will not give a press conference at the close of the NPC this year and will not hold a press conference in following years, according to Reuters. It was separately reported that Beijing is expected to resist market pressure for a much stronger stimulus to spur China’s economic recovery at the annual political event this week, according to FT.
• ZOZO (3092 JT), Disco Corp (6146 JT), and Socionext (6526 JT) are to join the Nikkei 225, from April 1
• China’s NDRC is to raise retail gasoline and diesel prices by CNY 125/ton and CNY 120/ton respectively from March 5th.
• Chinese insurers reportedly warn of debt risks at property giant Vanke (2202 HK/ 2 CH), via Bloomberg

European bourses, Stoxx600 (+0.1%) began the session on a mixed footing and currently trade on either side of the unchanged mark in what has been a catalyst-thin morning. Sectors are mostly lower; Tech takes the top spot, seemingly benefitting from broad-base optimism within the sector. Basic Resources is hampered by the softer risk tone in Chinese trade overnight. US Equity Futures (ES -0.1%, NQ +0.1%, RTY +0.2%) are firmer, though trading with little direction ahead of a quiet docket on Monday. The RTY outperforms, lifted by gains in SMCI (+12.2%) and in tandem with strength in Bitcoin. Attention this week will be on appearances from Fed Chair Powell, the ECB and the US NFP report on Friday.

Top European News

• UK Chancellor Hunt said he hoped to be able to lower taxes further in his annual budget on Wednesday but noted it would be “deeply unconservative” for him to do so in a way that required higher borrowing and his budget will be prudent and responsible, according to Reuters. Furthermore, Hunt said during an interview with the BBC that he wants to move towards lower taxes but will only do so in a responsible way and that the most unconservative thing he could do would be to cut taxes by increasing borrowing.
• UK Chancellor Hunt is putting together plans for up to GBP 9bln worth of tax increases and spending cuts in order to fund a 2p reduction in national insurance, according to The Times.
• UK Chancellor Hunt is reportedly expected to set out plans for private companies to trade shares on exchanges, according to FT.
• UK PM Sunak’s close allies reportedly worry that his chances of winning the next UK election have been made even more difficult as one of his Cabinet ministers, Business Secretary Badenock is said to be positioning to succeed him as Conservative Party leader, according to Bloomberg.
• EU’s Dombrovskis said it is positive that the e-commerce moratorium has been extended, while he noted there were disappointments related to agriculture and fisheries talks.
• S&P upgraded Portugal from BBB+ to A-; Outlook Positive amid ongoing steep external and government deleveraging.

FX

• Contained trade for DXY on a 103 handle, holding above Friday’s trough of 103.65 and the 200DMA at 103.79. Catalyst-light session thus far with greater attention on the week’s upcoming risk events.
• The EUR briefly eclipsed Friday’s high at 1.0856 before pulling back a touch. For now, is contained between between its 50DMA at 1.0867 and 200DMA at 1.0828.
• A slightly softer start to the week for JPY as USD/JPY maintains a footing on a 150 handle. Attention for the pair remains to the upside with Friday’s high at 150.72 and the YTD peak at 150.88. A decisively more hawkish BoJ is required to change fortunes for the pair.
• The Swiss Franc is the marginal outperformer across the majors in the wake of firmer-than-expected inflation metrics. EUR/CHF remains above its 200DMA at 0.9560. ING continues to target a move towards 0.96 for EUR/CHF by spring.
• PBoC set USD/CNY mid-point at 7.1020 vs exp. 7.1906 (prev. 7.1059).

Fixed Income

• USTs are the relative underperformers, and have been gradually fading from the 111-01 session peak which left USTs just one tick shy of Friday’s best, a pullback which has been gradual and without any real driver but one that is relatively modest when compared to Friday’s action overall.
• Bunds are in a tight 132.53-132.89 bound which keeps it near Friday’s best of 132.87 but markedly shy of last week’s 133.61 peak. There was no reaction to EZ Sentix as attention turns to ECB’s Holzmann later today (ECB is in the quiet period) and the ECB Policy Announcement on Thursday.
• Gilts are slightly weaker than EGBs but with an equally narrow 30 tick range, the high point resides at 98.33 shy of Friday’s 98.43 best and another 10 ticks from that week’s contract peak.

Commodities

• Sideways trade across crude futures with little impetus from the weekend OPEC+ output cut extension through Q2 (as expected), with the move seemingly limiting near-term downside. Geopolitics also remain in focus with Gaza truce talks underway; “Egyptian media reports ‘significant progress’ in talks between the mediators and Hamas on a ceasefire in Gaza”, according to Walla News’ Elster.
• A flat-to-subdued morning for precious metals with the Dollar index also caged in a tight range as participants await this week’s myriad of risk events in the absence of unscheduled macro drivers; Spot gold found intraday resistance at Friday’s high (2,088.19/oz) before waning.
• Mixed trade across base metals with copper firmer intraday despite the recently reported increases in Chinese inventories; 3M LME copper briefly fell under USD 8,500/t before reclaiming the level and currently prints a USD 8,481.50-8,570/t intraday range.
• OPEC+ members agreed to extend voluntary cuts to Q2 whereby Saudi Arabia is to extend its voluntary oil cut of 1mln bpd for Q2 with its output to be around 9mln bpd through June and Russia is to cut oil output and exports by an additional 471k bpd, while the UAE is to voluntary cut oil output by 163k bpd and Iraq will voluntary cut output by 220k bpd. Furthermore, Kazakhstan is to extend voluntary oil output cuts of 82k bpd through to Q2 2024 and Kuwait is to cut oil output by 135k bpd for June.
• Russian Deputy PM Novak said Russia will implement an additional voluntary oil and export output cut of 471k bpd for Q2 in which it will cut output by 350k bpd in April with exports cut by 121k bpd, while it will cut output by 400k bpd in May with exports cut by 71k bpd and will cut 471k bpd in June which will all be from output, according to Reuters and The Moscow Times.
• GCC ministerial meeting communiqué stated that the entire Durra gas field and its natural resources are jointly and only owned by Saudi Arabia and Kuwait.
• Iran’s Oil Minister said Iran aims to reach 1.3bln cubic metres per day of gas output in 5 years.
• HSBC says Qatar expansion is likely to prolong Global LNG glut until 2030; cuts Europe TTF forecasts by 14% on average to USD 9.25/9.5/MBTU in 2024/2025E
• EQT (EQT) is to curtail approximately 1bcf per day of gross production beginning late Feb amid low nat gas prices from warm winter weather and elevated storage inventories Q1 curtailments expected to total 30-40bcf of net production.

