Month: November 2024

By Jesse Colombo of The Bubble Bubble Report

Most gold and silver investors begin their journey by purchasing modern bullion coins, such as the American Gold and Silver Eagles from the United States Mint—a practical and popular way to invest in precious metals, and how I started as well. However, I soon discovered that the United States once minted gold and silver coins for everyday circulation, not just for investment purposes like today’s bullion coins. As I delved deeper into these classic American coins, I developed a profound appreciation for their elegance, historical significance, and connection to a time when the U.S. dollar was made from and backed by gold and silver. In this article, I aim to share the benefits and joys of investing in these timeless pieces of American history.

Four years after the ratification of the United States Constitution, Congress passed the Coinage Act of 1792. This landmark legislation established the U.S. dollar as the nation’s standard unit of currency, created the United States Mint, and set forth regulations for coinage. The Act designated the silver dollar as the official unit of money and declared it lawful tender. It also introduced three gold coins: the $10 “eagle,” the $5 “half eagle,” and the $2.50 “quarter eagle,” laying the foundation for the nation’s monetary system. The $20 “double eagle” coin containing 0.9675 troy ounces of gold was introduced in 1849 as a means to utilize and market the significant influx of gold from the California Gold Rush.

From 1795 to 1933, the United States Mint produced gold coins designed for everyday use rather than for investment or collecting. During this period, silver coins were commonly used for daily transactions, while gold coins primarily served as a means of savings and wealth preservation. Gold coins were also used for large purchases, such as land, and in commercial transactions. Due to their high value, gold coins were typically owned by the affluent. In particular, most $20 gold double eagles were stored in bank vaults and seldom circulated in everyday life because of their substantial value, even at the time.

Since pre-1933 U.S. gold coins were rarely used in everyday transactions, a significant number of them have survived in excellent condition, including many graded as Brilliant Uncirculated (BU). What I find fascinating is that many of these coins—provided they are not rare dates or strikes—are surprisingly common and can often be acquired at premiums similar to, or even lower than, modern bullion coins. Yet, they carry with them a rich historical legacy! Many reputable bullion dealers, such as SD Bullion, JM Bullion, Money Metals Exchange, and APMEX, offer these remarkable coins, making them accessible to collectors and investors alike.

If your primary goal is to invest in gold while still enjoying a touch of history (as opposed to collecting rare coins), focusing on common-year $20 gold double eagles from the late-1800s and early-1900s is your best bet. As far as classic coins go, these coins typically carry the lowest premiums over the spot price of gold. For instance, SD Bullion currently offers Brilliant Uncirculated $20 Saint-Gaudens double eagles at a 6.05% premium over the spot price of gold. By comparison, the ultra-popular modern 1 oz American gold eagle bullion coin is available at a 5.69% premium. In my opinion, that extra 0.36% premium is well worth it for owning a tangible piece of history!

The smaller $10, $5, and $2.50 gold eagle-series coins are certainly fascinating, and I personally own a few. However, they tend to carry significantly higher premiums compared to the $20 gold double eagles, making them less ideal for investment purposes. Among the $20 gold double eagles, the 1907–1933 Saint-Gaudens design is often regarded as one of the most beautiful coin designs in history, which has made it highly sought after. In contrast, the 1849–1907 Liberty Head $20 gold double eagle, while more understated in appearance, is still a desirable piece (and one I also own and appreciate). Notably, the 1933 Saint-Gaudens $20 gold double eagle holds the distinction of being the most valuable gold coin ever sold, fetching an astonishing $18.8 million in 2021 and setting the record for the most expensive coin in history.

In addition to classic American gold coins, I also enjoy investing in classic American silver coins, which were minted for everyday circulation between 1794 and 1970. During this period, dimes, quarters, half-dollars, and dollar coins were made from silver alloys. Today, these coins are a popular way to invest in silver and are commonly referred to as “junk silver,” pre-1965 silver coins, or 90%, 40%, and 35% silver coins. While I own some higher-value U.S. silver coins, such as early 20th-century pieces and silver dollars, the best option for most investors is to focus on common-date silver dimes, quarters, and half-dollars from the mid-twentieth century. These tend to have lower premiums compared to silver coins with greater numismatic value. For finding the best deals on junk silver, I recommend using FindBullionPrices.com, a great resource for comparing prices.

I absolutely love the look, feel, heft, and distinctive “clink” sound of classic American silver coins, which stand in stark contrast to soulless modern non-silver coins. Even when these silver coins have a weathered or slightly tarnished appearance, I find them even more charming, as they carry a tangible sense of history—evidence of the countless hands that have touched and handled them over the years. In fact, I often prefer circulated and weathered silver coins to pristine modern bullion coins because I can freely touch and handle them without worrying about tarnishing or leaving fingerprints. Unlike gold, silver naturally tarnishes, so I feel less guilty about enjoying these historic coins in a hands-on way, adding to their unique appeal.

America’s currency was once backed by and literally made from precious metals, which have served as money par excellence for approximately 6,000 years. However, the U.S. dollar has been steadily devalued since the establishment of the Federal Reserve in 1913. Unfortunately, the Federal Reserve has been a terrible steward of the nation’s currency, enabling excessive government spending by creating new dollars. For instance, within just six years of the Fed’s founding, the dollar lost half of its purchasing power—a trend that has persisted over time.

To add insult to injury, President Franklin Delano Roosevelt took the United States off the Gold Standard in 1933, ceased the minting of gold coins, and banned private ownership of gold. This policy required individuals to turn in their gold eagle coins to the government, which then melted them down. However, many of the pre-1933 U.S. gold coins available today were spared from this fate because they had been stored in European bank vaults, allowing them to survive unscathed and find their way back into the market decades later.

In 1965, the United States stopped minting dimes, quarters, and half-dollars from their traditional 90% silver alloy, replacing it with a cheaper nickel-and-copper composition. This marked yet another significant debasement of the U.S. dollar. As the melt value of the older silver coins soon exceeded their face value, those who recognized their greater worth quickly removed them from circulation. This historical shift explains why these silver coins remain popular among investors and collectors even today.

Finally, on August 15, 1971, President Richard Nixon ended the convertibility of the U.S. dollar into gold for foreign governments, effectively transforming the dollar into a pure fiat or “paper” currency with no intrinsic backing. This pivotal decision removed all constraints on the creation of new money, marking the final nail in the coffin for the dollar’s integrity and purchasing power. Over the ensuing decades, this shift paved the way for rampant inflation, unaffordable housing and other necessities, skyrocketing national debt, and an ever-widening wealth gap. To dive deeper into the steady debasement of the U.S. dollar and its far-reaching consequences, check out my detailed article on ZeroHedge.

Contrary to popular belief, inflation is not simply the rising cost of goods and services—that’s merely the inevitable consequence. True inflation is the expansion of the money supply itself. As Nobel Prize-winning economist Milton Friedman famously stated, “Inflation is always and everywhere a monetary phenomenon.” General inflation is rooted in monetary policy, not in supply shocks like energy crises or droughts that temporarily raise prices for specific goods.

A long-term chart of the U.S. adjusted monetary base, a key measure of the money supply, reveals a staggering 55,440% increase from 1920 to 2020. Curiously, the Federal Reserve stopped publishing this data series in late 2019—a move that raises serious questions. Could they be attempting to obscure the extent of the dollar’s debasement? You decide.

Another key measure of the money supply is the M2 money supply, and its correlation with the price of gold is clear. This relationship highlights why gold serves as an excellent long-term hedge against money printing and inflation. Silver also tracks the M2 money supply, though its price tends to exhibit greater volatility compared to gold.

