"Overnight, The World Became The Twilight Zone" - Exodus From Cities Sparks Mountain-Dweller Greatest Fear

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"Overnight, The World Became The Twilight Zone" - Exodus From Cities Sparks Mountain-Dweller Greatest Fear

Social distancing is transforming society as we know it. City dwellers are packing up their bags and are heading for the mountains amid the virus crisis.  

"Overnight, the world took a sharp turn into the Twilight Zone," Gina Grande told the Los Angeles Times. "I had to get out of there. So, I made a beeline to my boss' office and said, 'Th

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is is awkward, but can I please telecommute from Southern California?'" 

Grande, terrified of the fast-spreading COVID-19 outbreak in San Francisco, which is where she works and lives, left the metro area for her second home on the outskirts of Joshua Tree National Park, a desert area located in southern California. 

As the pandemic sweeps across California's largest cities, residents are fleeing their urban settings to isolated communities in the Mojave Desert or the rugged Sierra Nevada. The hope is that a remote area can reduce their transmission risk. 

But for some, social distancing measures enforced by the government have not just limited their mobility to and from work and or even their ability to go outside, residents in Los Angeles last week were restricted from leaving the city to vacation homes. 

In Mammoth Lakes, a town in California's Sierra Nevada mountains, banned non-residents because infection risk in the small community would quickly overwhelm their hospital system. 

The flight from cities to rural communities during the outbreak, ignited by fear, could be the next hottest trend for real estate that revives dying suburbs. Families, who've been subjected to chaos at Costco stores of panic hoarding or forced quarantine in their tiny 550 square-foot studios, want the freedom of rural communities and the security of land that could power them through any crisis. 

In Joshua Tree, vacation rental companies have said concerned families from large metro areas are renting short-term rentals for weeks and or months at a time following the virus outbreak. 

"We just confirmed two rentals for long-term stays over three weeks," said Josh Sonntag, who operates several rental units in the area. "In both cases, social distancing and the ability to work remotely was important."

Bryan Wynwood, the owner of Joshua Tree Modern Real Estate, said, "Every call I get is related to the coronavirus. Some of them are from city dwellers worried about being stuck in the center of a metropolis that loses control of its basic public services."

Sam Steinman, 28, owns several short-term rentals in Joshua Tree, said he'd noticed the desperation in city dwellers' voices who are willing to pay double for his properties to escape the outbreak in large cities. 

"I've seen this kind of fear and desperation before in Israel during rocket attacks," Steinman said. "A friend recently asked if I had a gun he could borrow. I said absolutely not."

And maybe, just maybe, COVID-19 will have a long-lasting impact on choices made by city dwellers, who have just realized their entire lives can come crashing down in a public health crisis - though, some are making a mad dash to remote areas where life goes on as usual. 

A noticeable trend is developing: A revival of dying suburbs could be on the horizon as cities are just too dangerous when everything goes to sh*t. 

If you’re looking to flee a metro area, not just because of a virus crisis, but also because housing prices in cities are due for a major correction, here are some affordable suburbs in America that you might find interesting.

Tyler Durden

Wed, 03/25/2020 - 20:10

"Sell The News"? Stocks Are Crashing After 2 Massive Pumps Overnight

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"Sell The News"? Stocks Are Crashing After 2 Massive Pumps Overnight

Despite getting help from Boeing's gains, The Dow has now crashed over 1000 points twice from the post-"we have a deal" highs... and is back in the red for the day...

This all has the stench of some major gamma pukes with VIX flying around right at the open...

Bonds had warned that yesterday's record short-squeeze in stock

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s wasn't to be trusted...

Just like the last time we saw a market move like that...

Fade accordingly.


Tyler Durden

Wed, 03/25/2020 - 10:12

After Trading Limit-Up Overnight, Nasdaq Has Crashed Into The Red

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After Trading Limit-Up Overnight, Nasdaq Has Crashed Into The Red

Despite The Fed's biggest asset-purchase week ever, US equity markets refuse to hold a bid.

After trading limit-up overnight )on what we have no idea), Nasdaq is now down almost 1% on the day...

What next Jay?


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Tyler Durden

Fri, 03/20/2020 - 12:13

Confirmed COVID-19 Cases Double Overnight In South Korea To 204; China Reveals Alarming Prison Outbreak, 500+ Already Infected

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Confirmed COVID-19 Cases Double Overnight In South Korea To 204; China Reveals Alarming Prison Outbreak, 500+ Already Infected

When historians look back at the COVID-19 outbreak, they'll remember this week as an important turning point in the crisis, when international public-health experts and investors started to focus their attention on South Korea, Japan and other countries in the region that have seen the number of new cases accelerate markedly in recent day

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Put another way, evidence that the virus is spreading more rapidly within other Asian countries outside mainland China has become impossible to ignore, which is probably why US futures are pointing to a lower open for a second straight day.

