Authored by Zachary Stieber via The Epoch Times,

A federal judge on May 6 blocked the U.S. Department of Education from canceling more than $1 billion in funding that was allocated to help address the impact of the COVID-19 pandemic on primary schools and students.

U.S. District Judge Edgardo Ramos entered a preliminary injunction that prohibits the Department of Education from enforcing its recission of extensions for the funding that had been granted in January by the prior administration.

Education officials also cannot modify the previously-approved extensions without giving the states at least 14 days notice, the judge said.

Congress allocated funds to states to distribute to schools to address problems stemming from the pandemic. The more than $276 billion was distributed to states through an education stabilization fund. Under laws passed by Congress, states had until Sept. 30, 2024, to designate the money, and until Jan. 28, 2025, to access funds to achieve the designations.

States could ask for extensions for the latter deadline, and a number did so. The Department of Education granted extensions to at least 16 states, and Washington, enabling them to access the money through March 2026. 

Education Secretary Linda McMahon informed the states in March that the extensions were being rescinded because additional review had determined they were “not justified” in part because the pandemic is over, although the states could reapply for extensions.

The plaintiffs—New York, Oregon, 13 other states, Washington, and Pennsylvania Gov. Josh Shapiro—said that they were facing being cut off from more than $1 billion if a preliminary injunction was not entered.

In a memorandum in support of their motion for an injunction, they said that the Department of Education’s shift with regards to the extension requests was arbitrary and capricious, in violation of federal law. The change “assumes incorrectly that all [the] appropriations were intended only for use during the pandemic” and “lacks any reasoned explanation,” they wrote.

Lawyers for the government said in response that the actions were not arbitrary and capricious.

“The Department’s actions are not arbitrary, capricious, or contrary to law because recission of the prior extension was within the Department’s discretion and did not conflict with the relevant appropriations statutes,” they said in a brief.

The lawyers also said that the plaintiffs would not be irreparably harmed absent an injunction because they can still reapply for a fresh extension, but have chosen not to do so.

The Department of Justice, which represents agencies in court, did not respond to a request for comment on the ruling by publication time.

New York Attorney General Letitia James, a Democrat, said in a statement that “this is a major win for our students and teachers who are counting on this funding to help them succeed.”

US equity futures are higher while global market are mixed ahead of the FOMC decision later today, following news tariff talks between the US and China will begin, and after a surprise stimulus by China. As of 8:00am, S&P and Nasdaq futures are 0.6% higher (though off the highs) on reports Bessent will meet Chinese Vice Premier He Lifeng in Switzerland this weekend in the first confirmed talks between the two superpowers. Bessent later said on Fox News that the meeting will be more about de-escalation than any sort of big trade deal. In premarket trading Mag7 names and Semis are leading the markets higher while RTY appears to be squeezing into outperformance. Cyclicals are poised for a strong session, too. Overnight China’s PBOC cut its reverse repo rates and lowered lender reserve ratio to help stimulate growth. India conducted military strikes in Pakistan in which Pakistan said it shot down five Indian jets. Attention shifts to the Powell and the FOMC at 2pm which is expected to yield no surprises as the CB preaches patience. Focus during the 2:30pm press conference will be on any commentary on how long Powell intends to wait for further clarity re tariffs/impacts (reminder no SEP). Bond yields are higher alongside a stronger USD which snapped three days of declines as the Taiwan Dollar slid for a second day. Commodities are bid higher led by Ags and Energy; gold/silver are modestly lower after another powerful breakout earlier this week.

In premarket trading, Magnificent Seven stocks are all higher (Tesla +1.3%, Apple +1.2%, Amazon +1.2%, Meta +0.9%, Nvidia +0.6%, Alphabet +0.6%, Microsoft +0.5%). Advanced Micro Devices (AMD) rose 1.6% after Nvidia’s closest rival in AI processors gave a strong revenue forecast for the current period, boosted by demand for high-end computers capable of creating and running AI software. Sarepta Therapeutics plunged 19% after the maker of rare disease treatments cut its net product revenue forecast for the year. Here are some other notable premarket movers:

• Apellis Pharmaceuticals (APLS) falls 13% after posting disappointing 1Q revenue.
• Arista Networks (ANET) declines 5% as analysts note that the company’s forecast is being clouded by a tariff overhang and will prove to be conservative.
• Charles River Laboratories (CRL) rises 15% after the company entered a cooperation agreement with Elliott Investment Management. The company also launched a strategic review.
• Electronic Arts (EA) gains 4% after the video-game company issued annual net bookings guidance that came ahead of consensus expectations.
• Klaviyo (KVYO) climbs 4% after the marketing automation company boosted its full-year revenue forecast.
• Marvell (MRVL) falls 7% after the company narrowed its first quarter 2026 guidance range to be about $1.875 billion within a range of plus or minus 2%, versus the prior range of plus or minus 5%.
• ODP Corp. (ODP) rises 8% after the office products company reported sales for the first quarter that beat the average analyst estimate.
• Oscar Health (OSCR) rallies 21% after the health insurer reported total revenue and adjusted Ebitda for the first quarter that beat the average analyst estimate.
• Porch Group (PRCH) rises 21% after the home-services software company reported first-quarter revenue that beat expectations and raised its full-year revenue forecast.
• Teradata (TDC) falls 5% after the infrastructure software company gave a second-quarter outlook that is weaker than expected.
• Uber Technologies Inc. (UBER) drops 2% after posting weaker-than-expected quarterly gross bookings and slower gains in its rideshare business, raising the possibility of a consumer pullback amid souring sentiment about the economy.
• Vestis (VSTS) tumbles 25% after the uniform services firm issued a revenue forecast for the current quarter that trailed Wall Street expectations. The company also eliminated its dividend in an effort to strengthen its balance sheet.
• Walt Disney Co. (DIS) gains 6% after reporting fiscal second-quarter results that beat Wall Street estimates and raising its outlook for the full year, citing strong performances from theme parks and streaming TV.
• Zeekr’s US-listed shares (ZK) rallies 11% as Geely Auto said it wants to take the Chinese electric vehicle company private.

Today’s highlight is the FOMC decision, where the Fed is expected to do nothing (full preview here): Powell will repeat the message that tariffs pose risks to both sides of the Fed’s dual mandate and they intend to wait for further clarity. While the FOMC appears to be setting a higher bar for rate cuts than during the 2019 trade war, Goldman does not think that high inflation would deter it from cutting if the unemployment rate begins to trend higher as the tariff shock hits the economy (full FOMC preview here).

“The Fed will bang on the same message again: they won’t cut rates, and they will try to push back the moment where they will need to as long as possible,” said François Rimeu, senior strategist at Credit Mutuel Asset Management. “In that sense, there is somehow a disconnect between the market expecting multiple cuts this year and inflation expectations which remain high for the second half of the year.”