The long-term U.S. Consumer Price Index (CPI) chart, which dates back to 1800, vividly illustrates how each successive erosion of the dollar’s integrity has led to soaring living costs and a dramatic decline in the dollar’s purchasing power. Remarkably, consumer prices in the United States were relatively stable for nearly a century until the establishment of the Federal Reserve in 1913. This marked a turning point, unleashing inflation on an unprecedented scale. Since the Fed’s inception, U.S. consumer prices have risen more than thirtyfold!

It’s difficult to imagine a time without steady, relentless inflation, but that was the reality throughout much of the 19th century. During this era, money was far sounder, backed by gold and silver, providing a stable foundation for the nation’s economy—despite the lack of modern technology and so-called “sophistication” we have today.

Since its creation in 1913, the Federal Reserve has overseen the U.S. dollar’s staggering loss of nearly 97% of its purchasing power—a decline that shows no signs of stopping, unfortunately:

Another striking way to visualize the dollar’s dramatic loss of purchasing power is by comparing it to gold. Over the past century, the U.S. dollar has lost an astonishing 99.25% of its purchasing power relative to gold.

The harsh reality is that the devaluation of the dollar will continue until it meets the same fate as every paper currency throughout history—complete worthlessness. Unfortunately, it’s not just the dollar that is on this trajectory; the euro, British pound, Japanese yen, Chinese yuan, and other fiat currencies are all on the same precarious path. Governments have always struggled to resist the temptation of money printing, a practice enabled by paper currencies but restrained when money is backed by gold and silver.

As I recently explained, the U.S. national debt has surged past $36 trillion, with annual interest payments now exceeding $1.1 trillion. This staggering figure surpasses federal spending on defense, income security, health, veterans’ benefits, and even Medicare, making it the second-largest expense for the U.S. government—second only to Social Security. This unsustainable fiscal situation will inevitably compel the U.S. to rely heavily on printing more money just to meet its obligations—a vicious cycle that will accelerate the currency’s decline.

Classic American gold and silver coins evoke a bittersweet feeling for me. On one hand, I love that they serve as a tangible reminder of a time when we had sound money; on the other, it saddens me that this era of monetary integrity is long gone. Anyone with wisdom and foresight should safeguard their hard-earned wealth with gold and silver—timeless forms of money that have reliably served humanity for thousands of years.

While I enjoy investing in modern bullion coins and bars, there’s something uniquely special about pre-1933 American gold coins and pre-1965 silver coins. Their history, craftsmanship, and connection to a bygone era set them apart. I believe you’ll understand exactly what I mean once you hold a piece of this history in your own hands.

If you enjoyed this article, please visit Jesse’s Substack for more content like this

In a decision which was expected and has long been previewed in international reports, the International Criminal Court (ICC) on Thursday issued arrest warrants for Prime Minister Benjamin Netanyahu and former defense minister Yoav Gallant over the war in Gaza.

Three judges of the ICC’s “Pre-Trial Chamber I” issued the warrants unanimously, accusing the Israeli leaders of crimes against humanity. They wrote: “The chamber considered that there are reasonable grounds to believe that both individuals intentionally and knowingly deprived the civilian population in Gaza of objects indispensable to their survival, including food, water, and medicine and medical supplies, as well as fuel and electricity.”

“The Chamber also found reasonable grounds to believe that Mr Netanyahu and Mr Gallant each bear criminal responsibility as civilian superiors for the war crime of intentionally directing an attack against the civilian population,” the ruling continued.

Over the summer as the arrest warrants were pending and expected at any moment, Netanyahu had actually begun altering his travel plans, in July avoiding stopovers in central Europe while en route to the United States.

Some 120 countries are party to the ICC, but Israel and the US are not. They have long blasted the war crimes investigation, and have condemned the warrants. Israeli media has highlighted that—

The decision marked the first time the ICC has ever issued arrest warrants against leaders of a democratic country.

Now, with the final issuance of formal ICC warrants, Netanyahu and Gallant face potential arrest should they travel to any of these 120 countries; however, the ICC of course lacks an enforcement mechanism and relies on the individual countries to follow through. Clearly the American pressure on The Hague-based court didn’t work.

But interestingly, the ICC has referenced Israeli leaders’ own words in making the case for their intentionally laying siege to a large civilian population. For example, in Oct. 2023 – within days after the Hamas terror attack which killed 1,200 and resulted in some 250 Israelis being taken hostage – Gallant said: “I have ordered a complete siege on the Gaza Strip. There will be no electricity, no food, no water, no fuel, everything is closed. We are fighting human animals and we are acting accordingly.”

Netanyahu has long warned that the ICC investigation and warrants would set a “dangerous” precedent for other democratic countries, including Israel’s allies. “Israel is given here a bum rap. I think it’s dangerous. Basically, it’s the first democracy being taken to the dock when it is doing exactly what democracies should be doing in an exemplary way,” he told CNN months ago. “It endangers all other democracies. Israel is first, but you’re next. Britain is next. Others are next, too.”

On Thursday, reacting to the new ICC warrants, Netanyahu’s office has blasted the ruling as “absurd and false lies” and characterized the decision as “antisemitic.” 

Supporters of Israel in the West, including Democratic Senator John Fetterman, also reacted fiercely on Thursday:

Don’t forget Karim Khan is under investigation himself. pic.twitter.com/716E32kz3P

— Al (@0kwhyn0t) November 21, 2024

Avi Mayer, the former editor of the Jerusalem post, has highlighted the selectivity of the new ICC move. Mayer wrote:

“In order to create a false impression of fairness, the international criminal court also issued an arrest warrant for Hamas military leader Mohammed Deif … who is dead. That should tell you just how ridiculous and politically motivated these warrants are. The ICC is a joke.”

Other than impacting potential travel of ‘wanted’ officials, the warrant is largely symbolic. But it creates a dilemma politically, and a possible strain on relations for some countries.

For example Russia’s Putin, also subject of a prior ICC arrest warrant, recently canceled an in-person trip to a BRICS summit in South Africa precisely to avoid putting the South African government in a sensitive position.

Existing Home Sales were expected to rebound modestly in October (+2.9% MoM) after dropping for 6 of the last 7 months to the lowest levels since 2010, and they did. Sales rose 3.4% MoM (a beat) but thanks to a downward revision for September from -1.0% to -1.3% MoM. What is most shocking about the shift is that it pushed the YoY change for existing home sales positive (+2.9% YoY) for the first time since July 2021…

Source: Bloomberg

…but in context, that shift up to 3.96mm SAAR homes sold is nothing…

Source: Bloomberg

High borrowing costs have led to a shortage of previously owned homes on the market, discouraging many would-be home sellers from listing their properties for sale and having to part with their current low financing costs.

“Additional job gains and continued economic growth appear assured, resulting in growing housing demand,” NAR Chief Economist Lawrence Yun said in a prepared statement.

“While mortgage rates remain elevated, they are expected to stabilize.”

Last month, the inventory of available homes edged up 0.7% to 1.37 million, continuing to trend higher although well below pre-pandemic levels.

Despite the weakness in sales, tight inventory is keeping prices elevated, yielding one of the least affordable housing markets on record. The median sale price last month increased 4% from a year earlier to $407,200, the highest ever for any October, the NAR figures show.

Contract signings rose in all four US regions, led by a 6.7% jump in the Midwest.

Sales of single-family homes increased 3.5% in October; purchases of condominiums and co-ops were up 2.7%

Finally, while that’s all very exciting – a scintilla of growth off almost record lows – the fecal matter is about to strike the rotating object as rising mortgage rates lagged impact threatens…

Source: Bloomberg

In October, 59% of homes sold were on the market for less than a month, compared with 57% in September, and 19% sold above the list price. Properties remained on the market for 29 days on average, compared with 28 days in the previous month. First-time buyers made up 27% of purchases, still historically low.