Geopolitics: Middle East

• Israeli military spokesman said the IDF concluded the initial review of civilian deaths at the Gaza aid convoy in which it was concluded that the IDF did not carry out a strike towards the aid convoy and the majority of Palestinians that died were the result of a stampede, while forces fired warning shots and responded towards several individuals that approached forces posing an ‘immediate threat’.
• Hamas delegation arrived in Cairo on Sunday for ceasefire talks, while it was also reported that a Palestinian official familiar with Gaza truce talks said they were not there yet when asked whether a deal was imminent. Furthermore, Egyptian security sources had previously stated that parties agreed on the duration of a truce, as well as hostage and prisoner releases although the completion of a deal still requires an agreement on the withdrawal of Israeli forces from northern Gaza and a return of residents.
• US VP Harris said what we are seeing every day in Gaza is devastating and too many innocent Palestinians have been killed and Gazans are suffering from a humanitarian catastrophe. Harris added that Israel’s government must do more to increase the flow of aid, “no excuses”, as well as work to restore basic services and restore order in Gaza. Furthermore, she said there must be an immediate ceasefire and the threat posed by Hamas must be eliminated, while she added there is a deal on the table and Hamas needs to agree to that deal, according to Reuters.
• US VP Harris is to meet with Israeli war cabinet member Gantz on Monday and US Secretary of State Blinken is also to meet with Gantz in Washington on Tuesday.
• US official said on Saturday that the outlines of a Gaza peace deal are in place and it depends on Hamas agreeing to release hostages, according to Reuters.
• Houthi transport ministry said hostile actions by British and US naval vessels against Yemen caused a malfunction in submarine cables in the Red Sea.
• Hezbollah claimed it detonated a large IED and fired artillery at an Israeli force that attempted to infiltrate Lebanon, according to a source via social media platform X.
• “Tangible progress on the second day of Cairo negotiations on the truce in Gaza”, according to Egyptian media cited by Sky News Arabia.
• “Egyptian media reports ‘significant progress’ in talks between the mediators and Hamas on a ceasefire in Gaza”, according to Walla News’ Elster.

OTHER

• Road traffic near Crimea’s port of Feodosia was temporarily restricted following reports of an explosion.
• China’s Embassy in the Philippines commented on remarks from the Philippines Ambassador to the US in which it stated the China-related remarks disregard basic facts, ‘wantonly hype up’ the South China Sea issue and maliciously smear China which they strongly condemn, according to Reuters.

US Event Calendar

• Nothing scheduled

Central Bank Speakers

• 11:00: Fed’s Harker Remarks on Economic Impact of Higher Education

DB’s Jim Reid concludes the overnight wrap

We’re currently on a run that you may not see again in your lifetimes. The S&P 500 last week completed a run of 16 positive weeks out of the last 18 for first time since 1971. If this carries on for another week it’ll be 17 out of 19 for the first time since 1964. A remarkable and relentless period of performance.

If the run survives this week it will have navigated a number of big events ending with US payrolls on Friday. Before that we have the US services ISM, China’s Caixin services PMI, the start of China’s National People’s Congress, alongside Super Tuesday in the US presidential race tomorrow. Wednesday sees the latest JOLTS data, the BoC meeting, the UK budget and Powell’s first congressional testimony of the week. Thursday has the latest ECB meeting. Biden’s state of the union address, and Powell’s second testimony. Friday has a fair bit of European data alongside payrolls, including German PPI and Industrial Production.

Let’s briefly review a few of these highlights now starting with payrolls. Our economists and consensus expect +200k against +353k last month with private payrolls at +175k (consensus +160k) versus +317k last month. Winter storms in February bring a lot of uncertainty to the reading as does the fact that January saw a low response rate versus long-term averages so revisions could be sizeable.

Before that we’ll hear from many Fed speakers (see the week ahead calendar at the end for them all) including Chair Powell’s testimonies to the House Financial Services Committee and the Senate Banking Committee on Wednesday and Thursday, respectively. He will likely stick to the January FOMC script but the market always seem to get something new out of these appearances which include a lot of congressional Q&A. He may receive plenty of questions about the balance sheet and DB’s Matt Luzzetti co-authored an important academic paper on Friday, discussed on releases by both Governor Waller and Dallas Fed President Logan, called “Quantitative Tightening Around the Globe: What Have We Learned?”.

The most interesting thing around the ECB meeting will be the updated staff forecasts where downgrades might not be as severe as they could have been a couple of months ago including to inflation where the flash print lasts week was ahead of consensus. So there is now unlikely to be any great urgency to cut and our economists have now pushed back their first cut to June from April. See their preview note here where they detail this and everything else you’d want to know about the meeting.

In politics, tomorrow sees ‘Super Tuesday’, when 16 states and territories will be holding primary elections. It perhaps lacks a bit of razzmatazz this year as a Trump vs. Biden rematch looks the overwhelmingly most likely outcome outside of an event removed from the results of the primaries. Perhaps the most interesting thing to learn is whether pollsters are accurately gauging Mr Trump’s actual support levels as a guide to more national trends/predictions for November.

Moving on to Asia, in Japan, there will be several appearances by BoJ speakers including Governor Ueda tomorrow. In China, the main event will be the National People’s Congress starting tomorrow. Our economists have an overview here and point to several key announcements to watch, including the 2024 growth target, the fiscal stance for 2024 and property sector policy.

