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Authored by Ven Ram, Bloomberg cross-asset strategist,

US stocks are seeing no evil and certainly hearing none, but Berkshire Hathaway’s ever-growing cash pile should hold a tacit warning for those who are overexuberant.

Berkshire’s war chest surged to a record $189 billion at the end of the first quarter, and Chair Warren Buffett told shareholders over the weekend that he expects the pile will rise to $200 billion soon:

“We’d love to spend it, but we won’t spend it unless we think we’re doing something that has very little risk and can make us a lot of money.”

Wall Street, of course, equates higher return with higher risk, but here is one of the best investors of all time decrying the very notion that one needs to do something egregiously risky to earn the additional dollar of return over and above what is available to passive investors who buy the entire market.

Stocks rallied on Friday after the markets interpreted the April non-farm payrolls data as providing just the right backdrop for the Federal Reserve to cut rates eventually. Considering that since of the end of 2022 alone, the S&P 500 has surged about 33% and the Nasdaq almost 50%, one would think that all the good news out there and more is already reflected in their price tag.

Over the long term, stocks can’t yield returns in excess of corporate earnings and economic growth, but investors have been in no mood to listen — and they may yet stay complacent in the short term. The S&P 500 now promises an earnings yield of less than 5%, well below the historical average. The Nasdaq 100 is, of course, trading even loftier, offering a prospective earnings yield of less than 4%.

At the moment, investors are paying a lot for stocks on the premise of promise. That is what Buffett may characterize as too much risk.

Authored by Ken Silva via Headline USA,

It was an old-fashioned romance scam, involving a man posing as a female online to induce unfortunate men to send him their life savings.

This scam, however, was fairly complex, involving a fake bank website and non-existent gold bars. The alleged perpetrator of this scam, Richard Opoku Agyemang, was arrested last month by the U.S. Postal Inspection Service.

According to the complaint against Agyemang, a USPIS agent interviewed a victim in January who sent $345,280 to Agyemang, who was posing online as “Emily.”

The victim told the USPIS agent that Emily spoke with an accent and purported to reside in Miami, where she was working as an ICU nurse at Jackson Memorial Hospital.

Eventually, Emily began asking the victim for money, which he sent to her. Emily told him the funds were going to pay for experimental and expensive medications meant for her mother in London.

“According to Victim 1, Emily also said she needed more money to pay ‘Mercury Assets Security Company’ in order to release two boxes of gold bars worth $9.2 million,” the complaint said.

“Victim 1 has never met Emily in person and has not received any gold bars.”

A second victim in New Mexico allegedly sent Agyemang $410,000 while the defendant was posing online as “Kathy.”

That victim told the same USPIS agent he developed a romantic relationship with “Kathy” that moved to text messages and eventually to speaking on Skype and via email. Instead of enticing him with gold, “Kathy” told the second victim “she” was supposed to be receiving an inheritance of diamond stones from her deceased father valued at $3.8 million.

The scam against the second victim also involved a fake bank website, according to the complaint.

“Based on screenshots of emails provided by Victim 2, it appears that the suspects created fraudulent websites for the First National Bank of London and for Neelevet, as well as fraudulent ‘customer support’ communications,” the complaint said.

The Virginia and New Mexico victims were the only ones highlighted in the criminal complaint, but the USPIS agent said there are at least “four dozen” other victims that have been bilked for more than $2 million combined.

“I have been able to interview some of the other suspected victims and confirmed that, at least as to those individuals, the funds were sent in connection with a romance fraud,” the agent said in his affidavit.

“For example, one victim provided copies of emails showing that he had been induced to send $13,000 to the RISUN LLC Wells Fargo account to pay for alleged taxes on gold bars being imported to the United States by his alleged online romantic partner.”

Agyemang was indicted on April 24 with one count of conspiracy to commit wire fraud, six counts of money laundering, and several other charges.

He currently has a jury trial set for June 24, though, at this early stage of the case, it’s likely that the Justice Department has yet to offer him a plea deal.

Ken Silva is a staff writer at Headline USA. Follow him at twitter.com/jd_cashless.

Global stocks and US equity futures jumped to start the new week, with the S&P 500 poised to extend last week’s rally as traders grew increasingly confident in the likelihood that the Fed will cut interest rates this year. As of 7:40am, S&P 500 and Nasdaq 100 futures added 0.3%, tracking gains in European and Asian markets although trading volumes were lower than average as UK and Japanese markets are shut for a holiday. Apple slid in pre-market trading after Berkshire Hathaway trimmed its stake for a second consecutive quarter. German 10-year yields fell and the yen weakened. Oil advanced after Saudi Arabia raised prices for customers in Asia. On today’s calendar we get the latest Senior Loan Officer Opinion Survey (SLOOS) which will signal whether demand for tight credit remains dismal.

In premarket trading, Apple dropped 1.2% after rising strongly over the past two sessions and as Berkshire Hathaway reported it had trimmed its stake in the company. Shares in cryptocurrency-linked companies rally as Bitcoin nears $65,000 level after adding around 10% in the last four sessions. Some of the biggest movers are Marathon Digital (MARA US) +5.6%, Riot Platforms (RIOT US) +4.1%. Steward Health Care filed voluntary petitions for relief under Chapter 11. Here are some other notable premarket movers:

• Luminar Technologies shares fall as much as 17% after the company confirmed it will cut about 20% of jobs and sub-lease parts or all of some facilities.
• Paramount rises 4.5% as it weighs Apollo and Sony’s $26 billion offer to buy the company.
• Perficient gains 55% after EQT agreed to buy the technology consultant in a deal valued at about $3 billion including debt.

With a light US economic calendar this week, the market’s direction may come from central bank officials, as well as policy meetings in the UK, Australia and Sweden. European Central Bank Chief Economist Philip Lane said recent data have made him more certain that inflation is returning to the 2% goal, according to an interview with Spanish newspaper El Confidencial, raising the likelihood a first interest-rate cut in June. New York Fed President John Williams and the Richmond Fed’s Thomas Barkin are due to make remarks on Monday, followed by Neel Kashkari of Minneapolis on Tuesday.

“This week is expected to be calmer on the economic front: few economic data releases and limited central bankers’ intervention,” wrote Credit Agricole strategists led by Jean-Francois Paren.

But while this week may be boring, strategists are already starting to hone in on the importance of next week’s US inflation print for April. “The price reaction on the back of this release may be more important than the data itself given how influential price action has been on investor sentiment amid an uncertain macro set up,” Michael Wilson wrote in a note.