The strength of the Apple iPhone 16 upgrade cycle has been one of the most critical questions for Wall Street analysts tracking the handset market. Apple’s latest earnings reveal that the highly anticipated AI-driven upgrade supercycle this fall has largely fallen short, compounded by new data from a research firm indicating underwhelming demand in the Chinese market. 

Counterpoint Research published a new note on Wednesday showing that iPhone 16 sales during China’s Singles’ Day—the world’s largest holiday shopping period, spanning two weeks—bombed as consumers opted for domestic brands instead.

Here’s more color on the report via South China Morning Post:

The country’s two-week Singles’ Day sales period this year yielded “a double-digit, year-on-year decline in iPhone sales”, as Apple “faced pressure from an abnormally high number” of new flagship smartphone models that domestic competitors launched just before and during the annual shopping extravaganza, according to a report published on Wednesday by Counterpoint Research.

The report did not provide the exact percentage drop or the fewer number of iPhone sales that Counterpoint tracked during the event’s sales period, which ran from October 28 to November 10. 

…

This year’s Singles’ Day debacle for Apple, which saw iPhone 16 prices slashed as part of online promotions, reflects the continued cutthroat competition in the world’s biggest smartphone market, where major Chinese handset vendors have already launched on-device artificial intelligence (AI) ahead of the US tech giant.

Overall, Singles’ Day smartphone sales this year fell 9 per cent compared with last year, as market demand and consumers’ enthusiasm for promotions have been subdued by economic headwinds, according to the Counterpoint report.-SCMP

Chinese smartphone brands, such as Vivo, Huawei, Xiaomi, Honor, and Oppo, are quickly taking market share away from Apple. Counterpoint’s report last month showed that Apple held the sixth spot with about 13.5% market share.

Apple’s much-awaited AI-led upgrade supercycle in the world’s largest handset market has been delayed primarily because Beijing still has to approve its AI services.

Meanwhile, competitor Huawei plans to launch the “most powerful” Mate Smartphone this month.  

“The most powerful Mate in history! See you in November!” Huawei’s consumer group chairman, Richard Yu, wrote in a short post on Chinese social media platform Weibo. 

Trade war fears with incoming President-elect Donald Trump have likely increased patriotic fervor in China to ditch Tim Cook’s products for domestic ones. 

We have covered the dismal iPhone upgrade supercycle this fall:

• No AI-Fueled Upgrade Supercycle? Apple iPhone 16 Discounts Offered At Major Chinese Online Retailers

• Apple Slips On Pre-Order Analysis Showing Weak iPhone 16 Pro Demand

• Apple’s iPhone 16 Sales Falling Short Of Expectations; DigiTimes Says

• Barclays Analysts Find “Weak” iPhone 16 Demand After Supply Chain Check

The strength of the iPhone 16 cycle is indeed underwhelming. Oops, AI. 

Authored by Ronald Beaty via RealClearEnergy,

In the cacophony of contemporary political discourse, few phrases resonate with the visceral immediacy of “Drill, baby, drill.” This slogan, emblematic of a robust conservative approach to energy policy, has been both vilified and venerated. However, in the quest for a balanced perspective, it’s imperative we dissect not just the slogan but the philosophy it represents. Here, I argue for a nuanced understanding of drilling that acknowledges economic imperatives while not wholly dismissing environmental considerations.

Economic Realities

Firstly, let us confront the elephant in the room: energy is the lifeblood of modern economies. The U.S., despite its advancements in renewable energies, remains tethered to oil and gas not out of antiquated loyalty but from an acute awareness of economic necessity. The slogan “Drill, baby, drill” is less about environmental insensitivity and more about economic pragmatism. It’s about recognizing that while the transition to renewables is vital, it cannot be abrupt without jeopardizing economic stability.

Consider the jobs in question. The energy sector doesn’t just mean rig workers; it involves entire supply chains, from manufacturing to transportation, impacting millions. When we talk about drilling, we’re discussing real livelihoods, not just abstract energy policies. The economic argument for drilling isn’t merely about filling gas tanks cheaper; it’s about sustaining industries, supporting small towns, and maintaining national economic health during a transition period that, despite aggressive targets, will span decades.

The Misnomer of Climate Neglect

To label “Drill, baby, drill” as climate denialism is to misunderstand its intent. This isn’t an all-or-nothing approach to energy but a call for a balanced strategy where fossil fuels and renewables coexist. The transition to green energy is not a light switch but a dimmer, needing careful adjustment. 

Moreover, the environmental narrative around drilling often overlooks advancements in technology. Modern drilling techniques, like precision drilling and enhanced recovery methods, are less invasive and more efficient than in the past. The focus should be on regulating these practices to minimize environmental impact, not on demonizing the industry wholesale. 

Carbon capture and storage (CCS) technologies, for instance, offer a bridge. If we can drill, why can’t we also innovate in capturing the carbon emitted? The dialogue should shift towards integrating drilling with emerging technologies that allow for cleaner fossil fuel use, rather than an either-or debate.

Strategic Autonomy

Energy independence isn’t merely an economic issue; it’s a matter of national security. Dependence on foreign oil has geopolitical ramifications, influencing international relations and sometimes compromising national interests. “Drill, baby, drill” in this context becomes a mantra for strategic autonomy. In an era where energy can be weaponized, the ability to produce your own resources isn’t just about saving at the pump; it’s about securing your nation’s future.

A Balanced Approach

Here, the conservative viewpoint isn’t dismissing climate change; it’s about a strategic, phased approach. If we compare energy policy to a chess game, “Drill, baby, drill” is not a checkmate but a necessary move to fortify our position. It’s about leveraging what we have now to fund and stabilize the transition to what we need for tomorrow.

This balanced approach involves:

– Regulation, Not Prohibition: Implementing stringent environmental regulations that ensure drilling is done safely. This means investing in technology and oversight to prevent disasters like Deepwater Horizon, ensuring companies internalize the environmental costs.

– Innovation Incentives: Encouraging innovation in both fossil fuel extraction and utilization technologies. This includes supporting research into CCS and cleaner refining processes.

– Economic Diversification: While drilling provides immediate economic benefits, the future lies in diversifying energy portfolios. This means not just supporting oil and gas but also investing heavily in renewable energy sectors to create jobs and infrastructure for the future.

– International Leadership: Instead of isolating ourselves, we should lead by example. By showing how a major economy can balance growth with environmental stewardship, the U.S. can influence global energy practices positively.

Conclusion

“Drill, baby, drill” should not be seen as a war cry against the environment but as a call for pragmatic balance in energy policy. It’s about recognizing that while we must move towards sustainability, we must do so without crashing our economic engine. The real challenge is not in choosing between drilling or not but in how we drill, how we innovate, and how we transition.

This op-ed isn’t just for conservatives; it’s for anyone who understands that solutions to our global problems need to be practical, not just idealistic. We’re in a marathon, not a sprint, towards sustainability. “Drill, baby, drill” can be part of that journey, provided we drill wisely, with an eye on the future, not just today’s benefits. Let’s refine the slogan to “Drill, innovate, and transition,” ensuring that our path to environmental stewardship is as economically sound as it is ecologically responsible.

Ronald Beaty is a former Barnstable County Commissioner, and a lifelong resident of Cape Cod, Massachusetts.

Is this admission a prelude to near-future negotiations under the Trump administration? Ukraine’s President Volodymyr Zelensky has for the first time expressly admitted in a Fox News interview that Ukraine will never be able to take back Crimea by force.

