Did Kam-unism Send Philly Fed Business Survey Crashing To COVID Lows?

Did Kam-unism Send Philly Fed Business Survey Crashing To COVID Lows?

Everything is awesome, right?

Well something just hit the wall in the Philly Fed’s region… and the timing is awkward for Kamala’s economic plan.

Remember in June, when The Philly Fed General Business Activity Index surged up into expansion at two year highs and there was much celebrating that ‘soft’ data was going to lead us out of a ‘hard’ data slump?

Well, that’s all over now as the index crashed to -25.1 in August – its weakest since the COVID lockdowns…

Source: Bloomberg

On a non-seasonally-adjusted basis (what exactly is a seasonally-adjusted ‘sentiment’?), it was an even bigger collapse…

Source: Bloomberg

Under the covers, it was even uglier with future activity expectations plunging into negativity, capex expectations tumbling, and full-time employees crashing to their lowest since COVID lockdowns…

Source: Bloomberg

Oh, and about that price-gouging stuff… for the last three years, businesses (at least in the Philly Fed region) have seen nothing but margin compression and pain as the prices paid for goods dominated the prices received for goods…

Source: Bloomberg

…but hey, that ruins the Democratic narrative that greedy mom-and-op store-owners are stealing your hard-earned real income losses.

Finally, today’s Philly Fed survey joins a recent rash of ‘soft’ sentiment surveys that has reversed the rebound we saw in Q2…

Source: Bloomberg

It seems that ‘hard’ data’s reality check is just too much for the always-optimism-biased adjustments in the surveys.

Now, what changed in August to prompt such a collapse in sentiment?

Tyler Durden
Tue, 08/20/2024 – 12:20

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Trump Vows To Slash Energy Costs By Half If Elected

Trump Vows To Slash Energy Costs By Half If Elected

Authored by Charles Kennedy via OilPrice.com,

  • Donald Trump has pledged to reduce energy costs by half within his first year in office if elected.

  • Trump plans to achieve this by canceling electric car mandates and reversing green energy policies.

  • Trump’s energy plan focuses on boosting U.S. oil and gas production, while criticizing wind and solar power.

GOP presidential candidate Donald Trump has promised to reduce energy costs by half by reversing current federal government policies in his first year in office if he gets elected.

Trump was speaking at an event at a defense manufacturing facility in Pennsylvania and said that if he enters the White House, during his first year he would remove future mandates for electric cars and cancel “green energy” policies, according to a report by UPI.

Trump went on to warn those in attendance that if Harris wins the presidential vote, energy costs would triple and quadruple, and the U.S. “won’t be producing a drop of oil.”

He also accused the Biden administration of a “regulatory jihad to shut down power plants.”

The Biden administration indeed has a very different energy policies agenda than Trump and Harris has indicated she would stay in the transition lane if she enters the White House as president.

Trump, on the other hand, has remained a staunch supporter of what he calls U.S. energy dominance, encouraging as much oil and gas production as possible to turn the country into a self-sufficient one in terms of energy and extend its international influence through energy exports.

Last month, in an interview with Bloomberg, Trump said that if he wins he would boost U.S. oil production, calling the commodity liquid gold.

“We have more liquid gold than anybody,” Trump told the publication, adding “We need energy at low prices. The advantage we have all over almost every country including the very large ones is that we have more energy than anybody. We have more of the real energy, the energy that works,” the former president vying for another term in office said.

“Wind does not work. It’s too expensive,” said Trump, claiming that solar and wind farms are neither too good for the environment, nor too suitable to provide energy at low costs and prices.

Tyler Durden
Tue, 08/20/2024 – 12:00

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Harris’ DNC Platform Calls For ‘Radical’ Mass Amnesty For Millions Of Illegals

Harris’ DNC Platform Calls For ‘Radical’ Mass Amnesty For Millions Of Illegals

The official Democratic party platform calls for the passage of the US Citizenship Act – which the Trump campaign on Monday called ‘a radical amnesty bill that would give automatic citizenship and social security numbers to the millions of illegal aliens that invaded our country, including criminals, human traffickers, and gang members.

 According to the DNC platform:

America is a nation of immigrants. The legal immigration framework was last updated in 1990 and does not reflect the needs of our country in the 21st century. Many immigrants today are forced to wait years, and often decades, to immigrate lawfully to the United States.

A robust immigration system with accessible lawful pathways and penalties for illegal immigration alleviates pressure at the border and upholds our values. The U.S. Citizenship Act would permanently increase family-sponsored and employment-based immigration.

This is in sharp contrast to Trump’s platform, which calls for sealing the border and carrying out the largest deportation operation in US history.

“This was the plan all along”

Some are suggesting that the Biden-Harris administration allowed the country to be flooded with illegal immigrants in order to eventually grant mass amnesty.

Tyler Durden
Tue, 08/20/2024 – 11:40

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Dormant For Decades, US Uranium Producers Are Regaining Traction

Dormant For Decades, US Uranium Producers Are Regaining Traction

Authored by John Haughey via The Epoch Times,

Since the Senate unanimously passed the Prohibiting Russian Uranium Imports Act and President Joe Biden signed it into law in May, at least five shuttered uranium mines across four U.S. states have been reactivated in response to accelerating global demand for nuclear-powered electricity.

