Month: March 2024

After yesterday’s ugly data, S&P Global’s US Manufacturing PMI offered a ray of ‘soft’ hope with an acceleration intra-month – from 50.7 in January to 51.5 preliminary in February to 52.2 final today.

BUT…

In the face of S&P Global’s gains, ISM’s Manufacturing survey puked from 49.1 to 47.8 (well below the expected jump to 49.5)

Source: Bloomberg

This is the biggest divergence between the two Manufacturing surveys in at least three years (Bloomberg data only back to 2021 on S&P Global).

S&P Global says total US manufacturing new orders grew at a strong pace that was the fastest for 21 months… but ISM say it contracted...

S&P Global and ISM agree that selling prices increased at the steepest pace since April 2023.

S&P Global saw employment pick up with the quickest rate of job creation since last September, while ISM saw employment contracting at its worst since June 2020…

Source: Bloomberg

Oh, and Aluminum prices are up… and down!!!

Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, said:

“Manufacturing is showing encouraging signs of pulling out of the malaise that has dogged the goods-producing sector over much of the past two years. After a long spell of reducing inventories in order to cut costs, factories are now increasingly rebuilding warehouse stock levels, driving up demand for inputs and pushing production higher at a pace not seen since early 2022. There are also signs of stronger demand for consumer goods, linked in part to signs of the cost of living crisis easing.

“Firms are consequently investing in more staff and more equipment, laying the foundations of further production gains in the coming months to hopefully drive a stronger and more sustainable recovery of the manufacturing economy.

“Problems with shipping disruptions and supply chains earlier in the year have eased, taking some pressure off input prices, though factory gate prices are recovering amid stronger customer demand, which will be an area to watch closely in the coming months as policymakers assess the appropriateness and timing of any interest rate cuts.”

So… S&P Global sees Manufacturing expanding at its strongest since June 2022… and ISM sees it contracting for the last 15 months.

In the continuation of a trend rocking “elite” institutions, Columbia University Medical Center’s chief diversity, equity and inclusion (DEI) officer has been accused of massive plagiarism in his doctoral dissertation — to include copying content from Wikipedia and poaching the work of 27 other writers.   

The accusations against Alade McKen came via a 55-page complaint anonymously submitted to the New York City Ivy League school this week and first published online by Washington Free Beacon. McKen’s dissertation was submitted in 2021at the Iowa State University School of Education. It’s title: “UBUNTU I am because we are: A case study examining the experiences of an African-centered Rites of Passage program within a community-based organization.”  

McKen took his post at Columbia in September. The job was created in 2021 as part of a Columbia quest to vanquish “structural racism” in health care. Just two weeks ago, McKen was quoted in a university profile as declaring that “everyone” in the DEI office is “committed to doing the work.”

Maybe the work of setting race relations back decades by imposing counterproductive DEI doctrine on Columbia Medical Center, but apparently not the work of doctoral dissertations. 

This is going to be a bloodbath in academia, and I suspect at some point they will claim they care more about “diversity” than honesty. https://t.co/y9fWvakRgs

— Mark Hemingway (@Heminator) February 29, 2024

The Beacon reports that the apparently plagiarized content represents about a fifth of McKen’s 163-page PhD dissertation. More than two pages are essentially identical to content on a Wikipedia page on Afrocentric education. Other passages reproduce the work of African academics.

To take one small example, here’s Chika Ezeanya-Esiobu of the University of Rwanda: 

Several studies have established that contrary to widespread beliefs, formal, and informal education were actively in existence in Africa prior to the commencement of colonialism. At the formal, nonformal and informal levels, Africans in various parts of the continent were consistently involved in the business of transmitting knowledge to the younger generation.

And here’s McKen, with the few tweaks that differ from Ezeanya-Esiobu bolded and underlined: 

Several studies have established that contrary to widespread beliefs, formal and informal education was actively in Africa’s existence before colonialism’s commencement. At the formal, nonformal, and informal levels, Africans in various parts of the continent were consistently transmitting knowledge to the younger generation. 

While, Columbia and McKen declined to comment to the New York Times, a spokeswoman for Iowa State told the Times that the school “is in the process of reviewing the complaint” and “is committed to the highest ethical standards to ensure…public trust” in research at the university. 

The Columbia case extends a steady drumbeat of plagiarism allegations leveled against Ivy League officers. In the most high-profile of those cases, Harvard University president Claudine Gay resigned in January after anonymous complaints that she’d committed plagiarism some 50 times across eight different works, including her doctoral dissertation and published articles. As with Columbia’s McKen, the unsigned Gay accusations were also first posted by Free Beacon. Gay had already been under fire for her response to allegations of antisemitism on the Harvard campus, and her performance in a congressional hearing on that topic. 

Two other Harvard officials have also come under fire for presenting other people’s writing as their own. Harvard’s chief DEI officer, Sherri Ann Charleston, was last month accused of 40 acts of plagiarism, including taking credit for her own husband’s work.  “[Her] 2014 paper appears to be entirely counterfeit,” said Peter Wood, the head of the National Association of Scholars and a former associate provost at Boston University. That anonymous complaint was first posted at — you guessed it — the Free Beacon. 

Last week, the City Journal reported on a plagiarism complaint against Harvard Extension School’s Title IX coordinator in the Office for Gender Equity. Shirley Greene was accused of including more than 40 plagiarized passages in her dissertation.   

I contend academic standards were much higher in the 1990s when I EARNED tenure at ⁦⁦@Princeton⁩. One had to have a pathbreaking book to be in contention. DEI has brought about a massive lowering of standards. What happens next is anyone’s guess. https://t.co/rME6A32U9U

— Dr. Carol M. Swain (@carolmswain) February 29, 2024

Authored by Philip Wegmann via RealClearPolitics.com,

As Nikki Haley stubbornly clings to life ahead of Super Tuesday, warning that nominating Donald Trump for president a third time would mean “suicide for our country,” some of her closest supporters take solace in the fact that the future is unknowable.

Perhaps there is a “fatal landmine” that the former president “could step on at any minute” or a lurking controversy that could “land him deep in the bottom of a well,” speculated Michigan State Rep. Mark Tisdal, who served on Haley’s leadership team for that state. “She is an alternative,” added Utah state Sen. Todd Weiler, who campaigned with Haley earlier this week, “and nobody knows what the future holds with the lawsuits and the age of both of our leading candidates.”

Such are the unrealized hopes of the anti-Trump coalition. He will turn 78 in June, just three years younger than President Biden. He faces 91 felony counts in total among his four criminal indictments.