He said that Ukraine could not afford to lose the number of lives that would perish in undertaking a military invasion of Crimea, saying that it would only be restored to Ukrainian sovereignty through diplomatic means. He also warned that if US defense aid is blocked under Trump, his country will ‘lose’ the war.

He did emphasize he’s not ready to cede territory, explaining that Ukraine “cannot legally acknowledge any occupied territory of Ukraine as Russian.”

“That is about those territories… occupied by (Russian President Vladimir) Putin before the full-scale invasion, since 2014. Legally, we are not acknowledging that, we are not adopting that,” he added.

All of this was in response to journalist Trey Yingst pressing Zelensky on whether he’d be willing to give up Russian-held Crimea in order to “stop the bloodshed in Europe”. Crimea had been annexed since 2014 following a popular referendum, but Moscow has always had its Black Sea naval fleet based there.

Yingst asked: “President Vladimir Putin has been very clear Crimea will never return to Ukrainian hands. Are you willing to give up Crimea in pursuit of a peace deal to end this war and stop the bloodshed in Europe?” 

“I was already mentioning that we are ready to bring Crimea back diplomatically,” Zelensky responded. “We cannot spend dozens of thousands of our people so that they perish for the sake of Crimea coming back … We understand that Crimea can be brought back diplomatically.”

Elsewhere in the interview, Zelensky was asked about the possibility of US President-elect Donald Trump cutting off US military aid once he returns to the White House.

“If they will cut, I think we will lose. Of course, anyway, we will stay and we will fight. We have production, but it’s not enough to prevail. And I think it is not enough to survive,” he conceded.

At the moment, the Biden administration is trying to rush everything it can to the Ukrainians, having just approved another $275 million arms package.

Biden officials are also still pressing Kiev to step up mobilization efforts. National Security Adviser Jake Sullivan in a recent interview with PBS News Hour described that the real problem allowing for a continued Russian advance is lack of manpower, and not arms or advanced technology.

Zelenskyy criticized German Chancellor Scholz for talking with Russian President Putin on the phone. Our exchange after I asked him why. pic.twitter.com/VeD5szuS1I

— Trey Yingst (@TreyYingst) November 21, 2024

Sullivan said in the Monday conversation, “Our view has been that there’s not one weapon system that makes a difference in this battle. It’s about manpower, and Ukraine needs to do more, in our view, to firm up its lines in terms of the number of forces it has on the front lines.”

He emphasized, “Where is the straightest line between Ukrainian performance and inputs? It’s on mobilization and manpower.” The West has been pressuring Zelensky to lower the conscription age, which would be a deeply unpopular move at home.

Just 213,000 Americans filed for first-time jobless benefits last week – the lowest number since April – as natural disasters’ effects fade from the data…

Source: Bloomberg

The overhang from the hurricanes has seemingly ended…

Source: Bloomberg

But WTF is going on in California?

Last week saw initial claims explode higher there..

…and this week claims collapsed…

However, the number of Americans filing for continuing jobless claims jumped back above 1.9 million for the first time since November 2021…

Source: Bloomberg

Totally normal…

Source: Bloomberg

So is the labor market in trouble or not?

US equity futures reversed earlier losses and are now trading higher despite disappointing guidance from NVDA’s earnings after the market close which led to some pressure in equities this morning. As of 8:00am S&P futures are are up 0.2%, erasing an earlier loss of 0.4%, as traders weighed a lackluster forecast from Nvidia against Snowflake’s 20% premarket surge, which also lifted its peers. Nasdaq futures were up 0.1% with Nvidia erasing its earlier loss of as much as 3.2% after its 4Q forecast fell short of the most optimistic expectations, and even rising 1%. With Bitcoin rising as high as $98,000 MicroStrategy rallied as much as 11% in early hours trading. Bond yields are 2-3bp lower this morning and the USD is unchanged. Fears the Russia-Ukraine war is escalating helped lift oil and gold prices, while European natural gas futures hit the highest in a year. Ukraine reported that Russia fired an intercontinental ballistic missile during an overnight attack, while a Kremlin spokesman called Kyiv’s earlier use of UK Storm Shadow missiles a new escalation. Gold was flat and base metals are largely unchanged. Meanwhile, Trump’s search for a Treasury secretary remains in flux, with no candidate having emerged as the clear favorite. Today, key macro data focus will be Leading Index, Jobless Claims and Existing Home Sales

In premarket trading, the world’s biggest company Nvidia dropped 1%, erasing an earlier loss as much as 3%, after the company assured investors that its new product lineup can maintain the company’s artificial intelligence-fueled growth run, though the rush to get the chips out the door is proving more costly than expected. Softward company Snowflake gained 22% after the company gave a better-than-expected sales outlook, suggesting newly launched products are receiving a strong reception from customers. Here are some other notable movers:

• MicroStrategy (MSTR), the largest publicly traded corporate holder of Bitcoin, rallied as much as 11%. The stock is extending gains after it announced an almost 50% increase in planned sales of convertible senior notes, to $2.6 billion, to fund purchases of more Bitcoin.
• Baidu ADRs (BIDU) falls about 2% after reporting a 3% sales decline in 3Q, citing weakness in online marketing amid a sluggish Chinese economy.
• BJ’s Wholesale (BJ) rises 7% after the warehouse-club operator increased some of its annual projections. Management announced the company’s first membership fee increase in seven years.
• Dream Finders Homes (DFH) climbs 8% amid news the company will replace Haynes International in the S&P SmallCap 600 prior to the open on Nov. 25.
• Palo Alto Networks (PANW) declines about 2% after posting quarterly results. Raymond James said newly-adopted metrics were above expectations, though traditional metrics measuring activity such as billings and collecting cash saw a meaningful decline.

Traders will be watching US initial jobless claims later Thursday for signs on the strength of the economy and the Federal Reserve’s interest-rate path. An expected decision on President-elect Donald Trump’s nominee for Treasury secretary is also in focus.

“Trump’s win has brought with it an increase in geopolitical uncertainty and that too is weighing on sentiment,” said Daniel Murray, Zurich-based chief executive officer of EFG Asset Management in Switzerland. “Ukraine now has an incentive to gain as much strategic advantage as possible ahead of Trump’s inauguration.”

On Wednesday, Boston Fed President Susan Collins said more rate cuts are needed, but policymakers should proceed carefully to avoid moving too quickly or too slowly. Swaps market pricing indicated a chance of around 50% that the Fed will cut rates again in December.

Europe’s Stoxx 600 was flat, erasing an earlier loss of 0.6%, as  investors sentiment was dampened by fears of an escalation of the Russia-Ukraine war and a disappointing revenue forecast from Nvidia. Autos and consumer stocks are the biggest laggards, while insurance is the only sector in the green. Here are some of the biggest movers on Thursday:

• Soitec surges as much as 21% as the semiconductor wafer maker’s reiterated full-year revenue and Ebitda outlook for 2025 brings reassurance.
• Jet2 shares surge as much as 12%, the biggest jump in two years, after the travel firm reported strong first-half earnings, including a pretax profit beat.
• MFE shares rise as much as 11% in Milan trading after the media company reported an increase in Ebit for the nine-month period and said it expects a growth in advertising revenues for the full year.
• Halma gains as much as 10%, the most in more than five months, after the health and safety sensor technology group released its first-half results.
• Ithaca Energy shares rise as much as 10% as the firm posted its first set of results since completing the acquisition of Eni’s UK upsteam assets.
• Zurich Insurance shares rise as much as 2.3% after the insurer outlined upbeat new targets for the next three years that came in above current expectations.
• Novartis shares rise as much as 0.8% after the Swiss pharmaceuticals giant company lifted its sales guidance, citing upbeat expectations for new medicines.
• JD Sports shares slide as much as 17% after the sports retailer issued a third-quarter sales update.
• CMC Markets shares slide as much as 14% after in-line first-half results weren’t sufficient to sustain strong gains in the lead up to the earnings.