Overnight sentiment was boosted after US and Chinese officials announced they will meet this week in Switzerland. Treasury Secretary Scott Bessent told Fox News the meeting will focus on de-escalation rather than reaching a deal, but said the current tariff rates aren’t sustainable. Sentiment was also lifted by a reduction in China’s policy rate, as Beijing unveiled several measures to support its economy. 

“It’s clear that the US and China want to have some sort of de-escalation and the rhetoric has eased a little bit, so the move upwards can definitely continue,” said Justin Onuekwusi, chief investment officer at St James’s Place. The Chinese rate cut is an added positive, showing that “China recognizes the need to prevent a slowdown in growth,” he said. 

In Europe, the Stoxx 600 falls 0.3%, led lower by health care and retail stocks while miners and auto stocks outperform. Pharmaceutical stocks followed their US peers lower after the US Food and Drug Administration named Vinay Prasad, a hematologist oncologist and critic of the Covid-19 vaccine for children, as the next director of the Center for Biologics and Research. Here are the most notable movers:

• Novo Nordisk shares rise as much as 6.5%, the biggest gainer in Europe’s benchmark Stoxx 600 gauge by index points, as some analysts say a guidance cut from the Danish drugmaker was already priced in.
• Ahold Delhaize shares gain as much as 5%, extending recent gains to hit a fresh 2002-high, after the Dutch retailer posted earnings ahead of expectations in the first quarter.
• Sampo shares jump as much as 3.7%, gaining for a sixth consecutive session and hitting a new all-time high, after the Finnish insurer delivered earnings that surpassed expectations in the first quarter.
• Pandora shares gain as much as 5.5% after the Danish jeweler reported a slight first-quarter earnings beat, with US like-for-like sales sequentially accelerating.
• Amplifon shares rise as much as 5.6%, adding to Tuesday’s 6.3% advance following the hearing-aid retailer’s 1Q results, reiterated guidance and expectations for strong French market growth from the second quarter onward.
• Auto1 shares rally as much as 11% to the highest since 2021, after the used car platform raised its full-year guidance for gross profit and adj. Ebitda.
• Pharmaceutical stocks follow US peers lower after Vinay Prasad, a hematologist oncologist and critic of the Covid-19 vaccine for children, was named as the FDA’s next director of the Center for Biologics and Research.
• Sea-freight stocks decline on the prospect of lower shipping rates after President Donald Trump said the US would stop its bombing campaign against Houthis in Yemen.
• Ambu shares slump as much as 13%, the most in six months, as performance by the Danish medical equipment company’s endoscopy businesses disappointed.
• Tomra shares drop as much as 13% following first-quarter results which came in significantly below expectations, with DNB Markets noting in particular “negative deviation” from the firm’s recycling segment.
• BioMerieux shares fall as much as 2.9% as RBC downgrades the French biotech company to sector perform from outperform, saying that risks to margin aren’t fully reflected in consensus estimates.
• Storebrand shares drop as much as 3.8% after the Norwegian insurer and asset manager reported profits below expectations in the first quarter, following a disappointing performance across its most important business lines.
• Fresenius SE shares slipped as much as 1.7% as an in line earnings update with unchanged guidance wasn’t enough to further fuel this year’s rally in the dialysis company.

Asian stocks fluctuated, as Chinese shares pared earlier gains driven by the central bank’s stimulus and a confirmation of trade talks with the US. The MSCI Asia Pacific Index erased a climb of as much as 0.7% to trade little changed, as concerns over trade uncertainties remained. TSMC, Hitachi and AIA Group were the biggest positive contributors, while Sony Group, Alibaba Group and Toyota Motor weighed most on the gauge. While Chinese stocks pared early gains sparked by a cut in interest rates and measures to support the economy, the onshore CSI 300 Index remained among the biggest gainers in the region. Sentiment also got a boost as senior officials agreed to hold trade talks with the US later this week. Prospects for a de-escalation in US-China trade tensions have also raised optimism over trade deals for other countries, helping to lift benchmarks in South Korea, Japan and Australia. Elsewhere, Pakistan stocks slumped as India conducted targeted military strikes against the nation. Shares in India were relatively steady after the strikes. Meanwhile, the Philippines’ key stock index gained as much as 1.8% after the country’s central bank chief said further reductions in interest rates were on the table for this year.

In FX, the Bloomberg’s dollar index rose 0.2% snapping a three-day losing streak; investors see a possibility that the talks will lead to a dialing back of tariffs between the two countries, which could support the dollar. Traders also awaited a Federal Reserve meeting later on Wednesday, where officials are expected to hold interest rates unchanged but could offer clues on this year’s monetary-easing path. The yen is the weakest of the G-10 currencies, falling 0.6% against the greenback as haven assets underperform.

In rates, treasuries fall ahead of the Federal Reserve decision, with losses led by the front-end, extending Tuesday’s late flattening move. US 2- to 7-year yields are 2bp-3bp higher on the day with long-end little changed, flattening 5s30s curve by about 2bp; the 10-year near 4.32% is about 2bp lower than Tuesday’s auction result. The Treasury auction cycle is on hiatus until Thursday due to Federal Reserve policy announcement at 2pm New York time and Chair Powell’s news conference 30 minutes later. Fed policy announcement is widely expected to produce no change in the fed funds target range; traders in recent days have been pushing rate-cut expectations into next year, collapsing SOFR Dec25/Dec26 spreads. Treasury auction cycle concludes Thursday with $25 billion 30-year new issue, following strong demand for the 10-year.

In commodities, oil prices advance, with WTI rising 0.8% and topping $60 a barrel at one stage for the first time in a week. Spot gold falls $57 to around $3,374/oz.

The US economic calendar includes March consumer credit at 3pm. We get earnings from Disney and Uber.

Market Snapshot

• S&P 500 mini +0.5%
• Nasdaq 100 mini +0.6%
• Russell 2000 mini +0.9%
• Stoxx Europe 600 -0.3%
• DAX -0.1%
• CAC 40 -0.6%
• 10-year Treasury yield +2 basis points at 4.32%
• VIX -0.4 points at 24.34
• Bloomberg Dollar Index +0.3% at 1220.28
• euro -0.1% at $1.1353
• WTI crude +0.7% at $59.5/barrel

Top Overnight News

• India conducted military strikes that hit nine targets in Pakistan, which said it shot down five jets in retaliation. New Delhi said it targeted known terror camps, but Islamabad said 26 civilians were killed and called the move an “act of war.” BBG
• US Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer will travel later this week to Switzerland for trade talks with China led by Vice Premier He Lifeng, seeking to de-escalate a tariff standoff that has threatened to hammer both economies. It will be the first confirmed trade talks between the countries since Trump’s early April tariff announcements. BBG
• Chinese authorities announced on Wednesday a raft of stimulus measures, including interest rate cuts and a major liquidity injection, as Beijing steps up efforts to soften the economic damage caused by the trade war with the United States. RTRS
• The yield gap between 10- and 30-year Japanese government bonds hit a record. BBG
• The UK and the US are close to agreeing a trade pact that would cushion the impact of Trump’s “liberation day” tariffs by granting lower-tariff quotas for British car and steel exports, according to officials in London and Washington. FT
• German factory orders rose 3.6% in March, beating forecasts and signaling strength in the run up to US tariff announcements. BBG
• Traders are betting on a slower pace of Fed rate cuts this year amid economic resilience. Money markets are pricing three quarter-point reductions in 2025, one fewer than at the start of April. BBG
• Watching Biotech: Group down ~8.5% yesterday (3 sigma) following the appointment of Vinay Prasad to be the director of CBER (this is the seat Peter Marks previously held). Biopharma was already heavy to start the week following the Trump pharma tariff commentary on Monday. A lot of focus centering around Prasad’s less industry-friendly views on accelerate drug approvals, negative views on vaccines among other criticisms of the FDA
• A more detailed look at global markets courtesy of Newsquawk

