California's Huntington Beach Declares Itself 'Non-Sanctuary City'

Authored by Kimberly Hayek via The Epoch Times (emphasis ours),

Huntington Beach’s city council in Southern California unanimously voted on Jan. 21 to declare the Orange County city a “non-sanctuary city.”

Visitors walk on the pier in Huntington Beach, Calif., on June 19, 2024. John Fredricks/The Epoch Times

The declaration, proposed by Mayor Pat Burns and intended to prevent crime, comes after Gov. Gavin Newsom convened a special legislative session to, in part, help protect illegal immigrants from deportation.

“We are going to provide the best safety for our citizens, plain and simple,” said Burns during the city council meeting. “It’s going to be what’s best for Huntington Beach. Huntington Beach first.”

The mayor also addressed concerns that the declaration would be used to attack immigrant communities, saying that it would make immigrant neighborhoods safer.

Huntington Beach City Council wrote in a joint statement that “Neither the Governor nor the State Legislature with the passage of laws may interfere with the City’s voluntary cooperation with federal authorities, nor cause or compel the City to violate federal laws such as Title 8 Section 1324 for the harboring of illegal immigrants.”

According to Huntington Beach City Attorney Michael Gates, California’s sanctuary state law interferes with local agencies’ ability to comply with federal law.

“In California in particular, fighting crime is difficult enough with the relaxed criminal laws and lack of enforcement,” Gates said in a statement. “The State should get out of the way of local law enforcement, stop handcuffing our police officers and California’s cities, and get back to the business of protecting innocent citizens. Emphatically, the State should not take a position of violating federal immigration laws or encouraging cities to violate federal immigration laws.”

During the Jan. 21 meeting, councilman Chad Williams criticized Senate Bill 54, which went into effect in January 2018 and prohibits state and local resources from being used to aid federal immigration enforcement.

“I find it fascinating and really kind of disturbing the way that Sacramento plays word games with laws like SB 54—the so-called Values Act or the sanctuary law—while they freely are admitting that entering the country illegally is a violation of federal law,” said Williams.

“As a charter city in Huntington Beach, we have the right, we have the responsibility, I think, to do better. Upholding the U.S. Constitution isn’t just some abstract idea.”

Huntington Beach’s action is in contrast to other jurisdictions, such as San Diego County, which declared itself a sanctuary region in December 2024. Around the same time, Los Angeles also finalized its sanctuary city policy.

“We’re going to send a very clear message that the city of Los Angeles will not cooperate with ICE in any way,” Los Angeles Councilman Hugo Soto-Martinez said at the time, referring to Immigration and Customs Enforcement. “We want people to feel protected and be able to have faith in their government and that women can report domestic violence, crimes.”

Huntington Beach has long supported federal immigration enforcement. The city signed in February 2024 a letter of solidarity with Texas over its efforts to secure the border.

According to the U.S. Department of Homeland Security, there are at least 2.5 million illegal immigrants in California.

Tyler Durden Thu, 01/23/2025 - 15:00

Federal Government Drops COVID-19 Vaccination Requirement For Legal Immigrants

Authored by Zachary Stieber via The Epoch Times,

A COVID-19 vaccine is no longer a requirement for individuals seeking permanent residence in the United States, U.S. Citizenship and Immigration Services (USCIS) said in a Jan. 22 notice.

USCIS, which oversees legal immigration, imposed the COVID-19 vaccination requirement in October 2021 on people looking to move to the United States. Applicants were required to submit proof of COVID-19 vaccination before completing medical examinations.

“USCIS will not issue any Request for Evidence or Notice of Intent to Deny related to proving a COVID-19 vaccination,” the agency stated.

“USCIS will not deny any adjustment of status application based on the applicant’s failure to present documentation that they received the COVID-19 vaccination.”

USCIS did not respond to a request for more information, including whether the change applies retroactively.

The U.S. Centers for Disease Control and Prevention, whose guidance the USCIS cited when announcing the COVID-19 vaccine mandate, did not return an inquiry.

U.S. immigration officials typically accept proof of prior infection instead of vaccination but did not offer that option for COVID-19.

They did offer exceptions for people whose doctor decided a COVID-19 vaccine was not medically appropriate, or whose religious beliefs did not permit a vaccination.

Some applicants successfully sought exceptions, Christina Xenides, a lawyer with Siri & Glimstad LLP, told The Epoch Times in an email.

Xenides said that the requirement has negatively impacted numerous immigrants while it has been in place.

“Families have endured prolonged separation due to this specific vaccine requirement, and others have had to give up their American dream due to either not wanting to receive the vaccine themselves or give it to their children as young as 6 months, as was required per CDC guidelines,” she said.

“The requirement for all residency applicants aged six months and older to receive this vaccine was particularly troubling for many reasons, especially given the clear evidence that the available vaccines do not prevent the transmission of COVID-19. Additionally, USCIS’s refusal to recognize natural immunity as a valid medical waiver and the limited scope of accepted medical contraindications effectively rendered these options inaccessible for many individuals with serious health conditions.”

Other USCIS vaccination requirements, including for the mumps, measles, and rubella vaccine, are still in place.

Xenides said that people can seek waivers for the remaining vaccination requirements.

If they’re solely opposed to COVID-19 vaccination, she said, the revocation of the COVID-19 vaccine mandate “marks a significant and positive development.”

Tyler Durden Thu, 01/23/2025 - 13:40

Canada Can't Afford To Play Trade Chicken With The US

Authored by Marco Navarro-Génie via The Epoch Times,

Calls for Canada to respond aggressively to U.S. trade threats ignore the economic realities of such a move. Consider Quebec and Alberta energy. The stakes for Alberta and Quebec in this morbidly anticipated trade-war gamble are profoundly asymmetric, with Alberta standing to lose far more in absolute terms and per capita. The arguments to engage in such conflict are reckless and fail to recognize the magnitude of our economic integration with the United States.

Canada and the United States share one of the world’s most extensive and intertwined trading relationships. In 2022, bilateral trade in goods and services exceeded $900 billion annually. Canada exported 75 percent of its goods to the United States. Beyond trade, bilateral investment is immense, with over $1 trillion in two-way direct investment (All amounts in Canadian dollars).

A trade war would jeopardize trade and these capital flows, which are critical for businesses and public finances. Retaliatory tariffs or export restrictions would destabilize relationships and harm key industries across Canada. During the 2018 NAFTA renegotiations, even the spectre of a trade breakdown cost Canadian industries millions in lost revenue and opportunities. A full-blown trade war would magnify these damages exponentially.

Alberta’s oil and gas sector is the backbone of its economy and a vital contributor to Canada’s prosperity. In 2023, Alberta exported  $127 billion worth of oil and gas to the United States, representing 82 percent of its energy exports. This sector accounts for 27 percent of Alberta’s GDP and contributes approximately $28,863 per capita to the provincial economy.

Halting these exports would be harmful to a weakened economy. Alberta’s energy industry supports tens of thousands of jobs and generates substantial government revenues that fund social programs and infrastructure. Alberta is also a net contributor to federal equalization payments, providing billions annually to support less prosperous provinces, including Quebec.

The suggestion that Alberta should stop exporting oil and gas to “do its part” for Canada is economically nonsensical. Unlike Quebec’s electricity sector, Alberta’s energy industry has no immediate alternative markets to replace U.S. demand. Shutting off the tap to America would devastate Alberta and weaken Canada.

In contrast, Quebec’s hydroelectric sector, though significant, plays a smaller role in its economy than oil and gas do in Alberta. In 2022, Hydro-Québec exported $3 billion worth of electricity to the U.S., representing about 12 percent of its total electricity production and 2.9 percent of its GDP. With a population of 8.6 million, these exports amount to $349 per capita.

While losing U.S. electricity exports would hurt Quebec, the economic impact would be far less severe than Alberta’s potential losses. Quebec’s export economy is more diversified, with industries like aerospace, aluminum, pharmaceuticals, and technology providing alternative revenue streams.

The notion that Alberta and Quebec will equally shoulder the burden of a trade war by withholding energy sales to the United States is deeply flawed. Alberta’s reliance on the U.S. market is far greater, and its potential losses are higher. This is partly because Quebec objected to Energy East, the proposed pipeline to carry Alberta energy to Atlantic waters. Halting oil and gas exports would cost Alberta almost 10 times more per capita than it would cost Quebec.

This asymmetry highlights the uneven stakes in any trade conflict. Asking Alberta to sacrifice its economy while Quebec faces minor losses is unfair, economically irrational, and deeply corrosive to national unity. Undermining Alberta’s economy would have repercussions far beyond the province’s borders.

Far from being “anti-Canadian,” as suggested by people with a political agenda to hurt Alberta, Alberta’s reluctance to dismantle its energy sector is a defence of Canada’s broader economic interests. The province’s contributions to federal revenues and equalization payments help sustain national programs that benefit all Canadians. Conversely, Quebec’s relative insulation from the harmful consequences of a trade war explains its more relaxed stance.

For Quebec, halting exports would be akin to a paper cut whereas for Alberta, it would be a lethal wound.

Canada’s strength lies in its economic diversity and regional contributions. Alberta’s oil and gas sector, Quebec’s hydroelectric industry, Atlantic fisheries, and Ontario’s manufacturing base are all critical to the country’s prosperity.

A trade war would disrupt this relationship and risk Canada’s position as a stable and reliable trading partner. Premier Danielle Smith alone has offered a mature and reasonable approach.

The idea of a trade war with the United States is reckless when Canada’s government is in stasis and already mired in the economic problems it created.

Rather than pitting provinces against one another, Ottawa (and the premiers spoiling for a fight) should focus on preserving a proven key to our prosperity: strengthening its relationship with the United States.

Tyler Durden Thu, 01/23/2025 - 13:00

Trump 2.0 - So Far, So Good For Markets

Authored by Peter Tchir via Academy Securities,

We are only a few days into Trump 2.0, but so far, so good.

This administration is more fully staffed on day 1 than the last time and is filled with people who are committed to his causes. That is an important difference as the level of preparation out of the gates is materially different. Depending on which direction the administration goes, this might be good or bad, but make no mistake, Trump 2.0 is far more prepared and ready to act.

We’ve had the first (of what could be many) “personality clashes” in the administration with Ramaswamy stepping away from Musk and DOGE. With so many prolific, high energy individuals, we should expect to see clashes. The only one that could manifest itself and be tough for markets would be if the Trump and Musk relationship goes sideways. There is a comfort level associated with the richest man in the world helping form and guide policy – from a markets perspective. If that gets tested, it could be trouble, but so far, so good.

Trump seemed almost like two different people. One, very “presidential” at the official inauguration, the other, far less so, promoting an almost “campaign-like rally” atmosphere at later events on Inauguration Day.

Many of the topics we discuss are related to issues covered in more detail (along with our outlooks) in Geopolitical Risks and Opportunities in 2025. So far, from the policy side, we have seen:

• Some chatter on tariffs, but little being done. It seems obvious to everyone now that this has become a negotiating ploy. He talks about it to rally his supporters but is listening to those who caution him about being too aggressive or too pre-emptive. It looks like we are just starting the negotiations. Have said that, be prepared to see some retrenchment on Trump’s part, though at this point, it might take actual actions rather than words to move markets.

• Immigration policy seems to be starting off “reasonably” well (in my opinion) – enforcing the borders, etc. There is very little obvious attempt to round up millions of people, especially law-abiding people, to deport them. I like the tactic of elevating the drug cartels to terrorist organizations, as that could be a big step towards Mexico and the U.S. really taking them down. That would solve so many issues (we’ve discussed “ungoverned space” in this context as well). A solution to the cartels helps the U.S. and Mexico and would set the stage for real growth.

• China. Trump seems to want to make a “deal.” No day 1 tariffs. No ban on TikTok. Bizarrely, this makes me nervous as I expect China to try to find a deal that provides them time. That lets them get through their current economic issues, while setting them up for the future (from AI, to high tech, to controlling shipping, to selling their brands globally – with the backing of China Inc.).

• AI and compute. The investments announced yesterday are very positive. What is possibly as important as the investments is the signal that those investors/investments are sending. There is a “bandwagon” building and people want to get on it. That could propel forward similar plans from others. I’m hearing about the “Roaring 20s” more and more in my conversations. This area might benefit further from Trump’s desire to deregulate (though I’m not sure if we will like the results, as so far, the U.S. has seemed pretty even handed in its regulation – unlike Europe which hurts the industry time and again).