Earlier in the session, Asian stocks fell, heading for back-to-back losses, as some of the region’s tech heavyweights slid following Nvidia’s lackluster revenue forecast. The MSCI Asia Pacific Index declined as much as 0.4%, with TSMC and Sony Group among the biggest drags. Indian benchmarks underperformed as Adani Group units’ shares tumbled after US prosecutors charged Gautam Adani with helping to drive a $250 million bribery scheme. Adani’s units were among the worst performers on MSCI’s Asian equity gauge, with flagship unit Adani Enterprises Ltd. down as much as 23%. Sentiment has been week this month as investors brace for Donald Trump’s second presidency and the potential for higher tariffs, particularly on China. The dollar’s recent strength and concerns that the Federal Reserve may be less aggressive in easing also have sapped demand for Asian assets. MSCI’s regional benchmark is down more than 7% from its late September peak.

In FX, the dollar gained and the Japanese yen outperformed G10 peers on haven demand after Ukraine said Russia launched an intercontinental ballistic missile, ratcheting up geopolitical tensions. The USD/JPY fell as much as 0.9% to 154.09 after BOJ Governor Ueda earlier reiterated that he’s closely watching currency impacts on the economy and inflation, though said it’s not possible to predict the outcome of the central bank’s policy meeting. “Direction of travel remains skewed to the downside as Fed, BOJ’s policy normalization takes different form,” Christopher Wong, a currency strategist at Oversea-Chinese Banking Corp. in Singapore, said of dollar-yen moves. “Risk to this view is a case of slowing BOJ policy normalization and/or Fed in no hurry to cut, alongside Trump policy uncertainties.”

In rates, treasuries are slightly richer on the day across front-end and belly of the curve, but TSY futures are off session highs as WTI crude oil futures rise more than 2%. Investors flocked to safe-haven assets with the bid in Treasuries pushing US 10-year yields as much as 3 bps lower to 4.38%, with bunds and gilts also gaining, after Ukraine said Russia launched a intercontinental ballistic missile. At 8:00am ET, rates were ~1bp lower across the front-end with 10-year little changed near 4.40%, outperforming comparable bunds and gilts by around 1bp; curve spreads are little changed. US session includes weekly jobless claims data, four scheduled Fed speakers and an auction of 10-year TIPS. The TIPS auction at 1pm New York time, a $17b second reopening of the July new issue, is the final coupon sale this week; next week’s auctions, to be confirmed at 11am, are anticipated to span Monday to Wednesday ahead of US Thanksgiving holiday on Thursday

In commodities, oil prices gained with WTI up 1.6% to $69.80 a barrel. European natural gas prices also jump. Spot gold climbed $18 to $2,668/oz.

Bitcoin topped $98,000 for the first time on optimism Trump’s support for crypto heralds a boom for the industry as the US pivots to friendly regulations in place of a crackdown. Trump’s transition team has begun to hold discussions over whether to create a White House post dedicated to digital-asset policy.

Looking at today’s calendar, US economic data calendar includes November Philadelphia Fed business outlook and jobless claims (8:30am), October Leading index and existing homes sales (10am) and November Kansas City Fed manufacturing activity (11am). Fed speaker slate includes Hammack (8:45am, 12:30pm), Goolsbee (12:25pm), Schmid (12:40pm) and Barr (4:40pm).

Market Snapshot

• S&P 500 futures down 0.5% to 5,910.00
• STOXX Europe 600 down 0.5% to 497.80
• MXAP down 0.3% to 182.15
• MXAPJ down 0.6% to 577.43
• Nikkei down 0.9% to 38,026.17
• Topix down 0.6% to 2,682.81
• Hang Seng Index down 0.5% to 19,601.11
• Shanghai Composite little changed at 3,370.40
• Sensex down 0.6% to 77,127.48
• Australia S&P/ASX 200 little changed at 8,322.96
• Kospi little changed at 2,480.63
• German 10Y yield little changed at 2.33%
• Euro down 0.3% to $1.0514
• Brent Futures up 1.1% to $73.61/bbl
• Gold spot up 0.6% to $2,666.61
• US Dollar Index little changed at 106.73

Top Overnight News

• Chinese government advisers are recommending that Beijing should maintain an economic growth target of around 5.0% for next year, pushing for stronger fiscal stimulus to mitigate the impact of expected U.S. tariff hikes on the country’s exports. Reuters
• Japanese PM Shigeru Ishiba is set to unveil a $140 billion stimulus package to address challenges from inflation to wage growth, following his election promises to alleviate a cost-of-living crunch. BBG
• According to Ukraine’s Air Force Command, Russia hit Ukraine with an ICBM for the first time since Putin launched his war nearly 1000 days ago. BBG
• Ukraine is getting more help from Joe Biden. His administration told Congress it plans to cancel $4.65 billion in debt owed by the country, the latest in a series of moves meant to bolster support for Kyiv before Donald Trump takes office. BBG
• US officials are meeting with Netanyahu on Thursday as the White House pushes hard for a Lebanon ceasefire. FT
• Richmond Fed President Barkin said he anticipates US inflation will continue cooling, even though progress has plateaued somewhat of late. FT
• Donald Trump has not yet been fully sold on his top 3 Treasury Secretary Candidates (Warsh, Rowan, or Bessent) as he struggles to find someone both emphatically supportive of tariffs and who would be welcomed by markets. BBG
• Marty Makary is reportedly seen as the leading candidate for US President-elect Trump’s FDA nomination: BBG
• US ETFs investing in Bitcoin surpassed $100 billion in total assets, fueled by optimism surrounding Donald Trump’s plans to foster the growth of the crypto industry. BBG
• The Justice Department on Wednesday said Google should have to sell off its popular Chrome browser as part of a court-ordered fix to its monopolization of the online search market. WSJ
• Fed’s Barkin (2024 Voter) says “Fed should not pre-emptively adjust monetary policy ahead of possible changes in economic policy; US is more vulnerable to inflation shocks”, via FT. “Forthcoming rate decision would depend on data.”. “If you got inflation staying above out target, that makes the case to be more careful about reducing rates. If you got unemployment accelerating, that makes the case to be more forward-leaning.”
• Fed’s Collins (2025 voter) said some additional rate cuts are needed as policy is still restrictive but she doesn’t want to cut rates too quickly and warned that overly slow rate cuts could hurt the labour market. Collins also stated that the final destination of rate cuts is unclear and monetary policy is well positioned for the economic outlook, while she added monetary policy is not on a preset course and Fed policy decisions will be made meeting-by-meeting.
• Fed’s Williams (voter) says sees inflation is cooling and interest rates falling further, adds 2% is the rate that can best balance the central bank’s employment and price stability goals, according to Barron’s

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were mostly subdued after the indecisive lead from the US where geopolitics and Nvidia earnings were in the spotlight. ASX 200 lacked firm direction amid weakness in the consumer-related sectors and after Westpac pushed back its forecast for when the RBA will begin cutting rates to May next year from a prior forecast of February. Nikkei 225 underperformed and tested the 38,000 level to the downside as the Japanese currency nursed some of its recent losses and despite a report that Japan is planning an economic package of around JPY 21.9tln. Hang Seng and Shanghai Comp were uninspired as participants digested recent earnings releases although support was seen in automakers after a MOFCOM official said they are planning the continuation of car trade-in incentives for next year to stabilise market expectations.