He has swept the first six nominating contests regardless.

And Trump has yet to trip into a proverbial well or stumble onto any of the aforementioned landmines. During the primary, that is. Haley has urged the GOP to look to November from the beginning, offering up a well-worn rebuttal to the chorus of party members calling on her to exit. Now she has some data to make that case: “He lost 40% of the primary vote in all of the early states.”

An accountant before politics, Haley points to the percentages in her favor as evidence of Trump’s weakness. In Minnesota Monday, she told a crowd, “You can’t win the general election if you can’t win that 40%.” Of course, unless the arithmetic changes in a hurry, Haley can’t win a primary with those numbers, either.

As one prominent GOP operative put it to RealClearPolitics, requesting anonymity to speak frankly, “She’s not building a big movement. What she’s doing is lying in wait and hoping for disaster.”

Her campaign rejects outright any suggestion that Haley is waiting for catastrophe, legal or otherwise, to fall on Trump. They point to her dogged cross-country schedule and her seven-figure national ad campaign as evidence she hasn’t adopted a rear-guard strategy. They say Haley plans to win.

“There’s a lot at stake this election. Nikki is fighting for the future of the Republican Party and long-standing conservative principles like fiscal discipline and a strong national security,” said spokeswoman Olivia Perez-Cubas.

“If we don’t right the ship, Republicans are going to keep losing and that means Democrats and the far left will keep winning.”

The substance of Haley’s fight has earned her comparisons to once-beloved Republican presidents. “She certainly represents the values and principal policy positions of a Reagan-Bush coalition,” said GOP strategist Whit Ayers. But unless things change in a hurry, her campaign could be compared to also-rans such as Pat Buchanan in 1992 and Steve Forbes in 1996, said Ayers, who noted that “there are a lot of people who’ve run for reasons other than simply winning the nomination.”

Writing in Politico, conservative columnist Henry Olsen speculated about one of those potential reasons to stay in the race. The more delegates Haley wins, the more influence she will have at the Republican National Convention “to get concessions from Trump on things she cares about, such as U.S. support for NATO.”

Speculation is in season, and more than one pundit has already written the Haley obituary. For her part, the former U.S. ambassador to the United Nations sticks to her argument that if Republicans nominate her old boss, “we will lose. It is that simple.” She brought this message with her to Utah, where the Republican governor, Spencer Cox, argued that if his party nominates Haley, “or literally anyone else, we would win by 10 to 14 points.”

Haley has targeted states in her final swing that are more moderate than Trump strongholds like Iowa and New Hampshire, places like Minnesota and Utah where his old rivals handed him defeats the last time there was a presidential primary. She will also spend Super Tuesday in Texas, one of six states that holds open primaries next week where registered voters, regardless of party affiliation, can vote for Republicans or Democrats.

“Republicans used to be about smaller government. We used to be about fiscal responsibility, too, and families. All of that has been abandoned under Trump,” Weiler said to explain Haley’s appeal out West. “That’s a message I think that resonates with Utah.”

“We’re a God-fearing people. We love our families. We want a president who our kids and our grandkids can look up to,” he added, “and we traditionally shy away from bullies.”

Now the last woman standing, the former diplomat has been more aggressive with Trump as he gains momentum. But Troy Eid, a former U.S. attorney during the Bush administration who now co-chairs Haley’s Colorado leadership team, said Haley “is not trying to cut people out; she’s trying to make the tent bigger.” If she fails in that mission, he worries, “the country will go off a cliff.”

“The other thing I worry about is that this election cycle, there are no issues,” he said of how the Republican frontrunner has built a lead focused, in Eid’s estimation, on himself and not the challenges facing the country.

“I’m amazed that we maybe have our two candidates from both parties, maybe that’s gonna happen next week … and we don’t have any issues on the table.”

No matter the result next week, Eid wants Haley to fight on until victory or the bitter end. “I hope she’s there when they’re going to have the national convention,” he said, “even if they don’t let her in the door. At this rate, who knows what will happen, but she needs to be outside and talking about issues like she did yesterday in Colorado.”

There was an overnight push among Arab nations to get the UN Security Council (UNSC) to pass a motion blaming Israeli forces for Thursday’s aid convoy massacre incident, which left a reported over 100 Palestinian civilians dead.

Algeria, the Arab representative at the UNSC as a non-permanent member, brought forward a statement expressing “deep concern” over the incident and asserted the mass casualty event was “due to opening fire by Israel forces.”

The lone veto which blocked it was from the United States, in a UNSC vote that was 14 to 1. The US last month was also the lone veto in the body calling for an immediate humanitarian ceasefire in Gaza.

The White House had in the immediate aftermath of yesterday’s early morning deadly incident called it “tremendously alarming” and said it is examining the conflicting accounts of what happened. 

“This latest event needs to be thoroughly investigated,” White House spokesperson Olivia Dalton has said. “This event underscores the need for… expanded humanitarian aid to make its way into Gaza.”

The Palestinian side says Israeli forces shot indiscriminately into large crowds of civilians seeking aid, after some 30 trucks loaded with food and supplies parked in a central Gaza City area. However, Israel’s account is that there was a crowd crush and stampede, but further admits that troops fired on a crowd when it surged toward a checkpoint. 

Israel says the vast majority of the deaths were not the result of IDF soldiers firing, and there are claims that the Israelis only sought to fire at civilians’ legs.

US deputy ambassador Robert Wood has said of UN efforts to produce a statement, “The parties are working on some language to see if we can get to a statement.”

“The problem is that we don’t have all the facts here,” he said, adding that he wanted the wording to reflect “the necessary due diligence with regards to culpability.”

Hamas released a statement in the aftermath saying this mass killing calls into question the future of ceasefire talks. “The negotiations conducted by the movement’s leadership are not an open process at the expense of the blood of our people,” the statement said as reported by Reuters.

After more than 100 people were killed near a convoy of trucks bringing in aid to civilians in Gaza City, calls in Congress for increased humanitarian aid and a cease-fire in Gaza are mounting https://t.co/gnaVVNCl0r pic.twitter.com/VTklyal1Rr

— The Hill (@thehill) March 1, 2024

On Tuesday President Biden raised eyebrows in hastily and seemingly prematurely declaring his hope that a truce deal between Hamas and Israel would be achieved by Monday. But now this is even less likely, though that timetable was acknowledged as unrealistic by all parties in response. On Thursday the president walked back the statement.

This latest US veto at the UN Security Council will be held up internationally as essentially another example of “the US and Israel against the world.”