• Crypto. With the SEC setting up a crypto commission. With the pardon of the Silk Road founder. With the launch of multiple meme coins (for the president and those surrounding him). With all those “withs,” it seems plausible that a serious push is being made for a crypto reserve. It makes zero sense to me, but I wouldn’t fight it. While this might be a stretch, the contributions from the crypto community might be the single biggest force in U.S. politics. SBF clearly influenced the midterms before he fell. The crypto community clearly influenced the last election, and I expect they are just spreading their wings. Lots of access to wealth (some of which may not be traceable), potential new means of generating wealth for those they want to support (meme coins), a passionate goal (higher and higher crypto prices), and in many cases, some flair. Every politician must be thinking (or should be thinking) about how to tap into this force! I have not bought any crypto (or crypto ETFS) since the election, but am tempted to, because regardless of whatever I think, there are a lot of supporters in his inner circle in addition to the donors pushing hard.

• Peace through Strength. I’ve seen little on the military front that has caught my eye. Though I believe that we will see successes in the Middle East and with Russia and Ukraine. We will return to a state where U.S. deterrence does just that – deter! See Bloomberg TV Last Week – Trump’s Defense Chief Must Restore U.S. Deterrence. I am going to be adding some European stock ETFs to my portfolio in the coming days, on the back of this expectation, along with positioning.

• Commodities. From “drill baby drill” to “refine baby refine,” we are in the early stages of actions that will change the commodity space. The president (rightfully so) argues that lower energy prices will keep inflation lower. I agree as energy prices affect everything from manufacturing costs to delivery costs. More broadly speaking, it results in lower commodity prices, lower prices for goods, and potentially services as well (as a byproduct of servicers spending less on the equipment they need). I don’t like owning the commodities, but the commodity producers should do well, though that might be tricky. Companies supplying the goods and services producers need should also do well. This includes anything from heavy equipment makers, to oil field servicers, to anyone in infrastructure. As awful as the fire in Los Angeles is, it may help set the stage for changing the regulations. This is all part and parcel of infrastructure spending.

• The Deficit. I see zero progress on this front, but for the past few trading sessions, the bond market has ignored the risk. Trump’s calls to abandon the debt ceiling were completely dismissed. The efforts to keep commodity prices down have probably helped, along with reduced fears of a tariff war. Having said that, look for yields to rise again, with my target being 4.9% on 10s.

• Work from Office. I like commercial real estate here as everywhere I look, work from home is going back to being a luxury for the employee, rather than a requirement that employers are forced to offer.

• Chips and Space. Nothing is jumping out so far, but I expect to hear more in the coming weeks, along the lines of what we’ve outlined.

So far, so good, but don’t forget the theme of 2025 – “messy” so as things look rosy, prepare for some negative headlines, and when things seem gloomy, expect the narrative to change more positive.

It should be an interesting year, but so far, so good for markets.

Tyler Durden Thu, 01/23/2025 - 12:20

WTI Tumbles On Trump Comments, Shrugs Off 9th Straight Weekly Crude Draw

Oil prices are lower this morning (extending a multi-day slump) following comments from President Trump to Davos that he will push Saudi Arabia and OPEC to lower oil prices. Prices had recovered some overnight weakness (due to across the board inventory builds reported by API) before Trump's comments.

“I’m also going to ask Saudi Arabia and OPEC to bring down the cost of oil,” Trump said in remarks delivered virtually to world leaders gathered in Davos Thursday. “You’ve got to bring it down.”

The remarks stifled a rebound earlier in the session that had been driven by signs that fresh US sanctions on Russian crude, introduced before Trump took office, were tightening the global market.

API

• Crude +1mm

• Cushing +500k

• Gasoline +3.2mm

• Distillates +1.9mm

DOE

• Crude -1.02mm

• Cushing -148k

• Gasoline +2.33mm

• Distillates -3.07mm

While API reported across the board builds, the official data was almost the opposite with only gasoline stocks rising (though only modestly... even if it was the 10th weekly build in a row). Crude inventories are down for the 9th straight week

Source: Bloomberg

Total US crude stocks dropped to their lowest since March 2022 and the seasonally lowest since 2015...

Source: Bloomberg

US crude production remains near record highs...

Source: Bloomberg

WTI was trading around $74.50 ahead of the inventory data and tricked up very slightly on the crude draw...

“Oil markets are now facing the introduction of a new variable this year, that is the ‘Trump call option’ on energy prices,” said Frank Monkam, head of macro trading at Buffalo Bayou Commodities.

Tyler Durden Thu, 01/23/2025 - 12:09

EXCLUSIVE: Piper Sandler's Kantro And Citi's King Deep Dive On Markets

Piper Sandler’s Michael “Kantro” Kantrowitz was ranked 2024’s number 1 portfolio strategist by the widely followed Extel survey. Matt King was head of global strategy for Citibank for two decades and now runs Satori Insights. 

Kantro and King will meet face-to-face this Thursday evening at 6pm ET, only accessible on the ZeroHedge homepage and only visible to premium and professional subscribers so sign up now and save the date. The event will be moderated by RealVision’s Ash Bennington.

Overview of their positions below.

Kantro: Cautiously Optimistic

• Modest economic growth ahead. Manufacturing appears to be picking up — either because of the Trump win or Fed easing cycle. PMI to increase.

• Rates should fall, but “ifthe 10 year goes above 4.5%, then markets are going to struggle.”

• “Ironically, that rise in the unemployment rate has actually been a good thing for stocks because it helped to get inflation down. It started to get the Fed pivoting.”

Kantro's new podcast with Piper Sandler launched last week.

King: Optimism Priced In

U.S. equities ahead of their skis compared to rest of globe (pictured bottom left). While this is not unjustified as American firms are the “biggest and the best” (bottom right)…

…money is beginning to flow out.

Both strategists agree: what Trump does on tariffs and immigration will be key to watch.

Tune into the live debate: Thursday, Jan 23 at 6pm ET right at the top of the ZeroHedge homepage but only if you are logged in as a professional or premium user so sign up now. Professional users may email debates@zerohedge.com to submit questions for the debaters.

Tyler Durden Thu, 01/23/2025 - 11:40

Supreme Court Denies RFK Jr. Request To Block California's Doctor Investigations Over COVID-19 Advice

Authored by Matthew Vadum via The Epoch Times (emphasis ours),

The U.S. Supreme Court rejected three doctors’ emergency request to prevent a California agency from investigating them over advice they give to patients that does not conform to the state’s position on COVID-19.

Supreme Court Justice Elena Kagan stands during a group photograph of the justices at the Supreme Court in Washington, on April 23, 2021. Erin Schaff/AFP via Getty Images

Justice Elena Kagan, who handles urgent appeals from California, rejected the emergency application in Kory v. Bonta late on Jan. 21. She did not explain why.

The decision came 13 days after the case was docketed by the court on Jan. 8. Kagan did not ask California to respond to the application.

Robert F. Kennedy Jr. was listed as one of two attorneys representing the physicians in the case.

President Donald Trump has nominated Kennedy, an activist on environment and health-related issues, to be secretary of the U.S. Department of Health and Human Services (HHS).

The other co-counsel on the application is Richard Jaffe of Sacramento, California.

The Medical Board of California considers the expression of the doctors’ dissenting views on the disease as potentially dangerous misinformation that needs to be suppressed.

The board argues that it has legal authority to discipline the doctors for speech it deems to be medical misconduct. The physicians counter that they didn’t surrender their free speech rights when they obtained medical licenses.

The application was initiated by Dr. Pierre Kory and Dr. Brian Tyson, both medical doctors; Dr. Le Trinh Hoag, an osteopathic physician; Physicians for Informed Consent; and Children’s Health Defense, a nonprofit organization founded by Kennedy.

Kennedy has resigned from the nonprofit because of his pending HHS nomination, Jaffe told The Epoch Times.

The application stated that California’s executive and legislative branches are “threatening California physicians with professional discipline for their viewpoint speech contrary to the mainstream COVID narrative.”

After the Federation of State Medical Boards in July 2021 asked its member medical boards in the United States to punish physicians for advancing perceived “COVID misinformation” and “disinformation” among patients and the public, Medical Board of California President Kristina Lawson announced in February 2022 that the board planned to sanction physicians for what it called “COVID misinformation.”

The California Legislature passed AB 2098, which took effect in January 2023, making the dissemination of “misinformation” about the disease an offense for which doctors could be disciplined, the application stated.

After a federal district judge halted the law in January 2023, the Legislature repealed the misinformation provision effective January 2024. The application said the board continued to probe physicians for violating its COVID-19 policy following the repeal.

The applicants were challenging “the practice and policy of threatening and targeting physicians with discipline for providing information and recommendations contrary to the mainstream COVID narrative,” according to the application.

On April 23, 2024, the U.S. District Court for the Eastern District of California rejected a request to preliminarily block the state’s enforcement program, holding that the applicants lacked legal standing.

Standing refers to the right of someone to sue in court. The parties must show a strong enough connection to the claim to justify their participation in a lawsuit.

The ruling was upheld by the U.S. Court of Appeals for the Ninth Circuit on Nov. 27, 2024.

The California Business and Professions Code, under which the California Medical Board claims its disciplinary authority, “regulates conduct, not speech,” the appeals court stated. “It provides for enforcement of the standard of care, which is the standard for physicians’ treatment of patients,” the court added.

To demonstrate standing, the applicants had to demonstrate that there was “a credible threat that the [board] will prosecute them under the statute,” but they did not do so, the appeals court stated.

The Ninth Circuit said the court record showed that the only disciplinary action taken against a doctor “involved a physician encouraging her patient to use veterinary ivermectin and resulted in the stipulated surrender of her license.”

The applicants were asking the Supreme Court for an injunction stopping the state from “continuing their enforcement program targeting the information, opinions, and recommendations on COVID-19 which California licensed physicians may provide to patients.”

A related challenge that Kennedy and Jaffe filed with the Supreme Court was rejected by the full court on Jan. 13.

In Stockton v. Ferguson, the justices were asked to prevent the Washington Medical Commission from investigating licensed physicians in the state over their criticism of COVID-19 policies.

The application was brought by former professional basketball player John Stockton along with Drs. Richard Eggleston, Thomas Siler, Daniel Moynihan, another 50 unidentified medical doctors, and Children’s Health Defense.

Jaffe told The Epoch Times it was “not surprising” that Kagan denied the application in Kory v. Bonta given that the full court declined the application in Stockton v. Ferguson.

The lawyer said his clients in the California case will either file a petition for certiorari, or review, with the Supreme Court, or continue pursuing the lawsuit that is still pending in federal district court.

“The plaintiffs are committed to pressing their case for the right of physicians to speak their truth to patients, and to the public,” he said.

Jaffe said “the tide is turning,” and pointed to Trump’s executive order signed Jan. 20 aimed at preventing government censorship, along with Facebook co-founder Mark Zuckerberg’s recent “admission that [Facebook parent company] Meta had been bullied into suppressing speech the government did not like.”

After Kennedy is confirmed, “we are hopeful that the government will start releasing information about the COVID vaccines and treatments which may further support the wisdom of the principle that physicians have the right to speak out against the government narrative without fear of government reprisal.”

Before the recent pandemic, the courts “fully recognized those rights, but I think COVID scared many, including judges to grant a constitutional exception in times of crises.”

Jaffe added that his side remains optimistic that in the future the Supreme Court “will reject what these two states are doing in these physician speech cases.”

The Epoch Times reached out to the Medical Board of California and to California Attorney General Rob Bonta, who represents the board, for comment. No replies were received by publication time.

Tyler Durden Thu, 01/23/2025 - 11:20

Trump Blasts BofA CEO Over Anti-Conservative Bank Bias, Unleashes His "Revolution Of Common Sense" On WEF Globalists

Update (1320ET): Trump did not disappoint on Thursday, as he delivered virtual address at the World Economic Forum in Davos, before taking questions from people who hate him with the intensity of a thousand suns.

Highlights:

• Trump said he would ask Saudi Arabia and other OPEC nations to bring down the cost of oil.