Staying with Asia, markets have started the week mostly on the positive side led by the KOSPI (+1.30%) after being closed on Friday. The Nikkei (+0.58%) is currently trading above 40,000 for the first time in history. Elsewhere, the CSI (+0.15%) and the Shanghai Composite (+0.22%) are edging higher ahead of the important political meeting this week. The Hang Seng (-0.06%) and the S&P/ASX 200 (-0.14%) are slightly weaker alongside S&P 500 (-0.11%) futures. 2yr (+1.45bps) and 10yr UST (+1.36 bps) yields are slightly higher, trading at 4.55% and 4.19%, respectively.

Brent futures (+0.16%) are slightly higher at $83.68/bbl after OPEC+ members agreed over the weekend to extend voluntary crude supply cuts of 2.2 million barrels per day (mbpd) until the end of second quarter to support the “stability and balance of oil markets”. This was as expected.

Recapping last week now, and markets were given fresh impetus after the US PCE inflation report was in line with expectations, after some fears had built up of an even stronger print. The S&P 500 gained +0.95% last week (and +0.80% on Friday), meaning the index has now recorded positive weekly gains for 16 out of the last 18 weeks, the first time since 1971. Talking of milestones, the Russell 2000 reached its highest level since April 2022, jumping +2.96% on the week (and +1.05% on Friday), so the rally was fairly broad. But it was tech stocks that led Friday’s sizeable rally, with the Magnificent 7 up +1.27% (+1.74% over the week). A strong earnings beat by Dell Technologies (+31.62% Friday) lifted semiconductor stocks (+4.29%) and saw Nvidia (+4.00%) move above $2trn market cap for the first time.

European equities enjoyed a more modest performance last week, with the STOXX 600 near flat (+0.07%) despite a +0.60% rise on Friday. But the German DAX was a standout, as the index shot up to a new all-time after rising +1.81% (and +0.32% on Friday).

Friday’s equity strength came despite the downside surprise in the US February manufacturing ISM (at 47.8 vs 49.5 expected). That said, it may have helped markets by increasing expectations of rate cuts, with the amount of Fed cuts expected by December rising +9.4bps last week to 92bps (+6.6bps on Friday). This supported a rally in sovereign bonds with yields on 2yr Treasuries slipping -16.0bps (and -8.8bps on Friday). 10yr Treasury yields fell by -6.7bps (and -6.9bps on Friday).

Meanwhile in Europe, flash inflation for February came in hotter-than-expected. Headline HICP slowed to 2.6% year-on-year (just above the 2.5% expected), while core saw a larger upside surprise at 3.1% (vs 2.9% expected). Against this backdrop, investors pared back expectations of ECB rate cuts, with the rate priced in for June rising +5.2bps to 23.2bps (+0.2bps on Friday). This marks the first week since October that less than 25bps of cuts have been priced by June. 10yr bund yields rose +5.1bps (+0.2bps on Friday).

In commodities, WTI crude rose to its highest level since October after gaining +2.19% on Friday to $79.97/bbl (+4.55% week-on-week), ahead of OPEC+’s production decision early this month. Last but not least, Friday was a remarkable day for alternative stores of value as gold (+1.89% to $2,083/oz) closed at an all-time high, whilst Bitcoin (+1.89% to $61,921) closed at a two-year high.

After opening for only one day, a Six Flags amusement park near Atlanta, Georgia was overrun by a mob of up to 600 rioters who proceeded to fight each other and destroy property.  The incident led to a shootout involving the Cobb County Police Department and resulted in the hospitalization of an alleged assailant. 

“As officers followed the crowd out, ensuring they left the property, an unknown number of suspects fired at officers. An officer returned fire, striking one of the suspects,” Cobb County Police Department said. 

The establishment media has decided to focus primarily on the shooting of the unnamed 15-year-old involved in the police altercation, and many outlets have ignored the events leading up to the incident.  The suspect, whose name was not released by police, was transported to Grady Memorial Hospital after receiving medical treatment at the scene. His condition is unknown at this time.  The likelihood of the teen being a minority is high, and the media’s focus may be in preparation for an attempt to provoke a BLM-like response in the near future.

🚨⚠️DEVELOPING: SHOOTING AT SIX FLAGS GEORGIA

Opening day at the amusement park in Georgia turned violent, with brawls erupting inside the park and ending in a shooting involving Cobb County officers.

pic.twitter.com/yr8mifsDao

— Kacee Allen (@kaceerallen) March 3, 2024

While Democrat politicians continue to claim that crime in the US is going down, violent mob actions similar to what happened at the Georgia Six Flags have been rising steadily in the past few years.  Why don’t crime stats reflect this?  Because progressive city governments rarely prosecute the people involved.  Low prosecution numbers lead to low convictions and low reported crime rates.  

Another factor to consider is a change in FBI crime reporting policies during the pandemic, which allows many cities across the US to avoid providing complete crime numbers until 2025.

🚨ICYMI: last night a violent mob stormed the Six Flags in Georgia:

Chaos erupted involving 500-600 teens that viciously beat and stomped out one another.

The mob then began to shoot at the police.

1 teen was shot.

Scores were arrested & taken to jail.pic.twitter.com/2HQ3nJYiKl

— Dapper Detective (@Dapper_Det) March 3, 2024

Atlanta and surrounding areas have recently adopted “equity” policies in criminal prosecution, which generally means lesser charges and lighter sentences for minorities.  The region is also known for shady political influences when it comes to criminal prosecution, as we have seen in the case of District Attorney Fani Willis.

Six flags shooting 💀 pic.twitter.com/9xRUXCfIIe

— Fake throwed fights (@itshoggs) March 3, 2024

In other words, the majority of these riots are dominated by a certain demographic, and this is largely due to the assumption that assailants will not be aggressively charged because of their skin color.  When a specific group of people are assured of privileged treatment in criminal cases, they are incentivized to commit more crimes.  It’s not rocket science, it’s common sense.  