Authored by Lance Roberts via RealInvestmentAdvice.com,

After over two years, retail investors, also known as the “dumb money,” are almost back to breakeven. A recent chart by Vanda Research shows that the average retail “dumb money” investor portfolio still sports a drawdown despite the markets making new all-time highs.

Such is unsurprising, given that retail investors often fall victim to the psychological behavior of the “fear of missing out.” The chart below shows the “dumb money index” versus the S&P 500. Once again, retail investors are very long equities relative to the institutional players ascribed to being the “smart money.”

The difference between “smart” and “dumb money” investors shows that, more often than not, the “dumb money” invests near market tops and sells near market bottoms.

We can confirm the “smart/dumb money” analysis by looking at the allocations of retail investors in stocks, bonds, and cash. With markets overvalued and hitting all-time highs, it is unsurprising that retail investor equity allocations are at very high historical levels with low holdings of cash and bonds.

Of course, it isn’t that retail investors are chasing the markets higher; it is what the “dumb money” is chasing that is most interesting.

Chasing The Russell 2000

Last week, I discussed the relationship between the NFIB data and the Russell 2000 index. As I noted:

“The recent exuberance for small-cap equities is also unsurprising, given the long period of underperformance relative to the S&P 500 market-capitalization-weighted index. The hope of a “catch-up” trade as a “rising tide lifts all boats” is a perennial bet by investors, and as shown, small and mid-cap stocks have indeed rallied with a lag to their large capitalization brethren.”

We see that exuberance in capital inflows into small-capitalization companies following the 2020 stimulus checks, which fueled an entire generation of “meme stock” traders on Reddit and the Robinhood app. The hopes for quick riches from a small-cap stock “going to the moon,” along with a lot of hype on social media apps, has increased the speculative craze.

At the same time, to leverage their bets, these retail traders have piled into call options. The risk with speculative call options is they are either a “win” or a complete “bust.” Therefore, the speculative risk in trading options is dramatically higher than buying the underlying companies.

However, retail investors are directly piling money into small-cap stocks, as shown by increasing weekly inflows.

Particularly into small-cap growth stocks versus value, with a substantial acceleration starting in November 2023 and increasing in 2024.

As noted above, this degree of speculative risk-taking by retail investors has always ended badly. This is why the financial market considers retail investors as “dumb money.”

Of course, this brings us to whether investors are again making the same mistakes.

A Small Problem May Turn Out To Be Big

Over the past decade, the Fed’s ongoing interventions have led to a massive increase in the leveraging of U.S. corporations. Of course, with repeated financial interventions combined with a zero-interest policy, why would corporations increase the use of cheap debt?

The increased debt load doesn’t provide an inherent risk for large capitalization companies with massive revenues. However, for small-cap companies, it is a very different story. Weaker economic growth continues to increase in the number of “zombie firms.” What is a “zombie” in the financial world? To wit:

“‘Zombies’ are firms whose debt servicing costs are higher than their profits but are kept alive by relentless borrowing. 

Such is a macroeconomic problem because zombie firms are less productive. Their existence lowers investment in and employment at more productive firms. In short, one side effect of central banks keeping rates low for a long time is that it keeps more unproductive firms alive, which ultimately lowers the long-run growth rate of the economy.” – Axios

The chart below from our friends at Kailash Concepts shows the problem facing the “dumb money” crowding in small caps.

With nearly 40% of the Russell 2000 index sporting negative earnings, many have issued debt to sustain operations. Unlike many companies in the S&P 500 that refinanced debt at substantially lower rates, many of the Russell 2000 were unable. The risk is that if higher interest rates remain when that “debt wall” matures, such could further impair survivability.

Interestingly, since the beginning of the year, we are seeing borrowers return to the market for refinancing. As shown, there has been a surge in B-minus (junk) rated borrowers, who are already taking on debt at higher rates to refinance old debt. While we are very early in the cycle, the risk to underlying balance sheets is rising.

As we concluded previously:

“There are risks to assuming a solid economic and employment recovery over the next couple of quarters. With consumers running out of savings, the risk of further disappointment in sales expectations will likely continue to weigh on small business owners. This is why we keep a close eye on the NFIB reports.”

At the moment, the “dumb money” is chasing momentum amid a bullish frenzy. Unfortunately, such will likely again prove disappointing when expectations eventually collide with fundamental realities.

US stock futures briefly fell to a session low – then quickly recovered – as Apple slumped in premarket trading after Goldman removed the company from its conviction buy list (but retained a buy rating). As of 8:00am, S&P and Nasdaq futures traded flat and European stocks retreated from their highs as the relief rally which sent US stocks to an all time high on Thursday encouraged by an in-line reading on core PCE faded, while New York Community Bancorp plunged more than 30% in Friday’s premarket after identifying “material weaknesses” in how it tracks loan risks. Europe’s Stoxx 600 gained 0.5%, reversing an earlier dip, after Euro area inflation printed hotter than expected. Treasury yields are lower, the dollar is flat, and bitcoin is higher and back over $62,000. Today, focus will be the ISM-Mfg report at 10am ET (exp. 49.5 survey vs. 49.1 prior). Keep an eye on ISM-Mfg Prices Paid: consensus sees prices to grow again: 53.2 vs. 52.9

In premarket trading, NYCB tumbled as much as 30% after the troubled commercial real estate lender said it discovered “material weaknesses” in how it tracks loan risks, wrote down the value of companies acquired years ago and replaced its CEO to grapple with the turmoil. Dell Technologies soared 21% after its results beat expectations, boosted by the buzz around artificial intelligence. Apple fell 0.6% as Goldman removed the stock from its conviction list, while keeping a buy rating. It also removed Merck and Vertex Pharmaceuticals from its conviction list, replacing them with Amgen, Monday.com and Vulcan Materials. Here are some other notable movers:

