WTI Holds Gains After Gasoline Stocks Hit 2-Year-Low (As Pump-Prices Plunge?)

WTI Holds Gains After Gasoline Stocks Hit 2-Year-Low (As Pump-Prices Plunge?)

Oil prices are higher this morning after a two-day decline on the possibility of more attacks in the Middle East and potentially tightening US crude stockpiles.

While one Israeli minister suggested that the war with Hezbollah could be over by year-end, the country’s military chief vowed to strike Iran “very hard” should the OPEC producer launch another attack.

“We think the oil market has relaxed too quickly,” Standard Chartered analysts including Emily Ashford said in a note.

“We see the risk of an escalating series of attacks over an extended period, with no immediate prospect of either military or diplomatic resolution.”

Additionally, all eyes are on OPEC+’s plans to gradually revive production from December, with traders split on whether the alliance will press ahead. Reuters reported that OPEC+ nations could delay plans to revive oil production in December, citing unidentified sources.

But more notable for now is what local demand and supply looks like…

API

  • Crude -573k

  • Cushing +320k

  • Gasoline -282k

  • Distillates -1.463mm

DOE

  • Crude -515k

  • Cushing +681k

  • Gasoline -2.707mm

  • Distillates -977k

The opfficial data shows a major decline in gasoline stocks and small draw in crude inventories…

Source: Bloomberg

Total Gasoline stocks fell to their lowest since Nov 2022…

Source: Bloomberg

The addition of 1.189mm barrels to the SPR moved total crude stocks up by 674k barrels last week…

Source: Bloomberg

US crude production remains at record highs 13.5mm b/d…

Source: Bloomberg

WTI is holding above $68 after the data, still well down on the week…

Source: Bloomberg

Finally, we note that pump prices remain mysteriously low (multi-year low in gasoline stocks?) given where crude and wholesales gasoline prices are…

Source: Bloomberg

Bear in mind that prices remain considerably higher than pre-Harris/Biden…

Source: Bloomberg

We are sure this not political at all… one week before the election.

Tyler Durden
Wed, 10/30/2024 – 10:39

via ZeroHedge News https://ift.tt/po0s6NA Tyler Durden

Quarterly Refunding: Treasury To Hold Debt Sales Steady For “At Least Several Quarters”

Quarterly Refunding: Treasury To Hold Debt Sales Steady For “At Least Several Quarters”

On Monday, the US Treasury published its debt sources and uses estimates for the coming quarter, it noted that it expects slightly less in calendar Q4 offset by a borrowing burst in Q1 2025, when the Treasury expects to issue $823 billion in debt , up from $546 billion in Q4, and a record nominal amount for that quarter.

Fast forward to today when this morning, the Treasury released its latest Quarterly Refunding Announcement, which unlike previous QRAs was a somewhat more subdued affair, with no notable surprises, after it left its quarterly auctions of longer-term debt unchanged as expected, and reiterated its guidance that sizes aren’t expected to be increased “for at least the next several quarters.”

The Treasury said it will sell $125 billion of securities at next week’s quarterly refunding auctions, in line with expectations. The gross issuance will refund approximately $116.4 billion of treasurys, and raise new cash from private investors of approximately $8.6 billion.  The securities are:

  • A 3-year note in the amount of $58 billion, unchanged from last month and unchanged from the last refunding
  • A 10-year note in the amount of $42 billion, up $3 billion from last month and unchanged from the last refunding
  • A 30-year bond in the amount of $25 billion, also up $2 billion from last month and unchanged from the last refunding

With regard to Treasury Inflation Protected Securities, or TIPS, the department again made some modest increases as it works to maintain a stable share of these securities relative to overall debt outstanding. Specifically, it bumped the auction sizes of two TIPS issues: December’s 5-year re-opening and the new 10-year issue, which was a bit more than expected. According to the Treasury, it “believes it would be prudent to continue with incremental increases to TIPS auction sizes in order to maintain a stable share of TIPS as a percentage of total marketable debt outstanding.”

Over the November 2024 to January 2025 quarter, Treasury plans to maintain the November 10-year TIPS reopening auction size at $17 billion, increase the December 5-year TIPS reopening auction size by $1 billion to $22 billion, and increase the January 10-year TIPS new issue auction size by $1 billion to $20 billion.

The table below summarizes the sizes for the August to October 2024 quarter and the anticipated auction sizes for the November 2024 to January 2025 quarter, including next week’s 3/10/30Y refunding:

“Based on current projected borrowing needs, Treasury does not anticipate needing to increase nominal coupon or FRN auction sizes for at least the next several quarters,” the Treasury said in a statement, using the same language since May. FRN refers to floating-rate notes.