The refusal to pursue severe punishment for violent offenses and repeat criminals in the name of “racial equity” is swiftly destabilizing American cities.  The widespread exodus of citizens from metropolitan areas in the past few years is a testament to growing public concerns over safety.  Blue cities are becoming socialist cesspools devoid of rational leadership, and this is the real reason why we can’t have nice things.   

European aerospace giant Airbus SE delivered around 49 aircraft in February, bringing the total for the year to 79, industry insiders told Reuters. Despite persistent supply chain snarls, Airbus aims to increase aircraft production throughout the year. Meanwhile, its rival Boeing Co. has plunged into a crisis following a near-catastrophic accident earlier this year, which has capped jet production.

Airbus’ 79 jets delivered so far this year puts it 20% higher than its performance at the same point last year. This means Airbus continues to outpace Boeing and expand its market share as the world’s premier jet producer. 

In the latest annual earnings report, Airbus signaled that it would increase jet deliveries to about 800 for the full year, 65 more than in 2023. Analysts had estimated the goal to reach about 825 units. 

“We progressed on our production ramp-up against a backdrop of an operating environment that remains complex and affected by supply chain challenges and geopolitical conflicts so at the end that’s quite an achievement in my view,” CEO Guillaume Faury told analysts last month during an earnings call. 

Last year, Airbus pulled in a record 2,094 commercial aircraft orders, primarily due to a massive surge in demand for narrow-body and midsize jets in Asia and other emerging markets. That sent the company’s backlog to 8,598 commercial aircraft. 

In comparison, Boeing delivered 528 commercial airplanes and secured 1,576 net orders last year. 

Meanwhile, Boeing has been forced by the Federal Aviation Administration to cap its jet deliveries following the incident in early January in which a door panel ripped off an Alaska Airlines 737 Max 9 plane. The cap puts the company at a disadvantage versus Airbus. 

And this is why Boeing shares are lagging behind. 

Also in the earnings call, Faury told investors: “It cannot be quantity over quality … We don’t want to deliver a number of planes. We want to deliver a number of planes that are of high quality and safe.”

Boeing could learn a thing or two from Airbus. 

By Eric Peters, CIO of One River asset management

My first trade ever was in the corn pit. 1989. Don’t remember if I bought or sold, but I lost money on the trade.

Losing on trade #1 was supposed to be good luck, and that’s probably right. If you learn to take a loss right out of the gate, you’ve at least got a shot.

Lots of people say markets go up because there are more buyers than sellers, and vice versa, but that’s not right. There are always the exact same number of buyers and sellers in the pit. What matters is whether one side is more motivated than the other.

The best trades are ones where you can see that there are a large group of aggressive sellers who will soon realize they not only need to buy back their short positions but will then want to get aggressively long. Or the inverse.

And if you spend your career looking only for such setups, you’ll be in the company of the very best investors in the world.

So, when people ask for crypto price projections, which is what most tend to want, I instead go back to my early pit-trader framework. It’s what I know best and is more valuable than the multitude of valuation metrics that humans invent to give themselves comfort in a system that is inherently unstable, prone to avalanche (melt ups too).

So here goes: The SEC approval of the bitcoin ETFs gave a massive group of buyers the ability to easily invest in bitcoin. The addition of bitcoin to a range of model portfolios at the large investment houses meant that there is a motivated buyer, and because there is no way to accelerate the pace of new bitcoin supply, the price must rise until a seller is willing to part with his position.

Rising prices ignite imaginations, and such buying can quickly become reflexive, self-reinforcing. And no doubt, there will be plenty of two-way volatility ahead, but the biggest institutions have barely even started to build their long positions. 

As spring approaches, there could be an uptick in capital market activity, hinting at the thawing of the prolonged stagnation in the initial public offering space. This resurgence is fueled by optimistic market narratives, including predictions of a ‘no landing’ economic scenario, the Federal Reserve winning the inflation fight, and the excitement around artificial intelligence, all of which have driven animal spirits. 

The latest evidence of an issuance window possibly opening up is a report from Bloomberg that specifies Reddit, the community-focused message board site with tens of millions of daily users, is preparing for an IPO with a $6.5 billion valuation.

People familiar with the upcoming IPO say insiders target a price range of $31 to $34 a share. They noted that Reddit would have a diluted value of about $6 billion to $6.5 billion at that price range. 

Morgan Stanley, Goldman Sachs Group Inc., and JPMorgan Chase & Co. are leading the IPO and plan to market shares to potential investors on March 11. Reddit has already disclosed that it will set a bunch of shares aside in the IPO for moderators on the platform. 

Meanwhile, several institutional desks are closely monitoring the IPO market for signs of potential “green shoots.” 

Jason Draho, head of asset allocation Americas for UBS Global Wealth Management, told clients in a recent note that “falling rates, rising confidence in the economy, and record dry powder” could be the catalysts to revive not just merger and acquisition deals but also the IPO market. 

Morgan Stanley’s Katy Huberty told clients last week that capital markets activity is on the rise:

With capital markets activity on the rise, our Thematics Research team is publishing a series of brief analyses of past IPO cycles to try to gain insight on the potential scale of the incipient recovery in deal activity. Their most recent work looks at first-day returns, which are viewed as emblematic of “successful” IPOs. Data going back to the 1990s indicate that average first-day returns demonstrate a positive relationship with IPO deal activity — both 6 months and 12 months thereafter. However, this relationship has become less close since 2008. Our team believes the change in the correlation could be attributable to the market becoming more reactive (i.e. a shortening time lag between rising first-day pops and a rise in volume of activity)

And Goldman’s Issuance Barometer increased to 119 in January, the highest level since February 2022. This index shows clients how conducive the macro environment is for IPOs. 

So what could burst this bubble? Well, hotter inflation prints, along with the Fed not cutting interest rates in the first half of the year. 

Authored by Ken Silva via Headline USA,

Concerned about a weaponized financial system, many countries have signaled plans to remove their gold and other assets from the U.S. in the wake of the unprecedented Western sanctions imposed on Russia over its invasion of Ukraine.