The latest reopening was Uranium Energy Corp. (UEC), which announced on Aug. 13 it has resumed production at its Christensen Ranch in-situ recovery operation in Wyoming’s Powder River Basin, with plans to begin shipping yellowcake—milled uranium oxide—from its nearby Irigaray Central Processing Plant by December.

Noting that 94 nuclear reactors operating in 55 power plants currently generate 20 percent of the nation’s electricity, UEC president and CEO Amir Adnani said the reopened mine and processing mill is an investment in reinvigorating a domestic industry that is vital to economic stability and national security.

“U.S. production has been virtually non-existent for many years, suffering from price insensitive imports via foreign state-owned enterprises that undermined domestic mining and investment,” he said, citing the bill and other actions as keys in reestablishing “the foundation of a robust nuclear fuel supply chain” in the United States.

The bill was adopted by the House in a 365–36 February vote and formally went into effect on Aug. 11. It is designed to usher in “a nuclear renaissance” with trimmed regulations, streamlined permitting timelines, and $2.7 billion in incentives and tax credits to expand domestic uranium enrichment capacity.

The Prohibiting Russian Uranium Imports Act was followed by the creation of a federal Nuclear Power Project Management and Delivery working group in May and the adoption of The ADVANCE Act in June, which is geared to tripling domestic nuclear power production by 2050 with billions more in incentives and tax credits to promote evolving technologies such as small modular reactors.

None of this is possible without the mining and processing of uranium—an industry dominated for decades by Russia and Kazakhstan, a former Soviet Union state closely aligned with the Russian Federation.

A half-century ago, the United States was the world’s largest uranium producer. In 1980, domestic operators produced and processed 44 million pounds of yellowcake—about 90 percent of the uranium used by 251 nuclear power plants that generated 11 percent of the country’s electricity, according to the U.S. Energy Information Administration.

By the post-Cold War mid-1990s, however, U.S. nuclear power plants were increasingly importing less expensive low-enriched uranium largely from Russia and Kazakhstan.

Uranium extraction and processing in the United States—already hampered by stiff mining regulations, lengthy permitting processes, litigation, and high operations costs—was further derailed by the 2011 Fukushima disaster in Japan.

By 2021, only 5 percent of the uranium used by the 55 nuclear power plants operating in the United States was produced domestically, with Canada (27 percent), Kazakhstan (25 percent), Russia (12 percent), Uzbekistan (11 percent), and Australia (9 percent) being the leading suppliers for U.S. plants.

Anfield’s Shootaring Canyon Uranium Mill sits in the middle of the Utah desert outside Ticaboo, Utah, on Oct. 27, 2017. Anfield is in partnership with the Russian firm Uranium One and bought the mill from Uranium One in 2015. The House of Representatives is getting ready to investigate the Obama-era approval sale of Uranium One to a Russian company. George Frey/Getty Images

Russia’s February 2022 invasion of Ukraine underscored how important it is for the United States and European Union nations to end reliance on imported uranium from Russia and Kazakhstan, spurring bipartisan action by Congress.

With the slate of 2024 bills and the 2020 establishment of a strategic uranium reserve to stockpile domestically produced uranium, “Russia’s chokehold on America’s uranium supply is coming to an end,” Sen. John Barrasso (R-Wyo.) said in a May 8 address from the Senate floor.

“Last year alone, our industry paid over $800 million to Russia’s state-owned nuclear energy corporation, Rosatom, and its fuel subsidiaries,” he said. “That number could be even higher this year and these resources are no doubt going towards funding Putin’s war efforts in Ukraine.”

“Production from stable jurisdictions is valued in today’s volatile world and has become a renewed priority in utility purchasing strategies,” Scott Melbye, executive vice president of U.S.-based Uranium Energy Corp (UEC), said.

He said uranium “carries a unique demand profile, not only applicable for U.S. and Western utilities’ security of supply, but also for U.S. national security.”

Melbye is also the president of Uranium Producers of America, a trade association based in Santa Fe, New Mexico, that represents 12 U.S.-based uranium extraction and processing companies that, with UEC’s reopened Christensen Ranch, operate 15 in-situ recovery (ISR) operations nationwide.

An Ugly Legacy

In ISR, or in-situ leaching, the ore remains in the ground and minerals are dissolved from the rock with a leaching solution through a series of wells. The solution is then pumped to the surface for extraction in a recovery plant.

Compared with the open-pit mines of the past—an estimated 1,000 remain abandoned across the West, with half in the Four Corners region of New Mexico, Colorado, Utah, and Arizona—in-situ mining causes less surface disturbance in a smaller footprint, uses less water, and leaves no contaminated tailings or waste rock.

Melbye said that when the United States led the world in uranium production 40 years ago, most operations were open-pit mines. Now, he said, about 90 percent will be ISR.

Nevertheless, critics argue, in-situ mining – uranium mining, generally – poses risks, including the potential for groundwater contamination with radon, heavy metals, and leaching fluids.