Europe was broadly higher, tracking US equity futures, with the Stoxx 600 rising 0.6% and trading near session highs although volumes were low due a UK public holiday. Among individual stocks in Europe, PostNL NV shares declined after it reported weak volumes. Demant A/S also fell as it reported a miss in sales driven by soft retail. Atos SE jumped after it received four offers that will frame the discussions with its stakeholders around its restructuring. Here are the biggest movers Monday:

• Indra Sistemas shares jump as much as 11%, after the Spanish defense company beat estimates in the first quarter and forecast Ebit for the full year of above EU400 million
• Know IT gains as much as 6% after Handelsbanken raised its short-term recommendation for the Swedish IT consultancy to hold from sell, noting small green shoots in end markets
• Maurel & Prom rise as much as 10%, the most since October, after the French oil firm received a license for operations in the Urdaneta Oeste field in Lake Maracaibo in Venezuela
• Demant falls as much as 5.3%, the most since November, after the Danish hearing-aid group reported softer-than-expected 1Q sales, with retail a stand-out disappointment, Citi says
• Castellum falls as much as 3% after DNB cut its recommendation for the Swedish landlord to hold, noting “rather soft” 1Q earnings which showed that vacancy rates is a concern
• ING Bank Slaski falls as much as 4.3% after the bank reported first-quarter results below estimates. Citi attributed the earnings miss to low non-core revenue figures and higher net provisioning

Earlier in the session, Asia stocks rose led by Chinese shares which led gains as mainland markets played catchup following a holiday break, although here too conditions were holiday-thinned with Japan and South Korea shut for holidays. The CSI 300 Index jumped as much as 1.8%, while stocks in Hong Kong took a breather following a nine-day winning streak.

• Hang Seng & Shanghai Comp were somewhat varied as Hong Kong stocks took a breather after the recent hot streak and as attention shifted to the mainland where stocks outperformed as they played catch up on their return from the Labour Day Golden Week holidays with property stocks boosted by recent support pledges, while participants also digested Caixin Services PMI data which matched estimates.
• ASX 200 was led higher by continued outperformance in the rate-sensitive sectors, while financials were also underpinned following Westpac’s earnings, special dividend and buyback announcement.

In FX, the Blooomberg Dollar index steadied as the Norwegian krone, British pound and Australian dollar led Group-of-10 gains; The prospect of central bank easing boosted risk sentiment sending global stocks higher. USD/JPY advanced as much as 0.6% to 154, paring some of last week’s more than 3% drop as short dollar positions by fast-money accounts were squeezed, according to an Asia-based FX trader. EUR/USD steadied around 1.0768, after composite PMI data for April came in above estimates and euro-area PPI for March fell 0.4% month-on-month in line with forecasts; ECB Chief Economist Philip Lane said recent data has made him more confident inflation will return to the 2% goal.

In rates, Treasuries reopened with yields lower by around 2bps at 4.48% after being closed for Japan and UK holidays. Gains have support from bunds, rallying on comments from ECB Chief Economist Philip Lane. US yields lower by around 2bp to 3bp across the curve with German yields down 3bp to 5bp after ECB’s Lane said recent data has improved his confidence that inflation will return to the 2% goal. Treasury auction cycle begins Tuesday with $58b 3-year note sale, followed by $42b 10- and $25b 30-year new issues Wednesday and Thursday.

In commodities, oil rebounded strongly after tumbling on Friday as hopes for a ceasefire in the Middle East once again died a miserable death. WTI traded 1.2% higher above $79 and Brent rose to $83.70. Gold was also significantly higher, trading about $2320.

In crypto, Bitcoin is back on a firmer footing and now holds around $65k, while Ethereum hovers around $3.2k, both have erased last week’s sharp losses. The next potential objective/resistance level for Bitcoin is at $67,200 and that represents a 61.8% correction of the 73,797-56,527 fall, via market contacts.

Looking at today’s calendar, the US economic data slate empty for the session, though Fed releases Senior Loan Officer opinion survey on bank lending practices at 2pm New York time. The calendar is light this week, leaving focus on Treasury refunding auctions and about a dozen Fed speakers scheduled. Fed members’ scheduled speeches include Barkin (12:50pm) and Williams (1pm). Ahead this week are Kashkari, Jefferson, Collins, Cook, Daly, Bowman, Logan, Goolsbee, Barr and Mester

Market Snapshot

• S&P 500 futures up 0.2% to 5,165.25
• STOXX Europe 600 up 0.3% to 506.89
• MXAP up 0.3% to 178.04
• MXAPJ up 0.7% to 551.80
• Nikkei little changed at 38,236.07
• Topix little changed at 2,728.53
• Hang Seng Index up 0.6% to 18,578.30
• Shanghai Composite up 1.2% to 3,140.72
• Sensex little changed at 73,916.80
• Australia S&P/ASX 200 up 0.7% to 7,682.37
• Kospi down 0.3% to 2,676.63
• German 10Y yield little changed at 2.46%
• Euro up 0.1% to $1.0775
• Brent Futures up 0.9% to $83.74/bbl
• Gold spot up 0.8% to $2,319.71
• US Dollar Index little changed at 105.03

Top Overnight News

• China’s May Day holiday saw aggregate spending rise 13.5% above pre-pandemic levels, although spending per capita lagged behind 2019 levels. RTRS
• China’s effective exchange rate is back to where it was in 2014 in real terms (given CNY weakness and the absence of domestic inflation) and this is turbocharging the country’s exports, creating trade friction with the US, EU, and other economies. WSJ
• The case for a ECB interest rate cut in June is getting stronger as services inflation is finally starting to ease, ECB Chief Economist Philip Lane told Spanish newspaper El Confidencial on Monday. The ECB has all but promised a rate cut on June 6, provided incoming data strengthen policymakers’ belief that inflation will head back to its 2% target by the middle of next year. RTRS
• A US crackdown on banks financing trade in goods for Vladimir Putin’s invasion of Ukraine has made it much more difficult to move money in and out of Russia, according to senior western officials and Russian financiers. Moscow’s trade volumes with key partners such as Turkey and China have slumped in the first quarter of this year after the US targeted international banks helping Russia acquire critical products to aid its war effort. FT
• The Israeli military has told tens of thousands of Palestinians to leave the southern Gazan city of Rafah as Israel’s defense minister warned of an imminent military “operation” as talks to free Israeli hostages appeared to have stalled. At least 100,000 civilians in eastern Rafah, along the border with Israel, should move to what Israel calls a humanitarian zone on the Mediterranean, an Israel Defense Force spokesperson told reporters, in “a limited scope” operation as part of a “gradual plan”. FT
• Saudi Arabia and its allies in OPEC+ are likely to keep oil production unchanged for a further three months when ministers review output allocations on June 1. The tightening of petroleum supplies and depletion of inventories widely anticipated at the start of the year has failed to materialize so far. RTRS
• Maersk warned that ongoing Red Sea shipping disruptions will reduce industry capacity between the Far East and Europe by 15-20% in Q2. RTRS
• The final chief executive of Credit Suisse, Ulrich Körner, is set to leave UBS in the coming weeks, as the Swiss bank prepares to complete a crucial step in the integration of its former rival. FT
• Warren Buffett said Apple is “even better” than AmEx and Coca-Cola. The stock will remain Berkshire’s top holding despite selling a large chunk. The sale bolstered his firm’s cash pile to a record $189 billion. BBG