PRESIDENT TRUMP: I've asked the Crown Prince of Saudi Arabia to BRING DOWN THE COST OF OIL — YOU HAVE TO BRING IT DOWN! pic.twitter.com/ytkGkYEcMB

— Trump War Room (@TrumpWarRoom) January 23, 2025

• He then slammed Bank of America CEO Brian Moynihan, telling him to stop discriminating against conservatives.

President Trump to Bank of America CEO Brian Moynihan: "I hope you're going to open your banks to conservatives because what you're doing is WRONG." pic.twitter.com/Ob3pwN9cAm

— Trump War Room (@TrumpWarRoom) January 23, 2025

Of note, the far-left activists at Bloomberg referred to this as "an unsubstantiated right-wing conspiracy theory."

Except, it's not, dicks. Amazing.

• Trump referred to his reelection, and ensuing flurry of executive orders, as a "revolution of common sense."

Trump: "What the world has witnessed in the past 72 hours is nothing less than a revolution of common sense." pic.twitter.com/0rz6tXgRJw

— The Post Millennial (@TPostMillennial) January 23, 2025

• Trump also said he hopes that China can help bring an end to the war in Ukraine.

BREAKING: Donald Trump wants to work with Russia and China to denuclearize and end the Russia-Ukraine war

This is huge! Donald Trump is the most pro-peace president of my lifetime. pic.twitter.com/bPI2AKaol3

— Liam McCollum (@MLiamMcCollum) January 23, 2025

*  *  *

Grab your popcorn...

With the 'woke' global left starting to crumble, as so well exclaimed by Argentina's Milei earlier today, President Trump will speak remotely at the World Economic Forum in Davos, Switzerland, this morning, delivering his first major speech to global business and political leaders.

The world will be listening closely for any details on his pledge to introduce universal tariffs on goods imported to the U.S., and for his position on major geopolitical and economic issues such as the Ukraine-Russia war, the future of Israeli-Palestinian relations and America’s economic rivalry with China.

Trump has openly criticized the diversity, equity, and inclusion (DEI) and environmental, social, and governance (ESG) initiatives championed by the WEF.

During his first term, Trump traveled to Davos twice, in 2018 and 2020, to attend the WEF meetings.

In his keynote address in 2020, he touted his protectionist trade policies and the United States’ position as the world’s largest oil and gas producer.

He also expressed concerns about NATO’s heavy dependence on the United States, urging member nations to increase their contributions to defense spending.

In recent years, however, the forum has increasingly faced criticism, with questions raised regarding the usefulness of its debates in resolving the struggles of regular people.

Watch Trump's speech here (due to start at 1100ET):

Tyler Durden Thu, 01/23/2025 - 10:56

Trump's Reforms Could Radically Overhaul, Consolidate Federal Workforce

Authored by Mark Tapscott via The Epoch Times (emphasis ours),

President Donald Trump wasted no time following his Jan. 20 swearing-in to sign dozens of executive orders, including seven specifically aimed at fundamentally changing the culture, costs, and size of the federal workforce.

President Donald Trump signs an executive order on birthright citizenship, at the White House on Jan. 20, 2025. Jim Watson/AFP via Getty Images

Most immediately, Trump ordered the 2.3 million career civil service government employees to report for work at their official duty stations, thus ending the teleworking started in 2020 because of the COVID-19 pandemic.

A second order directed federal officials to freeze all hiring for positions vacant as of Jan. 20 and bar the creation of new jobs. The federal government hired 631,639 new civilian workers from 2020 to 2024, an annual average of 126,327, according to FedScope.

The same order also directed the directors of the White House Office of Management and Budget (OMB) and the U.S. Office of Personnel Management (OPM) to work with the newly created Department of Government Efficiency (DOGE) to “submit a plan to reduce the size of the federal government’s workforce through efficiency improvements and attrition.” The order did not specify how many jobs are to be eliminated.

Several of the remaining five orders on the civil service are already hotly contested by congressional Democrats with large numbers of federal employees in their districts and states, as well as by professional associations and labor unions.

The most controversial is the return of Schedule F, an executive order that Trump signed in 2020 only weeks before losing his reelection campaign to Biden. Now renamed as the “Schedule Policy/Career,” the measure is needed, according to the Trump White House, because removing an incompetent government worker typically takes at least 18 months and can go much longer.

“Only 41 percent of civil service supervisors are confident that they can remove an employee who engaged in insubordination or serious misconduct. Even fewer supervisors—26 percent—are confident that they can remove an employee for poor performance,” the order stated.

Rep. Gerry Connolly (D-Va.) questions witnesses during a House Oversight and Accountability Committee hearing on March 29, 2023. Cliff Owen/AP Photo

The Schedule Policy/Career reforms concern the approximately 7,000 members of the Senior Executive Service (SES), who earn between $180,000 and $246,000 annually. These positions are the top policy-making jobs that career service employees can occupy. The order could cover additional positions below the SES in the future.

The fourth order complemented the third because it established a direct line of accountability from SES managers through their respective agency heads to the president. The order directs that all SES managers must implement the president’s and the administration’s agenda and policies.

The order also abolished the current Executive Resources Boards (ERB), which oversee the SES managers in particular departments and agencies, and replaces them with new panels with majorities made up of politically appointed officials.

The fifth order barred federal agencies from hiring employees on the basis of race, sex, or religion and requires hiring decisions to “prioritize recruitment of individuals committed to improving the efficiency of the federal government, passionate about the ideals of our American republic, and committed to upholding the rule of law and the United States Constitution.”

The sixth Trump order is aimed at two specific groups and seeks to discourage federal workers from abusing their access to classified information. One of these two orders withdrew the national security clearances of the 51 intelligence community officials who signed an October 2020 letter claiming the Hunter Biden laptop computer had “all the classic earmarks of Russian disinformation.”

Former National Security Adviser John Bolton speaks to reporters after a panel discussion hosted by the National Council of Resistance of Iran–U.S. Representative Office at the Willard InterContinental Hotel in Washington on Aug. 17, 2022. Anna Moneymaker/Getty Images

The order also withdrew the clearance of John Bolton, who was Trump’s national security adviser for a period in 2019. The order said Bolton’s 2019 memoir posed “a grave risk” of leaking classified information.

The last of the seven orders directed a 60-day freeze of all proposed regulations that have not been published in the Federal Register for public comment and prevents the issuance of any new proposed rules not previously reviewed by a Trump appointee.

Even before Trump officially issued these seven executive orders, Rep. Gerry Connolly (D-Va.) and three House colleagues introduced legislation designed to block the Schedule F/Schedule Policy Career order.

The largest federal worker union, the American Federation of Government Employees (AFGE), criticized Trump’s proposed reforms, especially the Schedule Policy/Career order.

“President Trump’s order is a blatant attempt to corrupt the federal government by eliminating employees’ due process rights so they can be fired for political reasons. It will remove hundreds of thousands of federal jobs from the nonpartisan, professional civil service and make them answerable to the will of one man,” AFGE President Everett Kelley said in a statement.

National Treasury Employees Union officials filed suit on Jan. 21 against the order.

Tyler Durden Thu, 01/23/2025 - 10:20

Milei Gives Blistering WEF Speech: Slams DEI, Says Woke Ideology "Cancer", And Calls For Limited Government

Argentina's President Javier Milei delivered a blockbuster speech at the World Economic Forum in Davos on Thursday, where he said that woke politics are a "cancer" on the world and must be eradicated to usher in a "new golden age" of freedom and prosperity.

"What once seemed like a global hegemony of the ‘woke’ left in politics, educational institutions, in the media, in supranational organizations or even in forums like Davos, has begun to crumble," said Milei, who took office in 2023.

The Argentinian politician says he's been forming alliances with other conservative figures and leaders.

"Over the course of this year, I have found allies in this fight for the cause of freedom in every corner of the world, from the amazing [tech billionaire] Elon Musk to that fierce Italian lady [Prime Minister] Giorgia Meloni, from [President Nayib] Bukele in El Salvador to Viktor Orban in Hungary," he said, adding "Slowly, an international alliance has been forming among all those nations who want to be free and believe in the ideas of liberty."

At WEF 2025, @JMilei declared that the "global hegemony" of woke ideology is "crumbling," highlighting the growing pro-freedom alliance that unites himself, @realDonaldTrump, @elonmusk, @netanyahu, @GiorgiaMeloni, and @nayibbukele.pic.twitter.com/StmTLkndwt

— CAPITAL (@capitalnewshq) January 23, 2025

.@JMilei at WEF 2025 calls woke ideology a "cancer" that must be eradicated in order to usher in a "new golden age" of freedom and prosperity. pic.twitter.com/KGaIbWfYio

— CAPITAL (@capitalnewshq) January 23, 2025

"Merit has been cast aside in favor of the doctrine of diversity," he continued, adding "Quotas are invented for every minority that politicians can come up with, which undermines the excellence of institutions."

.@JMilei at WEF 2025 criticizes corporations' embrace of DEI: "Merit has been cast aside in favor of the doctrine of diversity."

"Quotas are invented for every minority that politicians can come up with, which undermines the excellence of institutions."pic.twitter.com/SpJ4nH6vjJ

— CAPITAL (@capitalnewshq) January 23, 2025

Milei then said called out transgender men who adopt children to abuse. "They are pedophiles," he said.

Milei did it again.

He went to the WEF to tell them to go fuck themselves basically.

It was beautiful to watch.pic.twitter.com/hbTNuMv2Aw

— Ada Lluch (@ada_lluch) January 23, 2025

Milei also said that if the West wants to "reclaim" its progress, "we have to drastically reduce the size of the state," adding "The function of the state must once again be limited to defending the right to life, liberty, & property."

.@JMilei at WEF 2025: "If we want to reclaim the West's progress and build a new golden era, we have to drastically reduce the size of the state."

"The function of the state must once again be limited to defending the right to life, liberty, & property."pic.twitter.com/9ZUF5b7F1O

— CAPITAL (@capitalnewshq) January 23, 2025

Milei, who said that "the battle is not yet won," spoke days after US President Donald Trump's inauguration - after which Trump signed a slew of executive orders reversing woke policies from the Biden administration.

"Although hope has been rekindled, it is our moral duty and responsibility to dismantle the ideological edifice of sickly wokeism," he continued.

Libertarian Milei has been credited with revamping market confidence in Argentina’s downtrodden economy, implementing cuts to public sector spending and energy subsidies, among his policies. Inflation has also fallen from one of the world’s highest annual inflation rates of 289.4% in April to 117.8% in the year to December 2024, according to data from the country’s central bank. -CNBC

Last year Milei called on global leaders to reject socialism and instead embrace "free enterprise capitalism."

Watch the whole speech below via Rebel News.

WATCH: "MAKE THE WEST GREAT AGAIN!" Javier Milei's full fiery speech confronting the globalists at the World Economic Forum. He invites "all mortals of the world to hear the sacred call of freedom," and warns that the 'woke mind virus' is a global cancer that must be eradicated. pic.twitter.com/idDUp9tf0P

— Rebel News (@RebelNewsOnline) January 23, 2025

 

Tyler Durden Thu, 01/23/2025 - 10:00

Initial Jobless Claims Jump To One-Month High

After exploding to its highest since Jan 2022, unadjusted jobless claims crashed lower last week while 'seasonally-adjusted' initial jobless claims rose to 223k (its highest since the first week of December)...

Source: Bloomberg

Continuing jobless claims jumped higher to 1.899 million Americans, just shy of its highest since Nov 2021...

Source: Bloomberg

Certainly nothing new here and nothing that warrants a rate-cut next week.

 

 

 

Tyler Durden Thu, 01/23/2025 - 08:36

"Get Over It" - Dimon Backs Trump Tariffs As "Good For National Security"

Authored by Michael Every via Rabobank,

Get over it, but you can't get past it

Jamie Dimon of JP Morgan Chase --in Davos(!)-- yesterday stated US tariffs are an economic tool or an economic weapon and, “I would put in perspective: If it’s a little inflationary, but it’s good for national security, so be it. I mean, get over it.”

Exactly so. Our ‘grand macro strategy’ report on economic statecraft published after President Trump won re-election stressed that for political realists, not economic idealists, tariffs are always about national security, raising national savings and key related investments, and foreign policy goals; and both Trump’s and US history said we would be seeing a lot more of them.