Tariffs/Trade

• China’s Ministry of Commerce confirmed US-China trade talks with Vice Premier He Lifeng to visit Switzerland from May 9th-12th and will visit France from May 12th-16th for economic and financial dialogue.
• Chinese Foreign Ministry (on Geneva talks) says meeting was requested by the US; US should stop threatening if it wants a deal. holding tariff talks with the US before curb’s removal, says, China’s position has not changed.
• US Treasury Secretary Bessent and Trade Representative Greer are to meet with China’s lead representatives on economic matters later this week in Switzerland, while Bessent confirmed he is meeting the Chinese team on Saturday in Switzerland and said they agreed to talk on Saturday and will agree on Sunday what they are going to talk about. Bessent said his sense is this will be about de-escalation and said they have got to de-escalate before they can move forward, as well as noted that the US doesn’t want to decouple from China over textiles and similar goods but does want to decouple over strategic industries. Furthermore, he said trade frictions can go down, Americans can get fairer deals, and everything is on the table.
• Mexico’s agricultural minister said he met with US counterpart Rollins and reached agreements that will be beneficial to both countries.

APAC stocks traded mostly higher as participants digested the PBoC’s announcement to loosen monetary policy and reports of upcoming US-China talks this week but with the gains capped amid geopolitical escalation between India and Pakistan. ASX 200 eked mild gains as outperformance in the commodity-related sectors was partially offset by losses in healthcare and tech, while the top-weighted financials industry was kept afloat post-NAB earnings. Nikkei 225 was underpinned at the open as Japanese markets reopened from the four-day weekend although momentum waned shortly after in the absence of any major pertinent catalysts for Japan. Hang Seng and Shanghai Comp were underpinned following reports that the US and China will meet for talks on Saturday involving US Treasury Secretary Bessent, USTR Greer and Chinese Vice Premier He Lifeng, while there was also encouragement from the briefing by Chinese officials where PBoC Governor Pan announced to cut RRR by 50bps and the policy interest rate by 10bps.

Top Asian News

• PBoC Governor Pan announced to cut RRR by 50bps effective May 15th and to cut the policy interest rate by 10bps effective on May 8th with the 7-day reverse repo rate lowered to 1.40% (from 1.50%) and interest rates on Standing Lending Facility across all tenors lowered by 10bps. Pan stated that the policy rate cut will lead to a Loan Prime Rate cut of 10bps and the RRR cut will release about CNY 1tln in liquidity. Pan also noted that they will cut the personal housing provision fund rate by 25bps and will set up CNY 500bln in re-lending loans for elderly care and service consumption. Furthermore, the total quota of two monetary policy tools to support capital markets will be raised to CNY 800bln and they will lower interest rates on structural policy tools by 25bps with re-lending rates lowered by 25bps effective today, while Pan also stated that China will use multiple policy tools to make dynamic adjustments and will guide commercial banks to lower deposit rates.
• China’s financial regulator said they will expand the pilot scheme to allow insurance companies to invest in stock markets and will take further steps to stabilise the property market, while they will guide financial institutions to maintain steady financing support for the property market, guide banks to provide financing support for foreign trade companies affected by US tariffs and will approve CNY 60bln in long-term insurance funds into the stock market.
• China’s securities regulator said US tariff policy has brought great pressure to China’s capital markets but added that they will consolidate good momentum in capital markets and that China will roll out reform measures for tech boards. Furthermore, they will forcefully promote long-term capital into the stock market and said ample preparations have been made for dealing with external shocks.
• RBNZ Financial Stability Report stated that risks to the financial system have increased over the past six months and while the global economic environment has become more volatile, New Zealand’s financial institutions are in a strong position to support the economy. RBNZ also stated that banks have strong capital and liquidity buffers in place to maintain credit flows even if conditions deteriorate further.
• PBoC says FX reserves USD 3.282tln end-April (prev. USD 3.241tln), gold reserves USD 243.59bln end-April (prev. USD 229.59bln)

European bourses (STOXX 600 -0.3%) opened mostly lower and has traded sideways throughout the morning thus far. There have been a few updates to keep traders busy; 1) US and China are set to hold talks in Switzerland over trade, 2) China announced new easing measures amid global economic uncertainty; the PBoC is to cut its RRR by 50bps and reduce its 7-day reverse repo by 10bps (other measures were also announced), 3) India launched air strikes on Pakistan. European sectors are mixed and with the breadth of the market fairly narrow aside from the top/bottom performers. Autos takes the top spot, lifted by post-earning strength in BMW (+3.5%). Healthcare is pressured as traders react to the FDA appointing Vinay Prasad as its new vaccine chief. Elsewhere, Novo Nordisk (+5%) gains despite reporting a mixed set of Q1 results, cutting guidance and said it would not be conducting a buyback programme in 2025.

Top European News

• German Defence Minister Pistorius is reportedly seeking a drastic increase in German annual defence budget; aims for over EUR 60bln/year in defence spending from 2025, according to Reuters sources.
• Germany’s BaFin says financial institutions are generally currently in a strong position; uncertainty is extremely high and will remain so; possibility that problems in the non-banking sector have an impact on banks cannot be ruled out.
• Germany’s VDMA says March orders +4% Y/Y (domestic -3%, foreign +6%).