Local tribe leaders speak before President Joe Biden signs a proclamation creating the Baaj Nwaavjo I’tah Kukveni Ancestral Footprints of the Grand Canyon National Monument at Red Butte Airfield, Ariz., on Aug. 8, 2023. Madalina Vasiliu/The Epoch Times

The industry also has a bad reputation across much of the West Coast, especially with the Navajo Nation and Hopi and Havasupai tribes in New Mexico and Arizona, where radioactive waste and dust, heavy metals, and acid mine drainage from uranium mining have fostered cancers and other health issues since the 1940s.

That history—and the failure to remedy “unremediated” abandoned mines—is among the reasons the Havasupai Tribal Council and others virulently opposed the January 2024 restart of uranium producer Energy Fuels Resources’ Pinyon Plain uranium mine in Arizona’s Kaibab National Forest—about seven miles south of the Grand Canyon.

Closed since the 1980s, the mine is beneath Red Butte, which many tribes, including the Hopi and the Havasupai, say is sacred. President Biden signed a proclamation incorporating Red Butte into the Baaj Nwaavjo I’tah Kukveni Ancestral Footprints of the Grand Canyon National Monument in August 2023, but under Energy Fuels Resources’ pre-existing permit, the mining activities remain legal.

The 17-acre open-pit operation employs 60 people and is expected to tap out by 2027 after producing at least 2 million pounds of uranium, enough to power Arizona for at least a year with carbon-free electricity, the company says.

There’s no such conflict with UEC’s Christensen Ranch ISR operation, which is part of the company’s Willow Creek Uranium Recovery Project in Wyoming’s Campbell and Johnson counties.

UEC’s Irigaray Central Processing Plant is the project’s hub and has a licensed capacity of 2.5 million pounds of uranium per year. The company is seeking to extend that to 4 million pounds, or more than 1,814 metric tons, annually.

The plant will eventually process materials from as many as 14 nearby ISR operations, including four that have been fully permitted, with Christensen Ranch the first to come online. It employs 40 workers and will add 20 more in 2025, the company said.

“We are in full growth mode,” Donna Wichers, UEC’s vice president of Wyoming operations, said.

Tyler Durden
Tue, 08/20/2024 – 11:20

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Russian Army Captures New York

Russian Army Captures New York

Ukrainian President Volodymyr Zelensky has once again admitted the situation in Ukraine’s east is “difficult” amid a continuing Russian troop advance in the Donetsk region. He said this Tuesday as Moscow announced the capture of the key town of New York, or Niu-York.

The defense ministry hailed the fresh capture of “one of the largest settlements of the Toretsk agglomeration,”  calling it a “strategically important logistics hub.” It sits just south of the large industrial town of Toretsk, which has long been eyed by Moscow as a prime strategic goal in the region.

Image: RFE/RL

Ukraine’s military has said it is “doing everything necessary” to protect Toretsk after within the 48 hours prior Russia said it took over the nearby town of Zalizne.

New York marks the latest in a string of gains in Donetsk for Russian forces, with a population of around 10,000. It can serve as another launching point for attacks on Toretsk, which had a pre-war population of over 30,000.

AFP explains of the city’s curious name, “New York first found itself on the front line in 2014, when Moscow-backed separatists in the east tried to break away from Kyiv.”

“The origin of the town’s name is a mystery, with theories including possible American connections among its founders,” the report continues. “It was renamed Novgorodskoye — New City — by Soviet authorities in 1951 for ideological reasons, before Ukrainian lawmakers voted to switch it back to New York in 2021.”

In southern Russia, the fight to repel Ukraine’s cross-border Kursk offensive continues after pro-Kiev forces blew up three key bridges there over the past week.

Among the stated aims of Kiev officials for the operation deep in Russian territory is to distract and divide Russia’s army. There have been limited reports of Russia possibly diverting some manpower from Donetsk to help protect the homeland amid the incursion.

RIA is reporting Tuesday that the Russian defense ministry has newly announced the establishment of new military groups dedicated to protecting and stabilizing Russia’s border regions, with names of the new formations given as “Belgorod”, “Kursk”, and “Bryansk”. The bulk of these forces might be made up of new conscripts, as opposed to pulling more seasoned troops from Donetsk.

Anadolu via Getty Images

The cross-border operations have likely dented the Kremlin’s morale to some degree, and has captured the West’s attention; however, the war is ultimately being decided in Ukraine’s east, with the Kursk fighting likely to be short-lived, despite Zelensky’s recent declarations that he’s intent on holding territory and creating a “buffer zone” in Kursk.

Tyler Durden
Tue, 08/20/2024 – 11:00

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Pity Those Having To Make Forecasts For The Global Economy Right Now

Pity Those Having To Make Forecasts For The Global Economy Right Now

By Michael Every of Rabobank

Breaking With Convention

Pity those having to make forecasts for the global economy right now. After all, they are having to do so less than 80 days from a US election in which two radically different policy platforms are being proposed to the American public, and so to every corner of world markets, yet with some worrying things in common.