As Bloomberg reminds us, South Korea has seen its total cases soar past 200 as the number of infections doubled in 24 hours.

Meanwhile, cases in Singapore and Japan have topped 85, and let's not forget the 600+ from the 'Diamond Princess' who have been excluded from the 'Japan' total.

At least as far as deaths are concerned, the numbers outside of China remain small: out of 2,247 deaths, only 13 have occurred in other regions (this includes 2 more deaths in Iran announced just minutes ago).

But there's no getting around it: the spread of the virus will undoubtedly worsen the economic blowback, as one economist explained to BBG.

"The sudden jump in infections in other parts of Asia, notably in Japan and South Korea, has sparked renewed concerns," said Khoon Goh, Singapore-based head of Asia research at Australia & New Zealand Banking Group Ltd. "This points to a new phase in the outbreak, and one which will see continued disruption and more economic impact than previously thought."

Last night, we reported on the latest case numbers out of South Korea, and more have already been recorded. The current total is 204. Earlier this month, the WHO said China's approach to tackling the virus should be a "model" for other governments facing similar outbreaks. At the time, experts criticized the organization for appearing to parrot Chinese propaganda. But it looks like they might have been on to something. Because as we reported late last night, the Blue House has ordered a 'special management zones' in the cities of Daegu and Cheongdo, or what appears to be a kind of 'soft' quarantine. The government said that since they've failed to prevent an outbreak, they're pivoting decidedly to a strategy of containment.

Just a few hours ago, Chinese state media reported that 500 cases - roughly half of the new cases reported in China on Friday - involved prisoners at a handful of jails across the country, according to the Washington Post.

Infections have been confirmed at five prisons in Shandong, Hubei and Zhejiang, according to China's Ministry of Justice. A prison in eastern Shandong province showed 207 out of 2,077 inmates and staff were infected, and the provincial justice department’s Communist Party secretary was dismissed as a result, the province announced. Another jail in Zhejiang province found 34 cases. Hubei province, at the center of the outbreak, said Friday it found 220 new cases inside penitentiaries.

According to the Washington Post, the prison outbreaks underscore the virus's easy transmissibility in confined spaces.

Even the Global Times acknowledged that the prison outbreaks have "weakened" Beijing's claims that the virus is receding...

...Even as local officials adopt ever-more bizarre and draconian restrictions on individual movement.

Tests at a prison in eastern Shandong province showed 207 out of 2,077 inmates and staff were infected, and the provincial justice department’s Communist Party secretary was dismissed as a result, the province announced. Another jail in Zhejiang province found 34 cases. Hubei province, at the center of the outbreak, said Friday it found 220 new cases inside penitentiaries.

The prison outbreaks underscored the SARS-CoV-2 virus’s high transmissibility in confined spaces after the disease ravaged the Diamond Princess cruise ship docked in Japan.

While overall numbers remain low, thousands who fear they may have come into contact with a 'super-spreader' in Daegu, a city of 2.5 million about 2 hours south of Seoul. The woman, who believed she was suffering from a simple cold because she had not traveled abroad, reportedly attended four church services at a "cult-like" church with 1,100 members in the city, as well as branches in other cities, including Seoul, where the mayor has ordered the local church closed until further notice.

Communist Party leaders made yet another public misstep overnight when health officials said they would once again change their 'criteria' for what constitutes a 'confirmed' case of COVID-19 back to the more inclusive and accurate definition. Officials said they decided on the switch because they couldn't subtract already confirmed cases from the total, which sounds...almost plausible.

On CNBC Friday morning, Eunice Yoon, the network's reporter on the ground in Beijing, interviewed the owner of a Beijing restaurant discussing his fears about going out of business. But as China slouches back to work, millions are worried that Beijing might sacrifice the public welfare to get a few factories up and running.

Looks like the cat's out of the bag: North Korea has cancelled the Pyongyang Marathon, the country's largest tourism money-maker, because of COVID-19, according to the operators of several tour companies who spoke with AFP.

Beijing-based Koryo Tours, the official partner of the marathon, said on its website it had "received official confirmation today that the Pyongyang Marathon 2020 is cancelled".

"This is due to the ongoing closure of the North Korean border and COVID-19 virus situation in China and the greater region," it added.

North Korean officials have vehemently denied reports that the virus had crossed the Yalu River, evening becoming enraged at the US in response to an offer of assistance from the State Department. Recently, a WHO official said there are "no indications" that the virus has arrived in North Korea, but considering that we're talking about North Korea, that's hardly surprising.