FX

• DXY is attempting to claw back some of Tuesday’s losses that were seen alongside a pullback in US yields. Recent optimism has been spurred by news that US and China trade talks are to take place in Switzerland from May 9th-12th. For today’s US agenda, US Treasury Secretary Bessent is due to testify before the House. Thereafter, all eyes will be on the FOMC whereby expectations are for the Bank to stand pat on rates with Fed Chair Powell continuing to note that the Fed is well-positioned to wait for greater clarity before considering altering its policy stance. DXY is currently tucked within yesterday’s 99.17-100.09 range.
• EUR is flat vs. the USD after a session of gains on Tuesday which saw the pair advance from an opening level of 1.1314 to a peak at 1.1381 alongside a softening in US yields. From a domestic perspective, CDU Leader Merz was elected Chancellor in the second-round parliamentary vote.
• JPY the laggard across the majors with USD/JPY back above the 143 mark. The domestic story for Japan is a quiet one as market participants returned from the four-day weekend. USD/JPY has ventured as high as 143.35 but is still some way off Tuesday’s best at 144.27.
• GBP is a touch softer vs. the USD and EUR, giving back some of yesterday’s gains which were triggered by a Reuters report that the EU and UK have agreed to hold annual summits to discuss their relationship. Shortly after, the UK reached a free trade agreement with India, with India set to cut tariffs on 90% of UK imports. Thereafter, reports suggested that the UK is closing in on US trade pact with lower tariff quotas for cars and steel. The totality of the potential deals underpinned Cable sending the pair to a 1.3402 peak before returning to a 1.33 handle; currently oscillating around the 1.3350 mark.
• Antipodeans are both softer vs. the USD and unable to benefit from the PBoC’s decision to cut the RRR by 50bps, the 7-day reverse repo rate by 10bps and other easing measures. From a domestic perspective, NZ published mixed Employment data and a softer-than-expected Labour Cost Index but had little follow-through into NZD.

Fixed Income

• USTs traded without direction overnight but as traders digest the latest US-China trade talk updates and China’s latest monetary policy package, US paper has been coming under some modest pressure. USTs are at the bottom end of a relatively narrow 111-04 to 111-11+ band. Focus for today will be on the FOMC (expected to keep rates steady).
• Bunds were initially firmer, but only modestly so and unable to make a foothold above the 131.00 handle. As such, Bunds are shy of Tuesday’s 131.08 best when Merz failed to become Chancellor in the first vote – but secured the role in a second vote. Similar to USTs, Bunds were pressured in the European morning and found themselves back towards their 130.79 base. Thereafter a strong outing from France saw Bunds bounce back towards a session high of 131.09.
• Gilts opened higher by a handful of ticks given the read across from peers at the time. However, the benchmark then waned in-line with peers but with magnitudes slightly less pronounced; nonetheless, Gilts briefly took out Tuesday’s 92.82 base to a 92.79 low. Before making its way back above 93.00 on a strong auction.
• France sells EUR 12bln vs. exp. EUR 10-12bln 3.20% 2035, 1.25% 2038, 4.50% 2041 OATs.
• UK sells GBP 4.5bln 4.375% 2030 Gilts: b/c 3.23x (prev. 2.95x), average yield 3.977% (prev. 4.142%) & tail 0.4bps (prev. 1.0bps).

Commodities

• Firm trade across the crude complex (albeit with futures recently waning off highs) despite a relatively quiet market, softer Dollar pre-FOMC, and amid modest gains across most equity bourses, with the gains largely facilitated by developments overnight in trade, geopolitics, and with China loosening its monetary policy. WTI resides in a USD 58.94-60.26/bbl range while Brent sits in a USD 62.41-63.25/bbl parameter.
• Spot gold reverted to beneath the USD 3,400/oz level with pressure seen shortly after futures trading resumed as markets were jolted by reports that US and Chinese officials are to conduct talks later this week in Switzerland. Spot gold trades in a USD 3,360.20-3,422.14/oz range at the time of writing vs Tuesday’s USD 3,322.76-3,4335.06/oz parameter.
• Copper futures swung between gains and losses overnight and ultimately declined and remained subdued heading into European hours despite the PBoC’s RRR and policy rate cut announcements, albeit following a short rally since the end of April. 3M LME currently resides in a USD 9,446.95-9,584.08/t range awaiting the FOMC in the absence of macro impulses.
• US Private inventory data (bbls): Crude -4.5mln (exp. -2.5mln), Distillate +2.2mln (exp. -2.7mln), Gasoline -2.0mln (exp. -1.5mln), Cushing -0.9mln.
• Venezuela restarted a key gasoline production unit at its second-largest refinery after being shut down for a year.

Geopolitics: Middle East

• US President Trump said Houthis decided that they don’t want to do this anymore and that he told the military to stop attacks against Houthis, while he added that he is not planning to stop in Israel during his Middle East trip and they are talking to Israeli PM Netanyahu about a lot of things right now. Trump said it is crunch time for Iran and he hopes Iran does what is right, as well as stated that Iran will not have nuclear weapons.

Geopolitics: Ukraine

• Explosions were heard in Kyiv after Ukraine’s air force warned of a missile attack, while Ukraine’s military reported apartments are on fire after a Russian drone attack.

Geopolitics: India vs Pakistan

• An Indian missile attack on Pakistani-controlled territory has killed at least 26 civilians and left 46 injured, Pakistan officials have said, via Sky News.
• India launched ‘Operation Sindoor’ in which it hit terrorist infrastructure in Pakistan and Pakistan-occupied Jammu and Kashmir, while the Indian army announced that Pakistan violated the ceasefire agreement again in the Poonch-Rajouri area and it was responding appropriately in a calibrated manner. Furthermore, a Pakistan military spokesman noted there were exchanges of fire with Indian troops at multiple places along the ceasefire line in Kashmir and announced that five Indian aircraft were shot down.
• Pakistan’s Army Chief said they will respond to India at the time, place and in a way of Pakistan’s choice, via Sky News Arabia.
• Pakistan Government Security Committee says India has “ignited an inferno in the region”, the responsibility for ensuing consequences shall lie squarely with India. Authorised the military to undertake corresponding action.

Economic Data :

• 7:00 am: May 2 MBA Mortgage Applications, prior -4.2%
• 2:00 pm: May 7 FOMC Rate Decision (Upper Bound), est. 4.5%, prior 4.5%
• 2:00 pm: May 7 FOMC Rate Decision (Lower Bound), est. 4.25%, prior 4.25%
• 3:00 pm: Mar Consumer Credit, est. 9.39b, prior -0.81b

Central Banks

• 2:00 pm: FOMC Rate Decision (Upper Bound)

DB’s Jim Reid concludes the overnight wrap

Feel free to file this under first world problems but after renovating a wonderful but old house 7 years ago, things are slowly requiring maintenance. Roof leaks, paintwork peeling, windows mysteriously cracking, and lights going without obvious replacement bulbs have been the main ones. However over the weekend the tumble dryer “conked out” irrepairably. I grumbled at the cost of a new one, but accepted it, only to find that we built our kitchen area units around the specific size of this tumble dryer and that they now only make bigger ones or far too small ones. So if I want dry clothes from now on we have to redesign the kitchen units and get them remade. As such if you see me over the next few months (or years) don’t be surprised if I’ve refused and just walk around in wet clothes.

As we hit another FOMC day, market sentiment has seen another round trip (unlike my defunct tumble dryer) over the past 24 hours, with the S&P 500 (-0.77%) falling back for a second day as concerns about the economic outlook resurfaced but with futures erasing most of these losses overnight on news that US and China will this week begin talks to de-escalate the tariff standoff. The sides announced talks in Switzerland on Saturday and Sunday, led by Treasury Secretary Bessent and Trade Representative Greer on the US side and Vice Premier Lifeng on China’s. This would mark the first substantive talks between the world’s two largest economies since the prohibitive 125% tariffs were introduced a month ago. Bessent suggested last night that the talks would focus on de-escalation rather than a big trade deal “but we’ve got to de-escalate before we move forward”. China’s Commerce Ministry called on the US to “show sincerity” in the talks. Markets have advanced on the news, with futures on the S&P 500 and NASDAQ +0.60% and +0.66% higher respectively as I type.