• Caret Holdings shares jump 10% after the insurance technology company was upgraded to buy from hold at Jefferies and the broker raised its price target to a Street high.
• Eli Lilly gains 1.6% after BofA Global Research raised its price target on the weight-loss drugmaker to a Street-high of $1,000 on continued upside for its diabetes and obesity programs.
• Everbridge jumps 25% after the software firm said Thoma Bravo agreed to boost its acquisition price for the company by $6.40 per share to $35.00 per share, after it received a higher bid during the “go-shop” period.
• Ginkgo Bioworks shares slide 14%, after the synthetic biology firm’s forecast for the year disappointed, with Cowen saying that its guidance and quarter were “underwhelming” and noting that the company attributed the revenue decline to the biosecurity unit’s transition, and the lumpy impact of equity milestones that did not recur in 2023.
• HP Enterprise falls 5.6% after the computer hardware and storage company narrowed its adjusted earnings per share forecast for the full year. The firm cited cooling demand for networking products and a lack of availability of graphics processor units required to deliver high-powered servers.
• Humacyte falls 24%, after the biotech company offered shares to raise about $40 million at a 31% discount.
• New York Community Bancorp falls 21% after the company said it identified material weaknesses in its internal controls related to internal loan reviews. NYCB also replaced its CEO, saying that Executive Chairman Alessandro DiNello will take on the role.
• Senseonics shares drop 8.9% after the medical technology company reported fourth-quarter results. While the company beat expectations, Raymond James flagged the slower-than-expected adoption of Eversense.
• SoundHound AI falls 22%, with the voice AI software company retreating in the wake of its fourth-quarter results, as well as a massive rally in the stock price. Analysts are mixed on the report, and Cantor notes concerns about valuation.
• Sweetgreen jumps 20% after the salad chain’s first-quarter revenue forecast came ahead of expectations. Additionally, the company reported fourth-quarter same-store sales that were better than consensus. William Blair called the print a “sweet end” to the year.

Equity sentiment turned more cautious following Thursday’s core PCE data – t he Fed’s preferred inflation measure – which rose in January at the fastest pace in nearly a year, but matched economist forecasts. Traders were also comforted by jobless claims data that indicated labor-market softening. “The data came as a relief for those who were prepared for the worst,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

On the monetary policy front, euro-zone inflation eased less than anticipated in February — supporting European Central Bank officials who don’t want to rush into lowering rates. Meanwhile, Thursday’s US PCE report appeared not to dent the broader disinflationary trend underpinning rate-cut forecasts.

Federal Reserve Bank of San Francisco President Mary Daly said central bank officials are ready to lower interest rates as needed, but emphasized there’s no urgent need to cut given the strength of the economy. Her Atlanta counterpart Raphael Bostic said the central bank could begin cutting this summer. “For markets keenly focused on when the Fed will transition toward easing rates, this report will help restore confidence that it isn’t ‘if’ the Fed will begin to cut rates in 2024, but ‘when,’” said Quincy Krosby at LPL Financial.

Meanwhile, Bank of Americas’s Michael Hartnett said Chinese stock funds saw the largest weekly outflow since October, as the government seeks to stem a decline in the equity market. About $1.6 billion was pulled from Chinese funds in the week through Feb. 28, Hartnett wrote citing EPFR Global data. Beijing is attempting to restore market confidence after years of decline and slowing growth following the pandemic. As the turmoil deepened in recent months, the authorities have stepped up measures to help bolster sentiment, including restricting short selling and cracking down on high-speed trading.

European stocks advanced 0.5%, reversed earlier weakness after Eurozone CPI came in hotter than expected; banks and automobile shares leading gains, while construction and media stocks are the biggest laggards. Here are the biggest European movers:

• Daimler Truck shares rise as much as 15% to a record after the German truck maker posted fourth quarter results that were described “strong” by analysts, thanks to North American orders and the Mercedes-Benz trucks division
• IMCD shares rise as much as 10%, the biggest jump since August 2021, after the Dutch chemicals distributor reported margins that were better than analysts had expected
• Grifols shares jumped as much as 22%, rebounding from a 35% record decline on Thursday, after the Spanish plasma company said a key deal is coming closer to completion
• ITV shares jump as much as 16%, marking their biggest gain since April 2020, after the broadcaster sold its stake in streaming service BritBox and announced the net proceeds will be returned to shareholders through a buyback
• Bekaert gains as much as 9.1%, hitting the highest level since May 2017, with analysts planning to increase their 2024 estimates following the Belgian steel wire company’s results and outlook
• Corbion gains as much as 7.2% after the Dutch ingredients maker proposed a 9% dividend hike on the back of positive free cash flow momentum. Degroof Petercam analyst Fernand De Boer anticipates this could be followed by share buybacks
• Rightmove shares fall as much as 5.3%, the worst performance in the Stoxx 600 Real Estate Index on Friday, after the properly listings portal reported results that were in line with expectations
• IMI shares fall as much as 3.2%, extending losses into a fifth consecutive session, after the engineering firm’s EPS guidance for this year came in slightly below expectations, according to Liberum
• Acerinox declined 7.8% in early trading in Madrid, most since July 2022, after the Spanish stainless steel producer missed estimates and gave a weaker first-quarter outlook that Morgan Stanley says suggests high-single-digit downgrades to consensus Ebitda for 2024
• AMS-Osram’s shares extend drop after Thursday’s plunge of almost 40%, declining another 8.3% after Stifel cut the recommendation on the Swiss chipmaker to hold from buy

Earlier in the session, Asian stocks rose with Japan’s Nikkei 225 climbing 1.9% to its strongest-ever close near the 40,000 mark. Asian equities kickstarted March with gains after registering their best February performance in nine years, buoyed by a climb in Japan and China. The MSCI Asia Pacific Index rose as much as 0.5% , with technology and consumer discretionary stocks among the main advancers. Shares climbed on the mainland and Hong Kong ahead of next week’s crucial National People’s Congress meeting, where traders are awaiting more policy support from Beijing. Chinese authorities will likely display “a sense of urgency to show that there is no acceleration in this deflationary environment,” Xavier Baraton, global CIO at HSBC Global Asset Management in France, told Bloomberg television. “Valuations are extremely attractive, which means limited downside for us.”

In FX, the Bloomberg Dollar Spot Index rose 0.1%. The yen was the weakest of the G-10 currencies, falling 0.3% versus the greenback after Bank of Japan Governor Ueda told reporters the price target is not already in sight, reversing hawkish comments from one of his co-workers just the day before as the BOJ confirms it has no idea what it will do next. His comment tempered speculation the bank’s first rate hike since 2007 could come as early as March.

In rates, treasuries rose while European government bonds pared an earlier decline as US equity futures fall. US 10-year yields drop 4bps to 4.22% while European bonds recovered despite euro-area inflation slowing less than expected in February.

In commodities,  oil was on track for a modest weekly gain as market gauges continued to show signs of strength, with OPEC+ set to decide early this month whether to extend supply cuts into the next quarter. WTI rose 1.1% to trade near $79.10. Spot gold rose 0.5%.