Additionally, the Treasury said that given current fiscal forecasts, it expects to maintain the offering sizes of benchmark bills through November and, in late-November, anticipates issuing one or two CMBs to meet its cash management needs at that time.  Given projections for receipts associated with the mid-month corporate tax date, Treasury then expects to implement modest reductions to short-dated bill auction sizes during the month of December, just in time for the drain of the Reverse Repo facility. Thereafter, over the course of January 2025, Treasury anticipates increasing bill auction sizes based on expected fiscal outflows.

Given the massive increase in total US debt, and the relentless increase in US borrowing which has pushed interest expense on the debt to a record $1.1 trillion for the first time ever, a growing number of bond strategists had cautioned the Treasury might revise its guidance on holding auction sizes steady. Many dealers expected no change, however, given that current sizes – most at record highs – are likely to be sufficient for meeting the government’s funding needs until the second half of 2025, unless of course the next president unleashes a massive fiscal stimulus program… which they will.

Here even Bloomberg notes that since neither Trump nor Kamala have made deficit reduction a central element of their campaigns, raising longer-term debt sales is inevitable at some point, in the view of most dealers and economists. And that’s what the recent spike in yields may be reflecting: a return of the dreaded term premium, an imaginary concept which merely reflects the unknown surge in future debt issuance.

Indeed, recent auctions have sparked concerns about the size of issuance. The latest monthly auctions of 2- and 5-year securities, for example, drew higher-than-anticipated yields, showcasing such worries.

Over the three month period, the Treasury said it plans to use bills — which mature in up to a year — to address any seasonal or unexpected variations in borrowing needs. The department expects to implement “modest reductions” to short-dated bills in December before boosting them again in January.

Separately, several strategists had warned ahead of Wednesday’s announcement to take the Treasury’s new guidance with a grain of salt since it’s the final refunding for the Biden administration. Depending on who wins the Nov. 5 presidential election, there will almost certainly be changes in US debt management strategy, not to mention a new treasury secretary.

One thing that is certain is that whoever wins, will have to deal with operating under the constraint of the federal debt limit, which is scheduled to kick back in at the start of January at which point the US will resume draining the Treasury’s cash balance until another debt ceiling can kicking is approved. And so, until Congress re-suspends or boosts the ceiling, the Treasury will have to rely on a series of extraordinary measures, along with cuts to bill issuance and the cash balance, to make good on its spending obligations.

Meanwhile, in a separate statement from the Treasury Borrowing Advisory Commitee, arguably the most important unelected panel in the world after the Fed, composed of dealers, fund managers and other market participants, “emphasized the risk that debt limit constraints could hamper the efficient funding of the government at the lowest possible cost to the taxpayer.”

“Lack of resolution of the debt limit runs the risk of undermining the foundation of the US Treasury market,” the TBAC said adding that “these episodes can cause significant economic uncertainty, affect financial markets and impact US credit ratings.”

As noted above, the debt limit will resume just as the Treasury faces high seasonal borrowing pressures. On Monday, it advised that it faces a net borrowing requirement of some $823 billion in the three months through March — a record nominal amount for that quarter. The estimate assumes Congress will act in time to lift or set aside the debt limit.

One dynamic that could help the Treasury is a further slowdown, or end, to the Federal Reserve’s runoff of its Treasuries holdings. The Fed currently lets up to $25 billion mature a month without replacement — a dynamic that forces the Treasury to sell more to the public. The Fed holds its next policy meeting Nov. 6-7. However, with the repo market already on edge, many are worried that continued drains of systematic liquidity will only lead to another repo market crisis (see “What Is Going On With Swap Spreads?”: Goldman Warns All Hell About To Break Loose In Repo“).

In its quarterly survey of dealers ahead of the refunding, the department had asked whether it should consider adding to its current lineup of three TIPS maturities. The Treasury also asked the TBAC for thoughts on the use of digital technology in the Treasuries market, such as the potential benefits and costs of tokenizing Treasuries, and the use of blockchains.

What effects might these trends have on recommended Treasury issuance” and trading in the secondary market, officials asked.

Wednesday’s statement also detailed a new schedule of buybacks for the November-to-early February period. The Treasury began buyback operations in May that are aimed to support market liquidity. In September, it also launched buybacks for cash management purposes.

The TBAC said that the new buyback program “continues to be modestly supportive of liquidity, including from cash management buybacks.”

Tyler Durden
Wed, 10/30/2024 – 10:29

via ZeroHedge News https://ift.tt/ER2UCZt Tyler Durden

US Supreme Court Lets Virginia Purge Noncitizens From Voter Rolls

US Supreme Court Lets Virginia Purge Noncitizens From Voter Rolls

The US Supreme Court has granted a request by Virginia officials to move forward with its removal of roughly 1,600 alleged noncitizens from the state’s voter rolls – granting a request from state officials to pause a lower court order that blocked Virginia from continuing a systematic voter removal program launched in August.