Sticking with China, overnight the PBOC announced a package of support measures, including a 10bps policy rate cut, a 0.5pp reserve requirement ratio cut and a expansion of lending facilities for the services and consumer sectors. The moves signal a clear shift towards looser monetary policy in response to the trade shock and have similarities to the PBOC response last September, when China moved to announce a broad set of support measures to address its growth slowdown.

Chinese stocks are leading gains in Asia with the Hang Seng +0.50% after spiking over +2% at the open with the Shanghai (+0.64%) seeing similar moves. Elsewhere, the KOSPI (+0.35%) and the S&P/ASX 200 (+0.48%) are also gaining with the Nikkei (+0.09%) lagging a bit after a holiday. Indian equities have turned slightly positive after being lower earlier post military strikes on Pakistan “terror camps”. Pakistan claimed to have shot down Indian fighter planes in response. Obviously this is an incredibly tense situation with both countries being nuclear powers so one to watch closely. There is an Indian press conference at 10.30am local time where it’s expected they’ll call the action proportionate and will respond to claims Pakistan shot down fighters in response.

In terms of overnight data, the final au Jibun Bank Japan Services PMI for April returned to growth, climbing to 52.4 from March’s flat 50.0. This figure, which surpassed the preliminary 52.2, indicates stronger orders within the service sector, a marked difference from the persistent challenges faced by manufacturers.

Looking back to yesterday’s market losses now, those were in part a reaction to some weak corporate earnings, but investors were also wondering when we’d actually start to see the results of any trade deals, with the S&P 500 initially down over -1% in the first half hour of trading. That was then pared back after Treasury Secretary Bessent said some “very good” offers had been made in trade negotiations by other countries, while the FT reported that the US and UK were close to a deal that would cushion the impact of tariffs by granting lower-tariff quotas for British car and steel exports. There was a brief pop higher just after Europe went home that nearly took back flat for the day on Trump’s quotes over an announcement that will be “as big as it gets” between Thursday and Monday. It’s not clear whether this is the overnight China talks news or whether something else is in the wings. However intriguing this was, the pop soon faded. On top of that, there was more news on the retaliation front too, as Bloomberg reported that the EU were planning to hit around €100bn of US goods with tariffs if the trade talks failed.

This concern was evident across multiple asset classes. For instance, investors priced in more rate cuts from the Fed this year, with the amount expected by December up +5.1bps on the day to 81bps. In turn, that led front-end yields to fall back too, with the 2yr Treasury yield down -4.9bps to 3.78%. The 10yr yield (-4.8bps) was steady until a decent auction helped it rally and close at 4.30%. Lower yields added to a renewed decline in the US dollar, which lost ground against all G10 currencies, though this morning the dollar index (+0.30%) is on course to erase about half of yesterday’s -0.59% decline.

Even as investors were pricing in more rate cuts, inflation concerns again mounted, with the 1yr US inflation swap up +4.9bps on the day to 3.32%. That came as oil prices staged a recovery, with Brent crude up +3.19% on the day to $62.15/bbl, picking up from their 4-year low on Monday, after a major independent US oil producer predicted that US shale production will drop in the coming months. And gold prices (+2.93%) rose to a new record close of $3,432/oz, though they are -1.42% lower overnight following the news of the US-China talks.

Elsewhere, there was plenty happening yesterday in Germany as Friedrich Merz was confirmed as the new Chancellor by the Bundestag. However that doesn’t tell anything like the full story, as in a big surprise, he failed to obtain enough support on the first ballot, which is the first time that’s happened since WWII. In that initial vote, Merz only won 310 votes, short of the absolute majority of 316, despite the fact that the coalition parties hold 328 seats between them. As it was a secret ballot, it was unclear which lawmakers were responsible, and German equities slumped in the aftermath, with the DAX hitting an intraday low of -2.07%. That was even more aggressive for the MDAX of German mid-caps, which slumped to an intraday low of -3.13%. In essence, the fear was that if the coalition couldn’t even confirm their new leader then it would raise doubts over how it could push through the more difficult parts of its policy agenda and govern effectively. However, after initially being told that no second vote could happen before Friday, the situation evolved and Merz was then confirmed with 325 votes in a second ballot, and German equities pared back their losses, with the DAX only closing -0.41% lower. Our economists note that if the new government now swiftly implements its 100-day program with the urgently needed relief measures for the German economy, the fact that it took two attempts to elect a chancellor will quickly fade into the background. However a warning shot has possibly been fired.

Elsewhere in Europe, there was a bit more optimism after the final PMIs came in stronger than the flash readings. So that suggested the economic damage from the tariff uncertainty wasn’t as strong as feared . For instance, the Euro Area composite PMI came in at 50.4 (vs. flash 50.1), and the services PMI was revised up to 50.1 (vs. flash 49.7), putting it back in expansionary territory. So that helped European markets see more of a risk-on move yesterday, with the STOXX 600 only down -0.18%. Strikingly, the UK’s FTSE 100 (+0.01%) just about managed to maintain its longest-ever winning run, having now risen for 16 consecutive sessions. Meanwhile on the rates side, yields on 10yr bunds (+2.3bps), OATs (+2.2bps) and BTPs (+2.5bps) all moved higher.

Looking forward, the main highlight today will be the Fed’s latest policy decision. They’re widely expected to leave rates unchanged, but this is the first meeting since Liberation Day and the subsequent market turmoil, so it’ll be really important to gauge how the Fed are thinking about it and their reaction function. Our US economists think that the overall tone is likely to echo comments from Chair Powell and his colleagues in recent weeks. So he’s likely to emphasise the inflation side of the dual mandate, which could include repeating his comment that the Fed has an “obligation” to ensure tariff-driven inflation does not become more persistent. The signal will be that the labour market needs to weaken for the Fed to contemplate cuts.

In terms of the rest of the day ahead, data releases include Euro Area retail sales and German factory orders for March. And earnings releases include Walt Disney and Uber

A 335.5-meter container ship has been adrift off the U.S. East Coast for more than a week after an engine room explosion knocked out its propulsion system.

“The MAERSK SANA, a containership en route from Newark, USA to Singapore, remains not under command in the Atlantic off Bermuda” after “an engine room explosion disabled her propulsion on April 28,” the ship tracking website MarineTraffic wrote on X.

MarineTraffic provided more clarity on Sana’s status:

“The vessel came to a halt at 13:35 UTC that day and has been drifting ever since. MarineTraffic data confirms no signs of resumed movement, and her remote mid-ocean position has delayed the arrival of salvage assistance. A tug was dispatched from Mexico, according to reports, but with the  Maersk Sana positioned in the middle of the ocean, response time has stretched over days.” 