The Republicans offer extending consumer and corporate tax cuts, the introduction of universal (and higher for China) tariffs, the deportation of millions who entered the US illegally, and the president having more say on what the Fed does. It may also include help for first-time home buyers, with Trump indicating he might steal a populist Harris policy after she stole ‘no tax on tips’ from him, along with removing the $7,500 tax credit from EV purchases. It’s hard to read that as anything other than an at best an inflationary (at first) boom or at worst a stagflationary bust, a further fiscal blow-out, and a massive change in the global trading and financial architecture.

The Democratic platform released at its Chicago National Convention — where angry protesters were outside and at 11:30pm EST, President Biden still hadn’t started to speak(!)– includes raising the corporate tax rate to 28%, not much new on tariffs, a pledge to provide amnesty to the millions who entered the US illegally or have been deported from it, and a promise the president won’t interfere with the Fed – though that doesn’t preclude appointing dovish personnel who back MMT. It also includes building 3 million new homes (by whom?) with $25,000 for first-time home buyers, and stopping “price gouging” in the food industry: on the latter, some, like Adam Smith, argue anti-Borkian anti-trust actions increase competition; but this takes years, while a quick political win looks like Diocletian’s diktat on prices, leading to reduced supply. It’s hard to read that as anything other than at best a lower-inflation, more state-guided growth, or at worst a different sort of stagflationary bust, also a further fiscal blow-out, and again implying massive, different, changes in the global trading and financial architecture.

Can you see how many structural breaks with convention are now appearing all at once? Possibly not, as for many it’s easier to retreat to “Rate cuts!”, and its conjoined twin, “Higher asset prices!”

We are already in a global easing cycle, and Jackson Hole late this week will provide further proof that the Fed will finally join. However, rate cuts to what end against a backdrop so challenging that politicians are up-ending so much political and economic convention?

To make my point with just one key example, the Bank of England (BoE) started their own rate-cut cycle on 1 August: and we already see ‘Interest rate cut fuels immediate upturn in UK property market’. Indeed, with the five-year fixed rate mortgage now around 4.80% vs. 5.82% in August 2023, UK property website Rightmove says potential buyers contacting agents since that 1 August cut have jumped 19% y-o-y, and it now expects a “buoyant autumn property market,” upgrading its house price forecasts from -1% for 2024 to +1%. If rates fall enough, could we eventually put a zero after that second figure?

Does anybody — other than estate agents and those now selling their house– think the answer to any of the recently-riot-struck, housing-crisis-inflamed UK’s socio-economic and socio-political woes is “even higher house prices?” The same runs true even where we thankfully haven’t seen the violent UK reaction being mirrored yet. Indeed, as I put it to someone the other day, project the housing dots forward, and try saying “feudalism” without saying “feud”.

Yet what will BoE interest rate cuts –with services inflation still entrenched(!)– actually achieve other than that property market response?

Yes, it’s easier to borrow. But even with the new government push to build on green belt land, rational private property developers won’t build enough houses to compensate for the “Higher asset prices!” momentum flowing from “Rate cuts!” In which case, to make housing affordable, the debt-laden government might have to use the fiscal room lower rates give it – but that would imply a larger state role in the economy. For example, it could offer a subsidy to first-time buyers – directly from all taxpayers to richer home sellers in the Aussie experience, where prices rose to match the subsidy given; or it could build large numbers of new houses with the fiscal breathing room it gets, which might not be bad policy in some eyes, but is certainly unconventional in recent decades. Or there could be BoE macroprudential measures: if we had implemented such policies, with a guiding national geostrategy, years ago rather than just snorting “Rate cuts!”, we would not be in the mess we are now.

Combining several of the above, forward-planning Singapore just tightened loan-to-value ratios for mortgages for its large stock of (excellent) public housing to ensure that cheaper options than the expensive private sector remain available for most of its population. That’s a deliberate policy tightening with a socio-economic goal even as the rest of the world is about to undertake a monetary policy loosening that will inevitably flow back to the very open island economy.

That sits alongside something we have been saying for some time: that the more prudent course of central bank action is not to do what ‘conventional wisdom’ in self-serving markets says, i.e., to cut rates with abandon; it may be to reduce rates slowly, and to a higher low than we have become accustomed to. Or, if central banks do cut more, to put in place counterbalancing tightening policies in some sectors.

Even if central bankers act very conventionally –which those in property and financial markets will see as the ‘Right Move’– many politicians are likely to adopt convention-breaking policies that may counterbalance: for example, how about higher house prices and higher property taxes to match?

As another case in point, today saw the RBA’s August minutes, where they left rates at 4.35%, with the clear message now that they are on hold for a long time, and a subtext that the Bank wishes it had raised rates six months ago,… and could be forced to do so again(?) After all, with deposit and mortgage rates both plunging regardless of what the RBA is doing –it’s a global market! Who knew?!– we also saw comments that a few weeks ago, “Financial conditions appeared to be less restrictive than had previously been the case,” while “In light of these developments, members assessed that the risks of inflation not returning to target within a reasonable timeframe had increased.” Indeed, the earlier conditioning assumption was that RBA rates would start to fall in late 2024 and be trimmed several times over the subsequent year – something the Bank now sees would require a significantly tighter policy path to achieve. Yet the market is easing for it.