“The application for stay presented to The Chief Justice and by him referred to the Court is granted. The October 25, 2024 order of the United States District Court for the Eastern District of Virginia … is stayed pending the disposition of the appeal in the United States Court of Appeals for the Fourth Circuit…” reads the order, which passed by a vote of 6-3.

As the Epoch Times noted on Monday, the application was filed in the case known as Beals v. Virginia Coalition for Immigrant Rights.

The application was directed to Chief Justice John Roberts, who oversees emergency litigation from Virginia.

The lead applicant, Susan Beals, is Virginia’s Commissioner of Elections.

The U.S. Court of Appeals for the Fourth Circuit found unanimously on Oct. 27 that taking the names off the voter rolls within 90 days of an approaching federal election appears to violate the National Voter Registration Act.

Federal elections are scheduled for Nov. 5.

The Supreme Court previously held in Purcell v. Gonzalez (2006) that courts should not change rules close to an election because doing so creates a risk of causing confusion.

Virginia counters that the legal provision is not relevant because the names being removed are not those of U.S. voters.

But “that argument violates basic principles of statutory construction by focusing on a differently worded statutory provision that is not at issue here and proposing a strained reading of the Quiet Period Provision to avoid rendering that other provision absurd or unconstitutional,” the Fourth Circuit said.

Such an interpretation would be problematic because it would give the words “voters” and “registrant” an identical meaning, the circuit court said.

Moreover, Virginia had not demonstrated its appeal was likely to succeed or that it would suffer irreparable harm should the appeal be denied, the circuit court said as it affirmed an Oct. 25 ruling by U.S. District Judge Patricia Tolliver Giles.

Giles wrote that Virginia was still free to cancel the voter registration of noncitizens individually or to investigate “noncitizens who register to vote or who vote in Virginia’s election.”

The ruling applies only to Virginia’s “systematic” effort to remove noncitizens that began after Aug. 7, she added.

Tyler Durden
Wed, 10/30/2024 – 10:15

via ZeroHedge News https://ift.tt/V8YyK7P Tyler Durden

As Liz Cheney Slams Donald Trump’s Character, Her Integrity Comes Under Fire

As Liz Cheney Slams Donald Trump’s Character, Her Integrity Comes Under Fire

Authored by Julie Kelly via RealClearInvestigations,

Liz Cheney, a staunch “Never Trump” former Republican representative, has joined Democratic presidential nominee Kamala Harris in key swing states in the final days of the campaign to warn voters that Donald Trump does not respect the “rule of law” or the U.S. Constitution. “[When] you think about, what are you looking for in somebody you hire, you’re looking for somebody that you can trust, you’re looking for somebody who’s going to be responsible, who’s going to operate in good faith,” Cheney told the Detroit Economic Club on Oct. 22.

But new evidence has emerged suggesting that Cheney may have unethically influenced crucial anti-Trump testimony while serving as vice chairman of the January 6 Committee that investigated the protest at the U.S. Capitol in 2021.

At issue is Cheney’s collaboration with Cassidy Hutchinson, now 27, a former aide to then-Chief of Staff Mark Meadows. Hutchinson, who also is campaigning for Harris, is widely considered the committee’s “star” witness for her damning account of Trump’s alleged conduct on January 6. For nearly two hours during her June 28, 2022, televised appearance, Hutchinson explained her version of what happened before and after Trump’s speech at the Ellipse as the White House scrambled to respond to the escalating chaos at the Capitol.

In one of the more explosive moments of that hearing, Cheney held up the handwritten draft of a tweet for President Donald Trump to post instructing protestors to disperse from the area.

Cheney asked Hutchison if she had written the tweet, which was never posted. “That’s my handwriting,” replied Hutchinson, who said the words had been dictated to her by Meadows that afternoon around 3:00 p.m. A footnote in the committee’s final report stated that a “review of Hutchinson’s handwriting was consistent with the script of the note.”

The import of the testimony was clear: Hutchinson was not only an eyewitness but a key participant as events unfolded that day. 

But a certified handwriting analyst retained by Rep. Barry Loudermilk (R-Ga), chairman of the House Administration Subcommittee on Oversight, determined that Hutchinson did not write the note. The handwriting, according to the expert, belongs to Eric Herschmann, a Trump White House lawyer who had immediately contradicted Hutchinson’s testimony in 2022 and later provided several samples of his own handwriting to Loudermilk’s analyst.

The Select Committee was willing to take [Hutchinson] at her word, rather than checking into the facts. The American people deserve the truth,” Loudermilk said. 