According to Maersk’s statement, a towage vessel is expected to make contact with the Maersk Sana this week. At the time of the engine room explosion, the 8,450-TEU vessel, built in 2004 and flagged in Singapore, was sailing Maersk’s Transpacific TP11 service. 

“Safety is of paramount importance, and we will take the learnings from our investigation to avoid similar incidents in the future,” Maersk said.

No details were provided about the source of the engine room explosion.

Novo Nordisk shares surged as much as 6.5% in European trading, making it a top performer on the Stoxx 600, as Wall Street analysts said the Danish drugmaker’s guidance cut was largely priced in—and pressures on Wegovy sales from compounded anti-obesity drugs may soon ease. 

Investor sentiment was also buoyed by expectations that Wegovy sales, will rebound in the second half, as the availability of compounded copycat versions declines.

“We have reduced our full-year outlook due to lower-than-planned branded GLP-1 penetration, which is impacted by the rapid expansion of compounding in the U.S. We are actively focused on preventing unlawful and unsafe compounding and on efforts to expand patient access to our GLP-1 treatments,” Novo CEO Lars Fruergaard Jorgensen wrote in a statement. 

Jorgensen told CNBC in an interview earlier, “Compounders took a part of our business away,” adding, “We now expect that compounding will be knocked off, so to say, and we get that business growth going forward.”

For 2025, NOVO forecasted sales growth of 13% to 21% at constant exchange rates, below the February forecast of 16% to 24%. Operating profit growth is expected to be between 16% and 24%, compared with an earlier estimate of 19% to 27%. 

“The updated sales outlook reflects lower-than-planned penetration of branded GLP-1 treatments in the U.S., impacted by compounded GLP-1s. Novo Nordisk is focused on preventing unlawful compounding and further expanding access in the U.S.,”  Novo explained.  

Novo reported better-than-expected net profit results in the first quarter, coming in at 29.03 billion Danish kroner, ahead of the Bloomberg Consensus estimate of 27.91 Danish kroner. 

Sales of Wegovy rose 85% annually at constant exchange rates to 17.36 billion Danish kroner, missing the estimate of 18.98 billion Danish kroner. 

Some on Wall Street suggest the surge in compounded anti-obesity drug availabilities largely drove the guidance cut. Now, with those formulations beginning to exit the U.S. market as Wegovy-related shortages ease, analysts see a potential inflection point for Novo’s sales in the second half. 

Wall Street commentary (courtesy of Bloomberg):

JPMorgan (overweight)

• The cut to guidance has already been priced into the shares, analyst Richard Vosser writes in a note
• Any share-price weakness today would be a buying opportunity “ahead of the potential for improving Wegovy growth as the compounders exit the US market”

UBS (buy)

• The guidance downgrade was “broadly expected by the market,” analyst Jo Walton writes in a note
• UBS estimates for FY sales and Ebit growth are “well within the new range”

Intron Health (sell)

• Even though the outlook has been cut, Intron’s estimates are “unlikely to change” given they were already below guidance, analyst Naresh Chouhan writes in a note
• The price for Ozempic in the U.S. only fell 5% in 1Q, “which helps explain the 3% beat versus consensus”
• Still, it’s unclear whether “that price is better or that there was a one off”

Morgan Stanley (equal weight)

• The new forecast suggests “meaningful uplift of Wegovy volumes” in 2H, analyst Thibault Boutherin writes in a note
• Sees consensus FY Ebit expectations moving by -6% at the mid- point

BMO (market perform)

• The cut to guidance was likely expected by many investors, but could still pressure the shares, analyst Evan David Seigerman writes in a note 
• The obesity care miss and guidance cut overshadowed a relatively in-line topline performance, as well as a bottom line beat, in 1Q

Barclays (overweight)

• The impact of compounding will be in focus on the call, analyst Emily Field writes in a note
• Wegovy pricing and group profitability when it comes to recent telehealth and CVS announcements will also be in focus

Jefferies (underperform)

• The 2025 outlook cut is “slightly greater than expected,” analyst Benjamin Jackson says in a note
• Sees scope for consensus expectations to be downgraded even further on FX

Signs that the compounded drug threat may be easing gave Novo shares a boost, sending them up as much as 6.5% in European trading. The stock is still down 55% from its peak of 1,000 Danish kroner last summer and now trades at 16 times expected earnings—down from 40 times a year ago.

Paging Goldman’s James Quigley (a Novo super bull) … Is it time to buy the dip? 

Authored by Steve Watson via Modernity.news,

White House Deputy Chief of Staff Stephen Miller has shared a succinct definition of the “due process” leftists are continually referencing regarding the issue of deportation of illegal aliens.

It’s not complicated.

The correct process for illegal aliens:

Are you here illegally?

Deport.

— Stephen Miller (@StephenM) May 6, 2025

That about covers it.

I fully agree with this due process.

Should be super simple. Super fast. Easy to understand and prove.

Who could be against this?

— Matt Van Swol (@matt_vanswol) May 6, 2025

Exactly. Why is this difficult for so many people.

— Alisha Nasse (@AlishaNasse) May 6, 2025

Simple yes or no solution.
Yes=go
No=prove and stay.

Yes, goes right back home.

No trial needed to get in , no trial needed to leave.

— Priest. (@lob679) May 6, 2025

Why is this even controversial? Every other country on Earth does it.

— Voted for this 🇺🇸 (@PatriotChris__) May 6, 2025

Well, British people might argue with that point, but you catch the drift.

Fox News contributor Mollie Hemingway hit the nail on the head when discussing the “due process” Democrats are so eager to bring up over and over.

“It’s hard to take people in good faith when they’re talking about due process and rule of law, when they didn’t care at all about due process and rule of law when the border was completely open to bring in tens of millions of illegal immigrants,” she urged.

“That’s why there’s this nationwide injunction case before the Supreme Court is so important,” Hemingway continued, adding

“You had an election. Donald Trump was very clear that he wanted to shut down the border, and he wanted to deport people who were here illegally. And people voted for that.”

“And now you have all of these rogue lower level judges who are, frankly, embarrassing the Supreme Court with these temporary restraining orders and nationwide injunctions, where they’re saying, we don’t care who won the election, we’re going to pretend that Joe Biden is still president or that Kamala Harris won the presidency,” Hemingway further emphasised.

🚨@MZHemingway: Rogue judges “don’t care who won the election” — want to implement Democrat immigration policy from the bench:

“It’s hard to take people in good faith when they’re talking about due process and rule of law, when they didn’t care at all about due process and rule… pic.twitter.com/ts3PWQAONx

— Western Lensman (@WesternLensman) May 5, 2025

This “due process” narrative is a joke. They don’t have to have due process. And other presidents deported people too. If it wasn’t an issue then it can’t be now. Because it’s Trump.

— Garrett Phipps (@Phipps31) May 5, 2025

Trump is the only president that can’t deport illegals.

