At a time when leftists across America are increasingly disenchanted with President Biden, Republican operatives are quietly working to give them an alternative — by gathering signatures necessary to ensure that firebrand independent candidate Cornel West is on the ballot in swing states, according to reporting by NBC News. 

In an election year in which non-major-party candidates — led by independent Robert F. Kennedy, Jr — are poised to take the largest share of the presidential vote in years, the effort is clearly intended to siphon off some leftists who might otherwise reluctantly vote for Biden — or his replacement. In a close race, even a nominally-modest number could have a major impact. 

West, a former Harvard professor now teaching philosophy and Christian practice at Union Theological Seminary, is known for directing his sharp oratory against US foreign policy, including Washington’s blind support for the State of Israel. With many key Democratic constituencies outraged by the Biden administration’s arming and equipping of Israel’s war on Gaza, West stands as a natural protest vote. In that way, he starkly contrasts with Kennedy, whose rhetoric on the Gaza war is even more pro-Israel than Biden’s. 

PREACH, @CornelWest. 👏 ♥️ 🔥

“We don’t hate Jewish Brothers.

We don’t hate Jewish Sisters.

We don’t hate Jewish Siblings.

We loathe— we hate— a vicious Israeli occupation.

We loathe and we hate a vicious siege against Gaza.”

pic.twitter.com/zlDmqaFvdi

— James Foster (@JamesEFoster) November 12, 2023

So far, NBC has detected GOP-linked organizations working to qualify West for ballot access in Arizona and North Carolina. Arizona, which Biden officially won by only 10,457 votes in 2020, requires paid and out-of-state petition workers to register with the secretary of state. A dozen paid workers have indicated they were hired by a GOP-leaning firm to collect signatures for Cornel West. Hilariously, some misspelled “their” candidate’s name on their registrations forms, writing “Carnel west” or “Cornelle West.” 

The signatures aren’t only being solicited from leftists: 

In North Carolina…a prominent Republican activist was spotted in April outside a Trump rally gathering signatures for West, telling rallygoers it “helps take away votes from Joe Biden.” — NBC News

Trump: Cornel West, he’s one of my favorite candidates. Cornel West and I like her also, Jill Stein, I like her very much. You know why? She takes 100% from them. He takes 100% pic.twitter.com/l6k4cugvXo

— Acyn (@Acyn) June 22, 2024

The West campaign denies that it’s in cahoots with the shadowy Republicans. “The Democratic Party & the mainstream media are fabricating stories about us having ties to GOP operatives. False!” spokesman Edwin DeJesus told NBC News. “We’re not hiring Republicans or Democrats. This is a clear smear because we’re championing workers, while they protect the interests of the wealthy elite.”

However, emails obtained by NBC News show that the West-backing Justice for All Party named three people who were authorized to pick up and drop off signatures in North Carolina, and all three either work now or have in the past worked for a GOP-serving polling firm from Colorado called Blitz Canvassing. 

“There’s concrete evidence — not rumors, but evidence — in North Carolina and in other states of an organized Republican effort to get Cornel West on ballots, using Republican consultants and vendors that the West campaign is not paying for,” complained Pete Kavanaugh, who launched a Democratic super PAC to thwart third-party candidates…because saving Our Democracy apparently depends on limiting the choices. 

Even if Biden is replaced, West would likely have a nearly-identical impact in November. In December 2023, West predicted that Biden wouldn’t make it to the general election. “I’m not even sure whether I’ll be running against Biden,” West told Politico. “Biden — I think he’s going to have an LBJ moment [and] pull back…He’s running out of gas.”

Authored by Matthew Vadum via The Epoch Times,

The Supreme Court on July 1 sent legal challenges to laws in Florida and Texas that regulate how social media platforms moderate content back to lower courts, finding that they failed to carry out proper analyses of the two cases.

The court’s unanimous decision was written by Justice Elena Kagan.

Despite the 9-0 vote on the judgment, not all justices agreed with the reasoning behind it.

This was the first time the nation’s highest court had reviewed state laws that deem social media companies “common carriers,” a status that might allow states to impose utility-style regulations on platforms and forbid them from discriminating against users based on their political viewpoints.

Observers and activists on the left and right had been closely watching the cases.

At stake was the right of individual Americans to freely express themselves online and the right of social media platforms to make editorial decisions about the content they host. These competing rights are both protected by the First Amendment to the U.S. Constitution.

Republicans and conservatives were outraged when platforms acted in concert to ban President Donald Trump in January 2021, blocked a potentially election-altering New York Post article about Hunter Biden’s laptop in 2020, and silenced dissenting opinions about the origins of the COVID-19 virus, the treatments for the disease it causes, and the vaccines. They say that social media platforms have become the new town square and that users’ speech, therefore, enjoys constitutional protection.