Top Asian News

• Four Chinese government advisers advocate for a 2025 growth target of around 5% which is similar to this year, while one adviser presses for a growth target of above 4% and another recommends a 4.5%-5% range, while advisers suggested a higher budget deficit could mitigate the impact of expected US tariffs, according to Reuters.
• China MOFCOM official said they are planning the continuation of car trade-in incentives for next year to stabilise market expectations.
• Chinese banks are seen cutting lending rates in 2025 but may leave lending rates unchanged next month, according to analysts cited by China Securities Journal.
• Japan reportedly plans an economic package of around JPY 21.9tln, according to NHK. It was later reported that Japanese Deputy Chief Cabinet Secretary Aoki said the LDP-led coalition is introducing measures to reflect DPP requests as much as possible.
• Baidu (9888 HK) Q3 (CNY) adj. EPS 16.6 (prev. 20.4), Revenue 33.65bln (exp. 33.3bln)

European bourses began the session on a mixed footing, but gradually teetered lower soon after the cash open. A further extension of the downside was seen following updates via the Kremlin’s spokesperson who noted that the storm shadow attack at Russia is a new escalation, via TASS. Thereafter, ABC News reported that it is not confirmed that Russia used a ICBM last night, which helped to lift bourses incrementally off lows. European sectors opened with a slight positive bias, before sentiment soured to show a strong negative bias in Europe. Insurance manages to stay in mild positive territory, largely attributed to gains in Zurich Insurance after the co. announced their 2025-27 targets. Autos are Europe’s worst sector, joined closely by Consumer Products; seemingly weighed on by the defensive bias. US equity futures are modestly lower across the board, and with slight underperformance in the tech-heavy NQ after NVIDIA reported its Q3 results; the Co. is down 3.4% in pre-market trade, despite reporting strong headline metrics, but its Q4 guidance ultimately disappointed on the top-end of analyst expectations. NVIDIA (NVDA) – Shares -3% in pre-market trade; despite top- and bottom line beats, some analysts were seeking firmer guidance for Q4, and were disappointed by slowing growth rates, while some also continue to cite production concerns. Nvidia reported Q3 adj. EPS 0.81 (exp. 0.75), Q3 revenue USD 35.08bln (exp. 33.12bln). Q3 adj. gross margin 75% (exp. 75%), Q3 adj. operating expenses USD 3.05bln (exp. 2.99bln), Q3 adj. operating income 23.28bln (exp. 21.9bln). Exec said Blackwell production continue to ramp into fiscal 2026. Ahead, it sees Q4 revenue at around USD 37.5bln+/- 2% (exp. 37.1bln), and sees Q4 adj. gross margins between 73-74% (exp. 73.5%).

Top European News

• ECB’s Villeroy said inflation could sustainably be at 2% in early 2025 and the economy remains resilient, while stated that victory against inflation is in sight in Europe but added the balance of risks on growth and inflation is shifting to the downside. Villeroy said it is possible that US tariffs are not expected to alter significantly the inflation outlook in Europe and the degree of monetary policy restriction should continue to be reduced in which the pace must be determined by agile pragmatism, with full optionality maintained for upcoming meetings.
• ECB’s Stournaras says “25bps December rate cut is the right response; should cut every meeting until we reach 2%; neutral rate on average is about 2%”, via Bloomberg TV.
• Bundesbank says a significant number of German corporate insolvencies are likely next year with corporate default risk to remain elevated

FX

• DXY is higher but with the USD showing a mixed performance vs. peers. Fresh macro drivers for the US remain light and as such, risk sentiment may carry sway for the Greenback. Today’s US slate sees US Jobless Claims, Philly Fed Index, US Existing Home Sales, Fed’s Hammack, Goolsbee & Barr. DXY has been as high as 106.74 but has stopped shy of Wednesday’s 106.91 peak.
• EUR on the backfoot vs. the USD with some modest weakness triggered by geopolitical angst surrounding Russia-Ukraine. EUR/USD has been as low as 1.0515 but is holding above yesterday’s 1.0506 floor.
• JPY is firmer vs. the USD in what has been a choppy week for USD/JPY. Fresh macro drivers for the US and Japan have been lacking with JPY instead gaining impetus from some of the risk-aversion triggered by tensions between Russia and Ukraine.
• GBP on the backfoot vs. the USD and extending downside after yesterday’s failure to hold above the 1.27 mark post-UK CPI. Fresh macro drivers for the GBP are light and the currency is flat vs. the EUR. Today’s docket sees another appearance from BoE’s Mann. Cable’s low for the session is at 1.2624.
• Mildly diverging fortunes for Antipodeans with the AUD faring better than the Kiwi. AUD/USD has managed to hold above the 0.65 mark after yesterday’s session of losses. NZD/USD has extended on yesterday’s selling and slid further on a 0.58 handle.
• PBoC set USD/CNY mid-point at 7.1934 vs exp. 7.2482 (prev. 7.1935).

Fixed Income

• A contained start for USTs with fresh drivers somewhat light after the 20yr auction on Wednesday (which was weak) and as we await the latest weekly jobs data before the latest wave of Fed speakers. USTs have remained in a narrow 109-20+ to 109-25+ parameters; the high of which printed most recently as Russia described Ukraine’s use of storm shadow missiles as a “new escalation”.
• Bunds are firmer on the session and at highs given the latest geopolitical updates and specifically commentary from the Russian Kremlin on storm shadow. At a 132.52 peak, having comfortably reclaimed the 132.00 handle after languishing just below the mark throughout much of the APAC session. The morning has seen supply from Spain and France, which was somewhat tepid vs recent outings for Spain, though not sufficiently so to spark any reaction, and France thereafter was well received.
• Gilts are bid in tandem with peers but also as the benchmark rebounds from Wednesday’s CPI-induced pressures. However, the odds of a December BoE cut remain stuck at around the 15% mark. Action which has taken Gilts back above the 94.00 handle, surpassing Wednesday’s 93.81 best.
• France sells EUR 11bln vs exp. EUR 9-11bln 2.50% 2027, 0.75% 2028, 2.75% 2030, 0.00% 2030 OAT Auction.
• Spain sells EUR 4.25bln vs exp. EUR 4-5bln 3.10% 2031, 4.20% 2037 Bono & 1.00% 2042 Green Bono.
• UK sells GBP 2bln 0.125% 2026 Gilt via tender: b/c 4.31x and average yield 3.996%.

Commodities

• WTI and Brent are firmer on the session, benefitting from the tense geopolitical backdrop as updates out of Russia continue to weigh on general risk sentiment. Benchmarks posting gains of just under USD 1/bbl on the session and in proximity to respective highs of USD 69.84/bbl and USD 73.87/bbl.
• Dutch TTF printed a fresh YTD high of EUR 48.15/MW, benefitting from the above with magnitudes more pronounced than in the crude space. The next point of resistance comes into play at EUR 49.81/MWh from early-December 2023.
• Spot gold is firmer, benefitting from the tense geopolitical environment and the generally soft risk tone on this and after NVIDIA’s results. Action which has seen havens generally benefit across the board with the DXY, JPY and fixed income bid.
• Base metals struggled for direction overnight, but have since slipped into mostly negative territory given the dip in risk sentiment owing to geopolitical updates out of Russia/Ukraine.
• US President-elect Trump’s team is reportedly planning to revive the Keystone XL oil pipeline, according to POLITICO.

Geopolitics: Middle East

• Israel conducted raids on southern suburbs of Beirut, according to Al Jazeera.
• Israeli air strikes on several houses in Beit Lahiya in the northern Gaza Strip killed and wounded dozens, according to medics.
• US Senate blocked measures that would have halted sales of tank rounds and joint direct attack munitions to Israel.
• Israel’s Channel 14 quoting an Israeli political official reports “It is likely that no agreement with Lebanon will be announced during Hochstein’s visit to Israel” but there is optimism that an agreement to end the war could be reached within a week.