Hutchinson’s attorney did not respond to a request for comment. Cheney could not be reached for comment.

This latest disclosure by Loudermilk – who is conducting separate inquiries into the events of Jan. 6 and the now defunct J6 select committee – appears to represent another example of Cheney’s questionable involvement on the committee, particularly related to Hutchinson. 

Loudermilk unearthed text messages on an encrypted chat app between Cheney and Hutchinson prior to her public testimony, which represented the fifth time Hutchinson testified before the committee; she had already sat for transcribed interviews in February, March, May, and on June 20, 2022.

On June 6, 2022, Hutchinson texted Cheney using Signal, asking “to have a private conversation with you,” according to information released by the House Administration Subcommittee on Oversight. They were connected by Alyssa Farah Griffin, a one-time co-worker of Hutchinson and also a witness before the committee who now appears on “The View.” The texts appear to indicate Cheney and Hutchinson spoke on the phone shortly after that initial outreach. 

Hutchinson dismissed her attorney at the time, former White House deputy general counsel Stefan Passantino, a few days later. Passantino had represented Hutchinson and was paid to do so by Trump’s Save America PAC. Two Cheney-recommended lawyers, Jody Hunt and William Jordan, soon agreed to represent Hutchinson pro bono.

Cheney, a lawyer who is a member of the Washington D.C. bar, appeared to know her communications violated ethics guidelines about communicating with witnesses behind their lawyer’s back. A text from Farah Griffin to Hutchinson acknowledged a “concern” that Cheney “can’t really ethically talk to you without [Passantino.]”

But Hutchinson did more than just change lawyers; in several instances, she changed her story from her previous testimony. During her televised testimony, which committee staffers later described as an “emergency” event initiated by Cheney, Hutchinson re-enacted an alleged confrontation between Trump, his driver, and the head of his security detail in the presidential vehicle following his speech at the Ellipse. Under questioning led by Cheney, Hutchinson said Trump became “irate” upon being told it was not safe to go to the Capitol after he advised his supporters to march there “peacefully and patriotically.”

Trump, according to Hutchinson’s second-hand account, attempted to grab the steering wheel of the vehicle. “Mr. Trump then used his free hand to lunge toward [Head of Security] Bobby Engel,” Hutchinson said as she recounted a conversation she purportedly had with Tony Ornato, the deputy White House chief of staff at the time, after the incident.

Her testimony rocked the political world, with legal analysts from across the spectrum insisting that the story would doom Trump. Others expressed skepticism, prompting Cheney to defend her witness. “I am absolutely confident in her credibility, I am confident in her testimony, and the committee is not going to stand by and watch her character be assassinated by anonymous sources,” Cheney told ABC News correspondent Jonathan Karl on June 30, 2022.

But no one in the White House corroborated Hutchinson’s version of events. To the contrary, Ornato said the first time he heard of any confrontation in the presidential vehicle was during Hutchinson’s testimony. “I recall, that day after Ms. Hutchinson’s testimony, going to the Secret Service Counsel and being in his office and then the Secret Service spokesperson asking me about my recollection was of that story. And I relayed that that is not a story I recollect and I don’t recall that story happening,” Ornato told Cheney, who asked about the incident.

And during the committee’s questioning of the unnamed Secret Service driver, investigators didn’t ask about the alleged incident. The subject was discussed only after the driver’s attorney “proactively” brought it up, according to a report by Loudermilk’s committee, prompting the driver to tell the committee that he “[President Trump] never grabbed the steering wheel. [President Trump] never grabbed the steering wheel. I didn’t see him, you know, lunge to try to get into the front seat at all.”

The driver’s transcript, in addition to hundreds of witness interviews conducted by the J6 committee, still has not been made public.

Hutchinson went on to testify twice more behind closed doors in September 2022 as her stories continued to change. In fact, her attorneys filed a 15-page errata sheet that same month to significantly revise her earlier testimony. The document not only added the allegations related to the incident in the presidential vehicle but also claimed Hutchinson had heard about the presence of dangerous weapons at the Capitol, including firearms – something she said she had not heard during earlier testimony – and that she heard chants of “Hang Mike Pence” on the television in the president’s dining room to suggest he was aware protesters were threatening his vice president.

She also reiterated her authorship of the Meadows’ note.

“These newly released texts are more evidence that Liz Cheney’s J6 Committee was not interested in the truth, only in promoting their predetermined political narrative,” Loudermilk told RCI on Monday. “Not only did Cheney use Alyssa Farah Griffin to covertly communicate with Hutchinson, but she also directly communicated with Hutchinson about the sensational new claims that Pres. Trump was to blame for all that happened on January 6.”