As Bloomberg puts it, the current state of play is that Trump could potentially introduce sweeping changes to US and global trade policy, giving him a “loaded weapon” --of tariffs T+1-- as leverage for national security goals and new capital investment into the US. Or foreign policy goals.

Indeed, following the threat of a 1 February imposition of 25% tariffs on Mexico and Canada, and an additional 10% on China, all for national security reasons, President Trump has stated if Russian President Putin doesn’t accept a peace deal to end the Ukraine War, the US will impose tough sanctions, taxes, and tariffs on Russia’s energy sector which, by implication, might even extend to those buying from Russia or working with it: that could cover the EU (which, ridiculously from a statecraft perspective, still relies on Russian LNG); India; and China.

Our back of an envelope projection is that cutting off Russian LNG from Europe could raise TTF gas prices to €70-80/MWh.

Few in Europe would be saying, “Get over it,” and Europe’s key problem is that it can’t get over its structural geostrategic weakness. Cutting off Russian oil would see prices temporarily spike to $90-95 a barrel before OPEC picked up production to normalise things.

Yet as the economic statecraft report also stressed, in realpolitik things aren’t static.

If President Trump escalates to economic warfare to force President Putin to end physical warfare, Russia (and China, if its third-party neutral trading rights --also detailed in the report-- are penalised) can respond with their own economic statecraft, or the other two legs of grand strategy alongside it: political and military statecraft, to up the ante. That’s as the Financial Times says China is shipping sodium perchlorate to Iran to fuel ballistic missiles, which will see some in the US go ballistic; and a report claims two undersea cables connecting Taiwan to its outlying island of Matsu were mysteriously cut yesterday – something that seems to be happening a lot recently, and only on one side of the geopolitical fault-line.

For markets, given Trump and Putin both famously like to escalate to deescalate, and others can easily be dragged into this vortex, volatility remains the watchword. 

That’s hard going to get past even if you get over the shock of tariffs being accepted by Jamie Dimon.

Indeed, as politics moves at dizzying speed within the US, prompting the Wall Street Journal to note that ‘CEOs Launch War Rooms, Hotlines to Cope With Trump’s Order Blitz’, in geopolitics, the same is true – just with real War Rooms.

• Bloomberg reports that, ‘One by One, World Leaders in Davos Fall in Line in Trump Era’, though I can think of a few who don’t and won’t.

• President Zelenskyy says even if a Ukraine peace deal is signed, it would require 200,00 EU troops in the country to prove sustainable. That’s almost the entire French armed forces. If true, somebody in Europe is going to be spending a vast amount on defence in the next few years. After all, ‘Freedom isn’t free’ – or just free trade.  

• Saudi Arabia’s MBS reportedly offered the US at least $600bn in new trade and investments over the next four years. Some may say Saudi doesn’t have that kind of cash with oil prices at current levels, let alone the lower ones Trump wants to see… then again, neither does the Big Tech group behind the $500bn AI ‘Project Stargate’ announced yesterday, says Elon Musk.

• The US relisted Yemen’s Houthis as a terrorist organisation, ironically as the latter allows all but Israeli ships to transit Suez again while the current Middle East ceasefire holds – which many there expect is unlikely to last that long.

• Argentina’s President Milei is prepared to quit the Mercosur trade bloc to get a US FTA. Europe only just introduced an FTA with Mercosur is already losing out.

• The UK press argues PM Starmer must “fight hard and fast to define Britain’s destiny” and needs “a coherent strategic purpose.” So, grand strategy --where the key choice is does the UK go with the US or the EU?-- not a piecemeal technocratic Grand Starmer-gy.

• France’s trade minister suggested the EU should try to diversify trade to Latin America (more than the FTA with Mercosur minus Argentina?) and ASEAN (which mainly consists of net exporters whom the US can provide security guarantees to which the EU cannot).  

• The Pentagon is sending troops to the US-Mexico border to boost security and airlift out migrants, as Mexico reportedly sets up a tent city to prepare for mass deportations from the US.

• Secretary of State Rubio’s first official visit will be to the Panama Canal, a break from the precedent of going to key allies first. He also attacked China for its actions vis-à-vis the Philippines and promised the latter an “iron clad” US defence as well as expanded security and economic ties.

Day ahead

Today has the ECB’s Escriva, Canadian retail sales, and US weekly jobless claims, then Eurozone consumer confidence.

Tyler Durden Thu, 01/23/2025 - 08:11

Futures Drop As Treasury Yields Hit 1 Week High

US equity futures are slightly lower as markets look to take a  breather after making a new intraday all-time high in the US and Europe on Wednesday. As of 7:30am, S&P futures dipped 0.1% after the index closed on the brink of record peak, propelled by optimism over - what else - artificial intelligence, and a solid batch of earnings from corporate heavyweights. Nasdaq 100 futures fell 0.5% with all Mag7 names lower ex-META and Semis also weaker with NVDA/AVGO lower. Bond yields are higher, with the 10Y rising 2bps to session highs at 4.64% the highest since Jan 16, while the USD also rose. The commodity complex is under pressure with the exception of energy as WTI trades near session highs around $79.4. Today’s macro data focus is on jobless data and regional activity indicators ahead of tomorrow's Flash PMIs.

In premarket trading, Electronic Arts shares plunge 15% after the video-game company cut its full-year net bookings guidance to a range that’s below analyst expectations, with EA Sports FC 25 and Dragon Age: The Veilguard both underwhelming. Several analysts downgraded the stock. Semiconductor stocks drop as Korean memory chipmaker SK Hynix’s record quarterly results failed to impress investors. Potential US export controls have also weighed on the sector in recent days (Nvidia (NVDA US) -1.9%, Micron Technology (MU US) -3.7%, Arm (ARM US) -4.4%, Applied Materials (AMAT US) -1.3%, Lam Research (LRCX US) -1.4%). Mag 7 stocks also dropped (Apple -0.3%, Nvidia -1.9%, Microsoft -0.8%, Alphabet -0.2%, Amazon -0.5%, Meta Platforms +0.6% and Tesla -0.5% in premarket trading). Here are some other notable premarket movers:

• Alaska Air (ALK US) shares rise 4.3% as the carrier forecast a smaller-than-expected loss in the first quarter. The company joins larger rivals United Air as airlines capitalize on unusually strong demand for travel.
• AST Spacemobile (ASTS US) shares drop 13% after announcing the pricing of $400 million aggregate principal amount of convertible senior notes due 2032 in a private offering.
• Boston Beer (SAM US) shares trade 1.1% lower after Piper Sandler downgraded the stock to neutral from overweight, overweight, citing slower-than-expected sales growth of its Twisted Tea product.
• Plexus Corp. (PLXS US) shares fall 11% after the electronics manufacturing services company forecast revenue for the second quarter below the average analyst estimate.
• RLI Corp. (RLI US) shares decline 5.9% after the specialty insurance company posted 4Q net premiums written that fell short of expectations.
• Veeva (VEEV US) shares slide 4.7% after a double downgrade to sell from buy at Goldman Sachs.
• Vertical Aerospace (EVTL US) shares tumble 30% after the aerospace company announced that it has commenced an underwritten public offering of $75 million of units.

Markets started the year in an upbeat mood amid relief that Trump has so far held off on imposing tariffs on trade partners in his first few days in office, despite threatening levies on China, Mexico, Europe and China. That said, the rally that took stocks to new all time highs on the back of AI stocks amid collapsing breadth, showed some signs of flagging as investors took stock of President Trump’s first few days in office. While his move to boost AI spending buoyed tech megacaps on Wednesday, the risk of tariffs on major trading partners still weighs on sentiment. The S&P 500 index has climbed about 5% since Trump’s election victory on Nov. 6.

“We continue to expect near-term volatility as markets react to incoming Trump headlines, and see negative impact on targeted regions if the administration follows through with the proposed tariffs,” said Mark Haefele, chief investment officer at UBS Global Wealth Management. “But we also believe US equities have room to grind higher as growth momentum continues.”

Focus on Thursday will next turn to US jobless-claims data, as well as Trump’s address at the World Economic Forum in Davos and fourth-quarter earnings reports from companies including General Electric Co., American Airlines Group Inc. and Texas Instruments Inc.

Still, there are signs the rally could be overheating with valuations at sky-high levels, especially those of tech behemoths.
“There’s a loss of momentum,” said Paul Jackson, global head of asset allocation research at Invesco, “There’s a lot of hope, a lot of good news already priced in the US markets.”

The Stoxx Europe 600 index was little changed after coming within a hair’s breadth of an all-time high on Wednesday. Technology shares fell more than 1%, giving up most of the previous day’s advance as they underperformed every other industry group in the index. Puma plunged after reporting disappointing figures, while Sweden’s EQT and Swedbank both jumped on their respective earnings. Here are the biggest movers Thursday:

• EQT gains as much as 7.9% after the Swedish private equity firm posted a reassuring set of fourth-quarter figures. Analysts described it as the best value-creating reporting period in three years
• Spectris shares jump as much as 15%, the biggest gain since 2009, after the high-tech instrument maker said its 2024 profit will top consensus. Investors should welcome the update, Jefferies says
• Swedbank shares gain as much as 5.7%, the most since October, after the Swedish lender surprised the market with a higher dividend than expected, with analyst also noting net interest income beat
• Ashtead Technology gains as much as 9.4%, hitting their highest level since late October, after the subsea equipment rental firm said it expects annual adjusted Ebita in 2024 to be ahead of consensus
• ProSieben shares climb as much as 6.3% as JPMorgan raises its estimate for the broadcaster’s 2025 Ebitda, citing a better-than-expected start to 2025
• Logitech shares rise as much as 4.2% in Zurich to the highest since July after Morgan Stanley upgraded its rating to equal-weight from underweight, saying recent data suggests potential upside to shares
• Team17 shares rise as much as 13%, hitting their highest level in over three months, after the video game firm said its 2024 results will be ahead of expectations
• Puma shares fall as much as 19%, the steepest intraday drop since September 2001, after the sportswear maker’s preliminary net income for the fourth quarter missed estimates
• Inchcape drops as much as 11%, the most since March, as JPMorgan cuts the vehicle dealership group to neutral from overweight and puts the stock on negative catalyst Watch ahead of results on March 4
• ASML falls as much as 4.5%. The decline comes amid a broader retreat in chip-equipment stocks, as well as Dutch comments on potential US export controls and Korean chipmaker SK Hynix’s stance on capex
• Hochschild Mining shares drop as much as 6.3%, extending losses following the slump seen Wednesday when the miner’s update triggered concerns about the impact of rising costs on its earnings
• Tryg falls as much as 6.6% after the Danish insurance group’s 4Q figures missed expectations. Analysts say while the result will briefly disappoint, it does not impact the longer-term investment case
• Galapagos drops as much as 3.6% after Barclays cut its rating on the stock to underweight from equal-weight, saying any value creation from a planned spinoff will “take a long time to play out”

Asian stocks were mixed, with Chinese shares edging higher after a government push for long-term funds to raise holdings in the market. Korea led regional losses, weighed down by SK Hynix’s stock after it reported earnings. The MSCI Asia Pacific Index pared advances of as much as 0.4% to trade little changed. Japanese firms including SoftBank Group and Mitsubishi Heavy Industries were among the biggest contributors to the gauge’s climb. Japanese stocks rose for a fourth day, tailing gains posted by US technology companies, which are expected to lead large-scale investments in artificial intelligence. The Bank of Japan is widely expected to raise its benchmark rate Friday by the most in 18 years. Chinese equities received a boost after authorities said they are guiding local mutual funds and insurers to raise investments into stocks in latest efforts to shore up its ailing market. The onshore benchmark CSI 300 Index rose as much as 1.8%, before ending the day 0.2% higher.

In FX, the Bloomberg Dollar Spot Index is steady. The yen inches higher with some help from a Nikkei report that said the Bank of Japan are set to raise rates on Friday. The Norwegian krone falls 0.2% after the Norges Bank left interest rates on hold as expected and stuck with its guidance for a reduction in March.