As the lockdowns in Beijing, Tianjin and other cities intensified over the last week, more Chinese were subjected to displays like this:

On Friday, Japanese health officials and Carnival Japan will release the last batch of passengers and crew from their 14-day quarantine aboard the 'Diamond Princess' despite criticisms from the CDC that Japanese officials had failed to maintain the quarantine. Right now, infectious disease experts see Japan as one of the riskiest places outside China, according to BBG. Health Minister Katsunobu Kato said on Sunday that Japan had lost track of the route of some of the infection cases, which have tripled in the past week to more than 90.

Iran just confirmed 13 more cases and 2 new deaths, mostly in Qoms, the same city where some earlier cases had been detected, while also reporting that the virus has reached Tehran, according to Reuters. So far, seven Iranians have been diagnosed in Qom, four in Tehran and two in Gilan, according to a tweet from the Iranian health ministry. Iranian officials have acknowledged the possibility that the virus might have arrived in every major Iranian city.

Even in Korea, health officials say they their investigators can't figure out how some of the outbreaks started. That's not exactly reassuring.

Right now, the focus is on South Korea. Last week, it briefly shifted to the UK before moving on to Japan. Italy just reported another three cases, doubling its count from 3 to six. Will they be next? Maybe Africa?

Tyler Durden

Fri, 02/21/2020 - 06:51

Dow Dumps Into Red - Gives Up Overnight Trade/Virus Hope Gains

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Dow Dumps Into Red - Gives Up Overnight Trade/Virus Hope Gains

Well that didn't last long...

From record high to red in minutes.

S&P and Nasdaq are holding their gains for now...


Tyler Durden

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dateCreated" content="2020-02-06T14:49:29+00:00" class="field field--name-created field--type-created field--label-hidden">Thu, 02/06/2020 - 09:49


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Hospitality Recreation


Overnight Risk Rally Fizzles After Iran Vows "Historic Nightmare" Retaliation

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Overnight Risk Rally Fizzles After Iran Vows "Historic Nightmare" Retaliation

After putting fears about World War III aside on Monday, when stocks opened sharply lower only to close at session highs and the S&P on the verge of a new record, overnight concerns about the impending middle east conflict returned when shortly after 2am ET, Ali Shamkhani, the head of Iran’s national security council, roiled markets when he said that Iran is evaluating 13 possib

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le retaliations on the U.S. for killing a Solemani, adding that "even if the weakest of these scenarios gains a consensus, its implementation can be a historic nightmare for the Americans." The menacing comments from Shamkhani briefly roiled markets, and established a ceiling for the Emini.

Following the Iranian threat, S&P 500 futures gave up all of the morning’s advance before steadying. Despite the wobble in S&P futures, world shares steadied in delayed response to Monday's US rally, while oil and gold pulled back from multi-month/year highs on Tuesday after dramatic post-new year moves, as investors judged that prospects of an all-out conflict between the United States and Iran had eased.

After a strong rally, oil gave back much of its gains amid signs that Iran would be unlikely to strike against the United States in a way that would disrupt supplies. Brent crude futures fell 44 cents to $68.48 a barrel, having been as high as $70.74 on Monday, while U.S. crude dropped 34 cents to $62.93.

European equities meanwhile rose as much as 0.7%, tracking similar gains in Asia, before cutting gains in half. Technology stocks were among the top picks in Europe, mirroring trends in the U.S. overnight.

Earlier in the session, MSCI’s index of Asia-Pacific shares ex-Japan recouped almost all of Monday’s losses, led by health care and consumer staples, and rebounding from a drop on Monday amid U.S.-Iran tensions. Investor concerns over the Middle East flare-up have begun to ease, even as the U.S. ordered additional forces into the region, and Iran said it is assessing 13 scenarios to respond to the American killing of its top general, Qassem Soleimani. Most markets in the region were up, with Japan’s Topix index gaining the most since Nov. 5. Kweichow Moutai Co. and Industrial and Commercial Bank of China Ltd. led China’s Shanghai Composite Index higher, while Reliance Industries Ltd. and HDFC Bank Ltd. drove gains in India’s S&P BSE Sensex Index.

Meanwhile emerging markets, which had been hit hardest by spiking oil prices, bounced back on Tuesday, with stocks up 0.4%. That left the MSCI world equity index, which tracks shares in 49 countries, just 0.5% from a record high.

"Geopolitical risk has always felt much worse for markets in the heat of the moment than it does in hindsight, but it’s always possible that the next one will bring us into a different era," Deutsche Bank strategist Jim Reid said (see more below).

“Markets got a lift from the lack of follow-through (after the air strike) as yesterday progressed, and by the end of the session had actually staged a reasonable recovery,” Reid added.