While her role as the committee’s star witness has been a lucrative endeavor for Hutchinson – who earned a book deal from Simon & Schuster, which published three Cheney family titles, and speaking arrangements – the same cannot be said for Stefan Passantino, her first lawyer.

Last year, Passantino, who headed the White House ethics office under Trump during the first half of his administration, filed a $67 million lawsuit against the federal government, accusing the committee of violating his privacy and causing “significant economic, reputational, and emotional harm.” Passantino accused Cheney and her general counsel, Dan George, of attempting to set up a “sting” operation “seeking to induce Mr. Passantino to obstruct Congress during a third interview of Ms. Hutchinson” in May 2022.

Leaks to the news media with selected portions of Hutchinson’s testimony attempted to portray Passantino as advising his client to mislead the committee. A December 2022 CNN “exclusive” report claimed Passantino told Hutchinson to “tell the committee that she did not recall details that she did” and suggested the matter had been referred to the Department of Justice. The committee’s final report also contained the unsubstantiated allegations.

CNN’s story seeded dozens of follow-ups, including an article at the student-run newspaper of Passantino’s law school alma mater, Emory University, and articles at MSNBC, the New York Times, and CBS News.

The bad press resulted in Passantino’s firing by an Atlanta law firm and two separate bar complaints against him in both Georgia and Washington. Both were dismissed. 

But other text messages between Hutchinson and Farah Griffin appear to support Passantino’s claims that he did not interfere in the investigation. A text chain between the women in May 2022 in preparation for Hutchinson’s testimony later that month shows Hutchinson telling Farah Griffin that “[Passantino] isn’t against me complying.” As the discussion continued, Hutchinson reiterated that Passantino advised her to cooperate with the committee. “He doesn’t want me to stonewall the committee,” she told Farah Griffin. Testifying a third time, Hutchinson said Passantino advised, “builds my credibility as a witness.”

Passantino, now partner of his own firm in Atlanta, considers the texts an exoneration of the allegations against him.

“When I first filed suit against Congress to hold Liz Cheney and the January 6 Committee accountable for the damage done to my family, my reputation, and my career 18 months ago, I knew we had the facts to support our complaint. I was less than confident, however, that the documents supporting my claims had not been destroyed or would ever see the light of the day,” Passantino told RealClearInvestigations last week. “It appears, however, that Cassidy Hutchinson captured screenshots of her encrypted communications with Liz Cheney and turned them over to Chairman Loudermilk. The tip of the iceberg appears to have crested the waterline.”

Passantino also filed a defamation lawsuit against former DOJ prosecutor and MSNBC legal analyst Andrew Weissmann for posting a tweet in September 2023 that accused Passantino of “coach[ing] her to lie.” Earlier this month, a federal judge allowed the case to move forward.

Proof of the backchannel communications also prompted a bar complaint last week against Cheney, a licensed attorney in Washington. America First Legal, founded by longtime Trump advisor Stephen Miller, filed the complaint on behalf of Passantino. In the complaint, Cheney is accused of violating a D.C. bar rule that prohibits a lawyer from communicating with “a person known to be represented by another lawyer in the matter, unless the lawyer has the prior consent of the lawyer representing such other person or is authorized by law or a court order to do so.”

Tyler Durden
Wed, 10/30/2024 – 10:00

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BofA Warns “Enforcement Action” By Feds Possible Over Money Laundering, Zelle

BofA Warns “Enforcement Action” By Feds Possible Over Money Laundering, Zelle

A little more than two weeks after Toronto-Dominion Bank pleaded guilty to multiple criminal charges and paid $3 billion in fines and other penalties to the Department of Justice and financial regulators for failing to monitor money laundering operations of fentanyl drug traffickers and other criminals, the investigation into suspected money laundering at major banks appears to have expanded to the US.

Bank of America revealed in a filing on Tuesday that it’s in talks with several federal regulators “in relation to certain aspects of the Corporation’s Bank Secrecy Act/anti-money laundering and sanctions compliance programs (Programs), including transaction monitoring, training, governance, and customer due diligence.” 

“In cooperation with regulators, the Corporation has been, and plans to continue, implementing enhancements to these Programs. The Corporation is continuing discussions with its regulators about the Programs, and resolution of these discussions may include one or more public orders by the regulators,” BofA continued.

BofA is responding to an inquiry from the Consumer Financial Protection Bureau into electronic payments on the Zelle payment network.

“The CFPB staff has initiated discussions with the Corporation to pursue a resolution of the inquiry or file an enforcement action. The Corporation is evaluating next steps, including litigation,” the bank said. 

