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North Korea’s regime defied an increasingly broader chorus of voices, including the US, Japan, China, South Korea and Russia, saying on Monday that it will continue its nuclear weapons tests, and warned it would “speed up to the maximum” its measures for bolstering its nuclear deterrence in response to the U.S. increasing “aggression and hysteria” against the country, a North Korea Foreign Ministry spokesman says in statement distributed by the official Korean Central News Agency.

“Now that the U.S. is kicking up the overall racket for sanctions and pressure against the DPRK, pursuant to its new DPRK policy called ‘maximum pressure and engagement’, the DPRK will speed up at the maximum pace the measure for bolstering its nuclear deterrence,” a spokesman for North Korea’s foreign ministry said in a statement carried by its official KCNA news agency. North Korea’s “measures for bolstering the nuclear force to the maximum will be taken in a consecutive and successive way at any moment and any place decided by its supreme leadership,” the spokesman said.

North Korea has carried out five nuclear tests and a series of missile tests in defiance of U.N. Security Council and unilateral resolutions. It has been conducting such tests at an unprecedented rate and is believed to have made progress in developing intermediate-range and submarine-launched missiles. The communist nation test-launched a missile on Saturday which Washington and Seoul said was unsuccessful, but which nevertheless drew widespread international condemnation.

U.S. President Donald Trump has said a “major, major conflict” with North Korea is possible over its nuclear and ballistic missile programs, while China said last week the situation on the Korean peninsula could escalate or slip out of control.

Over the weekend, Trump said a “major, major conflict” with North Korea is possible over its nuclear and ballistic missile programs, while China said last week the situation on the Korean peninsula could escalate or slip out of control. As preemptive deterrence, the US has sent the nuclear-powered USS Carl Vinson aircraft carrier group and the Michigan nuclear sub to waters off the Korean peninsula to join drills with South Korea.

A diplomatic row was averted over the weekend, when South Korea said the United States had reaffirmed it would shoulder the cost of deploying the Terminal High Altitude Area Defense (THAAD) anti-missile system to counter the North Korean threat, days after Trump said Seoul should pay for the $1 billion battery. As Reuters reports, in a telephone call on Sunday, Trump’s national security adviser, H.R. McMaster contradicted the president, and reassured his South Korean counterpart, Kim Kwan-jin, that the U.S. alliance with South Korea was its top priority in the Asia-Pacific region, the South’s presidential office said.

While the recent THAAD deployment has drawn protests from China, which says the powerful radar that can penetrate its territory will undermine regional security, and from residents of the area in which it is being deployed, the United States is seeking more help from China to rein in Pyongyang’s nuclear and missile development.

Trump, asked about his message to North Korea after the latest missile test, told reporters: “You’ll soon find out,” but did not elaborate on what the U.S. response would be.

“There is nothing right now facing this country and facing the region that is a bigger threat than what is happening in North Korea,” White House Chief of Staff Reince Priebus told ABC’s “This Week.”

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Besides the upcoming FOMC meeting on May 2-3, and French & Italian politics – the decisive runoff round of the French election takes place this Sunday – this week’s releases are dominated by US payrolls expected to come around 170k. The busy release calendar continues with Norges bank and RBA meetings as well as global manufacturing PMIs.

The market’s focus during the week of 5/1 will begin to shift away from the micro as the CQ1 earnings season winds down and back to the macro w/a slew of eco data and some central bank decisions scheduled (including the FOMC on Wed 5/3 and US jobs on Fri 5/5; also note that Yellen is scheduled to speak Fri after the jobs report at 1:30pmET). The eco data out this week could be crucial in helping to resolve the current debate around growth

In the US, the data calendar will be very busy this week, highlighted by Monday’s personal income and spending data (including the PCE Deflators) and Friday’s April employment data. We expect solid income, modest spending, and relatively soft deflators, continuing the theme of very tame inflation data that we have seen over the past quarter. On employment, we expect a solid rebound in payroll growth following last month’s weather-induced disappointment and the overall tone will be consistent with the notion that the labor market is at or near full employment. Specifically, we also expect that AHE will rise on trend and that the unemployment rate will be unchanged at 4.5%. Rounding out the calendar, Wall Street expects modest declines in the ISM indexes, though both will remain at solid outright levels, a bump in auto sales following the March swoon, and solid construction spending as well.. In addition, there are several scheduled speaking engagements by Fed officials this week.

FOMC decision preview – the Fed statement on Wed (there won’t be a supplemental or Yellen presser) is expected to be pretty innocuous. JPM believes the Committee’s goal will be to acknowledge the softer run of data while still keeping June on the table as a live meeting. The bank continues to expect the Fed to hike rates at the June meeting, but does not think the statement will send a strong signal of impending action. Look for the statement to say that economic growth slowed early in the year, but to add that it is in part due to transitory factors. The second paragraph of the statement will continue to note that risks are roughly balanced.

Earnings preview – this week is another fairly big one for earnings with 131 S&P 500 companies and 85 Stoxx 600 companies reporting. Amongst the big names are Apple (Tuesday), BP (Tuesday), Facebook (Wednesday) and Shell (Thursday). As Jim Reid notes, we’ll see if they can continue what has been a decent start to earnings season to date. Indeed the trend so far is one of the strongest on record. In the US we have had reports from about 60% of the S&P 500 and 81% have beat at the earnings line, coming in 6.7% above consensus. This compares to the historical beat of 73% of companies and a median beat of 3.4%. This is made even more impressive by the fact that consensus estimates were not downgraded in the month leading up to earnings season compared to a typical 1% downgrade. He notes also that the results so far point to 15% EPS growth in Q1  which is the fastest pace since 2011. Our European equity strategists note also that EPS growth of Stoxx 600 companies has accelerated to 23% with reported earnings being 13% above pre-season expectations.

Breakdown of key events by day from Deutsche Bank:

On Monday, with it being a public holiday in the UK, Germany and France amongst other countries today, the main focus will be on the US session where there are a number of important releases include the PCE core and deflator readings and personal income and spending reports for March, as well as the ISM manufacturing reading for April and construction spending in March.

Tuesday kicks off in Asia with the Japan services and composite April PMIs and Caixin manufacturing PMI in China. Over in Europe all eyes will be on the final April manufacturing PMIs as well as a first look at the data for the periphery and UK. The Euro area unemployment rate will also be released. In the US tomorrow the only data due out is vehicle sales in April.

Kicking things off on Wednesday will be Germany where the April unemployment numbers are due to be released. Shortly after that we’ll get Euro area PPI for March and then the advanced Q1 GDP report for the Euro area. In the US on Wednesday we’ll get the ADP employment change report in April and the final April PMIs and ISM non-manufacturing reading. Also on Wednesday all eyes then turn over to the Fed meeting.

In Asia on Thursday the early data is out of China with the remaining April Caixin PMIs. In Europe we’ll also get the remaining April services and composite PMIs as well as Euro area retail sales in March and UK money and credit aggregates data. In the US on Thursday the data includes initial jobless claims, Q1 nonfarm productivity and unit labour costs, March trade balance, March factory orders and the final revisions to March durable and capital goods orders.

With little of note in Europe on Friday the main focus will be on the US where we’ll get the April employment report including nonfarm payrolls.