Democrats and liberals, on the other hand, claim that the platforms don’t do enough to weed out so-called hate speech and alleged misinformation, which they consider to be pressing social problems.

The challenge to the Florida statute is Moody v. NetChoice LLC; the challenge to the Texas law is NetChoice LLC v. Paxton. On Feb. 26, the justices heard nearly four hours of oral arguments.

NetChoice, a coalition of trade associations representing social media companies and e-commerce businesses, sued over a Florida law that makes it a violation for a social media platform to deplatform a political candidate, punishable by a $ 250,000-per-day fine. The law also establishes restrictions on deplatforming other users and requires consistent application of moderation rules. Deplatforming refers to removing or banning a person or group from a social media plaform.

The U.S. Court of Appeals for the 11th Circuit halted part of the law, and Florida appealed to the Supreme Court. The circuit court struck down part of the Florida statute, finding that “with minor exceptions, the government can’t tell a private person or entity what to say or how to say it.”

Even the “biggest” platforms are “private actors whose rights the First Amendment protects … [and] their so-called content-moderation decisions constitute protected exercises of editorial judgment.”

The U.S. Court of Appeals for the 5th Circuit took the opposite tack, finding a Texas anti-deplatforming law constitutional and rejecting the “idea that corporations have a freewheeling First Amendment right to censor what people say.”

Both state laws require platforms to explain their content moderation decisions, a mandate the platforms consider to be overly burdensome.

Ukraine has revived its talking point and demand that NATO ‘close the skies’ over Ukraine, which was first featured heavily in the wake of the February 2022 Russian invasion. When this was initially suggested, the idea was that Western jets would intervene or else US anti-air systems would be set up across Ukraine.

But now Ukrainian officials have shifted their request, to involve the establishment of US Patriot systems along Ukraine’s Western border from where they would provide protection. Ukrainian parliament member Oleksiy Goncharenko told AFP, “I don’t understand why NATO doesn’t deploy Patriot systems along the Polish border.”

“After all, Russian missiles have already entered Polish and Romanian airspace. This would protect the borders of Poland and Romania, and this would create a safe zone in the west and south of Ukraine,” he added.

Ukraine’s industry and energy infrastructure is being decimated by daily and weekly large-scale drone and missile attacks, to the point that rolling blackouts have had to be introduced nationwide.

However, even if the defense systems were established near the border, the scenario would still involve NATO-manned equipment shooting down Russian jets. It would obviously constitute direct NATO intervention against Russia, setting up for bigger war.

President Volodymyr Zelensky has of course been on board, recently renewing his call for a ‘no fly zone’ backed by the West.

He said in May: “So my question is, what’s the problem? Why can’t we shoot them down? Is it defense? Yes. Is it an attack on Russia? No. Are you shooting down Russian planes and killing Russian pilots? No. So, what’s the issue with involving NATO countries in the war? There is no such issue,” as cited in The New York Times.

And during that same month, Foreign Minister Dmytro Kuleba claimed that there remains “no legal, security or moral argument that stands in the way of our partners shooting down Russian missiles over the territory of Ukraine from their territory.”

Worrisomely, NATO officials are actually contemplating the idea of at least a partial no fly zone over Ukraine. According to more from AFP: 

“In the energy sector, the situation is really hard,” said a senior Ukrainian security official, speaking on condition of anonymity, adding he fears it will deteriorate further as winter approaches.

The official said talks were “in progress” with Western allies on a no-fly zone over western Ukraine using Patriot systems in Poland or Romania, “but that is not a simple decision.”

NATO’s escalation has come piecemeal, even as there has been little serious effort toward getting the two warring sides to the negotiating table. Only in the last several weeks have there been murmurings out of Kiev that it’s time for some kind of negotiations, given how poorly Ukraine forces are fairing on the front lines.

Authored by Daniel Lacalle,

Following the European elections, the French credit default swap has soared to a post-2020 record of 39 points. Many commentators blame the rise of the National Front for market turmoil, which has sent all euro area spreads higher. However, none of this would have happened if France’s debt was low, finances were strong, and the euro area economies enjoyed healthy economic growth.

France is the world’s poster child for statism.

The same statism that some politicians seek to impose on the United States has economically devastated France, a wonderful country with excellent human capital and outstanding entrepreneurs.

France never had austerity. It has the world’s largest government relative to the size of the economy. Government spending to GDP exceeds 58%, the highest in the world. Unions are exceedingly powerful. Their ability to organize paralyzing strikes gives them a level of economic power that far exceeds their actual representation. France’s state is so large that the public sector employs 5.3 million people (21.1% of the active population), a ratio of civil servants to inhabitants of 70.9/1,000, according to Eurostat. France has one of the highest taxation systems in the OECD. In France, income tax and employer social security contributions combine to account for 82% of the total tax wedge, according to the OECD. Corporate tax rates in France are also extremely high, at 26.5%, with companies with profits of more than €500,000 paying a rate of 27.5%. The labor market regulations in France are so restrictive that the number of companies with forty-nine employees is 2.4 times higher than those with fifty, primarily due to the significant burdens businesses face once they reach the fifty-employee threshold. According to Bloomberg, a 50-employee company must create “three worker councils, introduce profit sharing, and submit restructuring plans to the councils if the company decides to fire workers for economic reasons”.