Because as far as local markets are concerned, the next RBA move is still down, not up, whenever that might be (“Rate cuts!”). There are no macroprudential measures to fear, and the government will provide another first-time buyer subsidy if anything were to accidentally go wrong again. As such, house prices can only ever go up, up, up (“Higher asset prices!”). All is for the best in the best of all possible worlds. Perhaps Australia is The Luckiest Country. But in the long run, everyone’s luck runs out. And a more unconventional future awaits when it does.

In China, the PBOC didn’t move its 1-year rate from 3.35% nor its 5-year rate from 3.85% today. However, the Chinese property market remains very out of luck, with the political tide there having taken a ‘Common’ turn rather than a merely unconventional one: its houses are for living in, not speculation. Can you imagine that mantra in the West? It would shatter convention!    

Tyler Durden
Tue, 08/20/2024 – 10:40

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Lowe’s Cuts Full-Year Outlook On “Challenging Macroeconomic Backdrop” Hitting Homeowners 

Lowe’s Cuts Full-Year Outlook On “Challenging Macroeconomic Backdrop” Hitting Homeowners 

Home improvement retailer Lowe’s beat second-quarter earnings expectations but fell short on sales, slashing its full-year outlook due to “lower-than-expected DIY sales” in a “pressured macroeconomic environment.” Lowe’s and other industry peers like Home Depot have warned about an uncertain outlook as housing market trends slow amid high interest rates and elevated inflation, impacting low/mid-tier consumers. 

Goldman’s Kate McShane provided clients with an earnings snapshot for Lowe’s second-quarter earnings: 

LOW reported 2Q24 adj. EPS of $4.10, above the GS and consensus (Refinitiv) estimates of $3.99/$3.97. Adj results excludes a pre-tax gain associated with the 2022 sale of the Canadian retail business. Net sales decreased 5.5% y/y to $23.586bn, below the GS estimate of $24.038bn and consensus of $23.946bn, while comparable sales decreased 5.1% y/y vs. the GS estimate of -4.0% and consensus of -4.1%. Operating margin decreased 114 bps y/y to 14.4% (vs. GS/consensus of 14.1%/14.1%) as operating expenses (SG&A and D&A) as a % of sales increased 96 bps y/y to 19.0% while gross margin decreased 18 bps y/y to 33.5%.

Here’s more on McShane’s earnings breakdown for the second quarter:

  • Sales decreased 5.5% y/y to $23.586bn, below the GS estimate of $24.038bn and consensus of $23.946bn. Comparable sales decreased 5.1% y/y as a decline in DIY big ticket discretionary and unfavorable weather was partially offset by positive comps in Pro and online

  • Gross margin decreased 18 bps y/y to 33.5%, compared to the GS estimate of 33.5% and consensus of 33.3%.

  • Total operating expenses (SG&A and D&A) decreased 0.5% y/y to $4.5bn and represented 19.0% of sales compared to 18.1% in the prior year. Operating margin decreased 114 bps y/y to 14.4%, above the GS/consensus estimates of 14.1%.

  • Inventory decreased 3.3% y/y to $16.8bn and compares to the -5.5% sales decline. LOW’s payables ratio of 61.4% compares to 59.3% in the prior year.

Lowe’s reduced its full-year forecast because of a pull back in consumer spending, especially in do-it-yourself projects.

“Based on lower-than-expected DIY sales and a pressured macroeconomic environment, the company is updating its outlook for the operating results of the full year 2024,” the retailer wrote in a statement. 

McShane provided more color on the lowered full-year guidance: 

LOW lowered their FY24 guidance, including sales of $82.7bn-83.2bn (vs. $84bn-85bn prior), comparable sales of -3.5% to -4.0% (vs. -2% to -3% prior), adj. operating margin of 12.4%-12.5% (vs. 12.6%-12.7 prior), adj. EPS of $11.70-$11.90 (vs. $12.00-$12.30 prior). Guidance for interest expense remains at $1.4 and capital expenditures of $2bn.

Marvin R. Ellison, Lowe’s chairman, president and CEO, commented on the earnings report:

“The company delivered strong operating performance and improved customer service despite a challenging macroeconomic backdrop, especially for the homeowner.”

McShane noted, “Although LOW missed expectations, we think this was somewhat expected after the HD print last week.” 

She added that LOW is “Buy rated” for clients with a 12-month price target of $268, noting that “deterioration in the pricing environment from increased competition or softer-than-expected demand could weigh on profitability.” 