With risky assets starting 2020 on the back foot as Tehran and Washington traded threats after a U.S. air strike on Baghdad airport killed a top Iranian commander, on Monday the mood began to calm, helping U.S. shares recover ground. The Dow ended 0.24% higher, the S&P 500 0.35% and the Nasdaq 0.56%.

Marija Veitmane, a senior strategist at State Street, said she sticks to her expectation of a slight improvement in economic and earnings outlook: “The world is well stocked with oil and can stomach short disruptions, while large U.S. shale production should soften its impact,” said Veitmane, brushing aside worries that an oil price spike would dent global growth.

As risk was bid, safety plays were out of favor, with gold retreating to $1,567 an ounce, after scaling a near seven-year peak overnight. At the same time, eurozone government bond yields edged up from around three-week lows. German bunds were little changed while U.K. gilts sold off; the pound gained versus the euro as the U.K. raised its debt-sales target for financial year 2019-2020, spurring bets the government is planning an expansionary new budget that could fuel inflation

The sense of calm also saw the yen lose much of its safe-haven gains, while the dollar advanced versus all G-10 peers; the euro declined even as the region’s retail sales picked up more than forecast in November; separate data showed euro-area inflation accelerated in December in line with the median economist forecast, while core inflation remained unchanged.

The Australian dollar led declines among G-10 currencies, dropping as much as 0.9% on geopolitics. Australia’s currency had weakened earlier after a decline in job advertisements and as the bush- fire crisis boosted the odds for a central bank interest-rate cut.

Curiously, overnight Bitcoin broke above $8,000 overnight and is up 13% since the U.S. drone attack in Iraq last week. Though it is not seen as a safe-haven asset given its wild swings, the surge has coincided with the equities sell off.

Looking at the day ahead now, the highlights in terms of data come in the US with the December ISM non-manufacturing likely to be of particular focus. We’ll also get the November trade balance, November factory, durable and capital goods orders in the US. This morning in Europe we got the preliminary December CPI report for the Euro Area and Italy along with November retail sales data for the Euro Area. Also as mentioned the UK Parliament returns from recess, with MPs due to debate the Brexit Withdrawal Agreement Bill.

Market Snapshot

  • S&P 500 futures up 0.2% to 3,250.25

  • STOXX Europe 600 up 0.6% to 419.16

  • MXAP up 0.9% to 171.33

  • MXAPJ up 0.6% to 554.78

  • Nikkei up 1.6% to 23,575.72

  • Topix up 1.6% to 1,725.05

  • Hang Seng Index up 0.3% to 28,322.06

  • Shanghai Composite up 0.7% to 3,104.80

  • Sensex up 0.4% to 40,830.27

  • Australia S&P/ASX 200 up 1.4% to 6,826.44

  • Kospi up 1% to 2,175.54

  • German 10Y yield rose 1.1 bps to -0.276%

  • Euro down 0.1% to $1.1183

  • Brent Futures down 0.5% to $68.60/bbl

  • Italian 10Y yield rose 1.4 bps to 1.191%

  • Spanish 10Y yield rose 1.5 bps to 0.409%

  • Brent Futures down 0.5% to $68.60/bbl

  • Gold spot down 0.1% to $1,563.51

  • U.S. Dollar Index up 0.03% to 96.70

Top Overnight News from Bloomberg

  • Iran is assessing 13 scenarios to respond to the U.S. killing of Qassem Soleimani, the influential general in charge of foreign operations, and even the weakest of those options would be a “historic nightmare” for the U.S., Ali Shamkhani, the head of Iran’s national security council, was quoted as saying by Iran’s semi-official Fars news agency

  • U.K. Chancellor of the Exchequer Sajid Javid promised to unleash “a decade of renewal” when he outlines his budget on March 11 as he seeks to ready the U.K. for its departure from the European Union

  • Spain’s Socialist leader Pedro Sanchez looks set to secure the narrowest of victories in parliament on Tuesday to take power in Spain with the backing of the anti-austerity party Podemos.