— Schwarby1958 (@schwarby1958) May 6, 2025

*  *  *

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History tells us that civilizations and societies boom, bust and rise anew to repeat the pattern – a pattern that demographer Neil Howe says is surprisingly predictable in both its timing and trajectory.

Howe refers to these “seasons” of societal change as “turnings”, and has famously has declared America is now well into a Fourth Turning, the “bust” part of its cycle – where the status quo falls apart – often chaotically – and is replaced by a brand new order.

Well, in its first 100 days, the Trump administration has certainly made big – and some would say disruptive or even chaotic – strides in its attempt to replace the previous status quo with a new playbook, both domestically and internationally.

As ‘Thoughtful Money’ blog’s Adam Taggart asks in the following great interview:

Is this the kind of textbook Fourth Turning upheaval that Howe expected?

Neil Howe affirms that the global shift from globalization to nationalism, driven by Trump’s America First policies and parallel movements (e.g., Meloni in Italy, Modi in India), is a hallmark of the fourth turning. 

This trend, accelerating since the 2008 Global Financial Crisis, reflects a rejection of the U.S.-subsidized world order, with Trump criticizing globalization as a “bad deal” for America. 

Howe notes widespread support for re-industrialization and immigration control, aligning with populist demands for economic sovereignty and cultural identity, a classic fourth turning dismantling of established systems.

Howe explains that this bust phase, characterized by the collapse of the status quo and the rise of a new order, is not limited to the United States but is synchronized globally, with populist, nationalist, and authoritarian movements emerging worldwide. 

“The trend in the west certainly and now the rest of the world has been we’ve seen a synchronization of these turnings… it’s global. It’s now global.”

He highlights the Trump administration’s disruptive policies – such as tariffs, immigration crackdowns, and deregulation – as emblematic of Fourth Turning chaos…

“Trump is a necessary figure… unleashing something pretty primal. Where it goes though, I don’t think even Trump understands.”

…but notes inherent contradictions, particularly between trade protectionism and fiscal deficits.

“You cannot eliminate trade and therefore credit flows from the American economy while running up the deficit… We will literally have nothing left to invest in capital spending in America.”

Howe predicts increased volatility, legal battles, and potential crises (economic, political, or geopolitical) that could catalyze major institutional reshaping by the 2030s, when a new “First Turning” might emerge.

“History also suggests we need some sort of conflict… We need something that would really ensure that people actually reshape institutions for a reason.”

He advises investors to focus on absolute returns, hedge against volatility, and prioritize assets like commodities, gold, defense, and infrastructure, while emphasizing personal resilience to navigate the turbulent period ahead.

“Pay most attention to [financial professionals] that talk a lot about absolute return and don’t get sidetracked in looking at the relative return to other indexes.“

he “new golden age” is unlikely to emerge directly from Trump’s agenda due to legal battles (e.g., tariff laws, impoundment) and economic fallout (e.g., recession risks from labor cuts). Neil sees history resolving contradictions, potentially forcing fiscal discipline by weaning America off foreign credit, a painful but necessary step.

Trump’s legacy will be a transformed, protected America, but the fourth turning’s resolution—via domestic implosion or external conflict—will shape the 2030s first turning, with public mobilization determining the new order’s form.

Watch the full interview below:

Full transcript and summary can be read here…

Authored by Charles Hugh Smith via OfTwoMinds blog,

Corporate America took advantage of the Covid shortages and fiscal largesse to profiteer on a scale criminals could only dream of.

One of humanity’s most pernicious traits is the ease with which we habituate to conditions over time that we would have rejected out of hand if the transition had been sudden. This is the essence of what I term Anti-Progress: over time, what was solid melts away into thin air, what worked no longer works, but we no longer notice because wretchedness and decay have been normalized, i.e. accepted as “the way things are,” or hyper-normalized: everyone knows things no longer work but we’re unable to change the system, so we play-act that everything’s fine as a means of not going crazy.

Which brings us to the terminal rot in Corporate America, a rot so deep and pervasive that few recall that Corporate America once had some purpose other than increasing profits next quarter to boost “shareholder value.”

The moral rot in Corporate America goes unnoticed in a society in terminal moral decay. Why should corporate fraud, profiteering, deception and extortion attract our attention when self-service is the norm, lobbyists write regulations, legislators tell us we’ll find out what’s in the bill after they pass it into law, tax fraud by the wealthy is accepted practice, and so on in an endless stream of avarice and corruption?

But the rot isn’t just moral; it’s also the rot of reducing the entirety of enterprise to one goal: increase profits by any means available.

Correspondent Bruce H. neatly summarized the decay of “the business class”:

“This is the culture that created the McNamara fallacy (also known as the quantitative fallacy), named for Robert McNamara, the US Secretary of Defense from 1961 to 1968, that one can make policy decisions based solely on quantitative observations (or metrics) and ignoring all others.

The Atlantic ran an interesting piece a few years ago, which documented the destruction of the middle class and the disparate wealth imbalance between the top 10% and the rest of the population.

It began in the late 1960s with the rise of business schools and how those graduates were hoovered up by consultants who then sent these newly-minted efficiency experts out into the desperate businesses suffering from the stagflation of the ’70s to help them become profitable again.

Their preferred solution was to fire ‘extraneous’ staff. The net result of this was the elimination of the lower middle class. The foremen who managed a team of six to ten workers, the lower managers who managed four or five foremen, and so on.

Skip to the 80s. The corporations had trimmed employment costs, managers now directly managed between 50 and 100 people and the formerly well-paid foremen and mangers were now unemployed and no longer part of the economy, which started to deflate.

At the same time, Jack ‘chainsaw’ Welch was gutting General Electric and creating 15% ROI for shareholders, year after year. For his tenure, he was hailed as the ne-plus-ultra of business geniuses, regularly on the cover of business magazines and anyone who didn’t follow suit was ousted from every other business. Thus the change in orientation from running a business to profit-at-all-costs.

The second problem was the hiring of the chainsaw consultants by the very companies they had just cut into, directly into the upper-management level. Thus began a noxious process of business-school graduates going straight into consultancy jobs, then from there into the upper-echelons of businesses without every having worked for those businesses.

Thus the people running the businesses were hired for their ability to make money, not their understanding of the purpose and goals of the businesses. My own experience was the quarterly reports stopped talking about what awesome service we were providing while making a profit to gloating over what great profits we were making, and thus it has remained largely so to this day.

As a wise businessman said, if you want to make money, you can go do anything, but the business will be a hollow shell. You need to have a sense of purpose, some service to the community to exist to truly have a good business with happy employees.

The result of this change can be seen in the people at the top: in the 1960s, 90% of corporate CEOs had started on the shop floor and worked their way up to the top. By the late 1990s, only 10% had done so. The ones in the middle of the 20th Century saw their roles as providing a service or product, by the end of the century, the ones at the top saw their job as making profits and the business was just a means.

We don’t need a new way of living, we need an old way of living.”