Away from the data, this week’s Fedspeak is reserved for Friday when we’ll hear separately from Fischer, Williams and Yellen, as well as a panel debate with Rosengren, Evans and Bullard. Over at the ECB this week we are due to hear from Nouy and Nowotny on Tuesday and Lautenschlaeger, Praet, Draghi and Mersch on Thursday. At the BoJ we are due to hear from Kuroda on Tuesday, as well as receiving the minutes from the BoJ meeting last month. Other important events this week include a Fox interview with US Treasury Secretary Steven Mnuchin today, a meeting between Germany’s Merkel and Russia’s Putin on Tuesday, Wednesday’s live televised debate between French presidential candidates Macron and Le Pen, Wednesday’s meeting between President Trump and Palestinian Authority President Abbas and UK local elections on Thursday.

Finally, expect earnings to also be a big focus for markets this week with 131 S&P 500 companies reporting and 85 Stoxx 600 companies reporting. Amongst those reporting are Apple, BP, BNP Paribas, Facebook, Merck, Tesla, Time Warner, Pfizer, HSBC, BMW, Shell and VW.

* * *

Another weekly calendar, this time from JPM:

• Calendar for Mon May 1 – the focus will be on the US Mar PCE at 8:30amET (this will be watched very closely after the very soft Mar CPI; the St is modeling core -0.1% M/M and +1.6% Y/Y), US Apr manufacturing ISM at 10amET (the St is modeling 56.5, down from 57.2 in Mar), Bernanke’s CNBC interview (he will co-host CNBC from 8-9amET), and earnings (CAH, DISH, GGP, L, PLT pre-open and AMD, CC, CYH, DNB, FLS, FMC, IDTI, SBAC, VNO after the close).
• Calendar for Tues May 2 – the focus will be on the Eurozone manufacturing PMI for Apr (4amET), US auto sales for Apr (JPMorgan is modeling US SAAR rebounding to ~17.1MM vs. Mar’s disappointing 16.5MM http://bit.ly/2oJ5i3i), some analyst meetings (RHT and SSNC), and earnings (ADM, AET, BP, CDK, CHTR, CMI, COH, COP, CVS, EMR, ETN, FIS, GWR, HCA, HLT, MA, MO, MOS, MRK, OZM, PFE, WDR, XYL pre-open and AAPL, AKAM, ALL, CSOD, DVA, DVN, FEYE, FSLR, FTR, GILD, GDDY, HBI, HUBS, IPHI, MDLZ, MTCH, NFX, OCLR, PAYC, PRO, QLYS, TEX, TWLO, VIAV, WU after the close).
• Calendar for Wed May 3 – the focus will be on the Eurozone Q1 GDP numbers (5amET), the US non-manufacturing ISM (the St is modeling 56, up from 55.2 in Mar), the FOMC decision (2pmET), the French presidential debate between Macron and Le Pen, and earnings (ADP, BG, BNP, CDW, CLX, CVLT, DLPH, EL, FLOW, GRMN, HUM, ICE, MCK, NYT, Q, RAI, S, SPGI, SO, SPR, TAP, TWX, VSH, WCG, YUM pre-open and AIG, ALB, ALL, ANSS, ARRS, CAKE, CAR, CATM, CF, CRUS, CTL, DDD, FB, FIT, IAC, KHC, LNC, MET, MUR, NXPI, PRU, QRVO, RIG, SQ, TIVO, TSLA, TTMI, WMB after the close).
• Calendar for Thurs May 4 – the focus will be on the Eurozone services PMI for Apr, US productivity numbers for Q1 (the St is modeling +0.00% vs. +1.3% in Q4), the US trade balance for Mar at 8:30amET, US factory orders/durable goods for Mar at 10amET, Trump’s speech aboard the Intrepid in NYC, and earnings (ABC, Adidas, AMCX, Anheuser Bush, APA, ARW, BLL, BMW, CCOI, CHD, CHH, CHK, COMM, D, DBD, DNKN, FLR, H, K, LITE, MSCI, MSG, OXY, REGN, RLGY, Siemens, SNI, SocGen, TPX, VIA’b, WIN, WLTW, ZTS pre-open and AAOI, ABCO, AGO, ATVI, CBS, HLF, IMPV, INFI, LC, MOH, MRO, MSI, MULE, OLED, SHAK, WEB, ZEN, ZG after the close).
• Calendar for Fri May 5 – the focus will be on US jobs report for Apr at 8:30amET, Fed speakers (including Yellen speaking at Brown University at 1:30pmET), and earnings (CI, CTSH, MCO, MSGN, NPTN pre-open). US jobs – it’s been several months since a monthly jobs report created a lot of controversy and the Apr release will likely remain innocuous (even the Mar 98K “miss” really wasn’t “weak” although another sub-100K print could add somewhat to recent growth anxieties). For Apr the St is modeling total adds of 190K (up from 98K in Mar) w/an UR of 4.6% (up small from 4.5%) and wages +0.3% M/M and
  +2.7% Y/Y.
• Calendar for Sun May 7 – the French election run-off will take place this day and Macron is expected to win (by ~20 points according to recent polls).

Global breakdown of key events courtesy of Bank of America:

* * *

Full breakdown of main US events together with sellside estimates from Goldman

Monday, May 1

• 8:30 AM Personal income, March (GS +0.2%, consensus +0.3%, last +0.4%); Personal spending, March (GS -0.2%, consensus +0.2%, last +0.1%); PCE price index, March (GS -0.17%, consensus -0.2%, last +0.1%); Core PCE price index, March (GS -0.07%, consensus -0.1%, last +0.2%); PCE price index (yoy), March (GS +1.9%, consensus +1.9%, last +2.1%); Core PCE price index (yoy), March (GS +1.6%, consensus +1.6%, last +1.8%): Based on the Q1 GDP report and the January and February personal income and spending reports, we estimate that the core PCE price index fell 0.07% month-over-month in March and rose 1.61% from a year ago. Additionally, we expect that the headline PCE price index decreased 0.17% and rose 1.87% from a year earlier. We estimate a 0.2% increase in March personal income and a 0.2% drop in March personal spending (nominal, mom sa).
• 09:45 AM Markit flash US manufacturing PMI, April final (consensus 52.8, last 52.8)
• 10:00 AM ISM manufacturing, April (GS 56.9, consensus 56.5, last 57.2): Regional manufacturing surveys were mostly softer in April, and we expect ISM manufacturing to decrease by 0.3pt to 56.9 in the April report. The Philly Fed (-10.8pt to +22.0), Empire State (-11.2pt to +5.2), Kansas City Fed (-13pt to +7), Richmond Fed (-2pt to +22), and Dallas Fed (-0.1pt to +16.8) manufacturing sector surveys all declined while the Chicago PMI strengthened. Our manufacturing survey tracker—which is scaled to the ISM index—decreased to 56.5 in April from 59.0 in March.
• 10:00 AM Construction spending, March (GS +0.5%, consensus +0.4%, last +0.8%): We expect construction spending to increase 0.5% in March, on top of its 0.8% increase in February, as favorable construction fundamentals likely more than offset the negative impact of unseasonably cold and snowy March weather.