Bitcoin gained for a seventh day, trading above $62,000 as demand from exchange-traded funds continues. BlackRock Inc.’s iShares Bitcoin Trust netted a $604 million inflow on Thursday following a record $612 million on Wednesday.

Today’s US economic data calendar includes February final S&P manufacturing PMI (9:45am), January construction spending, February final University of Michigan sentiment, February ISM manufacturing (10am) and February Kansas City Fed services activity (11am). Fed speakers scheduled include Barkin (8:30am), Goolsbee (10am, 4pm), Waller, Logan (10:15am), Bostic (12:15pm), Daly (1:30pm) and Kugler (3:20pm).

Market Snapshot

• S&P 500 futures up 0.1% to 5,109.25
• STOXX Europe 600 up 0.5% to 496.98
• MXAP up 0.5% to 173.76
• MXAPJ up 0.3% to 526.58
• Nikkei up 1.9% to 39,910.82
• Topix up 1.3% to 2,709.42
• Hang Seng Index up 0.5% to 16,589.44
• Shanghai Composite up 0.4% to 3,027.02
• Sensex up 1.7% to 73,768.05
• Australia S&P/ASX 200 up 0.6% to 7,745.61
• Kospi down 0.4% to 2,642.36
• German 10Y yield little changed at 2.45%
• Euro little changed at $1.0812
• Brent Futures up 0.9% to $82.63/bbl
• Gold spot up 0.0% to $2,045.04
• US Dollar Index little changed at 104.14

Top Overnight News

• Stocks advanced Friday after a reassuring reading on US inflation calmed traders’ worst fears on the outlook for interest rates and spurred fresh record highs on Wall Street.
• Pacific Investment Management Co. is warning that US fiscal profligacy threatens to drag the Treasury market back to 1980s, a time when bond vigilantes demanded far higher compensation to own longer-dated bonds.
• Federal Reserve Bank of New York President John Williams said he doesn’t see a need for officials to tighten policy further and reiterated that he expects the central bank to cut rates later this year.
• Swiss National Bank President Thomas Jordan will step down in September after more than a decade on the job, according to a statement on Friday.
• Returns on carry trades using the world’s biggest currencies. This often profitable but potentially risky strategy involves borrowing the lowest-yielding currencies in the Group-of-10 economies and using the funds to bet on the highest-yielding ones.
• Bank of Japan Governor Kazuo Ueda is keeping his options open for the timing of a widely expected interest rate hike, a position that may fuel further market volatility as investors and economists speculate over a March or April move

Earnings

• Dell Technologies Inc (DELL) – Q4 2023 (USD): Adj. EPS 2.20 (exp. 1.73), Revenue 22.32bln (exp. 22.16bln). Shares +22.4% in pre-market trade.
• Saint Gobain (SGO FP) – FY23 (EUR): Recurring 6.39bln (prev. 6.48bln Y/Y), EBITDA 7bln (exp. 6.9bln, prev. 7.12bln Y/Y), Revenue 47.9bln (exp. 47.8bln, prev. 51.2bln Y/Y). Expects to complete previously announced 5yr 2bln buyback in 2024. Guides initial FY24 Op. margin “double digit”. Shares -4.2% in European trade
• Daimler Truck (DTG GY) – Q4 (EUR): Adj. EBIT 1.56bln (exp. 1.36bln), Revenue 15bln (exp. 14.85bln). Raises dividend to 1.9/shr (prev 1.30/shr). Guides initial FY24 Revenue 55-75bln. (Newswires) Shares +12.8% in European trade

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded with positive bias amid tailwinds from the US following an absence of any hawkish surprises in the PCE data, while participants also reflected on the latest Chinese PMI figures. ASX 200 printed fresh record highs and entered bull market territory after gaining over 20% from its 2022 low. Nikkei 225 extended on its best levels and advanced closer to the 40,000 level amid a weaker currency and after BoJ Governor Ueda said Japan’s economy is not yet in a situation where sustained achievement of 2% inflation can be foreseen, which is in contrast with the prior day’s hawkish rhetoric from board member Takata. Hang Seng and Shanghai Comp. lagged behind their regional peers although the Hong Kong benchmark clawed back initial losses with the help of tech strength, while the mainland was indecisive after the PBoC drained liquidity and as participants digested Chinese PMI data which was mostly encouraging although Official Manufacturing PMI remained in contraction territory for the 5th consecutive month.

Top Asian News

• China’s Commerce Ministry said China’s trade faces a complex, severe, and uncertain external environment, while it will help companies explore the market and expand imports to ensure domestic demand, according to Reuters.
• BoJ Governor Ueda said inflation is easing at a quick pace and wage negotiations will offer a tailwind, while he added that Japan’s economy will continue a gradual recovery and the economy is not yet in a situation where sustained achievement of 2% inflation can be foreseen. Ueda also commented that in judging whether a sustained achievement of the 2% inflation target can be foreseen, this year’s annual wage negotiation outcome is key.
• RBNZ Governor Orr said the economy is evolving as anticipated and inflation expectations have declined, while inflation is still too high but is declining and policy needs to stay restrictive for some time. Orr also said he expects to begin normalising policy next year and economic growth to begin picking up this year.
• RBNZ Deputy Governor Hawkesby said restrictive policy is needed to ensure inflation expectations anchor at 2% and policy is going to stay restrictive for some time yet, while they don’t have a lot of room to manoeuvre when it comes to future inflation shocks. Hawkesby said they are on the right path with inflation and have to hold their course, as well as noted they are not in a mindset to cut rates now and will be cutting sometime down the track.
• Fitch cuts China new home sales forecast, sees wider effects from a slower recovery. Cuts forecast for the Chinese hosing market to a 5-10% decline in 2024 new home sales

European bourses, Stoxx600 (+0.1%) began the session firmly in the green, though did succumb to some early morning pressure ahead of EZ inflation. Thereafter, European equities took another leg lower, with sentiment subdued following the hotter-than-expected print. However, the move came alongside marked uptick in EGBs, with the move seen across assets and has a risk-feel to it; though, it does appear to have been driven by the ‘relief’ in EGBs post-HICP which while hotter-than-expected continues the cooling narrative. European sectors hold a positive tilt; Autos is firmer, being propped up by post-earning gains in Daimler Truck (+12.8%). Energy has been lifted by recent strength in the crude complex; BP (+1.2%)/Shell (+1%). To the downside, Saint-Gobain weighs on Construction & Materials, after poor results. US Equity Futures (ES -0.2%, NQ -0.2%, RTY -0.4%) are entirely in the red. The RTY underperforms, largely hampered by regional banking fears after NYCB (-24% pre-market) announced it had identified weaknesses in internal controls.