Here are other analyst commentary from Wall Street’s top banks (courtesy of Bloomberg): 

Morgan Stanley (overweight)

  • “Our key takeaway on LOW’s results is better than feared for 2Q earnings,” as well as its revised forecast, analyst Simeon Gutman writes
  • Lowe’s is “holding to its promise” of managing margins, with “solid” gross margin performance in 2Q and what looks to be “exceptional cost control”
  • He thinks shares can “tread water in the near term,” and hold on to their ~4% gain since rival Home Depot reported last Tuesday
  • That said, Gutman views consensus estimates for next year as “too high” amid expectations for a prolonged recovery in home improvement

JPMorgan (overweight)

  • “Importantly, the gross and operating margin upside in 2Q is consistent with our relatively positive view of LOW’s margin outlook and contrary to the bear case that the company over- earned/under-invested and had high risk implied in its guide (it also counters a gross margin miss in 1Q),” analyst Christopher Horvers writes
  • Both gross and operating margin topped expectations as “productivity efforts continued to drive expense control,” he says
  • Bottom line on print: “nothing surprising with margin upside underpinning a more positive view.” He’ll be listening for quarter-to-date commentary to gauge how “prudent” the annual forecast might be

RBC (sector perform)

  • The 5.1% comparable sales decline was “largely expected” after Home Depot’s results last week, according to analyst Steven Shemesh
  • Pro comps gain of mid-single digits (vs. low-single digit growth in 1Q), which shows continued outperformance vs. Home Depot, but slowing DIY comp. sales probably give investors “some pause” even with likelihood of lower interest rates later this year
  • “Better gross margin and less SG&A deleverage vs. consensus is also noteworthy, but revised FY’24 guidance implies that 2H EPS still needs to come down by ~8% at the mid-point,” he adds
  • Still, he expects the comp miss/guidance cut to be viewed in “somewhat of a positive light” as it lowers the bar and makes for easier comparisons next year
  • Shares likely to remain “range bound” until there is more clarity on the “potential duration of consumer malaise”

In markets, LOW shares are marginally lower in premarket trading in New York. What’s important to note about the few years of sideways price action is that it stems from the Federal Reserve’s interest rate hiking cycle, which lifted off in early 2022. High interest rates and elevated inflation have pressured low/mid-tier consumers, forcing many to pull back on discretionary spending. 

Last week, Lowe’s rival Home Depot beat quarterly expectations for earnings and revenue but issued a warning for the quarters ahead that weaker consumer trends will emerge. One major theme this earnings season has been top execs overly concerned about discretionary spending pullbacks from low-end consumers.

Tyler Durden
Tue, 08/20/2024 – 10:20

via ZeroHedge News https://ift.tt/2Kwe6qr Tyler Durden

Harris Polls “Much Less Rosy” Than Reported, SuperPAC Admits

Harris Polls “Much Less Rosy” Than Reported, SuperPAC Admits

The founder of the main outside spending group backing Kamala Harris for president says their own internal opinion polling is “much less rosy” than public polls – and has warned Democrats that they face much closer races in key states.

Our numbers are much less rosy than what you’re seeing in the public,” said Future Forward super PAC president Chauncey McLean said during a Monday event hosted by the University of Chicago Institute of Politics.

According to public polls – which, as you’ll see below, are largely bullshit – Harris is leading Donald Trump in several national polls by FiveThirtyEight; 46.6% to 43.8%, and has allegedly pulled ahead in several battleground states, Reuters reports.

Except that’s not what Future Forward is seeing…

The PAC has created a ‘massive polling operation’ and tested some 500 digital television ads for Biden and 200 for Harris, along with polling some 375,000 Americans in the weeks after Biden was forced out of the 2024 race and Harris became the presumptive Democratic nominee on July 22.

According to McLean, the majority of Harris’ momentum after she took over for Biden was from young voters of color – opening up Sunbelt states such as Nevada, Arizona, Georgia and North Carolina. That said, Pennsylvania – the most consequential state in the group’s analysis, is a ‘coin flip’ based on Future Forward polls.

He says Harris must win one of three states – Pennsylvania, North Carolina or Georgia – to win the White House.

He warned that Harris has yet to fully rebuild the Biden coalition of Blacks, Hispanics and young voters that brought him the White House in 2020.

McLean said polling shows the public wants more detailed policy positions from Harris.

He says they don’t want “white papers,” but they also don’t want platitudes. He says they need more concrete examples of how she may differ from Biden and make their lives easier economically. Trump allies have called on Harris to do the same in recent days, hoping to pin her down on controversial issues. -Reuters

According to McLean, the race is tight as ever.

“We have it tight as a tick, and pretty much across the board,” he said.

About those bullshit polls…

Mark Davin Harris of political consulting firm ColdSpark says they’re seeing a “historic response bias on surveys that is setting the table for a large polling miss this fall.”

Diving right in, Harris says pollsters are essentially injecting unreported bias into polls by targeting subgroups more likely to answer the way they want.

For example, “In the meta data from the call centers college educated Dems are 3-4x more likely to answer than non-college. While weighting can help minimize the bias if done correctly it won’t totally eliminate the problem. For example even if you quota’ed for party (something I have very mixed feelings about) AND for education at the topline you can have the college Dems consume such a big chunk of Democrats that you miss the downscale Dems that are MUCH less partisan loyal.”

Harris is set to release an analysis that show “historically liberal” bias even when they “weight back to party.”

Gauging by turnout?

According to Harris, one possible solution would be to focus on a person’s past voting history – as those who ‘always’ vote are being oversampled vs. the ‘low turnout’ voters, who are more likely to vote for Trump.