Tuesday, May 2

• 05:00 PM Total vehicle sales, April (GS 16.9mn, consensus 17.2mn, last 16.5mn); Domestic vehicle sales, April (GS 13.2mn, consensus 13.4mn, last 13.0mn)

Wednesday, May 3

• 08:15 AM ADP employment report, March (GS +175k, consensus +180k, last +263k): We expect a 175k increase in ADP payroll employment in March, reflecting a drag from the softer headline payrolls growth in February utilized in the ADP model. However, we expect this impact will be largely offset by encouraging hiring trends and net strength in the financial and economic indicators also used in the model. The ADP report introduced methodological changes with the October release and now offers more details by sector. While we believe the ADP employment report holds limited value for forecasting the BLS’s nonfarm payrolls report, we find that large ADP surprises vs. consensus forecasts are directionally correlated with nonfarm payroll surprises.
• 09:45 AM Markit Flash US services PMI, March final (consensus 52.5, last 52.5)
• 10:00 AM ISM non-manufacturing, April (GS 56.0, consensus 55.8, last 55.2): We expect the ISM non-manufacturing survey to increase 0.8pt to 56.0 in the April report. Regional non-manufacturing surveys were mixed in April but all continue to signal moderate expansion in service-sector business activity. The Philly Fed (-5.3pt to +30.1), New York Fed (-4.6pt to +4.9, SA by GS), and Dallas Fed (-4.2pt to +9.0) surveys all moved lower while the Richmond Fed (+13pt to +22) increased sharply. Overall, our non-manufacturing survey tracker edged up to 55.8 in April (vs. 55.4 in March). We also expect a boost from a favorable swing in the weather and rebounding stock prices.
• 2:00 PM FOMC statement, May 2-3 meeting: As discussed in our FOMC preview, we expect the committee to keep policy unchanged next week and see only limited changes to the statement. Similar to the March statement, we expect constructive comments on economic activity, as we think Fed officials will view the slowdown in reported growth last quarter as temporary in nature, with underlying momentum considerably stronger. We do expect a brief acknowledgement of the softer March core inflation data, but we believe most of the inflation and inflation outlook language will remain unchanged. Given the extent of the balance sheet discussion in the March FOMC minutes, we expect a minor change to the balance sheet paragraph, with an allusion to possible eventual reductions. Finally, we look for the balance of risk assessment and the characterization of current policy (“accommodative”) to remain unchanged.

Thursday, May 4

• 08:30 AM Trade balance, March (GS -$44.5bn, consensus -$44.5bn, last -$43.6bn): We estimate the trade deficit widened in March. The Advance Economic Indicators report last week showed a partial reversal of February’s narrowing in the goods trade deficit, and we forecast a similar widening in the broader trade balance in this week’s report, based on an assumption of an unchanged services balance.
• 08:30 AM Nonfarm productivity (qoq saar), Q1 preliminary (GS flat, consensus flat, last +1.3%); Unit labor costs, Q1 preliminary (GS +2.6%, consensus +2.7%, last +1.7%): We estimate non-farm productivity was unchanged in Q1, below the 0.75% trend achieved on average during this expansion. We expect unit labor costs – compensation per hour divided by output per hour – for Q1 to increase 2.6% (qoq saar), reflecting firming wage gains and the lack of productivity growth.
• 08:30 AM Initial jobless claims, week ended April 29 (GS 240k, consensus 250k, last 257k); Continuing jobless claims, week ended April 22 (consensus 1,990, last 1,988k): We estimate initial jobless claims fell 17k to 240k after rising 14k in the previous week. The largest increases in that week were in New York (+13k) and California (+2k), and we suspect that some of these increases reflected seasonal adjustment difficulties in the weeks surrounding Easter and related spring break holidays. Continuing claims – the number of persons receiving benefits through standard programs – have continued to trend down in recent months, suggestive of additional labor market improvement that we expect to continue.
• 10:00 AM Factory orders, March (GS +0.0%, consensus +0.4%, last +1.0%); Durable goods orders, March final (last +0.7%); Durable goods orders ex-transportation, March final (last -0.2%); Core capital goods orders, March final (last +0.2%); Core capital goods shipments, March final (last +0.4%): We expect factory orders were unchanged in March following a 1.0% increase in February. Last week’s durable goods report showed an encouraging pickup in core capital goods shipments, which rose 0.4% in March, adding to the upwardly revised February increase of 1.1%. However, orders growth was somewhat softer, featuring a 0.2% decline in durable goods orders ex-transportation.

Friday, May 5

• 8:30 AM Nonfarm payroll employment, April (GS +200k, consensus +190k, last +98k); Private payroll employment, April (GS +200k, consensus +190k, last +89k); Average hourly earnings (mom), April (GS +0.3%, consensus +0.3%, last +0.2%); Average hourly earnings (yoy), April (GS +2.7%, consensus +2.7%, last +2.7%); Unemployment rate, April (GS 4.5%, consensus 4.6%, last 4.5%): We estimate nonfarm payrolls increased 200k in April, a sharp acceleration from March’s +98k pace and above the three-month moving average of +178k. Our forecast reflects encouraging labor market fundamentals and a favorable swing in the weather, with minor offsets from the tail end of the federal hiring freeze and a telecom strike that continued into the survey week (a -2k impact). Labor market fundamentals remained encouraging on the whole, as March exhibited improvement in regional service sector employment surveys, a further decline in jobless claims, and an elevated labor market differential reported by the Conference Board. Continuing claims also fell sharply from survey week to survey week, dropping at their fastest pace in two years (-64k). While April is a month with minimal snow, we expect that month-on-month payrolls growth should benefit from the timing of Winter Storm Stella, which hit the Midwest and East Coast during the March survey week. We estimate the unemployment rate remained stable at 4.5%, based on our expectation that household employment will hold on to its sharp year-to-date gains. Finally, we expect average hourly earnings to increase 0.3% month over month and 2.7% year over year, reflecting the interaction of firming wage growth with positive calendar effects.
• 11:30 AM Fed Vice Chair Fischer (FOMC voter) speaks: Federal Reserve Vice Chair Stanley Fischer will give a speech on “Monetary Policy Rules and Committees” at a conference hosted by the Hoover Institution at Stanford University. Audience Q&A is expected.
• 12:45 PM San Francisco Fed President Williams (FOMC non-voter) speaks: San Francisco Federal Reserve President John Williams will give the keynote speech at the Shadow Open Market Committee’s meeting in New York. Audience Q&A is expected.
• 01:30 PM Fed Chair Yellen (FOMC voter) speaks: Federal Reserve Chair Janet Yellen will give a speech at the “125 Years of Women at Brown” event at Brown University in Providence, Rhode Island. Q&A is not expected.
• 01:30 PM Fed Presidents Bullard, Evans, and Rosengren speak: St. Louis Fed President Bullard (FOMC non-voter), Chicago Fed President Evans (FOMC voter), and Boston Fed President Rosengren (FOMC non-voter) will participate in a joint panel at the Hoover Institution’s Monetary Policy Conference held at Stanford University in California. Audience and media Q&A is expected.
• 03:00 PM Consumer credit, March (consensus +$14.0bn, last +$15.2bn)

Source: GS, BofA, DB, and Jefferies

via http://ift.tt/2pxe0DF Tyler Durden

With much of Europe and Asia, including the U.K., France, Germany and China markets closed for Labor Day, Asian stocks and the dollar rose buoyed by news that Congress had reached a deal to keep the US government funded through the end of September. S&P futures are up 4 points or 0.2%. Oil declined as rigs targeting crude in the U.S. rose for a fifteenth week and output from Libya rebounded.