In rates, treasuries dip, with 10-year yields up 2bps to 4.64%, and slightly cheaper vs bunds and gilts. Front-end outperformance steepens 2s10s spread by around 2bp to 33bp, near weekly high. Bunds and gilts also edge lower with little economic data in Europe to dictate otherwise.

In commodities, oil prices are higher, with WTI around $75.40 a barrel. Spot gold falls $7 to ~$2,749/oz. Bitcoin falls 2% to below $102,000.

The US economic data calendar includes weekly jobless claims (8:30am) and January Kansas City Fed manufacturing activity (11am).

Market Snapshot

• S&P 500 futures down 0.2% to 6,105.50
• MXAP little changed at 181.48
• MXAPJ down 0.3% to 570.12
• Nikkei up 0.8% to 39,958.87
• Topix up 0.5% to 2,751.74
• Hang Seng Index down 0.4% to 19,700.56
• Shanghai Composite up 0.5% to 3,230.16
• Sensex up 0.2% to 76,568.99
• Australia S&P/ASX 200 down 0.6% to 8,378.71
• Kospi down 1.2% to 2,515.49
• STOXX Europe 600 down 0.1% to 527.37
• German 10Y yield little changed at 2.53%
• Euro little changed at $1.0405
• Brent Futures little changed at $79.05/bbl
• Brent Futures up 0.1% to $79.08/bbl
• Gold spot down 0.5% to $2,742.87
• US Dollar Index up 0.13% to 108.31

Top Overnight News

• Trump set to tap health industry lobbyist Don Dempsey for top white house budget job. This appointment would deal a blow to Robert F. Kennedy Jr's hopes of overhauling the sector: FT
• Trump said he doesn't care if Congress does one bill or two bills for reconciliation, while he stated regarding FEMA that he would rather see states take care of their own problems during a pre-recorded interview on Fox News.
• Trump announced Andrew F. Puzder will serve as the next US Ambassador to the EU.
• US Senate Committee will hold a confirmation hearing on January 29th for President Trump's Secretary of Commerce nominee Howard Lutnick.
• Saudi Crown Prince MBS spoke with US President Trump on the phone and said the kingdom seeks to increase its investments and trade with the US by at least USD 600bln in the next four years, while the Saudi Crown Prince said the expected reforms under Trump's administration could create "unprecedented economic prosperity": FT
• China orders state-owned mutual funds and insurers to bolster domestic equity markets following poor YTD price action. China’s central bank chimed in with some support for the stock market too, saying at the press conference that it will continue to lower requirements for companies to get loans for stock buybacks. WSJ
• A record number of US companies in China are thinking about moving some operations out of the country or are already in the process of doing so, as geopolitical tensions rise with Trump’s return to the White House. FT
• South Korea’s GDP grew 0.1% in the fourth quarter from the previous three months, missing estimates. Japan’s exports rose for a third month in December. Singapore’s inflation unexpectedly held at 1.6%. BBG
• Asia hedge funds rebounded last year, keeping pace with the global average, after three years of widespread losses. Aspex, Panview and CloudAlpha were among those returning more than 35% on tech and AI bets. BBG
• Russia's Kremlin on US President Trump threat of sanctions and tariffs on Russia, says "we do not see any particularly new elements here"; "we remain ready for equal and mutually respectful dialogue".
• President Vladimir Putin has grown increasingly concerned about distortions in Russia's wartime economy, just as Donald Trump pushes for an end to the Ukraine conflict. With domestic activity becoming strained in recent months by labor shortages and high interest rates introduced to tackle inflation, a negotiated settlement to the war is becoming increasingly desirable for Russia. RTRS
• SK Hynix shares slumped ~2.6% in South Korea after earnings (and it’s weighing on Eurozone chip stocks) as mgmt. spoke cautiously about demand in various non-AI end markets (PCs, smartphones, etc.) and acknowledged pockets of excess inventory while tempering expectations for capex growth this year (capital spending will rise only modestly this year). RTRS
• US crude inventories rose by 1 million barrels last week, the API is said to have reported. That’d be the first increase in nine weeks if confirmed by the EIA today. Fuel stockpiles also climbed. BBG
• Congress is considering a large bipartisan bill that would address the debt ceiling, the 3/14 budget expiration deadline, LA wildfire aid, and money for border security. Politico

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded somewhat mixed albeit with a mostly positive bias after the gains on Wall St where the S&P 500 printed a fresh record high and the Nasdaq led amid strength in tech and communications, while outperformance was seen in mainland China after Beijing announced efforts to support the stock market in a capital markets briefing. ASX 200 was pressured by underperformance in miners following several quarterly production updates, with tech and telecoms the only sectors that showed some resilience. Nikkei 225 climbed above the 40,000 level following recent yen weakness and mostly better-than-expected trade data. Hang Seng and Shanghai Comp were both initially underpinned with brokerage stocks lifted after the capital markets briefing in Beijing where officials from the CSRC, financial regulator and PBoC announced efforts to boost stocks with China to direct medium and long-term funds towards market investment, while there will be at least hundreds of billions of yuan of new long-term capital for A-shares every year from state-owned insurance companies. However, the Hong Kong benchmark eventually gave back the gains.

Top Asian News

• BoJ is poised to vote for a rate hike at tomorrow's meeting, according to Nikkei sources. The BOJ has so far viewed the economic and market conditions following Trump's inauguration as being relatively calm. The bank considered forgoing any hike if the inauguration resulted in a rollercoaster market ride, but several officials believe that "the situation is such that the bank can raise interest rates as expected."
• A record number of US companies are considering moving some of their operations out of China or are in the process of doing so, according to a study cited by the FT.
• ByteDance earmarks over CNY 150bln in Capex for 2025 mostly targeting AI; NVIDIA (NVDA) and Huawei expected to benefit from ByteDance spending, according to Reuters sources
• China's Vice Premier says China stands ready to increase understanding and mutual trust with the Netherlands.
• Nissan (7201 JT) is reportedly to procure EV batteries from SK's (034730 KS) SK ON for the US market, via Nikkei; agreed to supply 20GWh worth of batteries.
• China's MOFCOM, on US President Trump's tariff threats, says tariffs are not good for China, US, and the world; China willing to work with US to promote stable, healthy development of economic and trade ties.
• China CSRC chief said China will direct medium and long-term funds towards market investment and there will be at least hundreds of billions of yuan of new long-term capital for A-shares every year from state-owned insurance companies, while a pilot scheme of insurers buying stocks is to be implemented in H1 2025 with scales of at least CNY 100bln. Furthermore, public funds are to increase A-share holdings by at least 10% annually over the next 3 years and China will guide fund companies to buy their own equity funds using some of their profits.
• China's financial regulator vice head said they will encourage major state insurers to use 30% of their newly generated premium incomes for stock investment, while a PBoC official said they will expand the scope and increase the scale of liquidity tools to fund share purchases at the proper time.

European bourses (Stoxx 600 -0.1%) began the session mixed, continuing the indecisive mood seen in APAC trade overnight. Price action has generally moved sideways throughout the morning, given the lack of EZ-specific updates.  European sectors are mixed, and aside from the day’s clear underperformer (Tech), the breadth of the market is fairly narrow. Tech underperforms following SK Hynix results; the co. reported strong Q4 figures, but highlighted concerns regarding demand declines in commodity memory chips. Banks top the pile, joined closely by Utilities and Telecoms.

Top European News

• ECB's Escriva says the ECB still has restrictive policy; need to be moving towards a neutral stance
• French Finance Minister Lombard says the 2024 deficit is seen coming in close to 6% of GDP.
• EU's Sefcovic says a pan-European customs area is something the bloc would consider as part of a "reset" discussion with the UK; BBC's understanding is that the gov't has begun consultations on joining the Pan-Euro-Mediterranean Convention.
• Norges Bank holds rates at 4.50% as expected; Reiterates “The policy rate will likely be reduced in March”.
• The EU is to push AI, advanced research and clean tech in a bid to compete with the US, according to Bloomberg

FX

• DXY is flat with price action in the FX space contained amid quiet newsflow. Today's data highlight comes via weekly claims data (covers the NFP survey week). DXY currently sits in a narrow 108.16-43 range. Focus will also be on US President Trump, who is set to appear in Davos at 16:00 GMT / 11:00 EST.
• EUR is flat vs the Dollar with EZ-macro drivers light other than an ongoing drip feed of rhetoric from various ECB speakers who have added little to the debate on the GC given that a 25bps cut next week is so nailed on. EUR/USD is back below its 50DMA at 1.0437 but maintaining a footing above the 1.04 mark after delving as low as 1.0391 in early trade.
• JPY is flat vs. the USD as mostly better-than-expected Japanese trade data did little to spur a reaction in the currency. Greater attention lies on Friday's BoJ policy announcement and Governor Ueda press conference. Policymakers are set to pull the trigger on a 25bps hike with such an outcome priced at around 95% following a slew of recent source reports suggesting that this is the case. USD/JPY is currently contained on a 156 handle within a 156.21-75 range.
• GBP is trivially softer vs. the USD and EUR with fresh macro drivers for the UK on the light side asides from messaging out of the UK government which is attempting to kickstart its growth agenda. Greater attention lies on tomorrow's PMI metrics. Cable is currently pivoting around the 1.23 mark.
• Antipodeans are both marginally softer vs. the USD and towards the bottom of the G10 leaderboard with downside coinciding with a downward drift in European equities.
• EUR/NOK was choppy after the Norges Bank kept its Key Policy Rate at 4.50% (as expected) and reiterated that the “the policy rate will likely be reduced in March”; the pair slipped to lows of 11.7269 from pre-announcement levels of around 11.74. CapEco thinks the path of inflation will allow the Bank to move "a bit more quickly", cutting by 25bps once per quarter until the policy rate reaches 3% in the middle of 2026.
• PBoC set USD/CNY mid-point at 7.1708 vs exp. 7.2826 (prev. 7.1696).

Fixed Income

• USTs are modestly lower, in-fitting with peers; Potentially another relatively quiet session in terms of non-supply fixed drivers, with impetus potentially from weekly claims and then a virtual appearance by US President Trump in Davos at 16:00 GMT / 11:00 EST. USTs are modestly lower but also find themselves in a narrow 108-11+ to 108-19+ band. A brief bounce in EGB's following strong French/UK auctions were not seen in USTs, hence still reside at lows.
• Bunds hold a slight bearish bias, arising despite the pressure seen in equities. Downside which is relatively minimal in nature and as such is potentially not worth reading into significantly with no clear or overt driver behind it in recent trade and as it continues the bearish-trend WTD as we continue to await a significant tariff update from Trump who is scheduled at 16:00GMT. Bunds bounced off a 131.70 trough following a strong French/UK auction, but the pressure returned soon after to make a fresh session low at 131.57.
• OATs underperformed into their supply which likely saw a record amount offered for and bid on the exclusively shorter-dated tap. An outing which was very strong across the board and as such OATs have picked up by around 20 ticks from the 122.48 session low following the bidding deadline passing. However, the benchmark remains in the red.
• Gilts are also in the red. UK specifics light aside from some incremental updates around potential closer trade ties with the EU, though nothing concrete/significant has emerged on this yet. A strong UK 2028 auction, saw the b/c top 3x, and helped to boost Gilts by around 10 ticks from the bottom-end of a 91.74-92.05 band - though in-fitting with peers, pressure returned to take Gilts back to a fresh low of 91.67.
• UK sells GBP 4.25bln 4.375% 2028 Gilt Auction: b/c 3.2x (prev. 3.12x), average yield 4.384% (prev. 4.499%) & tail 0.2bps (prev. 1.0bps).
• France sells EUR 13bln vs exp. EUR 11-13bln 2.50% 2027, 5.50% 2029, 2.75% 2030 OAT auction.