  • Brevan Howard Asset Management’s flagship hedge fund returned 8.4% last year, building on its 2018 gain and helping to pause a bleeding of assets

Asian equities posted gains across the board following a less pronounced but positive handover from Wall Street in which the major indices experienced a modest recovery from the prior session’s losses. ASX 200 (+1.4%) was propped up by its largest-weighed financials as yields recouped from recent downside. Nikkei 225 (+1.6%) retraced some of the prior session’s hefty losses whilst welcoming recent favourable currency moves. Elsewhere, Hang Seng (+0.4%) and Shanghai Comp (+0.7%) conformed to the overall risk appetite - and with the former supported by gains in large-cap financial stocks. China Vice Agricultural Minister said China will not increase annual grain import quotas to accommodate higher US farm purchases. This refutes rumours that China may raise or scrap its corn import quota following a phase one trade deal with the US

Top Asian News

  • China Targets Internet Giants in Antitrust Law Overhaul

  • China’s Next Crisis Brews in Taiwan’s Upcoming Election

  • Disney Faces Pressure to Help Ease Hong Kong’s Housing Crisis

European bourses are firmer this morning, in a turn-around from yesterday’s dismal start to the week (Euro Stoxx 50 +0.5%). Notably, the Dax, which gave up the 13000 handle yesterday, has stayed well-clear of this mark to the downside; with the bourse having printed a cash high of 13266 and a future peak at 13260. Similarly, in contrast to yesterday, and indeed Friday, sectors are all firmly in positive territory with exception of energy names, where yesterday’s outperformers such as Shell (-0.8%) and BP (-0.7%) are under pressure; although, this is to the benefit of airlines such as Air France (+1.5%) and eastJet (+1.4%). Additionally, this downside in the aforementioned energy names is weighing on the FTSE 100 (+0.1%) this morning; with the bourse relatively flat at present. Other notable movers this morning include, Morrisons (+2.5%) after issuing their Christmas sales update and noting that PBT and exceptionals is likely to be within analyst forecasts for FY19/20. At the other end of the Stoxx spectrum are Standard Life Aberdeen and Man Group with both weighed on by broker moves.

Top European News

  • Premier Oil to Buy North Sea Assets From BP for $625 Million

  • Vestas to Invest in 5,000 New Vehicles in Massive E-Car Push

  • U.K. Soccer Team Sunderland Kicks Off Sale After Fan Backlash

  • Aston Martin Slumps After ‘Disappointing’ Year of Profit Decline

In FX, already feeling the adverse effects of natural disaster, anecdotal data overnight revealed a sharp decline in the number of Australian jobs advertised on the web and in newspapers to highlight the economic impact of the raging bushfires, with dovish RBA implications. Hence, the Aussie has weakened appreciably across the board, with Aud/Usd slipping through 0.6900 and the 200 DMA (0.6897), while Aud/Nzd has also breached a key chart level at 1.0367 (18 December 2019 low) as the Kiwi contains contagious losses against its US counterpart within 0.6642-80 parameters.

  • USD - Aside from gleaning traction from the underperformance in Antipodean peers, the Greenback is consolidating off recent lows vs major rivals on a combination of technical and other factors awaiting further developments on the geopolitical front (namely Iran’s response to the US airstrike targeting and killing a top IRGC leader). The DXY has pared declines towards 96.500 and appears more settled in a 96.620-835 range ahead of the upcoming services ISM that could be pivotal for near term Fed policy given the disappointing manufacturing survey and expectations for a firmer headline than previous.

  • CHF/EUR/CAD/JPY/GBP - As noted above, all weaker against the Buck with the Franc back below 0.9700 and not really inflated by Swiss CPI returning to positive territory in y/y terms, Euro fading ahead of 1.1200 and Loonie losing momentum alongside oil prices in advance of 1.2950 in the run up to Canadian trade data due alongside the US balance for direct comparison. Meanwhile, having met stiff resistance at 108.00 on several occasions of late the Yen is now deriving support from offers said to be capping the headline pair at 108.50, but the Pound has waned markedly after a stop driven rally in Cable on a break of 1.3180 (just above Monday’s peak) to 1.3200+ that pushed Eur/Gbp back under 0.8500 with more gusto and just under 0.8470 before the cross retraced some lost ground.

  • SEK - Some respite for the Swedish Crown via a less contractionary services PMI, but Eur/Sek is still elevated above the 10.5000 level in contrast to Eur/Nok holding shy of 9.8500.

  • EM - Although the Dollar has made advances elsewhere, Yuan strength off a marginally firmer PBoC midpoint fix has bucked the general trend, as Usd/Cnh eases back towards mid-December lows not far from 6.9200 and a series of key chart supports closer to 6.9000 amidst reports from the Chinese side alluding to the signing of Phase 1 in the not too distant future.