Russia-Ukraine

• Western Official tells CNN news that Russia did not use an ICBM last night, Ukraine air force said it was a ballistic missile and declined to characterise it further. Ukraine air force declined to comment, saying the impact was still being assessed. Prior to this, Ukrainian media Ukrainska Pravda say a RS-26 ballistic missile was used to hit Dnipro. The original report was via Ukraine’s Airforce which announced Russia launched intercontinental ballistic missiles from the Astrakhan region in the morning.
• Ukraine’s airforce announces ballistic missile attack alert, via Bloomberg; explosions heard in Ukraine’s Kryvyi Rih, via RBC Ukraine.
• Kremlin Spokesperson says storm shadow attack on Russia is a new escalation, according to TASS.
• Russia’s Foreign Ministry says Russia is open to talks on Ukraine, ready to look at realistic initiatives.
• Russian Foreign Ministry spokesperson, on the US missile base in Poland, says this results in an increase to the overall level of nuclear danger. The base has long been a priority target, which can be hit with “Russian new weapons”. Adds, Russia is open to talks on Ukraine, ready to look at realistic initiatives.

US Event Calendar

• 08:30: Nov. Initial Jobless Claims, est. 220,000, prior 217,000
  • Nov. Continuing Claims, est. 1.88m, prior 1.87m
• 08:30: Nov. Philadelphia Fed Business Outl, est. 8.0, prior 10.3
• 10:00: Oct. Leading Index, est. -0.3%, prior -0.5%
• 10:00: Oct. Existing Home Sales est. 3.95m, prior 3.84m
  • Oct. Existing Home Sales MoM, est. 2.9%, prior -1.0%
• 11:00: Nov. Kansas City Fed Manf. Activity, est. -5, prior -4

DB’s Jim Reid concludes the overnight wrap

Nvidia’s results overnight drew a tepid reaction despite a solid Q3 beat by the world’s most valuable company as its guidance failed to match some of the loftiest expectations. Q3 sales came in at $35.1bn (vs $33.2bn est.) and the earnings surprise the strongest in three quarters. However, the Q4 sales guidance at $37.5bn, was “only” a touch above the average analyst estimate of $37.1bn. The company’s earnings call talked of “very strong” demand for its new Blackwell chips that will begin to ship this quarter, but overall it was deemed to be a slightly underwhelming outcome with Nvidia’s shares down -2.5% in post-market trading. Of course, this has be to put in perspective of the stock’s +195% rally YTD.

Off the back of this, S&P 500 and NASDAQ futures are trading -0.16% and -0.25% lower as I type which overall means this potential high-volatility event has broadly passed without major incident. However, it has dampened sentiment a touch in Asia with the Nikkei (-0.65%) is leading losses with the Hang Seng (-0.14%) also lower. As I type, Chinese equities are reversing losses though with the Shanghai Composite (+0.25%) joining the KOSPI (+0.35%) higher. Also higher is Bitcoin (+3.40%) as it shows no signs of slowing, advancing for a fourth consecutive session, and trading at $97,670 as I type.

Ahead of Nvidia’s results, markets had managed to mostly shake off the negative mood that had dominated the session, with the S&P 500 ending the session flat (+0.002% to be precise) with more than 60% of its constituents higher on the day. The index had traded in the red almost all of the day, having been down nearly -1% early in the session as several concerns weighed on sentiment. Matters weren’t helped by a very weak earnings release from Target (-21.97%), which was the worst performer in the entire index after they cut the earnings outlook. The Magnificent 7 (-0.54%) also dragged on the broader market, with an uptick in volatility seeing the VIX Index (+0.81pts to 17.16pts) rise to its highest closing level since the US election. And there were modest declines in Europe, where the STOXX 600 (-0.02%) fell narrowly back to a fresh 3-month low, while the DAX (-0.29%), CAC (-0.43%) and FTSE 100 (-0.17%) saw slightly larger declines.

The earlier negative market driver was fears of an escalation in the Russia-Ukraine conflict. The geopolitical risk-off tone saw gold (+0.70%) post a third consecutive increase, while the dollar index rose +0.41%. Another related market theme was a notable rise in near-term inflation expectations, with the US 2yr inflation swap up +5.1bps to 2.72%. That’s its highest level since March 2023, right before SVB’s collapse, and it shows how investors have adjusted their expectations relative to early September, when it fell beneath 2%.

With inflation expectations moving higher, markets continued to pair back near-term Fed rate cut expectations, with the market odds of a December rate cut falling to 52% from 59% the previous day. The 13bps of easing now priced for the December meeting is the lowest that it’s been since April. This came as Fed officials continued to strike a patient tone. Fed Governor Bowman said she “would prefer to proceed cautiously” with further easing and Boston Fed’s Collins said that while “some additional policy easing is needed”, the cuts delivered so far “enable the FOMC to be careful and deliberate going forward”.

Global bonds mostly sold off yesterday, with the 2yr Treasury yield up +3.5bps to 4.32%, whilst the 10yr yield was +1.5bps higher at 4.41%. The Treasury sell-off was reinforced by a weak 20yr auction that saw bonds issued 3bps above the pre-sale yield. European yields also saw similar moves, with those on 10yr bunds (+1.3bps), OATs (+2.9bps) and BTPs (+2.8bps) all rising. Meanwhile in the UK, 10yr gilts (+2.7bps) sold off after the latest CPI print was above expectations in October. For example, headline CPI rose to a six-month high of +2.3% (vs. +2.2% expected), whilst core CPI was up to +3.3% (vs. +3.1% expected). So that led investors to dial back their expectations for rate cuts from the BoE, with the likelihood of another cut by February down to 78% now.

Over in the US, there was still no sign of who Donald Trump would appoint as his new Treasury Secretary. The four names widely reported to be in the frame include former Fed Governor Kevin Warsh, Apollo CEO Marc Rowan, hedge fund manager Scott Bessent and Senator Bill Hagerty. Bloomberg reported that Trump was scheduled to hold interviews yesterday with Warsh and Rowan, and that Hagerty had spent much of the day with Trump on Tuesday.

To the day ahead now, and data releases from the US include the weekly initial jobless claims, existing home sales for October, and the Conference Board’s leading index for October. In the Euro Area, we’ll also get the European Commission’s preliminary consumer confidence indicator for November. From central banks, we’ll hear from the Fed’s Hammack, Goolsbee and Barr, the ECB’s Knot, Holzmann, Cipollone, Escriva, Patsalides, Elderson, Lane, Kazimir, Vujcic, and the BoE’s Mann.

A spokesperson for the NFL said Wednesday that the league has “no issue” with players celebrating big plays and touchdowns with a dance reminiscent of President-elect Donald Trump, which spread throughout the league following his election win.

As The Epoch Times’ Jack Phillips reports, the dance, popularized by the president-elect at rallies, was first seen years ago when Trump pumped his fists and move them alongside his torso to the “YMCA” song.

Brian McCarthy, a spokesman for the NFL, told The Epoch Times on Thursday that “there’s no issue with a celebratory dance such as what took place Sunday or the previous week with the 49ers on November 10,” answering a question about whether the league would permit the “Trump dance.”

He then noted that the NFL only fines players for unsportsmanlike conduct such as “prolonged or excessive celebration, any violent gesture or an act that is sexually suggestive or offensive.”

San Francisco 49ers star defensive end Nick Bosa, a noted Trump supporter who was seen wearing a “Make America Great Again” hat days before the election, celebrated a quarterback sack with the dance on the Sunday. When he was asked after the game about the dance about what had inspired it, he told reporters: “I think you know the answer to that question.”