Top European news

• Portuguese Finance Minister Medina called for the ECB to start lowering borrowing costs and warned that maintaining them at their current level is a “high risk”, while he noted various European countries are experiencing a strong slowdown with some already in stagnation and recession, according to Bloomberg.
• SNB Chairman Thomas Jordan to step down at end of September 2024.
• UK Chancellor Hunt has ruled out stamp duty cuts in the March budget, according to i news; due to a belief this would fuel inflation

FX

• Contained trade for the DXY and within a 104.04-21 range, respecting yesterday’s 103.65-104.20 parameters. Upcoming data/speaker slate could provide impetus and bring the weekly high of 104.24 into view.
• EUR/USD is ultimately around flat after the hotter-than-expected inflation metrics but respecting yesterday’s 1.0795-1.0856 range. Interim resistance provided by the 100DMA at 1.0824.
• JPY is the underperformer across the majors following dovishly-perceived comments from Ueda. USD/JPY is up to 150.68 at best with all eyes on the YTD peak at 150.88.
• Antipodeans are marginally firmer vs. the USD in uneventful trade with AUD continuing to pivot around the 0.65 mark after making a base for the week yesterday at 0.6486. NZD/USD unable to crack 0.61 after printing a YTD trough yesterday at 0.6077.
• PBoC set USD/CNY mid-point at 7.1059 vs exp. 7.2011 (prev. 7.1036).

Fixed Income

• USTs began the session with a bearish bias, attempting to pare back some of the PCE-induced gains. However, after the EZ CPI (which sparked a fleeting hawkish reaction), the bond complex caught a bid, taking treasuries to fresh session highs; currently around 6 ticks firmer with the curve steeper into US ISM & Fed speak.
• Bunds also began the session on a softer footing. Following the hotter-than-expected CPI there was a fleeting downward move to a test of 132.00 however this was shortlived with Bunds now bouncing and briefly surpassing the 132.54 overnight high. Perhaps driven by the view that while HICP was hotter than expected, it is still cooling overall and does not change the pre-existing narrative of a June move.
• Gilt price action is in-fitting with EGBs, and unreactive to its own PMI (the HCOB commentary brought attention to ongoing inflationary pressures); Gilts following suit, briefly moved into the green as EGBs bounced but have settled near unchanged.

Commodities

• Crude is firmer after a relatively contained start to the session. The complex caught a bid in the European morning, just after the release of EZ Manufacturing PMIs which were revised up but remain bleak overall; Brent holds just shy of USD 83/bbl.
• XAU is firmer, continuing to build on the prior day’s PCE-induced gains. Has climbed above USD 2050/oz, but with still some way to go thereafter before the USD 2078/oz YTD peak.
• Base metals in the red, hit by PMIs remaining in contraction (despite upward revisions) and soft Chinese performance given the region’s Manufacturing number printed below 50.0 for the fifth consecutive month. Initial USD upside is also a hindrance, though this narrative has diminished somewhat.

Geopolitics: Middle East

• Israeli PM Netanyahu said Israel won’t fold to the delusional demand of Hamas but will provide freedom of worship to Muslims during the month of Ramadan while maintaining security at the same time, according to Al Jazeera.
• French President Macron said the situation in Gaza is terrible and a ceasefire must be implemented immediately to allow humanitarian aid to be distributed, while France’s Foreign Ministry said the shooting by Israeli soldiers against civilians trying to access food is unjustifiable and they are waiting for all light to be shed on the shooting. The ministry also said it is Israel’s responsibility to comply with the rules of international law and protect the distribution of humanitarian aid to civilian populations.
• UN Secretary-General Guterres said the killing of over 100 humanitarian aid seekers in Gaza would require an effective independent investigation.
• US military said it conducted strikes against six anti-ship cruise missiles and an aerial drone that posed a threat to ships in the Red Sea, according to Reuters.

Geopolitics: Other

• US Defense Secretary Austin told the House Armed Services Committee that the Russian leadership “won’t stop there” if Ukraine is defeated and that Russia and NATO could come into conflict if Ukraine falls, according to TASS.
• Japan’s government will freeze the assets of 12 individuals and 8 organisations due to their involvement in the Ukraine conflict.

US event calendar

• 09:45: Feb. S&P Global US Manufacturing PM, est. 51.5, prior 51.5
• 10:00: Jan. Construction Spending MoM, est. 0.2%, prior 0.9%
• 10:00: Feb. ISM Manufacturing, est. 49.5, prior 49.1
  • Feb. ISM New Orders, prior 52.5
  • Feb. ISM Employment, prior 47.1
  • Feb. ISM Prices Paid, est. 53.2, prior 52.9
• 10:00: Feb. U. of Mich. Sentiment, est. 79.6, prior 79.6
  • Feb. U. of Mich. 1 Yr Inflation, est. 3.0%, prior 3.0%
  • Feb. U. of Mich. 5-10 Yr Inflation, est. 2.9%, prior 2.9%
  • Feb. U. of Mich. Current Conditions, prior 81.5
  • Feb. U. of Mich. Expectations, prior 78.4
• 11:00: Feb. Kansas City Fed Services Activ, prior -2

DB’s Jim Reid concludes the overnight wrap

You’re not going to believe it but its March already! Since it’s the start of the month, we’ll shortly be releasing our monthly performance review, covering how different assets fared in February. In terms of the headlines, the Magnificent 7 posted its strongest performance in 9 months, which powered global equities up to all-time highs. But even as growth data remained resilient, fresh upside inflation surprises led to notable losses for bonds, and 2yr Treasury yields saw their biggest increase in 7 months since June as investors kept pushing out the timing of future rate cuts. See the full report in your inboxes shortly.

When it came to the last 24 hours, markets got a boost on a relief that the US PCE inflation report was in line with expectations, after the latest European inflation numbers fell back earlier in the day. That helped sovereign bonds rally on both sides of the Atlantic, while the S&P 500 (+0.52%) advanced to a new all-time high. The moves also leave the S&P just about on course to post another weekly advance (+0.15% so far this week). If it does hold on to this weekly gain, it would mark 16 out of 18 positive weeks for the first time since 1971, so it’s hovering around some big milestones. So no pressure today for the market!