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded with a positive bias after a dovish jobs report from the US but with the upside limited amid holiday-thinned conditions with Japan and South Korea shut for holidays. ASX 200 was led higher by continued outperformance in the rate-sensitive sectors, while financials were also underpinned following Westpac’s earnings, special dividend and buyback announcement. Hang Seng & Shanghai Comp were somewhat varied as Hong Kong stocks took a breather after the recent hot streak and as attention shifted to the mainland where stocks outperformed as they played catch up on their return from the Labour Day Golden Week holidays with property stocks boosted by recent support pledges, while participants also digested Caixin Services PMI data which matched estimates.

Top Asian News

• PBoC Shanghai is reportedly to support the renewal of large-scale equipment.
• Chinese President Xi said the China-France relationship is a model of peaceful coexistence and win-win cooperation between countries with different systems, while he added they are ready to consolidate the traditional friendship, enhance political mutual trust, build strategic consensus, as well as deepen exchanges and cooperation with France, according to Xinhua.
• EU is lobbying China to exclude agriculture from a series of escalating commercial disputes and called for the ‘strategic sector’ to be protected from trade tensions in the renewable energy and electric vehicle industries, according to FT.
• A magnitude 6.1 earthquake was reported in Seram, Indonesia, according to GFZ.

European bourses, Stoxx600 (+0.3%) are entirely in the green, albeit modestly so, taking impetus from a positive APAC session. EZ Final PMIs were generally revised higher, though ultimately sparked little reaction in the equities complex. European sectors are mostly firmer, though with the breadth of the market fairly narrow. Insurance takes the top spot, alongside Energy. The latter is benefitting from broader strength in the crude complex given the recent updates around Rafah. US Equity Futures (ES +0.2%, NQ +0.2%, RTY +0.5%) are entirely in the green, building on the strength seen on Friday. Apple (-1.1%) is lower pre-market after Berkshire Hathaway declared it had decreased its stake in the Co. in Q1 and in a breather from Friday’s post-earnings strength.

Top European News

• UK PM Sunak reportedly cancelled plans for a summer general election after local election defeats with the election anticipated to occur in Autumn, according to The Telegraph.
• UK PM Sunak was warned by Conservative MPs to show some vision and start digging his party out of a hole after a disastrous set of local election results, while it was also reported that the Labour Party comfortably won the London mayoral contest to give Sadiq Khan an unprecedented third term as London Mayor, according to FT.
• ArcelorMittal (MT NA) warned the UK government that one of its main divisions could be forced to exit the UK if an application to close and redevelop a commercial port in south-east England receives approval this week, according to FT.
• ECB’s Lane said in an interview with El Confidencial that the April slowdown in services inflation marks significant progress and confidence on inflation is improving, while he added exaggerating the impact of the ECB and Fed divergence is not necessary and Fed decisions have limited impact on the euro area.
• Fitch affirmed Italy at BBB; Outlook Stable and affirmed Denmark at AAA; Outlook Stable on Friday.

FX

• DXY is modestly softer and within a very tight 105.02-20 range, should selling pressure intensify, the 105.00 mark could be brought into focus.
• EUR is marginally firmer/flat vs the Dollar, though losing in the EUR/GBP cross. Price action today has been contained within a tight 1.0756-75 range, well within the prior session’s bounds. EZ final PMIs today were generally revised higher, albeit slightly, and provided little lasting move in the EUR.
• GBP is slightly firmer against the Dollar, despite UK equities/gilt markets closed on account of the region’s bank holiday and with catalyst light. Currently trading just off session highs of 1.2584.
• JPY is by far the biggest underperformer vs the Dollar, going as high as 154.00, paring much of Friday’s USD/JPY losses, amid holiday-thinned conditions with Japan away.
• Antipodeans are both marginally firmer vs USD, though very much within a contained range as catalysts remain thin. Over in China, the Caixin PMI were in-line with expectations which helped to lift sentiment on the region’s return from holiday.
• PBoC set USD/CNY mid-point at 7.0994 vs exp. 7.2127 (prev. 7.1063).
• S&P upgraded Turkey’s rating to ‘B+’; Outlook Positive on Friday and cited economic rebalancing.

Fixed Income

• Bunds are bid with specific drivers limited, though upside was trimmed by unusually large upward revisions to the French and then EZ Final PMIs though the internal commentary around German continues to point to stagnation/incremental growth. Current 130.98-131.62 parameters surpassed Friday’s best by a handful of ticks with little of note thereafter until 132.00.
• USTs are a touch firmer, in-fitting with EGBs, but with magnitudes thin given the UK Bank Holiday and Japan’s absence; docket ahead a touch busier with Fed’s Barkin & Williams due after the latest Employment Trend numbers.

Commodities

• Crude benchmarks are bid with geopols in focus. WTI and Brent have been grinding higher throughout the morning as the geopolitical narrative around Rafah continues to gradually escalate. Most recent developments have civilians being evacuated and the Israeli Finance Minister saying the army must enter Rafah today.
• Supported on geopols; XAU to a USD 2324/oz peak but one that leaves it over USD 20/oz shy of last week’s best but with the USD 2339/oz 21-DMA the first point of resistance.
• Base metals are bid on China’s return to the market with the metal following suit to APAC performance where the region was propped up by Friday’s NFP-tailwinds and in-line Chinese PMIs.
• Saudi Arabia raised its oil prices for all grades to Asia for June with Arab Light OSP to Asia set at a premium of USD 2.90/bbl vs Oman/Dubai average and OSP to NW Europe set at a premium of USD 2.10/bbl vs ICE Brent, while it set the OSP to the US at a premium of USD 4.75/bbl vs ASCI.
• UAE’s Sharjah announced the discovery of a new gas field which is said to carry ‘promising quantities’, according to a statement cited by Reuters.