And at least one congressman is demanding answers from the Federal Reserve as to how much foreign gold has actually been removed from U.S. shores so far.

According to a 2023 Invesco survey, a “substantial percentage” of central banks expressed concern about how the U.S. and its allies froze nearly half of Russia’s $650 billion gold and forex reserves. One anonymous central banker told Invesco that his country quietly repatriated its gold from London, and some 68% of the banks surveyed said they are keeping their gold reserve within their country’s borders—up from 50% in 2020.

The apparent desire of foreign countries to bring their gold home would accelerate a trend that began when the U.S. decoupled the dollar from gold in 1971. Since then, the Federal Reserve’s custodial services have dwindled from some 13,000 tons of gold to just a little more than 6,000 tons.

But amidst the geopolitical angst, Fed Chairman Jerome Powell is refusing to divulge information about the U.S. central bank’s gold holdings. Insiders say such information could be highly damning.

Fed Chairman Powell’s Obfuscations

In December, Rep. Alex Mooney, R-W.Va., asked Powell a series of simple and direct questions, including whether the Federal Reserve has recently repatriated gold to foreign nations, how much gold the central bank is holding now, and how much it held in 2022.

Powell responded to Mooney in a letter dated last Friday, giving evasive non-answers to all the congressman’s inquiries.

The Fed chairman told Mooney that the Federal Reserve does not own gold but holds it as a custodian for other entities—a fact the congressman presumably already knew. Powell also said that the Fed serves as a custodian for a “small portion” of the U.S. government’s gold, telling Mooney that “any questions you may have about such gold are best directed to the Treasury Department.” Rep. Mooney’s questions were not about the Treasury’s gold.

To Chris Powell, secretary-treasurer of the Gold Anti-Trust Action Committee, the Fed chairman’s responses to a sitting member of Congress are not only unacceptable but also telling.

“The refusal of the chairman of the Federal Reserve Board even to acknowledge, much less reply to, the questions of a member of Congress about the repatriation of gold from the Federal Reserve Bank of New York confirms that something really big is going on with gold internationally,” Powell said in an email to Headline USA.

“The New York Fed long has disclosed, as a matter of routine, the amount of gold it vaults for other countries. Even now total volume of 6,331 metric tons of custodial gold is listed at the New York Fed’s internet site.”

New York Fed’s Historical Holdings for Governments

Indeed, the Federal Reserve Bank of New York, or FRBNY, has listed an estimate for its total gold holdings online for more than a decade.

It appears as if Mooney’s letter may have at least prompted FRBNY to update its website, which states that the bank holds 507,000 gold bars, with a combined weight of 6,331 metric tons, as of 2024.

Before this year, FRBNY had been listing the same statistics on its site for the last five years—claiming that it held 497,000 gold bars, with a combined weight of about 6,190 tons as of 2019. Before 2019, FRBNY listed statistics that were current as of 2015—508,000 gold bars weighing 6,350 tons—and before that, the FRBNY said it had approximately 530,000 gold bars weighing 6,700 tons as of 2012.

Those numbers show that FRBNY’s gold holdings decreased from 2012 to 2019, then increased by 10,000 bars from 2019 through this year.

Assuming the Fed’s website is accurate, one possible reason for the recent uptick is that FRBNY has taken custody of the gold from Ukraine’s central bank.

Has Ukrainian Gold Offset the Withdrawals of Other Nations?

Such a scenario would explain news reports from 2014 about Ukraine’s gold reserves being “hastily airlifted” to the United States from Borispol Airport just east of Kyiv.

At the time, the New York Fed refused to answer questions from the Gold Anti-Trust Action Committee about whether it had taken possession of Ukraine’s gold. But when Ukraine disclosed in July 2022 that it had sold $12 billion of its gold reserves since the Russian invasion, the Gold Anti-Trust Action Committee returned to the issue.

“The United States and its allies have appropriated tens of billions of dollars in military and humanitarian aid to Ukraine. So why would Ukraine need to sell its gold reserves unless doing so was a condition of all that U.S. and European assistance, especially since the United States already had taken custody of the Ukrainian gold?” Chris Powell asked in a July 2022 article.

Chris Powell told Headline USA that it’s time for the Federal Reserve to start providing answers.

“What does the Federal Reserve know about international gold flows that it doesn’t want the American people to know?  Does this knowledge involve the grotesque financial mismanagement of the U.S. government and its currency? Why shouldn’t the American people know?” he asked.

“Indeed, since gold is the ultimate measure of the value of ALL government currencies, why shouldn’t the whole world be allowed to know?”

Stefan Gleason, CEO of online bullion dealer Money Metals, praised Congressman Mooney for continuing to ask the obvious, but seemingly tough, questions of the Fed and the Treasury about their gold activities.

“The answers as well as non-answers that Mooney receives back from these clandestine government money managers are truly remarkable. Who ever imagined the most basic questions would be so difficult to answer?” Gleason asked.

Ken Silva is a staff writer at Headline USA. Follow him at twitter.com/jd_cashless.

Iran has continued to publicize that it is executing alleged saboteurs linked to Israel. On Sunday state TV announced the judiciary had put to death a “terrorist” behind a drone attack that targeted a military site in Iran last year.

The person was convicted on terrorism charges related to a plot to “explode the workshop complex of the Ministry of Defense in Isfahan under guidance of the intelligence officer of Mossad.”

The identify of the person was not made clear in Iranian media, nor was the precise date of the execution initially disclosed. The defense ministry previously described that the nighttime drone attack merely cause minor damage, and no one was killed.

In December of last year, Iran executed four people it said were linked to Israel’s Mossad intelligence service, after their prior convictions for espionage and spying. Those killed were three men and a woman, who were put to death by hanging.

State media reported at the time that “Four members of a sabotage group related to the Zionist regime [Israel]… were hanged this morning.” The group of alleged saboteurs “committed extensive actions against the country’s security under the guidance of the Mossad.“

Iran is typically depicted in Western media as being paranoid about external spy interference in its affairs, but it’s also true that Israel has carried out an unprecedented assassination and sabotage campaign inside the country over the years, related to the Iranian nuclear program.