With positive month-end sentiment dominating the end of yesterday’s session, it was not only the S&P 500 eking out yet another all-time high, but there was also a new record high for the NASDAQ (+0.90%), which moved above its previous peak from November 2021. Consistent with the narrative of the year so far, the Magnificent 7 outperformed (+1.22%), with Amazon (+2.08%) and Nvidia (+1.87%) leading the way. The equity picture had been more subdued in Europe, where the STOXX 600 ended the day unchanged, although the German DAX (+0.44%) continued to outperform yesterday. Indeed, yesterday’s advance was the 7th consecutive gain for the DAX, taking the index up to a fresh all-time high.

Looking at the main trigger of the optimism, the PCE inflation report showed headline PCE running at a monthly +0.3% as expected, which took the year-on-year measure down to 2.4%, and its lowest since February 2021. Core PCE was running above that, at a 12-month high of +0.42%, but markets weren’t too alarmed as it was in line with the +0.4% expected by the consensus. Nevertheless, the report added to signs that inflation was still lingering above target, and some of the 6-month measures (which had previously pointed to inflation being back at target) were no longer looking as favourable. For instance, core PCE had been running at +1.9% on a 6m annualised basis, but after this January report, it was up to +2.5% again. Likewise, headline PCE rose from +2.1% to +2.5% on a 6m basis. Interestingly outside the pandemic period, and the month after 9/11, the monthly core print of 0.42% was the highest since the early 1990s. However there were some odd potential one-offs in the report such as a surge in portfolio management charges. So for now the market is relaxed but inflation is proving a little sticky as we start the year. Perhaps the sanguine response is based on the fact that pretty much nobody now expects a March cut and a lot of water can flow under the bridge before June when the market expects the first one. So plenty of time to change mind on things or the data to change.

Over in the Euro Area, rates initially saw a modest sell off amid country-level flash CPI prints for February. But in the end these came largely in line with expectations, with a pattern of slowing, but still above target, inflation. German inflation was down to +2.7% on the EU-harmonised measure, whilst in France it was down to +3.1%, its lowest since September 2021. Both of these were in line with consensus, while Spain’s print was a touch above (+2.9% vs +2.8% exp.). This morning we’ll get the Euro Area-wide release, which will set the stage for the ECB’s next meeting on Thursday. With the available country prints, our economists see a marginal upside risk to the consensus expectations of +2.5% headline and +2.9% core inflation.

Against this backdrop, sovereign bonds posted a moderate rally yesterday, clawing back some of their losses over February as a whole. In the US, 10yr Treasuries yields fell -1.5bps to 4.25%, while 2yr yields retreated by -1.8bps. This was a decent turnaround, having been up by 5-6bps shortly before the US data. And over in Europe, yields on 10yr bunds (-4.8bps), OATs (-4.2bps) and BTPs (-4.1bps) all fell back by a larger amount.

Both 2yr and 10yr Treasuries had traded flat on the day around the US equity close, but saw a slight rally late on after New York Community Bancorp said it had identified “material weaknesses” in risk controls. NYCB also announced a $2.4bn goodwill impairment and replaced its CEO. Shares of the troubled regional bank fell more than 20% in extended trading, having already declined by 54% over the past month. So one to keep an eye on today.

Asian equity markets are higher this morning with the Nikkei (+1.82%) leading gains, hitting a fresh all-time high after a two-day losing streak while the Hang Seng (+0.75%), the CSI (+0.33%) and the Shanghai Composite (+0.10%) are also moving higher. South Korea is closed for a holiday. S&P 500 (+0.15%) and NASDAQ 100 (+0.21%) futures are edging higher.

Early morning data showed that China’s o fficial manufacturing PMI contracted for the fifth straight month in February but was broadly inline at 49.1 (v/s 49.0 expected) versus the 49.2 seen in January. Meanwhile, the official non-manufacturing PMI grew more than expected to 51.4 in February after a 50.7 reading in January. This saw China’s composite PMI remain steady at 50.9 in February. Elsewhere, Japan ’s labour market remained tight as the jobless rate dropped to 2.4% in January, the lowest level since early 2020 as against December’s revised level of 2.5%.

The Japanese yen (-0.27%) weakened to 150.38 after the BoJ Governor Kazuo Ueda stated that he is still not confident the nation can sustainably attain the central bank’s 2% inflation target while stressing the need to see the outcome of wage negotiations currently taking place, for confirmation of a positive wage-inflation cycle. He seems to be wanting to temper speculation that the BoJ could move as early as this month giving the BoJ some optionality. It is still likely that happens before the end of April though.

Back to yesterday, and on the inflation side, one ongoing theme is that short-term US inflation expectations have continued to move higher in recent days. In particular, the US 2yr breakeven was up +1.5bps yesterday to 2.79%, the highest since last March, and the 2yr zero-coupon inflation swap (+1.1bps) reached its highest since October at 2.445%. This comes as the recent uptick in oil prices continues to filter through to the real economy, with US gasoline prices up to a 3-month high of $3.319 per gallon on Wednesday.

Looking at yesterday’s other data, UK mortgage approvals rose to 55.2k in January (vs. 52.0k expected), which is their highest level since October 2022. Otherwise in the US, the weekly initial jobless claims rose to 215k over the week ending February 24 (vs. 210k expected), ending a run of 3 consecutive weekly declines. In the meantime, continuing claims were up to 1.905m in the week ending February 17 (vs. 1.875m expected), their highest level since November.

To the day ahead now, and data releases include the global manufacturing PMIs for February, along with the ISM manufacturing reading from the US. Over in the Euro Area, we’ll get the flash CPI inflation release for February, as well as the unemployment rate for January. Otherwise, central bank speakers include the Fed’s Barkin, Waller, Logan, Bostic, Daly and Kugler, the ECB’s Holzmann, and BoE chief economist Pill.

Authored by Simon Black, Bloomberg macro strategist,

Eurozone inflation data for January just came in higher than expected, as hinted by the readings in Germany, France, etc earlier this week. Euribor futures rallied a few basis points after the release (perhaps more hawkish data was expected), but the over 90 bps of interest rate cuts priced in for this year are at risk as the fall in cyclical inflation in Europe reaches its limit.

A return to an inflation eden in Europe is the base case, as with the US. Fixing swaps for Eurozone HICP anticipate it will dip back below 2% in the late summer before settling just over 2% towards year end.

But it does not look like it will be that plain sailing. There are many ways to think about inflation, but one of the most helpful in this environment is to split it up into cyclical and structural components. We can do this by looking at all the categories in the HICP basket (there are over 400), and categorizing those that are persistently above their long-term averages as structural, and anything left over as cyclical.

Typically most of the ups and downs in headline inflation are driven by, expectedly, the cyclical component. But in this cycle, while the bulk of inflation’s fall has been driven by cyclical, structural inflation has been steadily rising.