Geopolitics: Middle East

• Israeli forces are now launching raids east of Rafah, via Sky News
• Israel military says not going to put a timeframe on the Rafah evacuation and will make “operation assessments”
• Israeli military says evacuating Rafah as part of a “limited scope” operation
• The Israeli army has ordered civilians in several parts of Rafah to leave the city as it begins an invasion of the southern city, via journalist Soylu
• Israeli Defence Minister, speaking with US Defence Secretary Austin, that action in Rafah is required due to Hamas’ refusal of hostage-release proposals
• Senior Hamas Official says to Reuters that Israel’s Rafah evacuation order is a “dangerous escalation that will have consequences”; Hamas may withdraw from truce talks due to Rafah operations.
• Israel’s military said the Kerem Shalom Crossing with Gaza is now closed to aid trucks after it came under fire with mortar shelling which killed 3 Israeli soldiers and wounded 12 others from the Givanti and Nahal brigades, while Hamas claimed responsibility for the mortar attack on Kerem Shalom and said it targeted an Israeli army base, according to Reuters.
• Israeli PM Netanyahu said they cannot accept Hamas’s demands for an end to the war and the withdrawal of forces from Gaza, while he noted that ending the Gaza war now would keep Hamas in power and Israel would not accept terms that amount to a capitulation with Israel to keep fighting until its war aims are achieved. It was separately reported that Israel’s Defence Minister said Hamas appears uninterested in a deal meaning strong military action in Gaza’s Rafah could happen very soon, according to Reuters.
• Israeli army is said to have started to evacuate civilians from parts of Rafah, according to Haaretz cited by Walla’s Guy Elster. Subsequently, Bloomberg reported that the Israeli military asks some Rafah civilians to move out of the city, according to Bloomberg.
• Hamas’ leader said they are still keen on reaching a comprehensive agreement, while the group said the round of negotiations in Cairo has ended and the delegation will leave to consult with the group’s leadership, according to Reuters. It was separately reported that Hamas agrees that Israel can commit to ending the war in the second stage of the hostage deal not the first, according to Times of Israel via social media platform X.
• CIA chief Burns is to travel to Doha for an emergency meeting with Qatar’s PM as Gaza talks are said to be ‘near to collapse’, while Qatar and the US are to exert maximum pressure on Israel and Hamas to continue negotiations, according to an official briefed on talks cited by Reuters. It was separately reported that Burns will stay in Qatar on Monday and likely travel to Israel this week to meet with Israeli PM Netanyahu, according to an Axios reporter.
• US reportedly put a hold on an ammunition shipment to Israel last week, according to two Israeli officials cited by Axios.
• Iraqi armed factions announced they targeted an Israeli air base in Eilat with drones, according to Al Arabiya.
• Israeli Cabinet decided to close Qatari TV network Al Jazeera’s operations in Gaza, according to a statement cited by Reuters. It was later reported that Israel’s communications ministry said a police raid was conducted at an Al Jazeera premises in Jerusalem.

Geopolitics:

• Russia said it took full control of Ocheretyne village in eastern Ukraine, according to the Defence Ministry, cited by Reuters.
• Russian Defence Ministry says preparations are beginning for the commencement of a missile exercises in the southern district, incl. aviation & navy forces

US Event Calendar

• 14:00: Senior Loan Officer Opinion Survey on Bank Lending Practices

Central Bank Speakers

• 12:50: Fed’s Barkin Speaks on Economic Outlook
• 13:00: Fed’s Williams Participates in Fireside Chat
• 14:00: Senior Loan Officer Opinion Survey on Bank Lending Practices

DB’s Peter Sidorov concludes the overnight wrap

Filling in for Jim with the UK off for the May Day bank holiday. As the calendar takes a quieter turn after the deluge of macro events last week, the focus will be on whether markets can continue to find a more solid footing. The latter half of last week saw strong gains for most asset classes thanks to an FOMC meeting that avoided hawkish surprises coupled with a softer payrolls report on Friday that reignited hopes of a soft landing for the US economy. 10yr Treasury yields saw their largest weekly decline of the year so far (-15.5bps) while the S&P 500 posted its best 2-day run in 10 weeks (+2.18%). See the full recap at the end.

Looking forward, the health of the US economic cycle will remain in focus with today’s Senior Loan Officer Survey from the Fed. The SLOOS has seen a gradual improvement in the past few quarters after the sharp tightening following the regional banking stress last March. A key question is whether the rise in yields since the start of the year could derail the nascent improvement in bank credit conditions. In their latest chartbook, Jim and Henry highlighted the delayed pass through of higher rates as one of their “What keeps us awake at night?” themes, while my own earlier note (see here) discussed how further improvement in the bank credit cycle may be unlikely without rate cuts materialising. Later in the week, the University of Michigan consumer survey will attract attention on Friday given the recent softening in US consumer confidence indicators.

The main macro event in Europe will be the latest BoE decision on Thursday. Our UK economist expects this week’s meeting to set the stage for the first rate cut in June and foresees dovish shifts in the MPC’s modal CPI projections and its forward guidance. You can see the full preview here. We will also have the RBA decision on Tuesday (see our economists’ preview here), while on Wednesday the Riksbank could deliver the first rate cut of the cycle there. Finally, we’ll have the accounts of April ECB meeting due on Friday. These are unlikely to deliver major surprises, with April’s clear if conditional signal of a June rate cut having solidified in recent ECB commentary. But we will watch for any hints on the ECB reaction function beyond June, including on what sort of data might justify consecutive ECB cuts.

The earnings season will begin to taper off this week, with almost 400 of S&P 500 members having already reported. Notable releases will include Walt Disney, Vertex, Uber and Airbnb in the US, Ferrari, Telefonica and Leonardo in Europe and Toyota and Nintendo in Japan.

Asian equity markets are mostly trading higher this morning in holiday thinned trading, catching up to the strong end of last week for US equities. As I type, mainland Chinese stocks are leading gains in the region with the CSI (+1.3%) and the Shanghai Composite (+1.05%) both trading notably higher after returning from a long holiday break while the S&P/ASX 200 (+0.60%) is also edging higher and on pace for a third straight day of gains. Elsewhere, the Hang Seng (-0.05%) is swinging between gains and losses in early trade while markets in Japan and South Korea are closed for a public holiday. Outside of Asia, US stock futures are trading marginally higher (+0.08% for the S&P 500).