In commodities, the crude complex has dropped into negative territory, with WTI and Brent down by around USD 0.30/bbl at present and approximately USD 1.0/bbl at worst in overnight APAC trade. Newsflow from the Middle-East continues to emerge with the latest pertinent reports noting that Iran is, according to a Fars report, considering 13-scenarios as retaliation against the US. Additionally, a Senior Iranian Official has stated that Iran is prepared to come back to full compliance with the Nuclear Deal. Note, Iran has following the assassination of Soleimani made clear that they are to conduct nuclear related operations on their own accord, disregarding the Nuclear Deal; as such, these remarks potentially indicate a pivot in Iran’s stance against the US and Western powers. However, its worth highlighting that the conditions around their potential return to the deal are not known and previously Iran has indicated sanction relief is a pre-requisite for this type of action. Looking ahead, today sees the funeral of Soleimani and as such participants will now be more actively anticipating/awaiting a response from Iran as the initial mourning period comes to an end. Elsewhere, turning to metals, spot gold is back in positive territory after dipping overnight to a low of USD 1555/oz, prices are now comfortably back above the USD 1560/oz mark; but remain well off yesterday’s multi-year high at USD 1582/oz. Separately, iron ore prices are bolstered following on from China’s main steel making city of Tangshan lifted its level 2 smog alert which was implemented late last week.

US Event Calendar

  • 8:30am: Trade Balance, est. $43.7b deficit, prior $47.2b deficit

  • 10am: ISM Non-Manufacturing Index, est. 54.5, prior 53.9

  • 10am: Factory Orders, est. -0.8%, prior 0.3%
    • Durable Goods Orders, est. -2.0%, prior -2.0%

    • Factory Orders Ex Trans, prior 0.2%

    • Durables Ex Transportation, prior 0.0%

    • Cap Goods Orders Nondef Ex Air, prior 0.1%

    • Cap Goods Ship Nondef Ex Air, prior -0.3%

DB's Jim Reid concludes the overnight wrap

I spent the evening last night taking down Xmas decorations before more bad luck could descend on my flu and bed ridden family. Normally my wife won’t let me anywhere near the decorations as when she last did, 11 months later she found them in such a mess the following Xmas that it took her as long to sort out/untangle as it did to put them up. I’ll let you know how she reacts on December 1st 2020 when the boxes come back down from the attic.

The first full day back for many in the market was busy spent digesting the fallout from the US/Iran tensions. In fairness there wasn’t much new to add from the weekend headlines so for now we’re still in a state of flux as to which way we go next. After the drone attacks on Saudi oil refineries in September there were expectations that the impact would linger for weeks or months, but in reality the market largely moved on within 24-48 hours. This does feel quite different though given the scale of the action and the war of words since. However it would be impressive if market professionals had a clear view on how this will all pan out. If you do though please get in touch and let me know. Throughout my career geo-political risk has always felt much worse for markets in the heat of the moment than it does in hindsight but it’s always possible that the next one will bring us into a different era.

Our oil analyst Michael Hsueh last night suggested that oil infrastructure and shipping is better protected now than it was last year and that the risks of retaliation are perhaps higher away from oil now. This could include cyber warfare. As such he doesn’t think the higher risk premium in oil will last for a prolonged period. See his note here for more.

The good news for now though is that markets got a lift from the lack of follow through as yesterday progressed and by the end of the session had actually staged a reasonable recovery from the lows. In fact the turnaround was so much so that by the close of trade yesterday, the S&P 500 was up +0.35%, recovering from futures being down -0.83% early in the European session. The steady rally puts the index back slightly higher for 2020 now. The NASDAQ also recovered to close +0.56%, and in Europe the STOXX 600 pared a drop of as much as -1.36% to close down ‘just’ -0.41%. Meanwhile oil faded from the highs with Brent crude now trading back below $70/bbl this morning at $68.14. It did touch a high of $70.74 yesterday having closed on Friday at $68.60 and at around $66 on NYE before the strike. For context the last time it closed above $70 was back in May so we haven’t managed that yet in this episode.

Looking at other assets, the move towards safe havens abated somewhat yesterday. The Japanese yen was actually the worst-performing G10 currency yesterday, having been the best-performing on Friday, while gold faded back to close up +0.87%, though this was still its highest level since April 2013. Over in fixed income, 10y Treasuries ended the session +2.1bps, in spite of the fall in yields earlier in the session, while the 2s10s curve saw a slight steepening of +0.3bps. In Europe, gilts underperformed thanks in part to stronger than expected PMI data from the UK (more on that below), ending +3.0bps, while 10yr bund yields ended the session unchanged.

The big event today is the services ISM in the US which will give us hints as to how the US economy closed last year.

Overnight Bloomberg has reported that the US Vice President Mike Pence will deliver an address on the Trump administration’s Iran policy next Monday. Elsewhere, the US denied media reports which circulated a letter suggesting that it had agreed to pull its forces from Iraq. Army General Mark Milley, chairman of the Joint Chiefs of Staff, said that the letter was a draft and should never have been sent. Elsewhere the Washington Post reported that senior Trump administration officials have begun drafting sanctions against Iraq with one of the officials saying that the plan was to wait "at least a little while" on the sanctions decision in order to see whether Iraqi officials followed through on their threat to push U.S. troops out of the country.