What’s happening this morning? Not a whole lot. The two big incremental headlines concerned China (the Apr PMIs were underwhelming) and US gov’t spending (as was widely expected a deal was reached to fund the gov’t until Sept 30 although a shutdown this fall, along w/a debt ceiling battle, remain distinct possibilities). Otherwise it was a relatively quiet weekend/morning. Note that a lot of the world (other than the US) is closed Mon 5/1 for Labor Day/May Day holidays (including HK/mainland China and Europe/London).

The Yen declined for a fifth day in six, while Treasuries retreated with gold.

The MSCI All Country World Index edged higher, after capping a sixth straight month of gains on Friday. Japan’s Topix rose to the highest level since March after its best week of the year. Trading volumes were lower than average due to holidays in most of Europe, China, India and Mexico, and a forthcoming three-day break in Japan.

MSCI’s index of Asia-Pacific shares outside Japan rose 0.1%. Japan outperforming on upbeat earnings, with Japan’s Nikkei climbing 0.4%, with high-tech blue chips gaining on strong earnings. 

Asian shares initially took their cue from Wall Street, which dipped on Friday after data showed the U.S. economy grew at its weakest pace in three years in the first quarter. The mood brightened however, on news that U.S. congressional negotiators hammered out a bipartisan agreement on a spending package to keep the federal government funded through Sept. 30, thus averting a government shutdown. Asian markets were little fazed by China’s official manufacturing survey on Sunday which showed growth in the country’s factories slowed more than expected in April to a six-month low.

Pointing to a higher open for the main market later in the day, E-minis gained about 0.2% while 10-year Treasury yields rose after three successive days of declines.

“It is hard for markets to make big moves with holidays in so many places today, and people are just waiting for more information to come out,” said Harumi Taguchi, principal economist at IHS Markit in Tokyo.

“The main focus of the broader markets this week will be on the United States, with the Fed’s May 2-3 policy meeting and the jobs report on Friday,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo. “While many of the indicators in the first quarter were weak, the jobs data could confirm that labor market conditions continue to improve and lift the dollar and U.S. yields.”

In currencies, the greenback was up 0.2 percent at 111.750 yen edging back towards a four-week peak of 111.780 reached last week. The euro handed back earlier modest gains and was flat at $1.0891. The common currency had been lifted on Friday after euro zone inflation data rose more than expected and returned to the European Central Bank’s target. The euro was still in range of the 5-1/2-month high of $1.0951 struck early last week on relief over the first round of the French presidential elections. The pound was 0.3 percent lower at $1.2907 after climbing to a seven-month high of $1.2957 on Friday, when traders were seen to have closed off bets against the pound ahead of Britain’s long bank holiday weekend.  The Australian and New Zealand dollars were slightly lower at $0.7483 and $0.6856, respectively.

In commodities, crude oil prices slipped amid lingering concerns that an OPEC-led production cut has failed to significantly tighten an oversupplied market.U.S. crude shed 11 cents to $49.22 a barrel, heading back towards a one-month low of $48.20 plumbed late last week and Brent LCOc1 was down 16 cents at $51.89 per barrel. Oil was weighed by news that US rigs targeting crude in the U.S. rose for 15th week while output from Libya rebounded. The number of oil rigs operating in U.S. fields advanced to most since April 2015, according to Baker Hughes. Libya’s crude production rebounded to more than 700k b/d as the OPEC member’s biggest oil field and another deposit in its western region resumed pumping after halt. “Higher prices will attract American producers to ramp up production, especially in profitable areas like the Permian basin, and the conflict in Libya was already winding down last week,” says Sheldon Laliberte, a Rotterdam-based crude oil analyst at commodities trader Cofco International Ltd. “I’m structurally bearish oil right now.”

DISH Network, Advanced Micro Devices, Cardinal Health among companies scheduled to publish results. It is another busy week for earnings with 131 S&P 500 companies reporting and 85 Stoxx 600 companies reporting. Amongst those reporting are Apple, BP, BNP Paribas, Facebook, Merck, Tesla, Time Warner, Pfizer, HSBC, BMW, Shell and VW.

Market Snapshot

• S&P 500 futures up 0.2% to 2,385.00
• STOXX Europe 600 down 0.04% to 386.92
• MXAP up 0.2% to 149.12
• MXAPJ up 0.1% to 487.23
• Nikkei up 0.6% to 19,310.52
• Topix up 0.5% to 1,539.77
• Hang Seng Index down 0.3% to 24,615.13
• Shanghai Composite up 0.08% to 3,154.66
• Sensex down 0.4% to 29,918.40
• Australia S&P/ASX 200 up 0.6% to 5,956.52
• Kospi down 0.2% to 2,205.44
• German 10Y yield rose 2.1 bps to 0.317%
• Euro down 0.01% to 1.0894 per US$
• Brent Futures down 0.6% to $51.72/bbl
• Italian 10Y yield rose 3.7 bps to 1.987%
• Spanish 10Y yield rose 2.2 bps to 1.648%
• Brent Futures down 0.6% to $51.72/bbl
• Gold spot down 0.4% to $1,262.81
• U.S. Dollar Index up 0.08% to 99.13

Top Overnight News from Bloomberg

• U.S. House and Senate negotiators reached a bipartisan deal on a $1.1t spending bill that largely tracks with Democratic priorities and rejects most of President Donald Trump’s wish list, including money to begin building a wall along the U.S.-Mexican border
• The U.S. is considering a range of options, from expanded economic sanctions to military operations, as it reaches out to allies in confronting North Korea’s latest provocations, according to a senior Trump administration official
• Marine Le Pen and Emmanuel Macron kick off the final week of the French presidential campaign with major rallies in Paris after weekend sparring on subjects ranging from the euro to the environment
• The pound fell as Prime Minister Theresa May stuck to her guns in arguing that Britain should be allowed to line up a “comprehensive” free-trade deal with the EU at the same time as it negotiates its departure from the bloc
• China’s official factory gauge declined on lower commodity prices, clouding the outlook for sustaining the past two quarters’ acceleration in economic growth
• U.S. Looks at Sanctions, Military Action Against North Korea; N. Korea Says Will Speed Up Steps to Bolster Nuclear Deterrence
• Fox, Blackstone Said Teaming to Make Competing Tribune Bid
• China Manufacturing Gauge Declines From Almost Five-Year High
• HSBC, RBS Saudi Arabian Ventures in Talks to Merge
• Macquarie, Hastings-Led Groups Said to Bid for Endeavour Energy
• First NBC Bank Fails; Deposits Assumed by Hancock’s Whitney Bank
• U.S. Oil Output to Expand 400k B/D This Year: Continental’s Hamm
• BNSF Says Track Outages in U.S. Midwest Impacting Operations
• Coach Said Considering Takeover of Jimmy Choo: Telegraph
• GSO Capital Partners Said to Buy More J. Crew Debt: Reuters
• Elliott Said to Meet BHP’s Australian Holders This Week: Reuters

Most of Asia was closed Monday for holidays (HK, mainland China, Taiwan, Korea, India, and others, were closed). Japan was open and saw decent gains (TPX +0.52%, NKY +0.59%). Australia also ended higher (+0.55%). News was quiet in Asia other than some eco headlines – the China NBS Apr PMIs were mildly underwhelming while Macau Apr gaming revs and Japan’s manufacturing PMI were both about inline. Within the NKY, tech was by far the top performer (the Japanese info tech index ended up ~3.8%) while materials did well too (energy, discretionary, healthcare, and utilities lagged). Tokyo Electron and Nippon Electric Glass both surged on earnings (up ~13.3% and ~11.7%, respectively); note that Tokyo Electron is just the latest pos. data point for semi equipment (semi equipment stocks have posted very healthy results).