In terms of early morning data, China’s Caixin Services PMI came in line with expectations at 52.5 in April (vs. 52.7 the previous month). The Composite PMI edged up from 52.7 to 52.8, its highest level since May 2023, so suggesting a reasonably positive performance of the Chinese economy.

In the FX space, the yen is trading moderately down (-0.57%) against the dollar at 153.92 as I type. The yen had been on course to breach its 1990 lows early last week, but ended up seeing its strongest weekly gain against the dollar since late 2022 (+3.45%) amid suspected FX intervention.On this topic, we heard from US Treasury Secretary Janet Yellen over the weekend, who didn’t comment on whether Japan had intervened but added that “we would expect these interventions to be rare and consultation to take place”.

Events in the Middle East have been in focus over the weekend. Hopes of a ceasefire in Gaza had risen on Friday following comments by Hamas officials that it was studying Israel’s latest proposals with a “positive spirit” but weekend talks ended inconclusively. Israel’s prime minister Netanyahu said on Sunday that it would not agree to Hamas demands to end the war in Gaza completely and Israel closed a crossing into Gaza after a rocket attack by Hamas. Oil prices have moved a little higher this morning with Brent futures (+0.31%) trading at $83.22/bbl, also on news that Saudi Arabia increased its monthly selling oil price to Asia. Geopolitics will remain in focus this week, not least with a visit by China’s President Xi Jinping to Europe that lasts until Friday.

Recapping last week in detail, the US payrolls release on Friday came in softer than expected across an array of indicators. The headline payrolls result rose 175k month-on-month (vs 240k expected), the smallest monthly gain in the last six months. The unemployment rate also ticked up to 3.9% (vs 3.8% expected), while average hourly earnings (+0.2% month-on-month vs +0.3%) and hours worked (34.3 vs 34.4) were both a tenth below expectations. So on the whole, the payrolls print was soft landing positive, with our US economists noting that some ad hoc factors may have overstated the weakening. See their post-payroll labour market chart book here for more.

Off the back of this, markets raised their expectations of rate cuts, with thenumber of Fed cuts priced in by the December meeting rising +11.4bps (and +4.8bps on Friday) to 45bps.The hope for additional Fed rate cuts was given further fuel on Friday after the April ISM services PMI came in at 49.4 (vs 52 expected), its lowest level since December 2022. On the other hand, the ISM services prices paid index rose to a three-month high of 59.2 (vs 55.0 expected), but this was largely driven by an increase in energy prices. This sent 2yr Treasury yields down -5.7bps on Friday, building on the earlier post-FOMC rally and down -17.8bps over the week. 10yr Treasuries also rallied, as yields fell -15.5bps to 4.51% (and -7.2bps on Friday) in their strongest week of the year so far. Lower yields saw the broad dollar index post its worst week in eight weeks (-0.86%).

For Europe, it was a similar story, as investors become increasingly certain that the ECB would be cutting rates at their June meeting. By the end of Friday, markets were pricing in a 95% chance of a rate cut in June, up from 88% at the beginning of the week. That lent support to European fixed income, as 10yr German bund yields fell -8.0bps (and -4.6bps on Friday). 10yr gilts fell -10.2bps (and -6.4bps on Friday).

With the payrolls print boosting soft landing hopes, equities enjoyed a strong end to the week, with the S&P 500 rising +1.26% on Friday and paring back earlier losses (+0.55% on the week). Markets were buoyed by the strong results from Apple, which gained +8.32% last week (and +5.98% on Friday). This saw the tech heavy NASDAQ outperform, rising +1.99% (and +1.43% last week). Overall, the rally was broad-based, as the Russell 2000 index of small caps rose +1.68% (and +0.97% on Friday), returning into positive territory year-to-date (+0.43%). It was a bit gloomier over in Europe, as the STOXX 600 fell -0.48%, although the index posted a small rally on Friday (+0.46%).

Finally in commodities, a more positive geopolitical backdrop and an increase in US oil inventories saw oil prices retreat last week. Brent crude fell -7.31% to $82.96/bbl (-0.85% on Friday), and WTI crude -6.85% to $78.11/bbl (-1.06% on Friday), their lowest levels in seven weeks. Gold retreated for the second week in a row, falling -1.55% to $2302/oz (+0.09% on Friday).

The Trump campaign has released a new ad featuring students pushing back against leftist protesters – including a fraternity from the University of North Carolina (UNC) who went viral for keeping the American flag off the ground.

“While campuses struggle to get control of their students, at UNC Chapel Hill, they are bringing order back,” says the narrator of the ad, posted to Truth Social and the Trump War Room Twitter account on Friday.

College patriots represent the majority of Americans loving their schools and their country! pic.twitter.com/sQqaCkCmkc

— Trump War Room (@TrumpWarRoom) May 3, 2024

In the ad, the young men from the UNC chapter of Pi Kappa Phi can be seen holding up the flag to keep it from touching the ground while protesters screech at them and throw water bottles.

The incident, which took place Tuesday, came after pro-Palestinian supporters replaced the American flag with a Palestinian flag. Following the scene, a GoFundMe was established to throw the fraternity “a Rager,” which is now standing at more than $500,000. Notable contributors include Bill ‘Redpill’ Ackman, who’s been in recent battles after Business Insider wrote a hit-piece on his wife after he slammed recent higher education plagiarism scandals and criticized DEI.

One of the fraternity brothers, Guillermo Estrada, wrote on X that he was heading to class and felt “immediately upset” the moment he saw a Palestinian flag hovering in place of the American flag.

“My fraternity brother and others ran over to hold [the flag] up, in order for it not to touch the ground,” he wrote. “People began throwing water bottles at us, rocks, sticks, calling us profane names. We stood for an hour defending the flag so many fight to protect.”

(Thread) Today was a sad yet empowering day at Chapel Hill. When I walked to class, I saw the Palestinian flag raised on our quad flag pole, and was immediately upset at the act that these “protestors” had made. I cannot say I am fully educated on the Israel/Palestine conflict pic.twitter.com/tZrZEOSu8a

— Guillermo Estrada (@estradguillermo) April 30, 2024

As the Epoch Times notes further, the fraternity drew the attention of country star John Rich, who offered to put on a free concert for their “celebration of freedom.”