This morning in Asia markets are following Wall Street’s lead. The Nikkei (+1.46%), Hang Seng (+0.45%), Shanghai Comp (+0.26%) and Kospi (+0.92%) are all up alongside most indices in the region. As for Fx, currencies of oil importing Asian countries like South Korea (+0.599%) and India (+0.301%) are advancing this morning on cooling oil prices while the Japanese yen is down -0.10%. Elsewhere, futures on the S&P 500 are up +0.24% while in commodities spot gold prices are down -0.23%. As for overnight data, Japan’s December services PMI came in at 49.4 (vs. the 50.6 flash) while the composite PMI stood at 48.6 (vs. 49.8 last month).

Back here in the UK, MPs will be returning to Parliament today, where they will resume debate on the Withdrawal Agreement Bill that implements the Brexit deal into UK law. The House of Commons is scheduled to debate the bill over the next 3 days, but with the government having an 80-seat majority in the Commons following last month’s election, there aren’t expected to be any issues over its passage. Elsewhere, the Telegraph reported overnight that the UK government will deliver its budget on March 11. Chancellor Sajid Javid’s first budget is likely to be expansionary as during the election campaign he promised to loosen constraints on borrowing to the tune of up to £20 bn a year for capital spending.

Away from the geopolitical newsflow there were a number of data points to digest yesterday. On the remaining PMIs, the final December services reading for the Euro Area was revised up 0.4pts to 52.8 – a four month high - leaving the composite at 50.9 and therefore the highest since August when it hit 51.9. That composite reading is consistent with growth of around +0.1% qoq in Q4. At a country level we saw a decent upward revision to Germany’s services PMI (52.9 from 52.0) while Italy (51.1 vs. 50.9 expected) and Spain (54.9 vs. 53.9 expected) both beat. For completeness, here in the UK the services PMI rose 0.7pts to 50.0 (vs. 49.1 expected) which helped to hold the composite at 49.3, with sterling up around +0.6% against the US dollar yesterday following the better-than-expected performance. So, overall a modest positive in Europe albeit with the data clearly overshadowed yesterday by the Middle East tensions.

Over in the US the services PMI was also revised up, by 0.6pts to 52.8 which is the highest reading since July. It’s worth noting that the employment component was little revised but nevertheless has nearly fully recovered the plunge that occurred this summer. Finally on the data, German retail sales in November rose by +2.1% (vs. +1.0% expected), while the previous month’s numbers were revised to show a smaller contraction than previously thought.

Looking at the day ahead now, the highlights in terms of data come in the US this afternoon, with the December ISM non-manufacturing likely to be of particular focus. We’ll also get the November trade balance, November factory, durable and capital goods orders in the US. This morning in Europe we’re due to get the preliminary December CPI report for the Euro Area and Italy along with November retail sales data for the Euro Area. Also as mentioned the UK Parliament returns from recess, with MPs due to debate the Brexit Withdrawal Agreement Bill.

Tyler Durden

Tue, 01/07/2020 - 07:53


Business Finance


After Overnight Chaos, Trump Trade Tweet Sparks Stock Buying-Panic

zerohedge News after overnight chaos trump trade tweet sparks stock buying-panic All https://www.zerohedge.com   Discuss    Share
After Overnight Chaos, Trump Trade Tweet Sparks Stock Buying-Panic

"home on Thursday", "home on Friday", small-deal, no-deal, mini-deal, skinny-deal, "meet with Trump on Friday" - all sent US equity markets flying overnight but when Trump talked of meeting Liu He in The Oval Office, markets got very excited.

Chinese stocks rallied overnight with the small-cap, tech-heavy indices dramatically outperforming...

Read More

Source: Bloomberg

European stocks ended higher, helped by Trump's tweet...

Source: Bloomberg


Futures show the utter carnage of the overnight chop in US markets...

And in context some key technical levels...

All US Majors were higher on the day after Trump's tweet...Trannies are back in the green for the week...

Very late on we got headlines of a deal coming BUT smaller than expected...

Odds of a (major) trade deal lifted very modestly today...

Source: Bloomberg


Cash equity markets chopped around their key technical levels all day...


Momo was very choppy today...

Source: Bloomberg

Dramatic short-squeeze at the open and again in the afternoon...

Source: Bloomberg

Global bank stocks are worth keeping an eye on...

Source: Bloomberg

VIX tumbled to a 17 handle...

Treasury yields were notably higher again on the day, rising around 7-8bps across the curve...

Source: Bloomberg

Pushing 30Y Yields back above 2.15%...