Top Asian News

• Korea Exports Surge for Sixth Month on Ships and Semiconductors
• North Korea Test-Fires a Ballistic Missile: Yonhap
• China April Manufacturing PMI at 51.2; Est. 51.7
• Japan Govt Considers Installing Aegis Defense System: Kyodo
• Mongolia Expects IMF Bailout to Happen ‘Soon’ After Postponement
• Lotte Chairman to Meet Hershey Chairman on U.S Trip: Yonhap
• PBOC Official Says China Should Deleverage Properly: Caijing
• Freeport Union Says About 8,000 Grasberg Workers Join Strike
• Nakheel, Hilton Agree Partnership for Rooms, Apartments in Dubai
• Macau Casino Revenue Gains for Ninth Month With High-Stakes Bets

Most European markets are closed due to the Labor Day/May 1 holiday.

Top European News

• Le Pen Says Her Presidency Will Lead to the End of the Eur
• Macron, Le Pen Kick Off Final Week With Major Paris Rallies
• Britain’s May Sticks to Guns Seeking Parallel Brexit Talks
• Renzi Faces Uphill Battle to Italy Premiership After Primary Win
• Novo Settles U.S. Probe of Kickbacks, Disguised Salespeople
• DLR Kredit Plans to Issue DKK1b in Senior Resolution Notes
• Alitalia Bridge Loan to Be Higher Than EU500m, La Stampa Says
• Luxottica 1Q Rev. Soft, Improving Trends May Be Supportive: RBC
• AB Science FY Revenue Decreases to EU1.5m
• Netherlands April Manufacturing PMI Unchanged at 57.8
• Danske Bank Raised to Strong Buy at Jyske Bank, PT DKK300
• Turkey’s Erdogan Says Need to Alleviate Exchange-Rate Pressure

In currencies, the yen fell as much as 0.4 percent to 111.92 per dollar to the lowest level since the end of March and traded at 111.74 in early morning trading. The currency last week had the biggest slide since the Fed raised U.S. rates in December. The Bloomberg Dollar Spot Index added 0.1 percent, while the broader dollar DXY index was up 0.2 percent at 111.750 yen edging back towards a four-week peak of 111.780 reached last week. The euro handed back earlier modest gains and was flat at $1.0891. The common currency had been lifted on Friday after euro zone inflation data rose more than expected and returned to the European Central Bank’s target. The euro was still in range of the 5-1/2-month high of $1.0951 struck early last week on relief over the first round of the French presidential elections. The pound was 0.3 percent lower at $1.2907 after climbing to a seven-month high of $1.2957 on Friday, when traders were seen to have closed off bets against the pound ahead of Britain’s long bank holiday weekend.  The Australian and New Zealand dollars were slightly lower at $0.7483 and $0.6856, respectively.

In commodities, crude oil prices slipped amid lingering concerns that an OPEC-led production cut has failed to significantly tighten an oversupplied market.U.S. crude shed 11 cents to $49.22 a barrel, heading back towards a one-month low of $48.20 plumbed late last week and Brent LCOc1 was down 16 cents at $51.89 per barrel. Oil was weighed by news that US rigs targeting crude in the U.S. rose for 15th week while output from Libya rebounded. The number of oil rigs operating in U.S. fields advanced to most since April 2015, according to Baker Hughes. Libya’s crude production rebounded to more than 700k b/d as the OPEC member’s biggest oil field and another deposit in its western region resumed pumping after halt. “Higher prices will attract American producers to ramp up production, especially in profitable areas like the Permian basin, and the conflict in Libya was already winding down last week,” says Sheldon Laliberte, a Rotterdam-based crude oil analyst at commodities trader Cofco International Ltd. “I’m structurally bearish oil right now.”

US Event Calendar

• 8:30am: Personal Income, est. 0.3%, prior 0.4%; Personal Spending, est. 0.2%, prior 0.1%
  • Real Personal Spending, est. 0.3%, prior -0.1%
  • PCE Deflator MoM, est. -0.2%, prior 0.1%
  • PCE Deflator YoY, est. 1.9%, prior 2.1%
  • PCE Core MoM, est. -0.1%, prior 0.2%
  • PCE Core YoY, est. 1.6%, prior 1.8%
• 9:45am: Markit US Manufacturing PMI, est. 52.8, prior 52.8
• 10am: ISM Manufacturing, est. 56.5, prior 57.2
  • ISM Prices Paid, est. 67.5, prior 70.5
  • ISM New Orders, prior 64.5
  • ISM Employment, prior 58.9
  • Construction Spending MoM, est. 0.45%, prior 0.8%

DB’s Jim Reid concludes the overnight wrap

Welcome to May. Given that today is either a May Day or Labour Day public holiday in most European countries we’ll be holding back the usual monthly performance review for tomorrow’s EMR. As always though we’ve got the full run through of what is another reasonably busy week ahead at the end. For markets this week we’ve got the double header of a Fed meeting on Wednesday and US employment report on Friday. Barring a big surprise though it’s more than likely that the Fed meeting is a bit of non-event and it’s hard to see the FOMC statement really diverging off course for now. It’s worth noting that there is no scheduled press conference after the meeting either. In terms of payrolls, the emphasis for now in terms of the timing and pace of global hikes in recent months has shifted away from employment and over to inflation and so this release is probably less of a focal point than it has been in the past.

Away from that, this week we’ll also get the final revisions to the April global PMIs which will be closely watched as always. Meanwhile ahead of this Sunday’s second round presidential election in France the two candidates, Macron and Le Pen, are scheduled to take part in a live televised debate on Wednesday evening which is certainly worth keeping an eye on. The last 5 polls all released in the past few days show Macron as holding an average lead of 20pp over Le Pen. This is down marginally from the 24pp average in the first 5 polls after the first round result but still represents a pretty comfortable margin for Macron. As we said this time last week it would take a numerical shock perhaps 5-10 times larger than Brexit or Trump for Le Pen to win. Staying with politics, this week President Trump is scheduled to meet Palestinian Authority President Abbas on Wednesday and Australian Prime Minister Turnbull on Thursday. After Congress averted a government shutdown on Friday lawmakers are also expected to hammer out the necessary legislation this week to keep the government funded for the rest of this fiscal year. In fact overnight news has emerged that Congress has tentatively reached a deal on a $1.1tn bill so worth seeing how that develops today. Meanwhile the situation in North Korea is never too far from the front pages with US National Security Adviser McMaster telling Fox News that the US and its allies need to respond, whether that be through military operations or enforcement of UN sanctions, following the news of a ballistic missile launch in North Korea on Saturday.

Not to be outdone, this week is another fairly big one for earnings with 131 S&P 500 companies and 85 Stoxx 600 companies reporting. Amongst the big names are Apple (Tuesday), BP (Tuesday), Facebook (Wednesday) and Shell (Thursday).