We may soon find cyclical inflation begins rising again (as it is cyclical), reinforcing still-elevated and rising structural inflation, causing the headline number to re-accelerate.

In January’s inflation report, the biggest positive monthly contributors to headline were cyclical in nature, i.e. electricity, gas and water, and food. As in the US, and across asset classes, a risk of an inflation revival is not yet being priced in European rate and bond markets.

Elon Musk claims in a lawsuit filed Thursday evening in the San Francisco Superior Court that ChatGPT-maker OpenAI and its chief executive Sam Altman, among others, have breached the artificial intelligence startup’s founding agreement that puts humanity over profits. 

“These events of 2023 constitute flagrant breaches of the Founding Agreement, which Defendants have essentially turned on its head. To this day, OpenAI, Inc.’s website continues to profess that its charter is to ensure that AGI [artificial general intelligence technology] “benefits all of humanity,”” the lawsuit reads. 

It continues: “In reality, however, OpenAI, Inc. has been transformed into a closed-source de facto subsidiary of the largest technology company in the world: Microsoft. Under its new Board, it is not just developing but is actually refining an AGI to maximize profits for Microsoft, rather than for the benefit of humanity.”

Besides breach of contract, Musk argues that OpenAI also violates fiduciary duty and unfair business practices and asks the startup to revert to an open source model to better humanity. The billionaire requests an injunction to prevent OpenAI, Altman, and or president Gregory Brockman – as well as Microsoft – from profiting off the startup’s AI products. 

Musk alleges that Altman, Brockman, and Microsoft conspired together to remove the startup’s board members, who were tasked with upholding its foundational mission.

“Mr. Altman hand-picked a new Board that lacks similar technical expertise or any substantial background in AI governance, which the previous board had by design,” the lawsuit said, adding, “The new Board consisted of members with more experience in profit-centric enterprises or politics than in AI ethics and governance. They were also reportedly ‘big fans of Altman.'”

According to Musk, OpenAI’s GPT-4 model, released one year ago, remains a closed model. And he said this is due mainly to commercial considerations instead of the interest of humanity.

“The internal details of GPT-4 are known only to OpenAI and, on information and belief, to Microsoft. GPT-4 is hence the opposite of ‘open AI … And it is closed for propriety commercial reasons: Microsoft stands to make a fortune selling GPT-4 to the public, which would not be possible if OpenAI—as it is required to do—makes the technology freely available to the public,” Musk said. 

He adds: “Contrary to the Founding Agreement, Defendants have chosen to use GPT-4 not for the benefit of humanity, but as proprietary technology to maximize profits for literally the largest company in the world.” 

Musk, an original board member of OpenAI, departed in 2018. In 2015, he co-founded the startup. 

*   *   *

Read the full lawsuit here:

Authored by Simon White, Bloomberg macro strategist,

Inflation is back on the radar this week after yesterday’s release of PCE in the US. It showed a modest fall from the prior month in the headline print (but under the surface the picture was more worrying), lending credence to the bigger picture signal of inflation pressures building again. Emblematic of how unpriced assets are for this likelihood, volatility in gold and silver and other metals is near decade lows.

Given how recently inflation was at generational highs, it is remarkable how complacent the market has become that the inflation problem is over. Normally after an inflation shock, there is a risk premium built into prices that persists for many years. It took a long time, and the brutal rate rises of Paul Volcker followed by the delphic utterances of Alan Greenspan, to finally convince the market to bring term premium back to the pre-Great Inflation levels of the 1960s.

Today, the fixing-swaps market foresees that CPI will return towards 2% CPI by the second half of this year. There is no risk premium for inflation built into yields, and money markets have a significant bias towards expecting lower not higher rates.

On top of that, commodity volatility is becalmed. Commodities and other real assets have historically performed well in in inflation regimes, with their volatility rising too. But implied vol in several commodities, especially metals and notably gold and silver, is preternaturally low.

This is not reflective of a market expecting a return of inflation, or indeed pricing much probability of it happening at all. No asset class, in fact, looks ready for an inflation redux.

One of the biggest drivers of US disinflation over the last two years has not been domestic monetary policy, but deflation in China. Yet, very slowly, leading indicators of activity and inflation are beginning to pick up in China as layers of fiscal and monetary stimulus start to bite.

A sign that China will soon be contributing positively to global and US price pressures again — and cause a repricing in markets — can be seen in the nascent rise in real narrow money (M1) growth, which has led gold volatility in recent years.

New Yorkers are grappling with skyrocketing housing rents despite rents across the nation slowing, if not reversing, in some cases. A lack of affordable housing is driving shelter costs higher in the progressive metro area plagued with elevated living costs, a migrant crisis, and a worsening violent crime wave. 

With new data from the rental site Zudmper indicating that one-bedroom rentals in NYC surged 18% in February to a record high of $4,200, it’s puzzling to consider who would choose to live there. Additionally, even median rents in Jersey City, located across the Hudson River from Manhattan, rose 5.4% to $3,140. 

Meanwhile, rents across the country have decreased by .7% this month compared to last year, primarily due to a surge in the construction of new rental units. February represented the fifth straight month of flat or declining year-over-year rent changes nationwide. Yet, this trend of cooling rental prices does not apply to NYC, where a housing shortage continues. 

Perhaps the housing shortage in NYC has been made worse by the surge of 200,000 illegals bussed into the metro area from the open southern border in the last 18 months. 

Protest break out in Harlem after residents found out NYC was turning a luxury building into a shelter for illegal migrants.

How far to the left will NYC go before it’s completely destroyed?

🔊 … 🚨🚨🚨 pic.twitter.com/tihL1FTdrO

— Wall Street Silver (@WallStreetSilv) February 17, 2024

Ahead of the November elections, Democrats have stuffed the illegals in schools, hotels, and community centers and have even wanted to give them debit cards pre-loaded with tax-payer funds. One can only assume that the government placing these migrants into apartments across the city will only make the housing affordability crisis worse. 

New York continues to bang nails into its own coffin.

Leftist New York Gov. Kathy Hochul, a leftover from the corrupt Cuomo regime, quietly changed the state’s “Safety Net Assistance” program eligibility regulations to allow illegal migrants to receive benefits, making thousands… pic.twitter.com/Feb2cG3d2s

— Old School Eddie (@Old_SchoolEddie) February 21, 2024

Given all this, who in their right mind would want to live in a city with record-high shelter costs and out-of-control crime?