The filing did not mention specifics about potential AML issues. However, the TD Bank case, where the Canadian bank chose profits over AML compliance, allowed fentanyl and narcotics trafficking operations to use banking services.

In early September, we cited a conversation with Sam Cooper, an investigative journalist behind the Substack The Bureau,” and David Asher, a former senior investigator for the State Department, in which Asher revealed, “And most of what we’re seeing is coming from this TD Bank case, and there’s a lot more. We’ll see which one of the big four US banks gets named next.”

At the time, we even questioned if AML investigations were pending at major US banks and potentially one of the reasons Buffett was dumping shares in the bank.

More broadly, AML investigation across multiple North American banks comes ahead of a potential Trump win in the White House. The former president said Tuesday that he would “seize assets” of drug cartels for their drug death catastrophe, killing 100,000 Americans per year. In other words, Trump is indirectly saying that if he wins – the feds will be disrupting ‘command & control’ networks (fin networks) of drug cartels … 

… to stop this madness that Biden-Harris allowed to inflict great pain on the nation while jeopardizing national security.

What’s important to note is the AML investigation of major banks has broadened and could drastically widen in the months ahead. 

Tyler Durden
Wed, 10/30/2024 – 09:40

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

Fat Bubble Popped: Lilly Shares Dive On Disappointing Weight-Loss Drug Sales

Fat Bubble Popped: Lilly Shares Dive On Disappointing Weight-Loss Drug Sales

Shares of Eli Lilly & Co tumbled in premarket trading after third-quarter sales of its blockbuster weight-loss drug fell short of Wall Street’s expectations, with the company citing ‘inventory issues’ as the reason. In reality, it seems Lilly channeled stuffed GLP1s to cash in on the anti-obesity drug craze, only to discover demand fizzled in the quarter—likely because these drugs are expensive and insurance coverage is limited.

Lilly reported third-quarter revenue from all products of about $11.4 billion, +20% yoy, yet missed the Bloomberg Consensus of $12.18. Notably, the drug Mounjaro generated $3.11 billion in revenue, while weight-loss drug Zepbound brought in $1.26 billion. Bloomberg analysts expected $3.62 billion and $1.63 billion. 

Here’s a snapshot of the third-quarter earnings report (courtesy of Bloomberg): 

  • Adjusted EPS $1.18 vs. 10c y/y

  • Revenue $11.44 billion, +20% y/y, estimate $12.18 billion (Bloomberg Consensus)

  • Trulicity revenue $1.30 billion, -22% y/y, estimate $1.21 billion

  • Mounjaro revenue $3.11 billion, estimate $3.62 billion

  • Zepbound revenue $1.26 billion, +1.2% q/q, estimate $1.63 billion

  • Humalog revenue $534.6 million, +35% y/y, estimate $423.6 million

  • Taltz revenue $879.6 million, +18% y/y, estimate $839.4 million

  • Jardiance revenue $686.4 million, -2.1% y/y, estimate $823.7 million

  • Verzenio rev. $1.37 billion, +32% y/y, estimate $1.39 billion

Lilly now anticipates full-year sales between $45.4 and $46 billion, lowering the top end of earlier guidance from $46.6 billion. It raised its full-year guidance twice this year… 

  • Sees revenue $45.4 billion to $46.0 billion, saw $45.4 billion to $46.6 billion, estimate $46.21 billion

  • Sees adjusted EPS $13.02 to $13.52, saw $16.10 to $16.60

More from the pharma giant:

“Following higher wholesaler inventory levels at the end of Q2, Mounjaro and Zepbound sales in Q3 were negatively impacted by inventory decreases in the wholesaler channel.” 

Perhaps channel-stuffing GLP1s wasn’t the best move by management as demand dries up, mainly because the drugs are super expensive and insurance coverage is limited. 

The unwinding of the fat bubble was visible for months.

In premarket trading, Lilly shares have dropped about 10.25%. If losses surpass the 10.51% plunge seen on December 16, 2016, this will mark Lilly’s largest single-day drop since October 2008.

Fat bubble implodes. 

Tyler Durden
Wed, 10/30/2024 – 09:20

via ZeroHedge News https://ift.tt/H5yboT0 Tyler Durden

Super Micro Crashes After Auditor Resigns

Super Micro Crashes After Auditor Resigns

Super Micro Computer says Ernst & Young resigns as auditor amid a review after EY communicated concerns about several matters relating to governance, transparency and completeness of communications in July.

SMCI stated in a filing that in late July 2024, EY communicated to the Audit Committee concerns about several matters relating to governance, transparency and completeness of communications to EY, and other matters pertaining to the Company’s internal control over financial reporting, and that the timely filing of the Company’s annual report was at significant risk.