We’ll see if they can continue what has been a decent start to earnings season to date. Indeed the trend so far is one of the strongest on record. In the US we have had reports from about 60% of the S&P 500 and 81% have beat at the earnings line, coming in 6.7% above consensus. This compares to the historical beat of 73% of companies and a median beat of 3.4%. This is made even more impressive by the fact that consensus estimates were not downgraded in the month leading up to earnings season compared to a typical 1% downgrade according to DB’s Binky Chadha. He notes also that the results so far point to 15% EPS growth in Q1 which is the fastest pace since 2011. Our European equity strategists note also that EPS growth of Stoxx 600 companies has accelerated to 23% with reported earnings being 13% above pre-season expectations.

Switching our focus now to the main weekend news. In terms of data, the main focus was on China where yesterday we got the official April PMIs. The data came in a little bit softer compared to March. The manufacturing PMI was reported as falling 0.6pts to 51.2 (vs. 51.7 expected) and the lowest level this year, while the non-manufacturing PMI declined 1.1pts to 54.0 and the lowest since October last year. The majority of markets in Asia are closed today including China so we might have to wait to see if there is much of a reaction tomorrow. Of those open however both the Nikkei (+0.50%) and ASX (+0.29%) have edged higher on thin volumes while US equity futures are also slightly firmer. The Greenback also rebounded from early losses following the spending bill headlines.

In terms of other news to report from the weekend, in Italy former PM Renzi was re-elected as the head of the ruling Democratic Party after securing more than 70% of votes. His reappointment was largely as expected however the margin of victory will likely be seen as giving Renzi a strong mandate ahead of a general election early next year. Meanwhile the latest Brexit development concerns the release of the European Council guidelines which are intended to govern the EU’s Brexit negotiations with the UK (you can find them here https://goo.gl/ nW8NBO) which were unanimously backed following a gathering in Brussels on Saturday. EU President Donald Tusk said following the meeting that “we now have unanimous support from all the 27 member states and the EU institutions, giving us a strong political mandate for these negotiations”. EC President Juncker added that “the negotiations will be difficult and it will be even difficult to retain the unity that we were able to have today”.

A quick wrap-up now of how markets closed out last week. Following a strong run for most of the week, risk assets seemed to run out of steam a bit on Friday. Despite some decent earnings in the tech sector from Amazon and Alphabet the S&P 500 (-0.19%), Dow (-0.19%), Stoxx 600 (-0.18%) and DAX (-0.05%) all finished with what were fairly modest losses still as markets digested a huge amount of economic data released on both sides on the pond. Much of the focus was on the Q1 GDP report in the US which revealed growth of just +0.7% qoq (vs. +1.0% expected). A negative contribution from inventories was cited as significantly weighing on growth along with a decline in government consumption. Private consumption eked out a small +0.3% saar gain. Our US economists estimate also that one reason for the weakness is residual seasonality with government statisticians not properly adjusting the data for normal seasonal variation. They estimate this to be worth 110bps on Q1 real GDP. Rates markets were seemingly more distracted by the ECI print however which came in at a higher than expected +0.8% qoq (vs. +0.6% expected) and the largest quarterly increase since Q4 2007. 10y Treasury yields touched a high of 2.334% intraday following that before settling down to finish just over 1bp lower on the day at 2.281%.

Away from that, in the US we also got the April Chicago PMI which was up 0.6pts to 58.3 in the month (vs. 56.2 expected). The final University of Michigan consumer sentiment reading for April was revised down 1pt to 97.0. Measures of inflation expectations were left unchanged however.

Closer to home in Europe the main focus was on the April CPI report for the Euro area. Headline CPI rebounded four-tenths to +1.9% yoy last month (vs. +1.8% expected) while the core rebounded five-tenths to +1.2% yoy (vs. +1.0% expected) which is the highest since June 2013. Given the timing of Easter – with services inflation accounting for the big jump – we will need to see another month of data to assess how much of the move has been sustained in reality. Away from that, Q1 GDP in the UK came in at +0.3% qoq which was also the same for growth in France. Both were a tenth below expectations.

Over to this week’s calendar now. As highlighted earlier, with it being a public holiday in the UK, Germany and France amongst other countries today, the main focus will be on the US session where there are a number of important releases include the PCE core and deflator readings and personal income and spending reports for March, as well as the ISM manufacturing reading for April and construction spending in March. Tuesday kicks off in Asia with the Japan services and composite April PMIs and Caixin manufacturing PMI in China. Over in Europe all eyes will be on the final April manufacturing PMIs as well as a first look at the data for the periphery and UK. The Euro area unemployment rate will also be released. In the US tomorrow the only data due out is vehicle sales in April.

Kicking things off on Wednesday will be Germany where the April unemployment numbers are due to be released. Shortly after that we’ll get Euro area PPI for March and then the advanced Q1 GDP report for the Euro area. In the US on Wednesday we’ll get the ADP employment change report in April and the final April PMIs and ISM non-manufacturing reading. In the evening on Wednesday all eyes then turn over to the Fed meeting. In Asia on Thursday the early data is out of China with the remaining April Caixin PMIs. In Europe we’ll also get the remaining April services and composite PMIs as well as Euro area retail sales in March and UK money and credit aggregates data. In the US on Thursday the data includes initial jobless claims, Q1 nonfarm productivity and unit labour costs, March trade balance, March factory orders and the final revisions to March durable and capital goods orders. With little of note in Europe on Friday the main focus will be on the US where we’ll get the April employment report including nonfarm payrolls.

Away from the data, this week’s Fedspeak is reserved for Friday when we’ll hear separately from Fischer, Williams and Yellen, as well as a panel debate with Rosengren, Evans and Bullard. Over at the ECB this week we are due to hear from Nouy and Nowotny on Tuesday and Lautenschlaeger, Praet, Draghi and Mersch on Thursday. At the BoJ we are due to hear from Kuroda on Tuesday, as well as receiving the minutes from the BoJ meeting last month. Other important events this week include a Fox interview with US Treasury Secretary Steven Mnuchin today, a meeting between Germany’s Merkel and Russia’s Putin on Tuesday, Wednesday’s live televised debate between French presidential candidates Macron and Le Pen, Wednesday’s meeting between President Trump and Palestinian Authority President Abbas and UK local elections on Thursday. Finally, expect earnings to also be a big focus for markets this week with 131 S&P 500 companies reporting and 85 Stoxx 600 companies reporting. Amongst those reporting are Apple, BP, BNP Paribas, Facebook, Merck, Tesla, Time Warner, Pfizer, HSBC, BMW, Shell and VW.

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Well, it’s been a little over four days since thousands of attendees at an ill fated music festival in the Bahamas were left to fend for themselves in a Millennial’s worst nightmare of dying cell phones, cardboard sandwiches, burning tents, roving bands of thieves, feral dogs, and worst of all – anarchy at the bar.  Advertised as having “first-class culinary experiences and a luxury atmosphere,” things like the “Private Luxury Villas” turned out to be nothing more than USAID disaster relief tents:

The festival was quickly canceled after the story broke, with event organizers Ja Rule (real name Jeffrey Atkins) and Billy McFarland sort of apologizing:

@Ruleyork .@Ruleyork OMG. This is the only way I’m apologizing from this moment on: http://pic.twitter.com/zxlwBc1ITF

— Omri (@Omri_Rawrlan) April 28, 2017

Sunday evening, a class-action lawsuit was filed against event organizers Ja Rule, Billy McFarland, and their company, Fyre Media, Inc. A copy of the filing was provided to iBankCoin.com by Geragos & Geragos – the high profile law firm which has represented such clients as Michael Jackson, Chris Brown, Winona Ryder, Ke$ha, and former Bill Clinton business partner Sousan McDougal.