In an update on Wednesday, the “Save a Horse” singer told his followers on X that he had been in contact with the UNC frat members and was setting up the show.

“Proposed law: if someone tears down the American flag and puts up another flag in its place, that person should get a free (but mandatory) one-way trip to that flag’s country,” he wrote Thursday on X alongside a poll asking how many users would support such a policy going forward.

“I’m not saying they can’t come back, but they have to experience that country for some period of time before returning,” he explained.

Upon the unveiling of the final poll results on Friday, the response to Mr. Musk’s proposition was overwhelmingly positive. Among 1.5 million X users who voted in his poll, nearly 1.2 million of them (79.9 percent) showed support for such a policy, while under 300,000 (20.1 percent) said they opposed it.

By Mish Shedlock of MishTalk

What percentage of all income tax collection should the top 1 percent pay? Top 10 percent?

Summary of the Latest Federal Income Tax Data

Inquiring minds may wish to peruse a Summary of the Latest Federal Income Tax Data, 2024 Update by the Tax Foundation.

I downloaded their data and created all but one of the charts in this post. The Foundation calls it the 2024 update but the latest data is for 2021.

The bottom half of taxpayers, or taxpayers making under $46,637, faced an average income tax rate of 3.3 percent. As household income increases, average income tax rates rise. For example, taxpayers with AGI between the 10th and 5th percentiles ($169,800 and $252,840) paid an average income tax rate of 14.3 percent—four times the rate paid by taxpayers in the bottom half.

The top 1 percent of taxpayers (AGI of $682,577 and above) paid the highest average income tax rate of 25.93 percent—nearly eight times the rate faced by the bottom half of taxpayers.

Income tax after credits (the measure of “income taxes paid” above) does not account for the refundable portion of tax credits such as the EITC. If the refundable portion were included, the tax share of the top income groups would be higher and the average tax rate of bottom income groups would be lower. The refundable portion is classified as a spending program by the Office of Management and Budget (OMB) and therefore is not included by the IRS in these figures.

The only tax analyzed here is the federal individual income tax, which is responsible for more than 25 percent of the nation’s taxes paid (at all levels of government). Federal income taxes are much more progressive than federal payroll taxes, which are responsible for about 20 percent of all taxes paid (at all levels of government), and are more progressive than most state and local taxes.

AGI is a fairly narrow income concept and does not include income items like government transfers (except for the portion of Social Security benefits that is taxed), the value of employer-provided health insurance, underreported or unreported income (most notably that of sole proprietors), income derived from municipal bond interest, net imputed rental income, and others.

Average Income Taxes Paid 2024

The top 1 percent pay an average of $653,730 in Federal income taxes. The top 10 percent pay an average of $108,251 in Federal income taxes.

The Tax Foundation reports the bottom 50 percent pay an average of $667 but that is overstated.

Counting child tax credits, earned income, food stamps, and rent support, the bottom 50 percent pay negative taxes. They get much more back than they put in.

Income Taxes Paid Millions 2024

The top 1 percent contribute over $1 trillion annually. That is nearly half of what the top 50 percent contribute.

The bottom 50 percent allegedly contribute $51 billion except in practice as noted above they actually pay negative income tax.

Average Tax Rate

For all the whining about how little the top pay, on average that just isn’t true.

Warren Buffet is fond of saying his secretary pays a higher tax rate than he does, but that is the exception (depending on how much he pays her).

Bear in mind these are Federal Income taxes. There are also state income taxes, payroll taxes, capital gains, etc.

Rising Fair Share

That’s a bonus chart courtesy of the Tax Foundation. It shows that the share of income taxes paid by the top 1 percent increased from 33.2 percent in 2001 to 45.8 percent in 2021.

2021 was heavily influenced by the pandemic which affected lower paid employees more.

Given the bottom half gets money back, and collections and there are also state income taxes, payroll taxes, capital gains, etc. what percentage is fair share?

Do we have a collection problem or a spending problem?

The California Highway Patrol found 15 lbs of cocaine with a street value of $700,000 during a traffic stop in Merced Country on April 27, the CHP reported.

Around 3:15 p.m., a 2010 Subaru driving on I-5 around 30 miles west of Merced was pulled over for a traffic violation. During the stop, the officer became suspicious and conducted a search using a K-9 officer, a CHP spokesman told the Epoch Times.

“It was just a normal traffic stop,” said CHP Officer Gregorio Rodriguez. “That’s kind of what usually happens. Something was out of the ordinary. The officer did see some criminal indicators and the dog hit on the bags of almonds.”

During the search, the police dog sniffed out the cocaine, divided into 1-kilogram amounts and factory sealed within bags containing almonds. The driver, 20-year-old Angel Lopez Velasco of Mt. Vernon, Washington, and his passenger, 20-year-old Jennifer Cisneros of Burlington Washington, were arrested and booked into the Merced County Jail on suspicion of possessing a controlled substance for sale, as well as transporting a controlled substance across noncontinguous counties.

The case is currently in the hands of the Merced Area Gang Narcotics Enforcement team, according to the report.

By Jack Phillips of The Epoch Times

Former President Donald Trump argued that special counsel Jack Smith’s classified documents case against him should be tossed after prosecutors wrote that they misled a judge about the order of items in an evidence box.

In a post on Truth Social over the weekend, President Trump called for the arrest of Jack Smith and argued that the case should be thrown out based on the new court filing.

It came after Mr. Smith’s team wrote that that the order of items within a box was “not the same” as they appear in digital photographs of materials after the FBI obtained those boxes from President Trump’s Mar-a-Lago home in August 2022.

“Since the boxes were seized and stored, appropriate personnel have had access to the boxes for several reasons, including to comply with orders issued by this Court in the civil proceedings noted above, for investigative purposes, and to facilitate the defendants’ review of the boxes,” Mr. Smith’s team told U.S. District Judge Aileen Cannon last week.

They added that there are “some boxes where the order of items within that box is not the same as in the associated scans.”

His team also acknowledged in a footnote that federal prosecutors effectively misled the court after telling the judge that the evidence was exactly the same when it was seized. “The Government acknowledges that this is inconsistent with what Government counsel previously understood and represented to the Court,” the footnote said.

Mr. Smith’s team provided multiple “possible explanations” as to why the documents were rearranged after seizing the boxes from Mar-a-Lago, according to the filing.