EY stated in resignation letter that:

“…we are resigning due to information that has recently come to our attention which has led us to no longer be able to rely on management’s and the Audit Committee’s representations and to be unwilling to be associated with the financial statements prepared by management, and after concluding we can no longer provide the Audit Services in accordance with applicable law or professional obligations”

SMCI responded:

“Although the Company recognizes EY’s decision is final, it disagrees with EY’s decision to resign as the Company’s independent registered public accounting firm – the Special Committee has not yet obtained all information relevant for the Review and has not concluded the Review.

Nevertheless, the Company has taken the concerns expressed by EY seriously, and will carefully consider the findings of the Special Committee and any remedial or other actions recommended by the Special Committee following conclusion of the Review.”

This news triggered an almost 30% collapse in the tech company’s shares…

Is this a sign of things to come for other tech giants?

The resignation comes a month after the US Justice Department launched a probe into an ex-employee’s claims that Super Micro violated accounting rules.

Tyler Durden
Wed, 10/30/2024 – 09:05

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AI Boom Puts Pressure On America’s Water Supply, JPMorgan Warns

AI Boom Puts Pressure On America’s Water Supply, JPMorgan Warns

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

The rapid expansion of artificial intelligence (AI) in the United States is adding significant strain to the nation’s already stressed water supply, according to a new report by JPMorgan Chase and consultancy ERM, which calls for urgent action to better manage this vital resource.

Fans cool servers at a facility in Niagara Falls, New York, on Oct. 24, 2022. Geoff Robins/AFP/Getty Images

The report, published on Oct. 28, notes that the surge in AI-driven technologies, including data centers and semiconductor manufacturing, is contributing to a growing mismatch between water supply and demand, while warning that ignoring the water demands of AI and other industries could have serious consequences.

There is an urgent and growing need to build resilience into our collective water management practices if we are to have reliable water for use in the future,” reads the report, which notes that the growing instability of water resources is “pushing us closer to disrupted ecosystem services, threatened biodiversity, and impacted human livelihoods.”

The primary driver of increased water demand in the United States is a combination of the nation’s growing population and more people moving to warmer, sunnier regions that are already facing water supply challenges. However, new demands from reshoring of manufacturing and AI-based data centers are putting additional strain on water resources.

Data centers use substantial amounts of water—often taken from drinking water resources—in order to cool servers that generate significant amounts of heat.

On average, a mid-sized data center uses about 300,000 gallons per day, while larger facilities can consume as much as 1 million to 5 million gallons daily—comparable to the needs of a town of between 10,000 to 50,000 people.

Data centers in the United States consumed more than 75 billion gallons of water in 2023, per the report, which notes that around 20 percent of the water used by such facilities is drawn from stressed watersheds, “presenting risks to the technology industry and the surrounding communities and environment.”

However, the broader impact of AI on the water sector goes well beyond cooling technologies used in data centers, the report warns. Data center operations rely on semiconductor chips, the manufacturing of which has major implications on water resources. Not only does it require vast amounts of water but it also generates toxic wastewater, posing additional challenges for water management.

“As semiconductors are the foundation of the AI supply chain, the future water management of their operations will be critical for the water sector,” the report notes.

The strain from AI-driven demand is part of a wider set of water-related risks, including the potential to strand business assets as production facilities become unusable or unprofitable due to insufficient supply or tighter regulations, such as wastewater discharge requirements.

JPMorgan and ERM’s report calls for increased investment in water infrastructure, which currently faces an annual funding gap of $91 billion.

The report suggests that innovative technologies, such as waterless cooling systems for data centers and advanced wastewater recycling solutions for semiconductor manufacturing, could play a key role in addressing water scarcity and stress.

Tyler Durden
Wed, 10/30/2024 – 08:50

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

US Q3 GDP Growth Disappoints, Despite Surging Personal, Government Spending

US Q3 GDP Growth Disappoints, Despite Surging Personal, Government Spending

Just moments after ADP published a laughably slanted private payrolls report according to which the US labor force grew by 233K in October (even though we are still in October), 6 standard deviations above the median estimate, moments ago the Biden Bureau of Economic Analysis came out with its own surprise when it reported in its first assessment of Q3 GDP that the US economy grew at a 2.8% rate, down from 3.0% in Q2…

… and below the 2.9% median estimate, the first ‘miss’ since Q3 2023…

As the BEA notes, the increase in the third quarter primarily reflected increases in consumer spending, exports, and federal government spending. Imports, which are a subtraction in the calculation of GDP, increased.

Yet while the overall number was weaker than expected, looking at the components one stick out: personal consumption surged more than expected, rising 3.7% SAAR vs 3.3% expected and 2.8% in Q2!

At a 3.7% annualized rate, personal consumption was a 2-sigma beat to expectations.