We just filed Federal Class Action against Fyre Media for festival of horror. Refunding ticket price is not enough! @markgeragos http://pic.twitter.com/5CsNtQ6yjh

— Ben Meiselas (@meiselasb) May 1, 2017

Filed in a California Court, Plaintiff Daniel Jung asserts:

The festival’s lack of adequate food, water, shelter, and medical care created a dangerous and panicked situation among attendees—suddenly finding themselves stranded on a remote island without basic provisions—that was closer to ‘The Hunger Games’ or ‘Lord of the Flies’ than Coachella.

Damages in excess of $100 million:

Plaintiff brings this class action on behalf of all ticket buyers and festival attendees defrauded and wronged by Defendants, and seeks damages in excess of $100,000,000.00 on behalf of himself and the Class.

Here’s where the fraud comes in:

Shockingly, Defendants had been aware for months that their festival was dangerously under-equipped and posed a serious danger to anyone in attendance…  …the few contractors who had been retained by Defendants were refusing to work because they had not been paid.

At the same time, however, Defendants were knowingly lying about the festival’s accommodations and safety, and continued to promote the event and sell ticket packages. The festival was even promoted as being on a “private island” once owned by drug kingpin Pablo Escobar—the island isn’t private, as there is a “Sandals” resort down the road, and Pablo Escobar never owned the island.

The suit describes the harrowing conditions:

Festival-goers survived on bare rations, little more than bread and a slice of cheese, and tried to escape the elements in the only shelter provided by Defendants: small clusters of ‘FEMA tents,’ exposed on a sand bar, that were soaked and battered by wind and rain.

“With only unsecured tents as accommodations, rather than the promised villas, attendees had no secure area to store valuables and other personal items. Similarly, the ‘world-class cuisine’ was nowhere to be found, replaced by meager rations that were in dangerously short supply. Even more troublingly, festival staff were nowhere to be found to address attendees’ concerns, and the medical staff was similarly absent.

As the weekend turned to chaos, attendees found themselves trapped at the ‘cashless’ event:

Faced with the complete lack of even the most basic amenities, as well as no assistance from Defendants, festival attendees began to panic. Predictably, Attendees began attempting to leave the island en masse, but found themselves trapped—even locked inside an airport awaiting delayed flights.

Attendees’ efforts to escape the unfolding disaster were hamstrung by their reliance upon Defendants for transportation, as well as by the fact that Defendants promoted the festival as a ‘cashless’ event—Defendants instructed attendees to upload funds to a wristband for use at the festival rather than bringing any cash. As such, Attendees were unable to purchase basic transportation on local taxis or busses, which accept only cash. As a result … at least one attendee suffered a medical emergency and lost consciousness after being locked inside a nearby building with other concert-goers waiting to be airlifted from the island.

We have been locked indoors with no air NO FOOD and NO water #fyrefestival #fyrefest fyrefraud http://pic.twitter.com/wg5pZmSvnx

— Lamaan (@LamaanGallal) April 28, 2017

Ja Rule and McFarland even warned performers not to attend!

Mr. McFarland and Mr. Atkins began personally reaching out to performers and celebrities in advance of the festival and warned them not to attend—acknowledging the fact that the festival was outrageously underequipped and potentially dangerous for anyone in attendance.

A statement from Jung’s attorney:

#fyrefestival official Statement. http://pic.twitter.com/O8HMGqnvLg

— Ben Meiselas (@meiselasb) May 1, 2017

While we don’t know how solvent Fyre Media, Inc. is at this point, event organizer Ja Rule (Jeffrey Atkins), a rapper and actor who spent two years in federal prison on gun and tax evasion charges, is estimated to be worth at least $8 million dollars.

Maybe it’s time to give Mariah a call? Somehow I don’t think the no-refund policy is going to hold up in court…

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In a post-World War II precedent-setting move (under the country’s expanded military doctrine), the Japanese Navy has reportedly deployed a helicopter carrier (and authorized it to use weapons, if necessary), to escort and protect a US supply vessel.

Defense Minister Tomomi Inada ordered the Izumo Maritime Self-Defense Force helicopter carrier to protect a US Navy supply ship, which is heading towards the Pacific to resupply the American armada sent by Donald Trump to keep North Korean nuclear ambitions at bay, sources told Kyodo news.

The Japanese helicopter carrier is set to depart Yokosuka port in Kanagawa Prefecture to Monday to escort the US Navy supply ship from waters off the Boso Peninsula, near Tokyo, to the area off Shikoku, one of the four main islands of Japan. Japanese media reports that the US ship could be delivering supplies to the aircraft carrier – the USS Carl Vinson striking group, that is now conducting a joint exercise with South Korea’s navy in the Sea of Japan. To ensure success of their escort mission, the Japanese seamen have been authorized the “minimum necessary use of weapons,” to deter any attacks amid North Korean threats to sink US ships, the Japan Times reports.

As RT notes, Monday's Izumo deployment will set a new milestone for the Japanese Navy which has not escorted any military vessels, outside of troop exercises, since the adoption of a pacifist constitution following Japan's defeat in World War II.  In 2015, Japanese Prime Minister Shinzo Abe and the ruling Liberal Democratic Party passed legislation to allow the country’s military to participate in foreign conflicts, overturning its previous policy of fighting only in self-defense. Since the Japanese constitution only allowed Japanese armed forces to act in self-defense, the legislation reinterpreted the relevant passages to allow the military to operate with overseas allies in “collective self-defense.”

The latest Kyodo News survey showed the Japanese are divided over whether or not to amend the Article 9 of the Constitution, which outlaws war as a means to settle international disputes. According to the figures, 49 percent of some 3,000 mail-in respondents said Article 9 must be revised while 47 percent oppose the change. Some 75 percent of respondents who support the pacifist constitution claimed that Article 9 allowed the country to stay out of world conflicts since World War II.

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Authored by Mike Shedlock via MishTalk.com,

Recent opinion polls for round two of the French election on May 7 show Emanuel Macron with 59-60% and Marine Le Pen 40-41%.

Le Pen is trending up from April 24 results that were as low as 36-37%.

Still, Le Pen has a long way to go. Can she close the gap? How?

French Election Polls

The above from French Election Polls on Wikipedia.

Results show the two candidates combined only got 45% of the vote in the first round. Apathy and distrust are strong.

Political Ambush

On Wednesday, April 27, Macron met with striking Whirlpool workers at a planned event in Amiens, Macron’s hometown. In a surprise political ambush, Le Pen showed up first and was greeted with cheers and selfie opportunities.

Macron Faces Hostile Crowd

The most recent poll show Macron falling below 60%. There may be more fallout from the ambush coming up. Even if one believes that support for Le Pen is a bit understated, picking up another 7-9% is a tough act to expect.

Close the Gap? How?

It’s possible Le Pen closes the gap, in a roundabout way: abstentions. Eurointelligence explains.