Source: Bloomberg

The Dollar dropped near 3-week lows today...

Source: Bloomberg

As Yuan exploded higher overnight (a 7 handle spike at one point)...

Source: Bloomberg

Cable soared on optimistic Ireland headlines...

Source: Bloomberg

Cryptos drifted lower today...

Source: Bloomberg

Commodities were mixed given the dollar weakness - oil and copper rallied, PMs were slammed...

Source: Bloomberg

Gold traded back below $1500 even as ETF holdings reach record highs...

Source: Bloomberg

WTI rallied on chatter about extended, deeper OPEC production cuts

Source: Bloomberg

Softs sold off after WASDE forecasts (led by corn), heading for worst week since May...

Source: Bloomberg

And finally, US CEOs are signaling an imminent recession...

Tyler Durden

Thu, 10/10/2019 - 16:01


Business Finance


Israel Believed Behind Overnight Attack On Iran's 'Land Bridge' From Iraq To Syria 

zerohedge News israel believed behind overnight attack irans land bridge from iraq syria All https://www.zerohedge.com   Discuss    Share
Israel Believed Behind Overnight Attack On Iran's 'Land Bridge' From Iraq To Syria 

Another mystery airstrike was conducted over Iraq late Friday night, after a summer that's witnessed Baghdad blame Israel for a series of unprecedented violations of its airspace to carry out alleged strikes on Iran-linked Shia militias in the country.

This newest incident involved an attack on Imam Ali base near the border with Syria, in an area

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which Israeli defense officials have voiced concern Iran is utilizing Iraq's Popular Mobilization Forces (PMF) to aid Syrian forces in establishing a security corridor stretching along the Syrian-Iraq border, or so-called Iranian "land bridge".

IAF file image

Israeli media has taken keen interest in each new 'mystery' attack on Iraq of late after last month Prime Minister Benjamin Netanyahu confirmed in public comments that he's been forced to "defend" Israel's security and "interests" even in faraway Iraq. 

The Times of Israel described of the overnight Friday attack:

Unknown aircraft reportedly struck bases belonging to Iranian-backed militias in Iraq close to the Syrian border late Friday night.

The Shiite fighters in the Boukamal region responded with anti-aircraft fire, according to local media. There were no reported casualties.

The area has been hit by several airstrikes in recent weeks that some have attributed to Israel.

Earlier in the week Israeli media featured satellite images released by the private Israeli intelligence company ImageSat International which had revealed extensive construction underway on military compounds along the border. 

Notably the attack came on the same day Iraq announced re-opening of the key al-Qa’im border crossing in Boukamal, which had once been controlled by ISIS.

Should there be proof or confirmation that Israel was indeed behind the overnight airstrikes, it could signal the start of a more aggressive Israeli campaign to ensure pro-Iranian forces can't establish bases along the Syrian border. Such Israeli operations are likely to receive Washington's tacit blessing.

Last month The New York Times confirmed that at least some among a spate of airstrikes on Shia militia compounds in and around Baghdad were carried out by Israel. 

The US and Israel have long sought to thwart establishment of a continuous Tehran-Baghdad-Damascus-Beirut land bridge.

This after Netanyahu said during an Aug. 30 Facebook campaign live stream event to political supports that “I am doing everything to defend our nation’s security from all directions: in the north facing Lebanon and Hezbollah, in Syria facing Iran and Hezbollah, unfortunately in Iraq as well facing Iran. We are surrounded by radical Islam led by Iran.”

Similar attacks by unknown aircraft (involving either drones or jets) on Western Iraq and the border area came on Sept. 9, 19, and 22 — resulting in dozens of total casualties. 

Currently there's a move in Iraqi parliament to order all American troops in the country expelled, given the widespread accusation the US coalition is turning a blind eye to the intensifying Israeli strikes. 

Tyler Durden

Sat, 09/28/2019 - 09:55


War Conflict


Cryptos Flash-Crash Overnight, Alt-Coins' Post-Libra Collapse Continues

zerohedge News cryptos flash-crash overnight alt-coins post-libra collapse continues All https://www.zerohedge.com   Discuss    Share

Another ugly overnight session in cryptos with a sudden high volume collapse striking around 0620ET driving Bitcoin down towards $9000 and Ether down towards $200...

The usual sea of red...

Source: Coin360

Early this morning, it appears someone decided it was time to exit their crypto positions en masse...

Sending Bitcoin down towards $9000...


And There down towards $200...



Read More

It's not been a great month for bitcoin, but bitcoin has actually outperformed...



Notably, since Libra's white-paper was released, Bitcoin is practically unchanged but the biggest alt-coins have all crashed...






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