If you are a Keynesian statist, you must be salivating.

The above-mentioned characteristics point to a perfect socialist society, an enormous state, extremely high and progressive taxes, and an enormous social network. It should be the optimal economy. Or not?

Well, no. France has been in economic stagnation for decades; it has not had a balanced budget since the late 1970s, and discontent is now the norm. Businesses and taxpayers have grown weary of the drain on their resources, and the subsidy system has spawned a group of dependent and irate citizens who feel left behind and struggle to comprehend their situation. The hailed social state has failed because the massive subsidy and spending machine has ignored economic calculation, making the country a nightmare for job and wealth creators, as well as a nightmare for those looking for a social net that provides opportunities. France has shown that the promise of socialist redistribution only creates stagnation. Despite its claims of extremely low inequality, at 31.5% Gini coefficient, it is one of the European countries with the highest level of discontent, insecurity, and entrenched impoverishment among citizens rotting in ghettos.

Socialism always disregards economic calculation and the need to promote growth and wealth to make progress. When maintaining a bloated state and redistribution become the only objectives, the economy stagnates, and everyone is angry.

The problem with France extends beyond these elections. Voters have the choice of deciding between statism, more statism, or outright communism. Fascinating.

Decades of agonising tax hikes and misguided immigration policies, which have alienated even those admitted into the country, have left taxpayers exhausted and law-abiding citizens terrified. The economy is experiencing low or no growth and declining productivity growth, resulting in weakened real wage growth, heightened insecurity, and crippling taxes. What are you reading in the media? “The threat is the far right.”. No. The threat is statism.

According to Bloomberg, none of the three possible alternatives to the government will decrease the debt or curb the deficit. None of them will tackle the government’s bloated size. Two want even more state control of the economy, while one wants lower taxes as the only evident pro-growth policy. However, those tax cuts are unlikely to attract much activity when administrative and bureaucratic burdens continue to weigh on the economy.

France has the potential to be a global economic leader. It has the talent, the entrepreneurial spirit, and the business expertise to create global leaders. However, the system simply expels them from the country. Many of France’s brightest have emigrated to other nations where they can thrive. Unfortunately, the political elite are extremely happy keeping the so-called state champions filled with politicians and a small group of crony sectors that are too afraid to raise their voices against the bloated state because they could suffer the wrath of government. A select breed of intellectuals and brave businesspeople are trying to change the system from within, and unfortunately, they are failing.

The lesson we can learn from France is that trying socialism never works and once the disastrous results are evident, it is almost impossible to correct the problem. France is an enormous problem in the eurozone, and the ECB cannot disguise it. But do not think this is a unique example. France is now at the tip of the iceberg. The disastrous Next Generation EU Fund and a deaf European Commission are currently covering up the much worse structural issues in Spain and other euro area nations.

France shows why no one should try socialism. The euro area demonstrates why no one should imitate the statist model that French politicians impose.

A senior ex-Moelis banker who punched a woman at a Brooklyn Pride event last month was arrested on Monday and charged with assault.  

Jonathan Kaye, the banker in charge of Moelis’ global business services franchise, resigned from the firm last week and was charged this morning in New York City with second and third-degree assault, Bloomberg reported.  

Kaye was initially placed on leave shortly after the June 9 video surfaced on various social media platforms, including X, showing the banker punching the woman. Some have questioned if there is more to the video, showing the events leading up to the altercation.

Jonathan Kaye 52 , an investment banker punches woman to the ground in New York. pic.twitter.com/OCPu0mo5PU

— Elijah (@Elijahwasike) June 9, 2024

In a recent report, the Financial Times said Kaye, who is Jewish, allegedly told four individuals with a Palestinian flag at the event that they were “on the wrong side” of history. Then, those individuals threw liquids at Kaye, and the altercation began.

A spokesperson for Kaye told Business Insider that the banker feared for his safety when surrounded by “agitators” who physically assaulted and dumped liquids on him. 

“Given the sharp rise in antisemitic incidents, any Jewish person in this situation would naturally feel threatened and feel the need to defend themselves and return safely to their family,” the spokesperson said, adding Kaye has faced death threats since the incident. 

Authored by Charles Kennedy via OilPrice.com,

The Trans Mountain pipeline delivered enough crude oil to load 20 tankers from Canada’s Pacific Coast in the first full month of operations of the expanded link, just below the company’s expectations, Reuters reported on Monday, citing data from tanker-tracking providers LSEG, Vortexa, and Kpler.