Commodities

• Crude futures trade with a modest upward tilt in the absence of major newsflow during the European morning and after settling marginally lower yesterday following a choppy session. Brent Mar in a USD 78.60-79.31/bbl parameter.
• Precious metals are mostly softer as the dollar remains resilient but with broader newsflow light in the European morning thus far. Spot gold traded rangebound overnight and took a breather after recently advancing to its highest level in almost three months, currently in a USD 2,740.86-2,756.59/oz range.
• Base metals are lower across the board amid the tentative risk mood and with Trump's Chinese tariffs threats remaining a grey cloud over demand in the complex.
• Private inventory data (bbls): Crude +1.0mln (exp. -1.2mln), Distillate +1.9mln (exp. -0.0mln), Gasoline +3.2mln (exp. +2.3mln), Cushing +0.5mln.
• MMG (1208 HK) says Las Bambas copper production expected between 360k-400k tonnes in 2025; delivered copper production 15% higher in 2024; Zinc copper production in 2024 is 8% higher than 2023.
• EU reportedly plans to extend gas storage refill targets (main target of 90% full storage by Nov) ahead of winter for another year (set to expire Dec 2025), according to EU diplomats cited by Reuters.

Geopolitics: Middle East

• "Heavy Israeli tank fire on city centre Rafah Southern Gaza Strip", according to Al Jazeera.
• US Secretary of State Rubio spoke to Israeli PM Netanyahu and conveyed that he looks forward to addressing threats posed by Iran.
• White House designated Yemen's Houthi movement as a foreign terrorist organisation and said the policy of the US is to cooperate with regional partners to eliminate Houthis' capabilities and operations.

Geopolitics: Ukraine

• "A senior European source told me this week yes, Russia has significantly escalated sabotage and it poses a real threat. But there’s a danger of adding 2 + 2 and getting five, concluding that Russia is deliberately behind everything", via to WSJ's Norman.
• Military administration in Zaporizhia reported 4 explosions in the city of Zaporizhia in southeastern Ukraine due to Russian missile shelling, according to Al Jazeera.

Geopolitics: Other

• US Secretary of State Rubio spoke to Venezuela's Edmundo González Urrutia and María Corina Machado on Wednesday, while he reaffirmed US support for the restoration of democracy in Venezuela and the immediate release of all political prisoners. Rubio also spoke with South Korean Foreign Minister Cho held a phone call and stated that the US-South Korea alliance is the linchpin of regional peace and security. Furthermore, he spoke to the Philippines Secretary of Foreign Affairs about China's dangerous and destabilising actions in the South China Sea.

US Event Calendar

• 08:30: Jan. Continuing Claims, est. 1.87m, prior 1.86m
• 08:30: Jan. Initial Jobless Claims, est. 220,000, prior 217,000
• 11:00: Jan. Kansas City Fed Manf. Activity, est. 0, prior -4

DB's Jim Reid concludes the overnight wrap

Markets continued to advance over the last 24 hours, with the S&P 500 (+0.61%) closing just -0.06% beneath its all-time high in early December. That was driven by another batch of strong earnings results, which led to growing optimism about the economic outlook over the next couple of years. In fact, the latest gains mean the S&P 500 is now up +3.48% in 2025 already, making this the strongest start to a year since before the pandemic in 2019, when the S&P was up by +5.03% at this point. Over in Europe it was a similar story, with the STOXX 600 closing just a whisker beneath its own record high from late-September.

Tech stocks were driving those gains yesterday, with Netflix (+9.69%) posting the largest advance in the S&P 500 after announcing the biggest quarterly subscriber gain in their history. Otherwise, Procter & Gamble (+1.87%) also had a strong day, as their quarterly sales beat expectations for the first time in over a year. And the Magnificent 7 (+1.32%) outperformed as well, led by Nvidia (+4.43%). That came amid broad gains for AI-related stocks, with Oracle (+6.75%) and OpenAI’s partner Microsoft (+4.13%) advancing after unveiling the AI investment partnership with President Trump the previous evening. However, unlike recent days, the rally didn’t have much breadth to it, with nearly two-thirds of the S&P 500 lower on the day and the equal-weighted version (-0.37%) ending a run of 6 consecutive gains. So even as the overall index almost hit a new record, it was a narrow rally led by tech stocks, of the sort we’ve been used to over 2023 and 2024.

We’ll hear a lot more on the earnings front next week, including from Apple, Microsoft, Amazon, Meta and Tesla. But in the meantime, investors are still heavily focused on the new Trump administration and how it’s going to pursue the implementation of tariffs. In terms of the last 24 hours, Trump did make a post on Truth Social about Russia, saying that if a deal weren’t made to settle the war, he would “have no other choice but to put high levels of Taxes, Tariffs, and Sanctions on anything being sold by Russia to the United States, and various other participating countries.” The comments confirm suggestions that the new administration might take tougher sanctions measures against Russia, even if they might be less willing to provide more military aid to Ukraine. Otherwise, there weren’t any fresh developments on tariffs yesterday, so the focus now turns to the February 1 tariff deadline that Trump suggested earlier this week.

Given the risk-on tone for markets, US Treasury yields also moved higher yesterday, with the 10yr yield up +3.5bps to 4.61%. In part, that was because of some growing doubts about whether the Fed would still cut rates by much (if at all) this year, particularly with the S&P 500 nearing new highs and financial conditions easing over recent weeks. But overall, it wasn’t a particularly big move, and the focus is increasingly turning to the Fed’s decision next week, and how Chair Powell is set to describe the outlook.

Meanwhile in Europe, the STOXX 600 (+0.39%) posted a 6th consecutive advance, which meant it closed just -0.008% beneath its own record high from late-September. And in Germany, the DAX (+1.01%) hit a new record once again, meaning its YTD gains now stand at +6.76%, the strongest of any major global equity index. That came alongside an increasingly optimistic tone in Europe, with the Franco-German 10yr yield spread down to its tightest in over two months, at 74bps, whilst Euro IG credit spreads are at their tightest in three years as well, at 96bps.

Elsewhere, we heard from several ECB speakers ahead of next week’s decision. Austria’s Holzmann suggested that it would be better “to wait a bit more” before the next rate cut, but there was no other pushback against a widely expected 25bps cut next week. ECB President Lagarde described the central bank as “on this sort of regular, gradual path”, while Spain’s Escriva said that a 25bp cut “feels like this is the most likely scenario” and Dutch central bank governor Knot noted that he was “pretty comfortable with the market expectations (for rate cuts in January and March)”. In all, those comments weren’t much of a surprise, and European rates traded in line with the global pattern for the most part, with yields on 10yr bunds (+2.1bps) and BTPs (+1.2bps) both moving higher, although French OATs (-0.7bps) outperformed.

Overnight in Asia, the market rally has continued for the most part, with Chinese equities leading the way, including the CSI 300 (+1.07%) and the Shanghai Comp (+1.35%). That’s been supported by comments from the China Securities Regulatory Commission, whose chairman said that mutual funds should increase their onshore equity holdings by at least 10% each year for the next 3 years. So for equity markets, that helped to offset concern about potential tariff threats. However, South Korean equities have underperformed this morning, with the KOSPI down -0.72%. That comes as South Korea’s growth data was weaker-than-expected overnight, with Q4 GDP only up by +0.1% (vs. +0.2% expected), and annual GDP for 2024 was up +2.0% (vs. +2.1% expected). That continues a pattern of pretty flat growth in recent quarters, with a -0.2% contraction in Q2, followed up by +0.1% growth in Q3 and Q4.

Over in Japan, the focus is increasingly turning to the Bank of Japan’s decision tomorrow, where markets are increasingly expecting another rate hike. Indeed, if they do announce a 25bp hike as expected, that would be the biggest hike since 2007, so it would continue the path towards monetary policy normalisation we’ve seen over the last year. In the meantime, the December trade data overnight showed that Japan’s trade surplus with the US was at ¥8.6 trillion in 2024, only slightly beneath the ¥8.7 trillion in 2023. Otherwise, the Nikkei (+0.97%) has continued to advance this morning, and its weekly advance of +4.11% as it stands would be its biggest since late September. Looking forward, US equity futures are only slightly lower, with those on the S&P 500 down -0.08%.

To the day ahead now, and data releases include the weekly initial jobless claims in the US, along with the European Commission’s preliminary consumer confidence reading for January in the Euro Area. Otherwise from central banks, we’ll hear from the ECB’s Escriva.

Tyler Durden Thu, 01/23/2025 - 07:51

"Pretty Shocking Print": Puma's Dismal Earnings Send Shares Crashing 

Puma shares crashed as much as 19% on Thursday, the largest intraday decline since September 2001. The selloff was triggered after the German sportswear company released preliminary 4Q24 net income figures that fell short of consensus analyst estimates. Also spooking investors, Puma announced a cost-efficiency program to curb margin pressures. 

Here's a snapshot of Puma's preliminary fourth-quarter results (courtesy of Bloomberg): 

• Prelim net income EU24 million, estimate EU54.5 million (Bloomberg Consensus)

• Prelim sales EU2.29 billion, estimate EU2.27 billion

• Prelim currency adjusted sales growth of 9.8%

• Prelim operating EBIT €109 million, vs € 94 million y/y

"Puma have pre-released their [fourth quarter/full year] results which are slightly below market expectations. Fourth quarter did not accelerate to the extent the market was anticipating with earnings and margin delivery also softer than expected," analysts at RBC Capital Markets penned in a note to clients. 

"Overall, we expect the shares to be under pressure and anticipate consensus downgrades for 2025," the analysts added.

Puma also announced cost cuts, with the aim of increasing the margin before interest and taxes to 8.5% by 2027. To achieve this, it said it would relocate staff to "strategic growth areas" such as marketing while keeping the total headcount "stable."

Goldman's Natasha de la Grense called the preliminary results a "pretty shocking print":

Pretty shocking print in the context of 1) adidas pre-announcing positively, 2) Puma sounding confident on Q4 as recently as November. It's a decent miss on Q4 EBIT (17%) driven by slightly worse cFX sales (+9.8% vs consensus +11.9%), GM but mostly opex. Simply reversing the €30m FX headwind last year should have got them to €124m EBIT and instead Q4 was €109m (consensus €131m) i.e. underlying profits down despite 9.8% sales growth. In addition, the 2025 8-8.5% margin target seems to have been pushed out as they are now talking to 8.5% by 2027 – consensus wasn't quite there for next year (7.8%) and stock has pulled back recently on nervousness around 2025 margin guide but still think this optically looks poor. Bottom line, while "only" a 3% miss on FY24 EBIT, there is a growing credibility issue here and questions will be raised around that H125 order book (which had been guided up DD – similar to Q4 – and in the end Q4 wholesale was +6.9%).

The downgrade in profit margin guidance and cost-cutting efforts were enough to send shares in Frankfurt crashing by as much as 19%, the largest intraday decline since September 2001.

Here is additional commentary from Wall Street analysts (courtesy of Bloomberg): 

JPMorgan (neutral)

• Analyst Olivia Townsend calls the results "weak," and says most of the sales shortfall against her estimates mainly came in the Americas region, where there was a surprising sequential deceleration in North America

• On the cost efficiency program, notes consumer discretionary companies tend to be rewarded in the long term for "earnings growth driven by the successful delivery of accelerating brand momentum (which we do not see much evidence of), rather than cost reduction"

• Results, along with those of Adidas, "demonstrate the importance of brand momentum" and make Adidas's delivery seem even stronger

• PT cut to €42 from €47

Morgan Stanley (equal-weight)

• Analyst Grace Smalley says the change in commentary since November and launch of a cost efficiency program is likely driven by factors including a strengthening US dollar, increased tariff risk to China and slower momentum in Puma's brand elevation strategy

• PT cut to €37 from €44

Citi (neutral)

• Analyst Monique Pollard says sales excluding FX were slightly softer than she had anticipated

• Net income also fell short of Pollard's expectations; notes commentary from management on how this was caused by higher net interest expenses and higher non-controlling interests

Deutsche Bank (buy)

• Both the preliminary 4Q and FY results were "weaker than expected both from revenue and profitability perspective," analyst Adam Cochrane writes

• PT cut to €55 from €60

Jefferies (hold)

• The new cost savings program as well as the shift of the margin target from 8%-8.5% in 2025 to 8.5% in 2027 suggests analyst estimate cuts for 2025 will be "significant despite a targeted step up in sales growth," analyst James Grzinic writes

• If this happens, "the low valuation is unlikely to prove especially effective downside protection"

Bloomberg Intelligence

• "Higher costs to support Puma's direct-to-consumer (DTC) segment are likely culprits to its weaker 2024 preliminary operating margin of 7.1%, which trailed consensus' 7.3%," analyst Poonam Goyal writes

Meanwhile, Puma's struggles stand in stark contrast to those of its rival, Adidas AG, which reported solid earnings for the 4Q25, driven by high demand for its retro sneakers.