Thank you, Bruce. Well said. Here we see corporate profits, which leaped 50% (+$1.2 trillion) virtually overnight as Corporate America took advantage of the Covid shortages and fiscal largesse to profiteer on a scale criminals could only dream of. But this stripmining wasn’t illegal; it was all legal, of course, as corruption isn’t just legal in America, it’s celebrated.

Did corporate products and services improve in quantity and quality? No, they shrank in quantity and quality declined–but the price went up, and unprecedented profits resulted. “Shareholder value” increased smartly.

And who are these “shareholders” who are benefiting so mightily from corporate profiteering? I know you’re shocked, shocked, that the top 1% own half of all the shares, and the top 10% own around 90%.

No wonder CEOs and corporate “innovators” are busy building private bunkers to protect themselves from the banquet of consequences they’ve laid out. To say this out loud is unacceptable, for those running the show are, well, shareholders.

*  *  *

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More than a month after a deadly crash involving one of Xiaomi’s electric vehicles—with the driver assistance system likely engaged—China’s Ministry of Industry and Information Technology held an urgent meeting to tighten regulations surrounding the high-tech autopilot software to prevent future tragedies. 

On Monday, state-run media Global Times reported that Xiaomi revised the wording of the SU7 sedan’s driving software from “Intelligent Driving” to “Assisted Driving” on its official ordering platforms. The change was first seen on the company’s Chinese social media, Weibo, and it had over 22 million views. 

Global Times said the technical changes were industry-wide:

Under updated guidelines from the Ministry of Industry and Information Technology (MIIT), several major Chinese automakers have adjusted their technical labeling since April. In the Shanghai International Automobile Industry Exhibition, XPeng rebranded its driver-assistance technology as “AI-assisted driving” and announced plans to launch the industry’s first “AI Driving Safety Boot Camp,” focusing on clarifying system limitations and demonstrating new features through enhanced user training, according to the Economic Observer’s report.

Meanwhile, Horizon Robotics named its newly released Level 2 (L2) driver-assistance system the “Urban Driver-Assistance System”; at Huawei’s Qiankun booth, all descriptions of technologies such as “smart driving” and “automatic parking” have been revised to “Intelligent Driver Assistance” and “Intelligent Parking Assistance”, according to China Media Group (CMG) ‘s report.

At the beginning of April, a horrific crash involved an SU7, which claimed three lives on the Dezhou-Shangrao Expressway in Tongling in southern Anhui Province, eastern China. There has been mounting speculation that the driver assistance system was engaged during the crash. 

“Overly optimistic terms like ‘fully autonomous’ created dangerous gaps between consumer expectations and technological realities,” Wu Shuocheng, a veteran automobile industry analyst, told the state-run media outlet. 

Shuocheng said, “Standardized labeling helps reset public understanding,” adding, “These changes reflect China’s balanced approach to fostering innovation while prioritizing safety. By tempering marketing hype, regulators create space for sustainable technological advancement.”

Global Times had no word on whether Tesla was forced to reword its Full Self-Driving system.

Authored by Thomas Brooke via Remix News,

Spain has seen an alarming rise in sexual violence over recent years, culminating in a record-high number of rapes, which reached 5,206 incidents in 2024, according to new official statistics from the Ministry of the Interior.

With an average of 14 rapes per day across the country, the figure nearly triples the 1,878 cases reported in 2019 when five daily incidents were reported. The upward trend has remained consistent year-over-year since 2018, aside from a brief dip during 2020 due to Covid-19 restrictions.

Regional breakdowns show that communities like Catalonia, Madrid, and Andalusia report the highest numbers, although increases have been noted throughout all regions of Spain. Cases involving minors, nightlife-related assaults, and attacks perpetrated by groups of offenders are also on the rise. The grim reality presented by these numbers translates to a woman being raped every hour and 45 minutes in Spain.

Remix News reported in November last year on a La Rázon report that revealed 91 percent of those convicted of rape in Catalonia are foreigners, with immigrants comprising just 17 percent of the region’s total population.

When it comes to sexual assault and rape combined, 64.2 percent of inmates are foreign nationals.

As reported by El Español, the rapid increase in sexual violence has overwhelmed specialized police units such as the Family and Women’s Care Units (UFAM) of the National Police and the Women-Minor Teams (EMUME) of the Civil Guard, both reporting understaffing and resource constraints. Officers within these units indicate that they are working beyond capacity, often handling a significantly higher workload than a decade ago without adequate support, training, or compensation.

Government officials have partly attributed this increase to more women coming forward and make no reference to the dramatic rise in mass immigration into Spain over the past decade. However, the continuous surge raises difficult questions about the effectiveness of initiatives such as the “Only Yes Means Yes” law, designed specifically to curb sexual violence.

Elena Ramallo, a Spanish campaigner battling violence against women, took to social media to criticize the El Español report for failing to address an obvious factor.

“Not a single reference in the entire article to the identity of the aggressors,” she wrote.

Ni una sola referencia en todo el artículo a la identidad de los agresores.https://t.co/RX3tkFZ4Uc

— Elena Ramallo (@ElenaRamallo3) May 5, 2025

Police unions, however, have cited multiple factors contributing to this trend, including what they describe as “influence from cultures that undervalue women,” deteriorating societal values, and growing youth gang violence. The unions called for preventive measures, such as education on consent and bolstering police resources to cope with the epidemic.

Amid mounting public and political pressure, calls are intensifying for the Spanish government to strengthen institutional responses, not just through symbolic campaigns but by significantly investing in personnel, specialized training, and improved victim support initiatives.

Read more here…

The European Union is preparing to impose up to €100 billion ($113 billion) in tariffs on US goods if trade talks fail, according to a new report by Bloomberg this morning.

The draft list of retaliatory measures will be circulated to member states as early as Wednesday, with a one-month consultation period before finalization.

“These import taxes are unjustified and cause economic harm on both sides of the Atlantic,” said EU trade chief Maros Sefcovic. “This situation is not acceptable and we cannot afford to stay idle.”

The EU has already delayed €21 billion in planned tariffs after the US halved its reciprocal duties during ongoing negotiations. Talks, which began in earnest last month, have made little headway.

The Bloomberg article notes that the bloc has proposed eliminating tariffs on industrial goods and increasing purchases of US products like LNG and soybeans, but the US has rejected those offers, focusing instead on EU digital tax rules and tech regulations. A commission spokesperson declined to comment.

A new EU proposal paper is expected this week to revive talks.

The bloc is targeting high-impact areas without mimicking US tariffs directly, aiming to avoid damage to its own supply chains. Earlier retaliatory lists targeted politically sensitive goods like Louisiana soybeans.

Currently, the US imposes tariffs of 10–25% on €380 billion worth of EU exports—around 70% of the bloc’s total exports to the US. The EU’s 2024 goods trade surplus with the US was €198.2 billion, though the overall surplus narrows to €48 billion when services are included.

“This is the time to act, in unequivocal terms, for the EU’s interest,” Sefcovic told lawmakers.