The researcher Serge Galam confirms what we suspected all along: it does not take much for Marine Le Pen to win if voters abstain. Galam looked into what it takes for her to win under different abstention scenarios. He starts with the vote intentions as suggested by the polls, 42% for Le Pen and 58% for Emmanuel Macron. Then, if 90% of the FN voters go to vote but only 65% of those for Macron, Le Pen would end up winning with 50.07%. For Macron the threshold to win is thus 65.17%. This threshold is even higher the closer the two get in the polls. Assuming Le Pen wins two points in the polls and gets 44% of voters intentions, then the threshold for Macron would be 70.71%. So for 2 extra points in the voters intentions for Le Pen the barrier for Macron to win rises by 5 percentage points. We know that the voters behind Le Pen are much more loyal and steadfast than the votes for Macron. Many backed Macron unenthusiastically to block Le Pen. Since the first round, there is a clear rise in aversion against Macron. The absence of a clear backing from Mélenchon and the hashtag #SansMoiLe7Mai on twitter give solidarity to those who consider abstaining, Le Figaro explains. Students from schools and universities mobilized yesterday for a ni-ni: a no to Le Pen and her nationalism, and a no to Macron as a “boss”.

Ni-Ni Mobilized, SansMoiLe7Mai

A ni-ni is “neither nor”. SansMoiLe7Mai translates as “Without Me May 7”.

Abstentions

An amazing 71-80% of those who supported Benoît Hamon are for Macron, with as low as 1% for Le Pen. But Hamon only received 6.36% of the vote in round one.

Jean-Luc Mélenchon received 19.58% of the vote while François Fillon received 20.01%. Those are the votes that will matter most. It is difficult to judge the likelihood of that combined 39.58% block of disenfranchised voters does indeed vote in round two.

Looking at the first set of polls at the top, somewhere between 17% and 29% of the electorate plans to abstain. The average of 22%, 29%, and 17% is 22.67%. Those abstainers are already factored into the 59-41% poll estimate for May 7.

Voting Intention Averages

• On average, 39.33% of Mélenchon supporters claim they will abstain. 39.33% of 19.58% is 7.66%.
• On average, 30.67% of Fillon supporters claim they will abstain. 30.67% of 20.01% is 6.14%.
• On average, 24.33% of Hamon supporters claim they will abstain. 24.33% of 6.36% is 1.55%.

Curiously, the combined abstainers from the Mélenchon plus Fillon plus Hamon camp is only 15.35% whereas the average overall abstention percentage is 22.67%.

That margin says suggests there is an extra pool of voters who intend to sit this out. Assuming Le Pen supporters are more enthusiastic, the extra block of abstainers must come primarily from those who voted for Macron but now intend to sit it out.

Determining Questions

1. Will enough weak Macron supporters turn up to vote?
2. Will the “ni-ni” campaign have an impact that does not show up in the polls?
3. Is there a pool of Le Pen supporters who simply do not tell pollsters their intention?
4. Will Macron’s Whirlpool gaffe be a factor?

To win, Le Pen needs to capitalize on Macron’s gaffe. She also needs low turnout and a ni-ni impact that affects Macron more than it does her.

This is an uphill battle, but possible, and more likely than most expect.

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Authored by Harry Kazianis via The Strategic Culture Foundation,

If North Korea truly desires state of the art nuclear weapons and missiles – something that can deliver an atomic payload to say Los Angeles – then we are indeed in for some tense time ahead.

The only way Kim Jong-un – the portly pariah of Pyongyang – can truly develop a medium-range missile that can hit even Hawaii or Alaska is through a rigorous testing program. Even in failure, the Kim regime gains vital technical data that creates pathways to future success. The same goes for making nuclear weapons small enough to place atop such a missile. While Washington, Moscow or Beijing might have mastered the Jedi arts of nuclear weapons decades ago, North Korea is still in padawan mode—but making slow and steady progress.

From there it could get worse. What happens if a North Korean missile test goes wrong, and say crashes on South Korean or Japanese territory? What happens if innocent civilians are killed? As I explained recently, it could set Asia on a path to war:

Let's say in the not-too-distant future a North Korean missile veered off course and crash landed in the outskirts of Seoul, killing several hundred people in a tragic accident. South Korea would be hard pressed not to respond. In this fictional tale, Seoul would strike back with a missile of its own, destroying the North Korean launcher and crew responsible.

So where do we go from here? As I have explained on a few occasions now, we do have options short of a unilateral strike – not an option at all if you consider what happens if you can’t guarantee taking out every single one of Kim’s nuclear weapons.

First, President Trump and his team must work to contain North Korea's nuclear and missile programs so they are unable to gain any outside assistance. Tough secondary sanctions would be placed on any nation, financial entity, company, or individual who dares help the regime develop such weapons. The Trump administration must make it clear: if you seek to profit from helping one of the world's most rogue regimes build nuclear weapons or long-range missiles you will pay the most severe of prices—slapped with the label of international pariah. While sanctions won’t solve the problem entirely, or erase the nuclear knowledge from the minds of North Korea’s scientists, such measures could greatly slow the rate of technological development and raise the costs of such work for Pyongyang.

 

Second, the Trump administration must use sophisticated cyber tools, just as the Obama administration did in the case of Iran's nuclear program, to trip up North Korea’s nuclear and missile efforts at every turn. While reports indicate such efforts seem underway, the administration should make every effort to ramp these programs up as much as possible. Again, the goal would be to slow the progress of these programs, and increase their cost.

 

Lastly, and as repulsive as it sounds, the time has come where talks with North Korea would be most wise – something the administration now seems open to after remarks to the contrary. To be fair, history shows such an option has a slim chance of success—Pyongyang is not exactly the most reliable of negotiating partners and has rarely kept its word. But considering the risks, we owe it to our allies and the American people—the potential new targets of North Korea’s nuclear tipped missiles—to act on Winston Churchill’s axiom: to jaw-jaw is always better than to war-war.

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Authored by Michael Snyder via The End of The American Dream blog,

Our world is changing at a blinding pace that is accelerating with each passing day. 

Thanks to the Internet, information travels at a speed that would have been unimaginable at other times in human history, and our technological capabilities are advancing at a rate that is exponentially increasing.  What all of this means is that seismic cultural shifts that used to take decades can now be accomplished in a matter of months or even weeks. 

The following are 20 amazing facts about what happens every single minute of every single day in our rapidly changing world… 

#1 250 babies will be born, and 113 of them will be born into poverty.

#2 500 hours of video will be uploaded to YouTube.

#3 The Earth will travel 1,118 miles around the sun.

#4 McDonald’s will sell 4,500 hamburgers.

#5 Lightning will strike our planet about 6,000 times .

#6 28,500 trees will be cut down.

#7 51,000 applications will be downloaded from Apple’s App Store.

#8 65,000 barrels of oil will be used used.

#9 People will watch 64,444 hours of content on Netflix.

#10 120,673 pounds of edible food will be thrown away in the United States.

#11 $203,596 worth of products will be sold on Amazon.com.

#12 448,800 tweets will be posted on Twitter.

#13 527,760 photos will be shared on Snapchat.

#14 3.3 million posts will be made to Facebook.

#15 3.8 million Google searches will be conducted.

#16 5 million pounds of garbage will be generated.

#17 6 million chemical reactions will happen in each one of our cells.

#18 20.8 million messages will be sent using WhatsApp.

#19 25 million Coca-Cola products will be consumed.

#20 204 million emails will be sent.

So will all of this change lead to a wonderfully positive future for humanity, or will it result in a dystopian nightmare?  Only time will tell, but what everyone can agree on is that our world is rapidly becoming a much different place than the world that our parents and grandparents grew up in.

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