Tyler Durden Thu, 01/23/2025 - 07:45

Gold In 2025: After The Rally Is Before The Rally

Authored by Ronnie Stoeferle via ConGreyerz.gold,

2024 was an eventful year in politics. Around half of the world’s population was called to the polls for presidential or parliamentary elections. For the first time in the history of Western democracies, every governing party lost support in the elections. Among all the changes of government, Donald Trump’s return to the White House stands out, especially as the Republicans also hold the majority in the Senate and the House of Representatives. A few weeks ago, the German traffic light coalition collapsed after long squabbles. Germany is now voting prematurely at the end of February.

For gold investors, 2024 was truly a golden year. The yellow precious metal gained 27.2% in US dollars, 35.6% in euros and 37.1% in Swiss francs. The marked differences in performance in the various currencies indicate the significant exchange rate shifts between the currencies last year. In US dollars, 2024 was the sixth year with a positive annual performance for gold since 2016; in euro terms, it was the seventh consecutive year with positive returns. In Swiss francs, the rhythm that has existed since 2015 – one year of losses followed by two years of gains – was broken in favour of gains. Gold in Swiss francs has, therefore, closed seven of the past 10 years with positive returns. And in the first days of the new year, gold reached a new all-time high in euro terms, due to continued weakness of the euro weakened.

The astounding rise in the price of gold since the summer was halted by Donald Trump’s re-election as US President at the beginning of November. However, the dip in the final weeks of 2024 was unable to significantly change the far above-average annual performance of gold. In euros and Swiss francs, the marked appreciation of the US dollar since Donald Trump’s re-election prevented a decline in the price of gold in both currencies.

Gold beat most other asset classes in 2024

With a clear double-digit percentage increase, gold outperformed most stock markets, which also performed well to very well. Gold was even ahead of the booming US stock market.

Year-on-year, there was little movement in long-term bonds despite the repeated interest rate cuts. However, 2024 was another year in which bonds ended the year in the red. The 10-year US Treasury fell slightly, marking the third year in the past four in negative territory. This also applies to the 10-year German Bund.

Among the other precious metals, silver also had an outstanding year, gaining 21.5% on a US basis, 29.6% on a EUR basis and 31.0% on a CHF basis, despite the marked weakness following the US elections at the beginning of November. In the wake of the bull market in precious metals, mining stocks also recorded gains. The HUI rose by as much as 13.3%.

Public debt continues to grow skywards

After the impressive gold price rally last year, it would come as no great surprise if the gold price were to continue or even intensify its consolidation phase, which has been ongoing since Donald Trump’s re-election, following the strongest annual rise since 2010. The first trading days of the new year did not confirm this fear. In the medium and long term, the general conditions for gold remain positive to very positive.

One structural factor supporting gold is the permanent growth of public debt, aggravated by the fact that public debt is reaching a critical level, even in industrialized countries. In April last year, the Director of the International Monetary Fund (IMF), Kristalina Georgiewa, warned with unusual urgency about the development of sovereign debt, particularly in industrialized countries.

She said: “Our forecasts point to an unforgiving combination of low growth and high debt – a difficult future.” It is true that the growth prospects for the US are better than for most other industrialized countries precisely because of the high budget deficits. However, an economic slowdown due to an escalation in geopolitical tensions or as a result of the broad use of tariffs announced by Trump would also affect the US.

Donald Trump, the politician who described himself as the “king of debt” during the 2016 election campaign, was re-elected US President. In 2017, he moved into the White House with a US debt of just under USD 20trn; now, it stands at over USD 36trn or 80% more. As a percentage of economic output, the increase is almost 20%!

Trump cannot reject this legacy; on the contrary, it can be assumed that he will continue to increase it – in a negative sense. The Committee for a Responsible Federal Budget (CRFB), a non-partisan organization, has made calculations on the development of the US national debt based on the proposals presented by Trump during the election campaign up to the end of October. The CRFB’’s calculations showed that, based on the legal situation at the time, the US public debt would rise from its current level of around 100%, i.e. excluding intragovernmental debt of around 20% of GDP, to 125% by the end of 2035. The range of proposals presented by Donald Trump during the election campaign would see the US national debt rise to between 128% and 180%, with 142% as the most likely scenario. In his first term in office, Donald Trump widened the deficit from 3.4% in his first year in office to 4.6% in 2019 and then to 14.7% in the first year of the Covid-19 pandemic. Whether the new/old US president will actually implement his announcement to get the structurally high US budget deficit under control through massive spending cuts by establishing the Department of Government Efficiency (DOGE) is doubtful, given the experience of his first term in office, especially as many states governed by Republicans also benefit considerably from the transfers from Washington. In addition, the next federal elections in the US are already just around the corner. The entire US House of Representatives and a third of the Senate will be re-elected in November 2026.

Europe’s number one problem child, France, is also failing to get its budget under control. At around 6%, it is of similar size as the US deficit. Add to that the political instability of France. France is on its way to becoming the new Italy, both politically and economically. However, France has a completely different, heavier political and economic weight in the EU and in the ECB than Italy. Germany is back on the consolidation path due to the constitutionally secured debt brake.

And China is supporting its weakening economy with fiscal and monetary policy measures. Accordingly, the Chinese budget deficit is steadily increasing and is likely to exceed the 6% mark. As a result, the deficits are pushing up the government debt ratio. The precarious debt and, in many cases, fiscal situation will put more and more central banks under at least indirect pressure to loosen monetary policy.

Central banks are already cutting interest rates again

The number of over 60 interest rate cuts in the fall of 2024 is the fourth-fastest decline in global interest rates since the turn of the millennium. At the peak of the rate cut cycle during the global financial crisis, the number of rate cuts was only slightly higher at 76. These repeated interest rate cuts and the announcement of further interest rate cuts are surprising in that inflation on both sides of the Atlantic remains stubbornly above the inflation target of 2.0%. Relief for the inflation rate has come primarily from energy prices in recent months. According to the flash estimate, even this trend came to an end in the eurozone in December 2024, particularly due to the sharp depreciation of the euro against the US dollar since Trump’s election victory.

Core inflation, in particular, is proving to be quite stubborn in many countries. Core PCE inflation has been consistently above the 2.5% mark since May 2021, while core CPI inflation has even been above the 3% mark over the same period. The long-lasting disinflationary trend came to an end in summer 2024. In the eurozone, core inflation has been moving sideways, well above the 2% mark for more than half a year

It is, therefore, not surprising that capital market interest rates are developing differently from key interest rates. Since the first interest rate cut in the US by a surprising 50 basis points on 18 September 2024, the yield on the 10-year US Treasury rose significantly by almost 1 percentage point by the end of the year, while the federal funds rate was cut by a total of 1 percentage point.

Despite QT: M2 rises again globally

The interest rate cuts are already having an impact on the development of the M2 money supply in the world’s most important currency areas. In the summer of 2024, the global money supply gained momentum, even though the Federal Reserve and the ECB are continuing their respective QT programs, and the Bank of Japan has also been reducing its balance sheet for several months. However, this reduction in the balance sheet total to a “normal” level cannot compensate for the People’s Bank of China’s expansionary course. The significant monetary stimulus measures are driving the global money supply trend, in combination with the numerous fiscal stimulus measures that are now in place.

Demand for gold remains high despite price rally

Despite the soaring price of gold in the calendar year 2024, demand for gold remains high, although there have been notable shifts in demand categories. At 3,761.9 tons, total demand in the first three quarters of 2024 set a record for the first nine months of a calendar year. Compared to 2023, total demand increased by 2.7% in this period.

Central bank demand declined compared to the record year 2022 and the second-best year 2023 but remains at a very high level. After just three quarters, it is already certain that central bank demand for gold in 2024 will be at least the third strongest year since 2010, the year in which central banks became net buyers again. In October 2024, the central banks increased their gold holdings by 60 tons, the highest monthly figure in 2024, and in November by a further 53 tons. In addition, after pausing for several months, the People’s Bank of China also returned as a buyer. There seems to be no end in sight to the current above-average demand for gold from central banks

The development in the category “OTC and other” continues to be striking. In this category, an increase of 61.0% was recorded in the first three quarters compared to the previous year. After 2020, when OTC demand doubled compared to 2019, 2024 is likely to be the second strongest year in this demand category. In times of global tensions and rising mistrust, bilateral settlements are clearly gaining in importance. Gold ETFs recorded a net outflow in 2024 as a whole. While minimal inflows were recorded in the US and significant inflows in Asia, there were strong outflows in Europe. However, December 2024 was the first December 2019 with net inflows. This could signal a trend reversal.

On the supply side, there was an increase of 3.0% in gold mining and 9.1% in gold recycling, which is why the total supply rose by 2.7% year-on-year in the first three quarters. The substantially higher gold price is having an impact on the supply side.

Conclusion

Following Donald Trump’s re-election, the long-awaited consolidation phase in the gold price set in. This breather is a good sign, as this consolidation allowed speculative demand to be reduced. The foundations have thus been laid for a continuation of the upward trend.

There are, however, some downward risks to gold in 2025: A continuation of the rally in cryptocurrencies could have a dampening effect on the price of gold in 2025, as could the increased attractiveness of bonds due to higher yields or a further upswing on the stock markets, as well as a stabilization of the Chinese real estate market and a lasting easing of geopolitical tensions.

All in all, however, it can be assumed that the general economic and (geo)political climate will continue to support the gold price in 2025, even if a repeat of the record year 2024 should not be expected.

Despite the record run in 2024, gold is not overpriced.

Adjusted for inflation, gold only reached a new all-time high in the fall of 2024, replacing the previous all-time high from January 1980.

In nominal terms, gold rose more than fourfold during this period, but global GDP increased more than ninefold and the S&P 500 almost tenfold.

The risks on the equity and bond markets, as well as a possible weakening of the US dollar following Donald Trump’s inauguration, could give gold an additional boost. There is, therefore, much to suggest that gold will continue to perform well in 2025.

Tyler Durden Thu, 01/23/2025 - 07:20

Popularity Of Meta Smart-Glasses Erupt As Apple Vision Pro Demand Vanishes

Demand for Meta's smart Ray-Ban glasses has been explosive, surpassing Apple Vision Pro in late 2024. New app download data from the fourth quarter of 2024 suggests Meta's mass-market appeal is primarily driven by price affordability.

Goldman's Jack McFerran showed Sensor Tower data that revealed a massive 200% year-over-year increase in the "Meta View" app downloads in 4Q24, suggesting that these glasses, priced at around $300, were a hit with consumers during the Christmas holiday shopping season. 

Source: Goldman

McFerran laid out Meta's wearables product roadmap through the end of the decade:

1. True AR Glasses speculated for release in 2027 with potential support from an accompanying wrist strap, with potential to open Orion Prototypes to software developers in 2026 - noting recent comments that products currently cost US$10k to manufacture; and

2. Prototypes of Advanced Earbuds which also include cameras and are similar functionality to current Ray-Ban Meta frames are also being investigated, but face difficulties around visibility.

Zuck showing Meta’s new glasses,it's called Orion.pic.twitter.com/JbDo8HvViJ

— AshutoshShrivastava (@ai_for_success) September 25, 2024

"That is a very real-time data point on sales. Louise and Ben have pulled the app data so we can see quite how bumper xmas really was," McFerran.

Wearable sales at Meta could contribute 5% of revenue by 2028, up from 1.2% last quarter.  

Google Search trend for "Meta glasses" spiked in the second half of 2024. 

And we wonder why. 

Zuck might have something here. On the other hand, Tim Cook struck out with $3,500 Vision Pros. 

Tyler Durden Thu, 01/23/2025 - 06:55

Germany's Outgoing Economy Minister Warns Europe Not To Over-Rely On US Energy

Authored by Tom Ozimek via The Epoch Times,

Europe must avoid becoming too dependent on U.S. energy supplies, Germany’s outgoing economy minister Robert Habeck cautioned on Jan. 21, which comes amid President Donald Trump’s demands that the European Union (EU) buy enough American oil and gas to make up for the U.S. trade deficit with the EU - or face tariffs.