The increase in consumer spending reflected increases in both goods and services. Within goods, the leading contributors to the increase were other nondurable goods (led by prescription drugs) and motor vehicles and parts (led by used light trucks). Within services, the leading contributors to the increase were health care (led by outpatient services) as well as food services and accommodations.

A closer look at the components reveals the following breakdown:

  • Personal Consumption added 2.46% to the bottom line number, up from 1.90% and accounting for 86% of total growth in Q3!
  • Fixed Investment added 0.24%, down from 0.42% last quarter.
  • Private Inventories subtracted 0.17% from the bottom line GDP print, a big drop from the 1.05% contribution in Q2.
  • Net exports (exports less imports), subtracted 0.55% from the growth print, a smaller hit vs the 0.89% hit in Q2.
  • Finally, government consumption added 0.85%, up from 0.52%

How much of a contribution is government spending? Here is the answer: government has contributed to “growth” for 9 consecutive quarters, and Q3 saw the biggest addition in the past year.

On the inflation side, the Core PCE buried inside the GDP data slowed to 2.2% from 2.8% (but that was slightly hotter than the 2.1% expected)…

So growth slower than expected, inflation higher than expected, and in this stagflationary mess consumption is somehow much higher than expected, just as the Fed launches its first easing campaign in years.

Tyler Durden
Wed, 10/30/2024 – 08:40

via ZeroHedge News https://ift.tt/4N9tSW6 Tyler Durden

76% Of Americans Are Worried About Post-Election Violence: Poll

76% Of Americans Are Worried About Post-Election Violence: Poll

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

A new poll shows that the vast majority of Americans are at least somewhat worried about a possible outbreak of violence following the fast-approaching Nov. 5 presidential election.

An early voting site ahead of the Republican primary election at Wando Mount Pleasant Library in Mount Pleasant, S.C., on Feb. 17, 2024. Madalina Vasiliu/The Epoch Times

The Associated Press-NORC Center for Public Affairs Research poll, released on Oct. 28, found that 41 percent of registered voters were “extremely” or “very” concerned about post-election political violence, with another 35 percent saying they are “somewhat” concerned about an outbreak of unrest after Election Day.

A higher percentage of Americans (82 percent) said they were at least “somewhat” concerned about increased political violence directed at election officials or political figures. The specter of violence has hung over much of the presidential campaign due to two assassination attempts against former President Donald Trump, while President Joe Biden said recently he’s confident the election will be “free and fair” but is unsure whether it will be “peaceful.”

The findings of the AP-NORC survey align with the results of a recent Scripps News/Ipsos poll, which showed that 62 percent of Americans believe that an outbreak of post-election violence is at least “somewhat” likely. At the same time, over half (51 percent) of those polled by Scripps News/Ipsos said they would support using the U.S. military to prevent election-related violence, including 61 percent of Republicans.

The use of the U.S. military to respond to political violence has become a heated topic of discussion in recent weeks after Trump said he wasn’t concerned about election-related violence because, if chaos were to truly break out, the National Guard—or even regular military units—could step in to restore order.

“I think it should be very easily handled by, if necessary, by National Guard, or if really necessary, by the military, because they can’t let that happen,” Trump said in an Oct. 13 interview with Fox News’ Maria Bartiromo, in response to a question about the potential for an outbreak of election-related violence. The former president added that he wasn’t worried about potential Election Day chaos being fomented by his supporters or foreign actors, but instead by people he labeled “radical left lunatics” and the “enemy from within.”

Vice President Kamala Harris’s campaign seized on Trump’s remarks, saying that Americans should find them alarming.

“Trump is suggesting that his fellow Americans are worse ‘enemies’ than foreign adversaries, and he is saying he would use the military against them,” Ian Sams, a spokesperson for the Harris campaign, said in a statement.

Trump’s running mate, Sen. JD Vance (R-Ohio), dismissed those concerns as unfounded campaign rhetoric. In an Oct. 27 interview on CNN, Vance said that when Trump spoke about using the U.S. military against the “enemy from within” he was not referring to political opponents but to extreme cases like the far-left activists who “burn down our cities,” referring to the chaos that engulfed parts of the country in the summer of 2020 following the death of George Floyd.

The poll showing a growing public concern about election-related violence was released with just eight days of campaigning left before Election Day. Over 45 million early votes have already been cast.

Meanwhile, the vast majority—92 percent—of local election officials have taken steps to increase security for poll workers, election infrastructure, and voters ahead of the 2024 election, according to a survey conducted earlier this year. The survey also showed that election-related safety concerns have reached or exceeded levels recorded in the prior election cycle.

Tyler Durden
Wed, 10/30/2024 – 08:35

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