We’re seeing a lot of surveys WAY oversampling the ‘always voters’ and not getting enough of the infrequent voters that are so important in a Presidential race and Trump does better with low turnout folks,” he said.

Tyler Durden
Tue, 08/20/2024 – 09:40

via ZeroHedge News https://ift.tt/6wTyaZt Tyler Durden

CCP Conducts Emergency Drills For ‘Pneumonia Of Unknown Cause’ Across China

CCP Conducts Emergency Drills For ‘Pneumonia Of Unknown Cause’ Across China

Authored by Alex Wu via The Epoch Times (emphasis ours),

In recent months, local health authorities have conducted emergency infection disease response drills across China.

On Aug. 15, Dingxi City in Gansu Province, a district in Yancheng City in Jiangsu Province, and Lingchuan County in Shanxi Province carried out emergency drills for the outbreak of “pneumonia of unknown cause,” according to an official notice.

Laboratory technicians wearing personal protective equipment working on samples to be tested for COVID-19 at the Fire Eye laboratory, a COVID-19 testing facility, in Wuhan in China’s central Hubei province, on Aug. 4, 2021. STR/AFP via Getty Images

A staff member of the Gansu provincial government’s health hotline told the media on Aug. 15 that the national-level authorities had ordered officials in 10 provinces to conduct emergent infectious disease drills by the end of August.

The ruling Chinese Communist Party (CCP) first used the term “pneumonia of unknown cause” in 2003 to describe the SARS outbreak in China before it was officially named; it was also used when COVID-19 first broke out in Wuhan, Hubei Province, in late 2019.

Drills have been conducted since June in more than a dozen provinces and regions, including the nation’s capital, Beijing, according to notices issued by local health departments and Chinese media reports. This is the first official annual infectious disease emergency drill since the COVID-19 pandemic.

Notices across China said the responses are based on the “Notice from the National Disease Prevention and Control Bureau on Preparing for Emergency Drills for Infectious Diseases in 2024” issued in April, following the ”2024 National Infectious Disease Emergency Response Conference” held in Chengdu, Sichuan, on April 17.

People wearing masks wait for medical attention at Wuhan Red Cross Hospital in Wuhan on Jan. 25, 2020. Hector Retamal/AFP via Getty Images

The CCP’s sudden abandonment of the three-year COVID-19 lockdown and all restrictions in December 2022 caused a massive outbreak and countless deaths in China. Despite international concerns and criticism from the World Health Organization, the communist regime proceeded to declare COVID-19 defeated in February 2023.

COVID-19 Cases Surge

In its latest update, China’s CDC reported on Aug. 8 that the number of COVID-19 cases in China spiked from 8.9 percent in the first week of July to 18.7 percent in the last week of July. The main prevalent strains were JN.1 series variants and XDV series variants.

Meanwhile, Guangdong Province’s Health Commission reported that there were 18,384 COVID-19 infection cases in the province in July, an increase of more than 10,000 cases from June’s 8,246 cases.

The international community has suspected the CCP of downplaying and covering up the true scale of COVID-19 infections and deaths in China since late 2019, when it first broke out in Wuhan, Hubei Province, because of its lack of transparency.

Dr. Jonathan Liu, a professor at the College of Traditional Chinese Medicine in Canada and the director of Kangmei Traditional Chinese Medicine Clinic, told The Epoch Times on Aug. 15 that the drills across China in recent months are aimed at another COVID-19 outbreak.

The CCP already declared victory over COVID-19, so if there is another wave of infections, it must be [labeled] ‘pneumonia of unknown cause,’” he said.

Liu added that there shouldn’t be so many cases of infections during the summer, as it doesn’t conform to the known pattern of COVID-19.

Dr. Tang Jingyuan, a U.S.-based China affairs observer, told The Epoch Times on Aug. 15 that the emergency response drills conducted across China show that COVID-19 is still prevalent in the country and that its severity has fluctuated over time.

Each wave of recurrence of COVID-19 has different characteristics. Right now, it seems to mainly target young people,” he said.

Sean Lin, a microbiologist and assistant professor in the biomedical science department at Feitian College, said that in the context of the sluggish economy and high unemployment rate, “this kind of drill may be a special political signal,“ and that ”the authorities are trying to achieve more control over society on the grounds of health.”

Luo Ya contributed to this report.

Tyler Durden
Tue, 08/20/2024 – 09:20

via ZeroHedge News https://ift.tt/1V5cdTI Tyler Durden

“This Is Awful” – Biden’s Final Indignity: ‘Angry Old Man’ Demoted To Midnight Speech At DNC

“This Is Awful” – Biden’s Final Indignity: ‘Angry Old Man’ Demoted To Midnight Speech At DNC

Day one of the Democratic National Convention (DNC) kicked off with excitement as delegates and attendees listened to speeches from major lawmakers and leaders from the Democratic Party.

Amid embittered remarks from Hillary Clinton, protesters gathered outside the perimeter of the United Center to demonstrate against the Biden-Harris administration’s military support for Israel during the Israel–Hamas war.