Israeli officials have at times appeared to positively boast about it at various points in the recent past, and several top Iranian nuclear scientists have died.

Observers have long suspected that the exiled Iranian opposition group Mojahedin-e-Khalq (MEK) has a significant covert network inside the Islamic Republic, and that they cooperate with Israeli intelligence. Washington officials have also been very public in their support to MEK as well.

The timing of these latest “Mossad-linked” executions seems also related to the Gaza War. Israel has been repeatedly threatening Iran given its historic support for both Hamas and Hezbollah, while Tehran officials have also been issuing daily threats and denunciations as the Palestinian death toll rises.

Authored by ‘Quoth The Raven’ via BictoinMagazine.,com,

The Bitcoin network teaches us that there’s safety in numbers. Now, what could bring people together in numbers to mass-adopt it further than they have?

Today in my series called “things people following Bitcoin for the last 13 years have already figured out but I’m presenting as a brand new epiphany”, I wanted to write about a revelation about Bitcoin’s adoption, standardization, and normalization I had this past week. While thinking about what it would take for Bitcoin to receive a massive adoption push in the United States, I was able to think of one such scenario that may not be very far off.

And contrary to what you think, it doesn’t have anything to do with regulation, taxation, accounting standards, or any of the things that are mistakenly talked about as the ebb and flow of Bitcoin adoption on a daily basis. As I learned firsthand while finally doing some research on Bitcoin over the last month, none of those things truly matter. The decentralized nature of the network necessitates that it doesn’t need any of those things to flourish. I noted this in my article last week called “Why I Bitcoin.”

But what I also noted in the same article was that Bitcoin will survive if the people want it to survive. For those who understand the network, they understand that ~20,000 global nodes mean that the network is going to stay up regardless of which politician, jurisdiction, or regulatory agency around the world tries to stand in its way. This is part of the elegance of the network.

And still, having realized that, I think to myself, “What is going to accelerate that adoption so much that we move from now—a point of almost no return for Bitcoin—to a significant point of serious escape velocity?” The answer was right underneath my nose.

When I wrote the title to my article last week called “Why I Bitcoin,” it was just one of those titles that came to me instinctively. Sometimes I spend hours trying to figure out which title is going to be the catchiest, and other times, like with this article, I have the title set out beforehand because it is very clear what I want to say.

But I was walking around over the weekend and wondering where I had heard that phrase before.

Suddenly, it came to me. In one of my favorite comedy skits, a group of Philadelphia improv comedians went to the Occupy protests that occurred as a result of the 2008 economic crash. In more than one spot, there are signs that say “Why I Occupy.” In fact, this was basically the namesake of part of the Occupy movement. I remember that WhyIOccupy.org was the source for quite a bit of the pissed-off populace at the time; they thought whatever ideology was on that website was their particular brand of solution to the financial crisis.

It was only after remembering that, that I thought in the next major financial crisis, people really are going to have a legitimate exit ramp from the system. Bitcoin is that exit ramp. It’s the thing that people involved in the GameStop frenzy were so desperately looking for, whether they knew it or not, but couldn’t find.

While the GameStop fiasco was taking place, I remember thinking to myself that there were too many people who were pissed off but didn’t have any idea what they were angry about. In chat rooms and on social media, everybody was catching blame but the Federal Reserve. These people were pissed off because they felt like they were getting gypped: they were reacting, whether they knew it or not, to the widening of the inequality gap while they were struggling to make ends meet.

But what they didn’t know was that this wasn’t the fault of Ken Griffin, Citadel, or short sellers; rather, it was the fault of the Federal Reserve.

Nowadays, it’s becoming clearer as the Fed shoehorns that inequality gap even wider. It’s clearer because inflation is a mainstream story and a phenomenon that people can understand. Even if they don’t know why inflation is happening, most people have a semblance of understanding that it has to do with the Fed blowing out the money supply over the last four years and then, to add insult to injury, lying to the public about inflation being transitory.

And those who hoped to repeat GameStop’s success with names like AMC now know that toxic management and a loss-making business can very easily take the air out of any momentum in any type of short, or FOMO, squeeze in any one equity. And they also know that brokerages and regulators can prevent them from transacting in it anytime they damn well please.

During the next major financial crisis, which, in my opinion, isn’t that far away, the same group of pissed-off “have nots” will hopefully direct more of the blame where it belongs: monetary policy. After all, inflation is a brutal tax on the people who can’t afford it and is all but meaningless for the super-rich. And, the super-rich get super richer as a result of quantitative easing and money printing, which directs a disproportionate amount of relief to the stock, bonds and housing market: assets that rich people have that lower-income people do not have.

I would often ask during the Fed money printing over Covid, that if the Fed wanted to print $5 trillion, why wouldn’t they just divide it up evenly amongst all people in the United States and cut us all a check? After all, $5 trillion divided by 300 million people is about $16,500 per person. Putting systemic reasoning aside, this is a fairly simple straightforward question. If you want to stimulate the economy by spraying money all over the place, why not do it equally amongst all of its citizens, instead of playing favorites?

But that isn’t what happened in 2008, and it’s not going to be what happens during the next financial crisis.

What I do think will happen, however, is a new group of “have nots” and economic renegades will be exponentially more informed about how monetary police works, not just as a result of the GameStop fiasco, but also as a new, younger generation has familiarized themselves with the ideological case for Bitcoin. Before I even took to Bitcoin, one of the things I liked about it was the idea that it was forcing a younger generation to understand Austrian economics in a world where we have all but overused and beaten to death our modern monetary theory privileges. Armed with this new knowledge, an entire new generation of pissed-off, regular people will once again bear the cost of socialized losses from nefarious, toxic companies who privatized their profits. And this will be within an inflationary crisis still fresh in their minds. This time there will be no question about who is eroding the purchasing power and the wealth that they have worked for through taxation and inflation.

Which brings me to my point: Bitcoin could very well be the exit ramp that millions of angry people look towards in such a situation.