“There are several possible explanations, including the above-described instances in which the boxes were accessed, as well as the size and shape of certain items in the boxes possibly leading to movement of items,” they wrote. “For example, the boxes contain items smaller than standard paper such as index cards, books, and stationary, which shift easily when the boxes are carried, especially because many of the boxes are not full.”

But President Trump wrote that Mr. Smith’s filing is effectively an admission of what he has “been saying happened since the Illegal RAID on my home, Mar-a-Lago, in Palm Beach … that he and his team committed blatant Evidence Tampering by mishandling the very Boxes they used as a pretext to bring this Fake Case.”

He then called for the case to be immediately dropped.

President Trump has pleaded not guilty to 40 charges connected to allegations that he illegally retained classified documents at his home after leaving in January 2021 and obstructed officials’ attempts to retrieve them. Two of his aides, Walt Nauta and Carlos de Oliveira, have also been charged in the case.

Legal group Judicial Watch also suggested that Mr. Smith’s classified documents case against President Trump should be tossed after the admission.

Judicial Watch head Tom Fitton wrote on X that prosecutors’ latest filing suggesting that there was “evidence tampering” involved is “yet more reason to throw out this sham prosecution.”

He said that the filing also included an FBI “admission” that the agency was “completely screwing with the classified documents.”

Continue reading at The Epoch Times

Authored by Jana J. Pruet via The Epoch Times (emphasis ours),

The Biden administration announced on Friday that it had finalized a directive to expand the Affordable Care Act (ACA), also known as “Obamacare,” to thousands of immigrants who were brought to the United States as children.

The Centers for Medicare and Medicaid (CMS) estimates that “this rule could lead to 100,000 previously uninsured DACA [Deferred Action of Childhood Arrivals] recipients enrolling in health care through Marketplaces or a BHP [Basic Health Program],” the Department of Health & Human Services (HHS) said in a press release.

The move took longer than promised and fell short of President Joe Biden’s initial proposal to allow those migrants access to Medicaid, which provides free or low-cost health care coverage to the nation’s lowest-income people.

But it will allow thousands of immigrants, known as “Dreamers,” to access tax breaks when they sign up for coverage after the Affordable Care Act’s marketplace enrollment opens Nov. 1, just days before the presidential election.

“Today, my Administration is expanding affordable, quality health care coverage to Deferred Action for Childhood Arrivals (DACA) recipients,” President Biden said in a statement on Friday. “Dreamers are our loved ones, our nurses, teachers, and small business owners. And they deserve the promise of health care just like all of us.”

The measure could boost Biden’s appeal among Hispanic voters, a crucial voting bloc that he needs to turn out at the polls.

“I’m proud of the contributions of Dreamers to our country and committed to providing Dreamers the support they need to succeed,” President Biden said. “That’s why I’ve previously directed the Department of Homeland Security to take all appropriate actions to ‘preserve and fortify’ DACA. And that’s why today we are taking this historic step to ensure that DACA recipients have the same access to health care through the Affordable Care Act as their neighbors.”

The move drew criticism from presidential candidate Donald Trump’s campaign spokeswoman, Karoline Leavitt, on Friday.

“Joe Biden continues to force hardworking, taxpaying, struggling Americans to pay for the housing, welfare, and now the healthcare of illegal immigrants,” Ms. Leavitt said in a statement on X. “This is unfair and unsustainable, and Joe Biden’s handouts for illegal immigrants are especially devastating to Black Americans, Hispanic Americans, and union workers who are forced to watch their jobs and public resources stolen by people who illegally entered our country.

“President Trump will put America and the American worker first, she continued. ”He will seal the border, stop the invasion, and expand economic opportunity for American citizens, not illegal aliens.”

Any participant in the Obama-era DACA program will be eligible to access health care through the government marketplace.

HHS Secretary Xavier Becerra said that many of those migrants have delayed getting care because they lack coverage.

“They incur higher costs and debts when they do finally receive care,” Mr. Becerra told reporters on a call. “Making Dreamers eligible to enroll in coverage will improve their health and well-being and strengthen the health and well-being of our nation and our economy.”

New Definition for ‘Lawfully Present’

The administration modified the definition of “lawfully present,” which is used to determine eligibility for coverage so that DACA participants can legally enroll on the marketplace exchange.

“These changes aim to ensure complete, accurate, and consistent eligibility determinations and verification processes for health coverage for these populations,” HHS wrote.

The DACA initiative was launched by then-President Barack Obama to protect immigrants from deportation who were brought to the United States illegally by their parents as children. The program allowed them to work legally in the country.

However, the “Dreamers” were still ineligible for government-subsidized health insurance programs because they did not meet the definition of having a “lawful presence” in the United States.

Senior officials told reporters that the administration chose not to expand Medicaid eligibility for Dreamers after receiving 20,000 comments on the proposal during the public comment period. They declined to explain why it took so long to finalize the rule, which was proposed in April 2023.  The delay kept the immigrants from enrolling for coverage this year.

At one point, as many as 800,000 immigrants were enrolled in DACA, though now that figure is roughly 580,000. Officials predict only about 100,000 will actually sign up because some may get coverage through their workplaces or other ways, and others may not be able to afford coverage through the marketplace.

Other classes of immigrants, including asylum seekers and people with temporary protected status, are already eligible to purchase insurance through the ACA marketplaces.

Last year, President Biden also unveiled a regulation aimed at fending off legal challenges to DACA; former President Donald Trump moved to end the policy, and it has bounced back and forth in federal court. Last fall, a federal judge said the current version can continue at least temporarily.

“President Biden and I will continue to do everything in our power to protect DACA, but it is only a temporary solution,” Vice President Kamala Harris said in a statement. “Congress must act to ensure Dreamers have the permanent protections they deserve.”

By John Kemp, senior energy analyst at Reuters

Saudi Arabia and its allies in OPEC⁺ are likely to keep oil production unchanged for a further three months when ministers review output allocations on June 1.

The tightening of petroleum supplies and depletion of inventories widely anticipated at the start of the year has failed to materialise so far. If OPEC+  officials had hoped to increase production into a tightening market characterised by rising oil prices they are likely to be frustrated.

Crude stocks, futures prices and calendar spreads are all at similar levels to a year ago, making a significant increase in output unlikely.

The group may nonetheless decide it needs to rescind some of last year’s output cuts to pre-empt a further rise in production from the United States, Canada, Brazil and Guyana and avoid conceding more market share.

But current market conditions mean any increase is likely to be symbolic, in the absence of a wholesale shift in strategy to increase volumes and accept lower prices.