Habeck, a member of Germany’s Green Party, said at the Handelsblatt energy summit in Berlin on Jan. 21 that relying too much on U.S. energy supplies risks repeating the same type of “blackmail that we had in Russia.”

Europe’s high degree of reliance on Russian energy constrained the region’s ability to respond to Russia’s invasion of Ukraine with forceful sanctions like cutting energy ties entirely to starve Moscow of revenues, which have bolstered the Kremlin’s war chest.

Habeck urged Europe to “meet the Trump administration with an outstretched hand, but not have our hand cut off,” adding that the EU should define its own interests rather than submit to America’s direction.

It comes as Trump recently threatened to impose tariffs on European countries unless they buy large enough quantities of U.S. energy to make up for the EU’s trade gap with the United States, which in 2023, stood at around $57 billion in favor of the EU.

“I told the European Union that they must make up their tremendous deficit with the United States by the large-scale purchase of our oil and gas. Otherwise, it is tariffs all the way,” Trump wrote in a Dec. 20 post on Truth Social.

European Commission spokesperson Olof Gill told The Epoch Times in response to an inquiry about Trump’s tariff threat that the bloc is prepared to hold discussions with the Trump administration on how to address its concerns.

“The EU and U.S. have deeply integrated economies, with overall balanced trade and investment. We are ready to discuss with President-elect Trump how we can further strengthen an already strong relationship, including by discussing our common interests in the energy sector,” Gill told The Epoch Times in an emailed statement.

Trump has long been a critic of America’s trade deficits with other countries and an advocate of using tariffs as a negotiating tool to achieve various policy aims. One of these objectives is for Europe to import more energy from the United States, which would both add to America’s wealth and help European nations bolster their security with a NATO ally by further reducing reliance on Russian imports.

While the EU has dramatically decreased its reliance on Russian energy since the outbreak of the war in Ukraine, the bloc continues to import significant quantities of Russian natural gas. In fact, Europe imported a record 16.5 million metric tons of liquefied natural gas (LNG) from Russia in 2024, exceeding the prior record of 15.2 million that it imported in 2022. This comes despite the EU’s pledge to cut all energy deals with Russia by 2027.

European officials have acknowledged they need to do more to wean the bloc off Russian energy. European Commission spokesperson Anna-Kaisa Itkonen told reporters in Brussels on Jan. 20 that, despite lack of progress in some areas, the EU is determined to cut all energy ties with Russia and is finalizing a plan to accomplish this aim.

“We cut all Russian coal imports, most Russian oil imports, and over two thirds of Russian gas,” Itkonen said. “Despite these significant results, there is still presence of Russian gas on the EU market. And this is something that we'd rather not see.”

Top EU officials have indicated their intention to increase purchases of American energy. Ursula von der Leyen, president of the European Commission, said in November that LNG imports from the United States could replace the bloc’s remaining imports of Russian LNG.

“We still get a whole lot of LNG via Russia, from Russia,” von der Leyen told reporters at a summit in Budapest, Hungary, on Nov. 8. “And why not replace it with American LNG, which is cheaper, and brings down our energy prices.”

Meanwhile, in a bid to bolster domestic U.S. energy production—which would increase its availability for export to allies—Trump on Jan. 20 signed an executive order lifting former President Joe Biden’s freeze on LNG export permitting, as well as other orders promoting oil and gas exploration in Alaska, and reversing Biden’s actions aimed at protecting Arctic lands and coastal waters from drilling.

Tyler Durden Thu, 01/23/2025 - 06:30

Russian Official Warns Trump Against Taking Control Of Panama Canal

A top Russian official on Tuesday warned the Trump administration against taking over the Panama Canal after the president stated in his inaugural address that he intended to regain control of the strategic waterway.

Since the election, President Donald Trump has mentioned on several occasions that the United States should reassert control over the canal, which was built by Americans and controlled by the U.S. government until the Carter administration. Panama’s president has said that his government will not give up control of the canal.

As Jack Phillips reports for The Epoch Times, Trump’s comments prompted a response from Alexander Shchetinin, head of the Latin American department at the Russian Ministry of Foreign Affairs, who said that Moscow expects the leadership of Panama and the Trump administration to respect the “current international legal regime of this key waterway” during any discussions about control of the Panama Canal, according to a translation of comments reported by Russia’s state-run news agency TASS.

“Russia has been a party to the protocol since 1988 and reaffirms its obligations to respect the permanent neutrality of the Panama Canal, advocating for keeping this international transit waterway safe and open,” Shchetinin said, adding that the canal legally belongs to Panama.

The Panama Canal links the Pacific Ocean and the Caribbean Sea and is considered one of the most important trade routes in the world. About 40 percent of U.S. container ships pass through the waterway, according to the Center for Strategic and International Studies.

The U.S. government built the canal in the early part of the 20th century, starting under the administration of President Theodore Roosevelt, after it took over construction in 1904. Under President Jimmy Carter, negotiations started on handing over the waterway to the Panamanian government by the end of the 20th century.

Trump has said that Chinese entities are operating the canal, which he said is unacceptable. In his inauguration speech at the U.S. Capitol on Monday, Trump again spoke about the canal.

“American ships are being severely overcharged ... and above all, China is operating the Panama Canal, and we didn’t give it to China, we gave it to Panama, and we’re taking it back,” he said.

Responding to Trump’s earlier comments, Panamanian President Jose Raul Mulino, in a video released on social media in December 2024, rejected arguments that the United States could reassert control over the canal.

“As president, I want to clearly state that every square meter of the Panama Canal and its adjoining zone is Panama’s and will remain so,” Mulino said at the time. “The sovereignty and independence of our country is non-negotiable.”

Trump has also suggested that the United States could take control over Greenland, the world’s largest island located in the North Atlantic that is currently part of Denmark’s territory.

Speaking to reporters on Monday as he signed executive orders in the White House, the president said he believes Denmark will “come along” on the possible sale of Greenland to the United States.

“Greenland is a wonderful place. We need fair, international security, and I am sure that Denmark will come along, I think. It’s costing them a lot of money to maintain it, to keep it,” he said.

Tyler Durden Thu, 01/23/2025 - 05:45

Thailand Could Be The Home Of The Next Luxury Yacht Boom

Thailand could be the next home for a luxury yacht boom after "wealthy residents of Thailand caught the sailing bug during the COVID-19 pandemic," according to a new Nikkei Asia report.

The enthusiasm wound up boosting marinas, yacht brokers, and related industries. Yacht traffic at Phuket, Koh Samui, and Pattaya surged 63% from 2022 to 2024, with over 2,000 trips through Phuket alone, according to the Ministry of Transport, the report says.

Recognizing the economic potential, Prime Minister Paetongtarn Shinawatra attended the Phuket boat show on Jan. 12. The global luxury yacht market, valued at $8.75 billion in 2024, is projected to grow to $17.3 billion by 2032, with the Asia-Pacific leading growth due to rising incomes, maritime tourism, and government support.

Paetongtarn said at the show: "The government is ready to fully support luxury marine tourism to continue to grow more."

Lies Sol, a Phuket-based charter manager for yacht brokerage Northrop & Johnson told Nikkei: "The main aim is to get Thai people more familiar with yachting and let them grow into luxury yachts. Before you buy, why don't you charter and learn what is essential for you?"

The Nikkei report says that Thailand's Transport Ministry plans to lower the yacht charter license size requirement from 29 meters to 24 meters, increasing options for day trips and tours.

Former Prime Minister Thaksin Shinawatra has reportedly used chartered yachts for private political meetings, including with Malaysia's Prime Minister Anwar Ibrahim.

At the Phuket boat show, Thai buyers remained discreet, while Russian, Chinese, British, and Australian enthusiasts were prominent. Over 5,000 visitors attended the expo, showcasing 50 yachts, since its debut in 2023.

As the report notes, competition from Malaysia and Indonesia is strong due to tax exemptions and relaxed regulations, drawing yacht owners away from Thailand.

And while Thailand promotes yachting as a luxury lifestyle, fuel costs, environmental concerns, and limited infrastructure remain challenges. Despite this, rising local interest, a strong resale market, and regional collaboration to position the Andaman Sea as a global yachting hub indicate significant growth potential.

Tyler Durden Thu, 01/23/2025 - 04:15

US Sanctions Could Hit 1.5 Million Bpd Of Russian Oil Exports

Authored by Tsvetana Paraskova via OilPrice.com,

• The outgoing U.S. Administration on January 10 imposed the most severe sanctions on Russia’s oil yet.

• Many of the vessels transporting Russia’s oil from the Arctic and Far East Pacific fields and production clusters to Asia have now been sanctioned.

• India’s refiners have stopped doing business with the Russian tankers and companies sanctioned by the U.S., a source at the Indian government told Reuters on Monday.

One week into the latest – and most aggressive yet – U.S. sanctions on Russian oil exports, the Asian buyers of Russian crude are scrambling for alternative supply, the price of oil has rallied, and analyses suggest that more than 1 million barrels per day (bpd) of Moscow’s export volumes could be severely constrained, at least in the short term.

The outgoing U.S. Administration on January 10 imposed the most severe sanctions on Russia’s oil yet, designating two major Russian oil companies, Gazprom Neft and Surgutneftegas, as well as 183 vessels, dozens of oil traders, oilfield service providers, insurance companies, and energy officials.

Many of the vessels, specialized tankers, and shuttle tankers transporting Russia’s oil from the Arctic and Far East Pacific fields and production clusters to Asia have now been sanctioned. This puts around 1.5 million bpd of Russia’s crude flows from its Pacific and Arctic ports at risk, according to a Bloomberg analysis of the tankers now designated by the U.S.

Most of the flows from the Sakhalin projects require special ice-class tankers—all of these have been sanctioned. The storage tankers and specialized vessels servicing shipments, storage, and loadings at Murmansk are also under sanctions now. The Gazprom Neft fields on the Yamal peninsula will also find it much harder to export crude—the company itself has been sanctioned, as have all its seven ice-class tankers handling shipments at and through the Arctic Gates terminal.

In the Arctic and Russia’s Far East, the crude grades most severely hit by the sanctions are expected to be Sokol, Sakhalin, and ESPO, according to Bloomberg’s analysis.

The least affected shipments are likely to be those of the Urals crude grade from the Baltic and Black Sea, which are mostly going to India.  
Only a quarter of Russia’s shipments of Urals since October were carried on now-sanctioned tankers. That’s the smallest share of designated tankers of any Russian crude grade, Bloomberg’s analysis showed.

The sanctions are already roiling the market. India and China are racing to procure alternative supply while studying the wider implications of the U.S. sanctions on Russian oil deliveries six months from now.

The sanctions caught a few million barrels of crude oil en route to India in a precarious situation. There is a wind-down period until February 27 for parties to complete dealings with now-sanctioned entities and vessels. Indian state-held refiners are targeting to settle the payments for Russian oil in half the time they have taken so far, as part of efforts to complete the deals before the seven-week wind-down period in the latest U.S. sanctions ends.

India’s refiners have stopped doing business with the Russian tankers and companies sanctioned by the U.S., a source at the Indian government told Reuters on Monday.

India doesn’t expect major disruptions during the wind-down period until March.

But “Going forward, it's early days yet to anticipate the impact, how discounts shape up, if somebody is willing to sell below the $60 price cap,” a source with the Indian government told Reuters earlier this week.

Indian officials and refiners held emergency meetings to discuss the implications of the sanctions on the exports of its single largest crude oil supplier. China’s independent refiners have also held emergency meetings to discuss the fallout and a workaround for the sanctions, sources tell Bloomberg.

Fleet capacity to service Russian exports is expected to tighten significantly, according to Mary Melton, a freight analyst at Vortexa.

So far, U.S. sanctions on individual vessels have been very effective in limiting further employment in Russian trade, Melton said this week.

According to Vortexa, the most likely scenario for Russian crude exports going forward is that they will most likely face serious logistical difficulty due to the lack of available tonnage.

“In order to keep export volumes at the same level, Russia will be forced to sell crude below the price cap. At that point, Western vessel operators would be able to get involved to lift Russian crude,” Vortexa’s Melton noted.

However, greater adherence to the Russian price cap will depend on China’s stance on allowing sanctioned vessels to call in its ports, Vortexa reckons.

Tyler Durden Thu, 01/23/2025 - 03:30