Unlike with GameStop, Bitcoin actually does have the chance to affect major change because the network’s success is tethered to how large it grows. This means that with every single person who decides to own, or educate themselves about, Bitcoin, they become part of a self-fulfilling prophecy of the network’s success. And, of course, the ideology behind the success of the network is firmly rooted in empowering people just like them: the people who are tired of having what little they earn silently whisked away from them by the dark inflationary financial machinery of the night.

Many people who participated in the GameStop frenzy, including the “apes” over at Reddit’s Wall Street Bets and millions of other retail traders, will be forced to realize that Bitcoin has all of the positives of what they sought to achieve in the past without the negatives. There is no management to mess it up, there is no counterparty to dilute them, there is no one to turn off the buy button and there is essentially no governing or regulatory body to prevent the network from being a success if the people want it to be one. It becomes the digital freedom that all of these people sought out during the last financial crisis but had no effective way to manifest.

2008 was yet another echo of what has become par for the course on Wall Street: every time things get catastrophic, the public bears the cost, gets pissed off and brandishes the torches. But then it eventually blows over and people go about their business.

“I’m starting to feel a little better about this whole thing,” John Tuld says at the end of Margin Call, signifying that the more things change, the more they stay the same.

Bankers and politicians have been relying on this pattern to play out the way it has in the past in order for them to continue to perpetuate the same scheme they’ve been part of for decades. It is, in essence, what enables the miscarriage of justice of everyday Americans bearing the cost of failures of the ultra-rich.

And so, the next time this happens, the investing public could legitimately have a chance to break that cycle for the first time in half a century by adopting Bitcoin. It has a chance to opt them out of the system that they have railed against. Capital flows into Bitcoin and out of traditional financial assets will send a message to major financial institutions who only respond to the opportunity to make fees (see their newfound obsession with Bitcoin now that there’s ETFs for reference). At the same time these flows could add to the self-fulfilling prophecy of the network becoming a success, due to its redundancy essentially serving as the barometer for the health of the network.

It is by no means guaranteed, but if the system ever goes belly up again, and the average person is looking for a true weapon to fight the system – and one that is literally programmed to be the technological braille of the phrases “there’s safety in numbers” and “power to the people,” Bitcoin could shine through and open an epoch for itself that be seen in the future as its adoption Renaissance.

Since Hamas launched a brutal terrorist attack on Israel on October 7 – and the resulting invasion of Gaza by the Israel Defense Forces shortly after to eradicate the terrorist group, the Biden administration has been scrambling to prevent a regional war from erupting during the US election cycle, all while the Federal Reserve is fighting the wicked inflation monster. 

Deterring a regional war has been a significant challenge for the Biden administration and will likely require restraint on Israel’s part. The US’ latest bombing campaign against dozens of Iran-backed militia targets across Yemen, Iraq, and Syria has only made the situation worse. At the same time, Houthi rebels continue causing chaos at a critical maritime chokepoint in the southern Red Sea. 

There has been an escalation in the Middle East crisis. Navigating this very uncertain macroeconomic climate as the post-1945 economic order fractures – is giving way to a dangerous multi-polar world. 

David Asher, a senior fellow at Hudson Institute and former investigator into Covid origins at the State Department, recently penned a note titled “Navigating the New World Disorder: Economic Faultlines, Fissures, Fractures, and Failures.” 

In this note, Asher points to a world that is in crisis, similar to the 1920s/30s. 

On slide three, the macro strategist labels five “looming supply shocks” for the global economy.

He asks: “Is this the end of the long economic growth cycle that has existed since 1947 or “just” a return to the 1970s?” 

While China’s economy struggles to recover, Asher asks another question: “Is Global Trade Recovering or Not?” 

On slide nine, given the mounting risks in the Middle East. He said: “Global oil shock could trigger a crisis ala 2007-2008.” 

He described a series of events that paint an awful gloomy outlook for the Middle East that have significant consequences for global markets. 

Slide thirty is titled: “Iran is Preparing For Oil War: Markets Ignore Growing Risk.” 

The next slide shows the US Navy needs to be better positioned in the Red Sea and Gulf area to respond to a major crisis. Not being prepared has been the theme so far with the failure of Biden’s Operation Prosperity Guardian to secure the critical Red Sea waterway. 

Could Tehran use oil as an economic weapon against the West?

Consider the economic impacts of previous oil shocks…

This is where readers need to pay attention: Imagine the scenario where Yemen’s Houthi rebels start targeting key oil facilities in Saudi Arabia.

Remember 2019?

Should a repeat of 2019 occur, then Brent crude prices could surge. 

And this would cause a massive headache for Jerome Powell’s inflation fight. 

Given all this, are defense stocks a good buy?

The core theme of this note is America’s adversaries in the Middle East could weaponize energy to cause a financial shock. What is necessary for the US military is not just to be focused on the Red Sea chokepoint but also on Saudi’s energy infrastructure because crude prices could be one attack away from spiking over the $100 a barrel level. 

There is good news: US crude production is at record highs. The bad news: radical climate change warriors in the White House have drained the SPR and crushed the ability to expand refining capacity. 

A perfect storm of higher crude prices is brewing… All eyes on the Middle East. 

Authored by Katie Spence via The Epoch Times (emphasis ours),

The Earth is too hot and only getting hotter, according to governments and global bodies such as the United Nations; and the efforts to reduce carbon dioxide aren’t having enough of an effect.

“The world is passing through the 1.5°C ceiling and is headed much higher unless steps are taken to affect Earth’s energy imbalance,” James Hansen, the previous director of the NASA Goddard Institute for Space Studies, warned in January.

Thus, to buy more time, on Feb. 28, scientists from NASA and the National Oceanic and Atmospheric Administration (NOAA) released a report detailing a solution called “intentional stratospheric dehydration,” or in layman’s terms, flying planeloads of ice to 58,000 feet and spraying ice particles into the upper atmosphere.