PRICES AND SPREADS

Front-month Brent futures have averaged $84 per barrel so far in May putting them exactly in line with the average since the start of the century after adjusting for inflation.

Prices have risen by just $6 per barrel (7%) compared with a year ago when the group was planning production cuts to boost them.

Brent’s six-month calendar spread has traded in an average backwardation of $3.54 (86th percentile for all months since 2000) so far in May compared with $1.81 (60th percentile) this month in 2023.

The increased backwardation implies traders see the market somewhat tighter than in 2023 with a greater likelihood inventories will deplete over the rest of 2024. But the backwardation has been breaking down in recent weeks and has already narrowed from an average of $4.86 (95th percentile) in April.

Despite an increase in tensions across the Middle East, causing a temporary rise in the war risk price premium, there has been no actual impact on oil supplies, and the premium has largely faded.

Diplomatic efforts have contained conflict between Iran and Israel, with no impact on either oil production or tanker exports from the Persian Gulf.

Tanker traffic has been re-routed from the Red Sea and the Gulf of Aden around the Cape of Good Hope to avoid drone and missile attacks from Houthi fighters based in Yemen.

U.S. OIL INVENTORIES

In the United States, commercial crude inventories are at almost the same level as this time last year and close to the prior ten-year seasonal average. Commercial crude stocks amounted to 461 million barrels on April 26 compared with 460 million barrels a year earlier.

Crude inventories were just 5 million barrels (-1% or -0.11 standard deviations) below the prior ten-year seasonal average.

There have been no signs of a significant and sustained draw down of inventories that would indicate the market has been under-supplied.

Most U.S. crude inventories are held at coastal refineries and tank farms along the Gulf of Mexico, which is also the region most closely integrated with the global sea-borne market.

Gulf of Mexico stocks amounted to 262 million barrels on April 26, which was 6 million barrels above the same time last year…

…and 15 million barrels (+6% or +0.57 standard deviations) above the ten-year seasonal average.

The United States is not the whole global market but given the efficiency with which traders move barrels to exploit local discrepancies between production and consumption, it is a good marker for the global balance.

U.S. crude inventories, global futures prices and to some extent softening calendar spreads all point to a market fairly close to balance. Portfolio investors certainly seem to think so, with roughly equal upside and downside risks to prices.

On April 23, hedge funds and other money managers held a net long position in futures and options linked to crude prices equivalent to 453 million barrels (46th percentile for all weeks since 2013).

The position was an increase from 388 million barrels (29th percentile) at the same point in 2023 but was basically neutral.

Neither fund managers nor physical traders are signalling the need for an increase in production from Saudi Arabia and its OPEC⁺ allies in the third quarter.

PRODUCTION POLICY

Senior OPEC ministers and officials stress the group’s policy is to be proactive and forward-looking. That may be true when it comes to reducing production to avert an increase in excess inventories and stabilise prices.

When it comes to increasing production, however, the group has normally waited until stocks have fallen and prices have already risen significantly.

In this instance, inventories and prices close to the long-term average imply ministers are likely to decide to keep output unchanged, based on their behaviour in the past. In the last decade, OPEC⁺ production cuts have propped up prices and supported continued growth in output from outside the group especially in the western hemisphere.

Some members of the organisation have expressed concerns about the loss of market share and pushed to increase production.

So far, Saudi Arabia has led OPEC⁺ in cutting production to reduce stocks and boost prices at the expense of volumes.

There are questions about the long-term sustainability of this strategy, but so far there’s no sign of a fundamental rethink.

If ministers eventually decide the loss of market share has gone too far, they could cite stronger forecast demand and a predicted future decline in inventories to justify boosting production.

That would reveal a major change in strategy to prioritise volume over prices and there is no sign of it yet. If OPEC⁺ nonetheless decides to announce an output increase, it is likely to be small and symbolic.

In the wake of a catastrophe that claimed the lives of six roadwork crew members and disrupted one of the nation’s busiest ports, Maryland has committed to a monumental task of rebuilding the Francis Scott Key Bridge. The project, set to be completed by the fall of 2028, is projected to cost between $1.7 billion and $1.9 billion, according to David Broughton, spokesperson for the Maryland Department of Transportation.

The announcement comes as state and federal agencies press forward with recovery efforts following the bridge’s tragic collapse on March 26, which not only resulted in significant loss of life but also temporarily shut down the Port of Baltimore. The collapse occurred when a container ship, having lost power, struck one of the bridge’s main supports.

Fifth body recovered

Salvage operations achieved a somber milestone late Wednesday with the recovery of Miguel Angel Luna Gonzalez, 49, from Glen Burnie, Maryland, marking the last of five missing people identified after the accident. Gonzalez, along with the other victims, was working on the bridge when the disaster struck, AP reports.

Salvage teams found one of the missing construction vehicles Wednesday and notified the Maryland State Police, officials said. State police investigators and Maryland Transportation Authority Police officers and the FBI responded to the scene and recovered the body inside a red truck. The state police underwater recovery team and crime scene unit also assisted.

Governor Wes Moore expressed his condolences, reflecting the collective heartache: “We continue to pray for Miguel Angel Luna Gonzalez, his family, and all those who love him, acknowledging the anguish they have experienced since the Key Bridge collapsed. We pray for comfort, we pray for healing, and we pray for peace in knowing that their loved one has finally come home.”

The detailed engineering plans for the new bridge are still under development, with state officials emphasizing both the urgency and the complexity of the design process. The new span not only promises to restore a critical infrastructural node but also aims to be a beacon of safety and innovation to prevent future tragedies.

Meanwhile, the broker for the bridge’s insurance policy confirmed Thursday that a $350 million payout will be made to the state of Maryland in what is expected to be the first of many payouts related to the collapse.

Chubb, the company that insured the bridge, is preparing to make the $350 million payment, according to WTW, the broker. Douglas Menelly, a spokesperson for WTW, on Thursday confirmed plans for the payout, which was first reported by The Wall Street Journal. Chubb did not immediately respond to a request for comment Thursday.

The Maryland Transportation Authority said Thursday that the state’s treasurer filed a claim on the day of the bridge’s collapse “against our $350 million property policy and put on notice our $150 million liability policy first tier carrier on behalf of MDTA.” -AP

The FBI, alongside Maryland State Police and the Maryland Transportation Authority Police, continues to investigate the circumstances surrounding the collapse, ensuring that the lessons learned from this tragic event will forge a safer path forward for all.