Bosa was fined on Nov. 9 not for the dance, but because he wore a “Make America Great Again” hat after the game. McCarthy told The Epoch Times that Bosa received a more than $11,000 fine “for a violation of the NFL uniform and equipment rules for wearing a hat that contained a personal message.”

More players performed the dance on Sunday, Nov. 17, according to an Epoch Times review of footage. Notably, Detroit Lions defensive end Za’Darius Smith, Tennessee Titans wide receiver Calvin Ridley, and Las Vegas Raiders tight end Brock Bowers were seen performing it.

Ridley did the dance while celebrating along with teammate Nick Westbrook-Ikhine during Tennessee’s 23–13 loss to the Minnesota Vikings on Sunday. Smith and also Malcolm Rodriguez performed the dance after a sack in the fourth quarter of Detroit’s 52–6 rout of the Jacksonville Jaguars.

Bowers on Sunday was asked about the dance by a reporter: “I’ve seen everyone do it. I watched the UFC fight last night and Jon Jones did it. I like watching UFC so I saw it, and thought it was cool.” The Raiders then appeared to end Bowers’s media availability after the question and his answer.

He was referring to Jones, the UFC heavyweight champion, also performing the dance after defeating challenger and former champion Stipe Miocic on Saturday night in front of Trump, Elon Musk, Tulsi Gabbard, Robert F. Kennedy Jr., and other members of the president-elect’s entourage. Footage also showed Jones presenting his championship belt to Trump, who smiled in return.

Aside from the NFL and UFC, college players have been doing it for weeks and it’s gone international. Players from the English soccer club Barnsley celebrated a goal with the Trump dance.

With weeks to go before the 2024 election, three former Pittsburgh Steelers stars, Antonio Brown, Mike Wallace, and Le’Veon Bell, appeared alongside Trump at a rally in Pennsylvania. Brown, meanwhile, has been posting pro-Trump content to his popular X account throughout the campaign.

Authored by John Haughey via The Epoch Times,

Economists near-universally warn that President-elect Donald Trump’s pledge to impose “across-the-board” 20-percent tariffs on imports will trigger inflation, disrupt domestic industries, and spur global trade wars.

Despite overwhelming critical consensus, Trump calls tariffs “the most beautiful word in the dictionary” and hasn’t backed down since his Nov. 5 reelection.

But the threats may be a “negotiating tactic” to give the United States leverage in mediating trade pacts, Peterson Institute for International Economics (PIIE) President Adam Posen said during a Nov. 14 virtual event.

And it may be working already.

Japan, South Korea, the United Kingdom, Canada, “and maybe some others, are likely lining up offers,” he said. “These offers will be in the form of, ‘We promise to buy more natural gas from the U.S. … We promise to move more production to the U.S.’”

European Commission President Ursula von der Leyen suggested on Nov. 8 that European Union (EU) nations can buy more liquified natural gas (LNG) from the United States to avoid tariffs.

Speaking to reporters after congratulating the president-elect on his reelection, von der Leyen said Trump appeared eager to sustain what the Congressional Research Service calls “the world’s largest trade and investment relationship,” which accounts for 46 percent of global gross domestic product.

About 48 percent of LNG used by EU nations is imported from the United States, according to the U.S. Energy Information Administration. Noting that EU nations import up to 16 percent of LNG from Russia, von der Leyen said there’s room for a deal.

“Why not replace it by American LNG, which is cheaper for us and brings down our energy prices?” she asked.

Posen said this is exactly what Trump’s team wants to achieve.

“The ideal outcome for the Trump administration is they’ve made this threat, a set of threats, but they don’t actually have to implement them, and they get these goodies,” he said.

In the short term, Posen said, some nations may acquiesce. “They’ll say: ‘Okay, we don’t want to be on the bad side of the U.S. We don’t want a bad side of a President Trump.’ But in [the] medium-term, two to four or five years out, I think the reverberations could be quite large.”

Responses from “like-minded U.S. allies” will differ from those from China, Mexico, and nonaligned nations, such as India and Indonesia, he said.

Allies are “probably just going to try to make nice with Trump: ‘We’re going to be aligned with the U.S. on national security and, therefore, against China,’” Posen said. “We should just … try to be on the inside of a ‘Fortress America economy’ and grow with them.”

There are at least two problems with this scenario, he said. “Getting these goodies is really not necessarily going to solve a bunch of problems. A number of people close to the president-elect believe trade deficits are really a big deal.

“These measures are likely to actually increase U.S. trade deficits because they’ll drive up the dollar, drive up inflation.”

Posen said the second problem is that “this is not a one-round game,“ adding that ”once this happens … the question is, how do economies adapt and how do they cope?”

“Maybe in that sense … people start building the U.S. out. That’s something we’re going to watch,” he said.

The CSCL East China Sea container ship sits in a berth at the Port of Oakland in Oakland, Calif., on June 20, 2018. A 2023 study estimated that under Section 301 of the Trade Act of 1974, tariffs decreased imports from China by 13 percent each year from 2018 to 2021. Justin Sullivan/Getty Images

‘Asymmetric Trade Warfare’

Without an effort to renegotiate trade deals before imposing “across-the-board” tariffs, which also would slap a 25-to-100 percent fee on imports from Mexico, “I think the Trump administration is underestimating how other countries might react,” he said.

A 60-percent tariff on imports from China will spur “asymmetric trade warfare,” Posen said.

“If the U.S. says, ‘Well, we don’t want steel, we don’t want batteries, we don’t want EVs from China’ … then the Chinese can say, ‘Well, we don’t want Hollywood movies, we don’t want American video games, we don’t want American accounting firms,’” he said.

Rep. Brad Sherman (D-Calif.) is among those in Congress lobbying for a hard line against imports from China, calling on the Biden administration to slap “an automatic 25-percent tariff on all China goods” during a February 2023 House hearing.

“I represent Hollywood. Let me give you an example of my constituent’s issues with China,” he said. “Hollywood is told they can only get 40 movies into China each year. That means if you make a movie critical of China, that doesn’t go to China.

“But it also means that none of your movies are going to China. They control it and do it with lobbyists, and that means China can control what Congress does.”

But Posen said China will remain “a special case,” noting Elon Musk “is going around saying to people in China: ‘Count on me. I’ll keep things from getting out of hand.’”

He said Mexico is also “a special case, unfortunately for Mexico.”

“There’s so many issues where the Trump administration is going to play hardball, on the border, on drugs, on their new judiciary reforms, on their energy deregulation, or lack thereof, in addition to blocking Chinese investment in Mexico and then reviewing [the United States–Mexico–Canada trade pact].”

According to a Coalition for a Prosperous America 2023 analysis, annual direct China investment into Mexico quadrupled between 2007 and 2016. In 2021, Chinese companies invested $385 million in Mexico.

If the Trump administration imposes a 25-to-100 percent tariff, Posen said, “Mexico is going to be in trouble.”

“I’m not sure how they’re going to react,” he said.

The Trump administration may also not foresee responses from “the big emerging markets” such as India, Indonesia, Brazil, Poland, Turkey, Nigeria, and South Africa, he said.

“The Biden administration did a terrible job of engaging with these countries, kept using rhetoric like, ‘You’re our friends … our allies,’ and didn’t offer anything,” Posen said.

Paying lip service to “friend-shoring” is not enough, he said, citing Indonesia’s recent deal with China as a lost opportunity unlikely to be reversed for a generation.

“I think we’re going to see a lot of that. And so these big emerging-market countries with geopolitical strength are going to actually do pretty well, and they’re probably going to successfully play off the U.S. and China,” Posen said.