“It’s a very small effect,” said lead author Joshua Schwarz, a research physicist at NOAA’s chemical sciences laboratory. “Pure water vapor doesn’t readily form ice crystals. It helps to have a seed, a dust particle, for example, for ice to form around.”

The researchers report that by dispersing small particles, or what it calls ice nuclei, into areas of the atmosphere that are both “very cold and super-saturated with water vapor,” water vapor in the atmosphere will “freeze-dry” and rain out of the atmosphere as ice crystals, cooling the planet.

The proposal is known as geoengineering—and NASA and NOAA’s joint plan is far from the only idea that’s jumped from the pages of science fiction, à la the 2013 Hollywood film “Snowpiercer,” to mainstream science.

István Szapudi, an astronomer at the University of Hawaii Institute for Astronomy, has turned to essentially geoengineering a giant parasol, or what he calls, a “tethered solar shield” to shield the Earth from a portion of the sun’s energy.

“Any sunshield works by blocking a small fraction, circa 1–2 percent, of sunlight reaching Earth,” Mr. Szapudi told The Epoch Times. “This is an almost undetectable amount by looking at the sun, but it would still cool the atmosphere to pre-industrial temperatures according to climate models.

“Specifically, the tethered sun shield is a solution that is lighter, thus cheaper, by many orders than traditional designs.”

Technology entrepreneurs Luke Iseman and Andrew Song of Make Sunsets have already taken action and have been creating reflective, high-altitude clouds by releasing balloons full of sulfur dioxide (SO2) into the stratosphere, what they call stratospheric aerosol injection (SAI).

“With climate change rapidly transforming our world, it’s crucial that we prioritize action over words,” Make Sunsets states on its website.

“We believe that SAI is the immediate, necessary solution to cool the planet and buy us time to transition to a more sustainable future.”

But scientists such as Christopher Essex, emeritus professor of applied mathematics and physics at the University of Western Ontario and the former director of its theoretical physics program, said CO2 isn’t the driver of Earth’s warmer temperature and that such geoengineering measures are “extraordinarily dangerous.”

“I used to run a climate panel for the World Federation of Scientists,” he told The Epoch Times. “And we had one session where we presented on exactly why geoengineering is extraordinarily dangerous. It’s a crazy idea.”

Ian Clark, emeritus professor for the Department of Earth and Environmental Sciences at the University of Ottawa, echoed Mr. Essex.

“Geoengineering the climate is a very scary prospect,” he told The Epoch Times.

“It’s something that should be relegated to the fantasy realm and science fiction.”

The Oxford Geoengineering Programme defines geoengineering as “the deliberate large-scale intervention in the Earth’s natural systems to counteract climate change.”

Solar Shield

According to Mr. Szapudi, climate change is a looming threat, and greenhouse gases, such as CO2, are a driving cause of that threat.

He published a report on July 31, 2023, outlining his proposal for a tethered sun shield, what he calls solar radiation management.

“Solar radiation management (SRM) is a geoengineering approach that aims to reduce the amount of solar radiation absorbed by the Earth to mitigate the effects of climate change,” he wrote in his report.

“Two strategies proposed for SRM involve adding dust or chemicals to the Earth’s atmosphere to increase the reflected fraction of sunlight or reduce the incoming radiation from space with solar shades or dust.”

He’s advocating for a sun shield because he believes it is less risky.

When asked to comment on Mr. Essex’s claim that geoengineering is “extraordinarily dangerous,” Mr. Szapudi said: “Space-based geoengineering, especially if it is modular and reversible in design, carries less risk than Earth-based SRM injecting dust or chemicals into the atmosphere, and [it is] vastly less risky than doing nothing.

“Given what we know today and the known risks of climate change, a tethered sun shield near the L1 Lagrange point at 1.5 million kilometers from us would not present an obvious risk to Earth. The benefit is preventing and even reversing negative effects of climate change.”

NASA defines Lagrange points as “positions in space where objects sent there tend to stay put” because of oppositional gravitational forces. The agency has identified five such points.

Mr. Szapudi acknowledged that there could be unknown risks and said that his proposal would need to undergo a more detailed scientific study, followed by a preliminary engineering study.

“Such a study would specify the location, the design, the materials, etc., that are most suitable. At that point, a quantitative and thorough risk assessment can be done, and a decision can be made [on] whether to go ahead with the implementation,” he said.

“In general, any big project would go through many layers of risk, cost, and benefit analyses as the design shapes up, and any showstoppers identified would halt the project. Ultimately, only the most cost-effective and safest design, if any, will be implemented.”

But Mr. Essex, who built his first computer climate model in the 1970s and was chairman of The Global Warming Policy Foundation’s Academic Advisory Council, said part of the problem with a sun shield is that it looks at the climate from an engineering perspective instead of a scientific one.

“You might be able to generate some plausible argument for defining the actual parasol and getting into space,” he said. “But the part you don’t understand is how climate will respond to it.

“Because we’ve been pushing this propaganda as being able to solve a problem, it starts to appear like an engineering problem where you can do trial and error and see if it works or doesn’t work. But the climate problem is not an engineering problem; it’s a fundamental scientific problem. … It’s much more subtle and complex.”

Mr. Essex explained that solar radiation travels through the atmosphere, and while some believe that radiation causes warming at that point, that’s not what’s happening. Instead, the shortwave radiation hits the Earth, which heats the surface, and then the ground radiates that energy as longwave radiation into the atmosphere, increasing temperature.

“With the parasol, they’re trying to control shortwave radiation,” Mr. Essex said. “And it’s an indirect way of controlling what goes on with the longwave, the infrared.

“People like to think the Earth is like a brick, and it’s getting too hot, so we need to cool it down—global boiling, that’s the slogan—well, that’s ridiculous. It’s just about hyping up anxiety and fear so the people will go along with things and not question what’s going on.

“There’s so much going on in the atmosphere. It’s complex, conductive, and turbulent.”

Balloons of Sulfur

Like a sun shield, reflective aerosols fall under the definition of solar radiation management. But unlike a sun shield, reflective aerosols aren’t modular or immediately reversible.

Read more here…