But all eyes were really on the last speaker of the night – the outgoing president – who spoke late, very late (well past his prescribed bedtime) in a speech that attempted to revive Dark Brandon but just sounded like an angry old man yelling at the moon (of lies he has conjured in his mind about the ‘others’).

Prior to Biden’s speech at the convention, Harris made a surprise appearance on the convention stage on Monday night to honor Biden.

“Joe, thank you for your historic leadership, for your lifetime of service to our nation and for all you will continue to do. We are forever grateful to you,” she said in brief remarks.

As LibertyNation’s Tim Donner wrote:

Since Joe Biden was willing to accept the humiliation of being forced out of his campaign for reelection, perhaps it follows that he would be amenable to accepting the final indignity of delivering his farewell address at his party’s convention on a night usually reserved for second- and third-tier speakers.

Indeed, the unconventional decision to have the sitting president speak on the first night of the 2024 Democratic National Convention (DNC)  – as opposed to either not speaking at all or being placed in a prominent slot on a succeeding night – was undoubtedly the product of a tortured compromise.

To add to the indignity, the DNC ran so far behind schedule on its opening night that the president did not even appear until 36 minutes after his scheduled start time of 10:50 pm ET, which by itself was something of an insult, and led some to question if the delay was deliberate, or effectively an attempt to drive Biden out of view to the primetime audience.

Making the sitting president of the United States wait until after 11:30 P.M. Eastern – well after prime time – to give the final big speech after 52 years in public office was the final signal that they were done and dusted with old Joe.

“This is awful. He literally set up a campaign and handed it over to them — do they have to cut him out of prime time?” one longtime Biden aide texted Axios reporter Alex Thompson.

“The media is very East Coast focused though, you’ve gotta be pretty naive to think the prolonged DNC tonight is for any reason other than diminishing Biden’s visibility, Silver tweeted.

Joe received the required ovation, and as PJMedia’s Victoria Taft details below, the party’s cheerleaders held signs reading “We (heart) Joe.”

The crowd chanted “We love Joe!” but nothing can quite make up for how Biden was treated by his party in the days leading up to night one of the Chicago convention.

An angry looking and glassy-eyed Joe gave nothing more than a typical stump speech to the crowd with check list State of the Union overtones.

Joe attempted to summon Dark Brandon, but just looked like an angry old man.

And then came the whoppers.

Biden lied about his reason getting into the 2020 race, claiming Donald Trump embraced neo-Nazis.

Obviously, that “nice people on both sides” trope has been obliterated by simply looking at the record, but Joe doesn’t care.

Ironically, Biden gave everyone a spit-take moment when he later said that “both sides” of the Gaza war protests, including pro-Hamas—literal pro-Nazi– protesters outside the convention hall, “have a point.”

You can’t make this up.

The president told the crowd that Donald Trump scuttled a border deal that would have legalized all the people Biden allowed into the country.

Even his own crowd wasn’t buying it.

He claimed billionaires pay fewer taxes than most taxpayers.

Embarrassing.

The man who tyrannically used COVID emergency powers to keep America shut down and businesses on ventilators claimed he stood for “freedom, democracy, and America.”

“Democracy must be preserved!” thundered glassy-eyed Joe to a crowd that was looking for a little inspiration.

Joe bungled a few lines of the speech when he lost his way on the teleprompter, and at one point the crowd guffawed at the bumbling.

Toward the end of his speech, a meandering President Sundowning began slurring and rushing his sentences and then told the biggest whopper of the night:

“And all this talk about how I’m angry at all those people that said I should step down—that’s not true.”

We “believe” you, angry guy.

He told the dwindling and less enthusiastic hangers on in the room that he had given the country his best. Was anyone listening?

Joe got around to talking nicely about Kamala Harris and America after midnight Eastern time. And that’s not hyperbole! Not a joke. I give you my word as a Biden.

Reflecting on the farce that was last night, LibertyNation’s Tim Donner concludes, like the outsized stakes of this election itself, the outcome will be either a triumph or catastrophe for Joe Biden.

If Harris wins, it will affirm his presidency and his legacy as the man who saved the country from Trump.

But if Trump wins, Biden will forever be blamed for seeing the handwriting of his demise on the wall and stubbornly refusing to step aside until it was too late, ultimately handing the country back to the 45th president.

In a career marked by sustained power but constant disappointments –  two badly failed presidential campaigns, an unserious image, and rejection by Barack Obama in 2016 in favor of Hillary Clinton – the end is nigh for Joe Biden. He cashed in on extraordinary circumstances to finally reach the promised land, only to be betrayed by the irreversible indignity of his own cognitive decline. His half-century as the quintessential Washington insider was marked by bookends of success and failure, centrism and progressivism, and, in the end, youth and age.

“For the longest time, I was too damn young because I only was 29 when I got elected,” Biden playfully lamented at a recent rally for his VP in Maryland. “Now I’m too damn old.”

Was last night setting the scene for the ‘October Surprise’ we hinted at?

Tyler Durden
Tue, 08/20/2024 – 09:00

via ZeroHedge News https://ift.tt/lVLpsro Tyler Durden