The expanded Trans Mountain pipeline has tripled the capacity of the original pipeline to 890,000 barrels per day (bpd) from 300,000 bpd to carry crude from Alberta’s oil sands to British Columbia on the Pacific Coast.

The higher shipment capacity gives Canadian crude additional access to international markets. The U.S. West Coast and Asian markets were expected to be the two top destinations for the crude now flowing through the expanded pipeline in Canada.   

And they were in the first month of operations of the Trans Mountain Expansion Project (TMX). 

A total of 20 vessels loaded crude delivered to Canada’s West Coast via TMX, compared to 22 the company – currently operated by the Canadian federal government – had expected.

The initial volumes were slightly lower than expected, but this could be due to the early phase of operations, according to analysts.

Traders and market analysts are closely watching Asia’s appetite for Canadian crude, as the TMX gives Canadian producers an outlet on the Asian markets and on the U.S. West Coast.

The 20 tankers that left the Canadian Pacific Coast with crude delivered by TMX headed mostly to the U.S. West Coast and Asia. Some cargoes on Aframaxes – mid-sized ships that can carry about 550,000 barrels each – were loaded onto bigger tankers with destinations in India and China, per data from LSEG, Vortexa, and Kpler cited by Reuters.  

Rongsheng Petrochemical has become the latest refiner in China to have purchased crude oil delivered to Canada’s Pacific coast via the expanded Trans Mountain pipeline.

The pipeline is set to boost the price of Canada’s heavy crude oil for years to come, top executives at the major energy firms say.

Following this weekend’s conclave between President Joe Biden and his family advisors, a ‘massive’ PR campaign is underway to reject calls for him to drop his re-election campaign and rally Democrats to stop publicly debating about his age and future, Axios reports.

According to the report, Biden has ‘zero interest’ in stepping aside, while First Lady Jill Biden, family and friends agree despite the fact that the Democratic party doesn’t want him to continue following last Thursday’s horrendous debate that validated years of reporting on the president’s cognitive decline.

Biden, who has avoided tough interviews and taking actual questions during press conferences, is now considering doing so in a town hall format, or a big one-on-one interview, or both.

This weekend’s Sunday gathering at Camp David included a ‘long-scheduled session with celebrity photographer Annie Leibovitz, while the Bidens insisted that Joe stay in the race.

“They’re all-in, and want him to stay in,” a Biden source told Axios, adding that the campaign is “charging ahead.“

Behind the scenes: Some Biden friends and family blamed longtime aides who had prepped Biden. They complained about everything from data-heavy answers to his makeup to his briefing on camera angles.

• But the president smoothed it over: He called former chief of staff Ron Klain, who led the team, and one of the things they talked about was that neither he nor the family blames the prep.
• Campaign spokesman Kevin Munoz told us: “The aides who prepped the president have been with him for years, often decades, seeing him through victories and challenges. He maintains strong confidence in them.”
• Klain, who is expected to lead Biden’s prep for the second debate — on ABC on Sept. 10 — told us: “In 38 years of working with Joe Biden, we’ve had many successes and some failures. I’m always happy to share in the good results and assume my share of the responsibility for the times we’ve come up short.”

According to Biden’s inner circle, ‘one bad night of a scratchy voice and a few mangled answers doesn’t warrant ending it all,’ so they’re ‘unleashing the full power of the White House and top Democrats to resist the loud calls for him to give up the race.”

NEW @BidenHQ Ad: “I Know”

Folks, I know I’m not a young man. But I know how to do this job.

I know right from wrong.

I know how to tell the truth.

And I know, like millions of Americans know, when you get knocked down, you get back up. pic.twitter.com/B9nzCizqp4

— James Singer (@Jemsinger) July 1, 2024

“You guys don’t get to decide,” one source close to Biden told the outlet, referring to high-profile Democrats who want him out. “That’s not how this works. We don’t have smoke-filled rooms.”

“They just have to cool down,” the source added. “We live in a democracy, at least for now.”

Axios then posted an 8-point plan to keep Biden in:

1. Dismiss “bedwetting.” The official White House and campaign line is this is much ado about nothing — that Biden works so hard it drains his young staff. This attitude is driving elected officials and donors — basically any top Democrat not on the Biden payroll — nuts. They feel it’s delusional. Nonetheless, Biden allies are cranking out data and pushing out surrogates to insist he had one bad night, mostly because of a scratchy voice and over-preparation.
2. Squeeze polls for juice. Biden allies are circulating polls and focus group results showing the debate did little to change the dynamics of the race. They’re ignoring contrarian results — like a CBS/YouGov poll out Sunday that shows a surge in voters who think Biden is not up for the job. If you’re to believe the polls: Voters thought Biden lost the debate and seemed too old. But there’s little evidence they’re moving fast to Trump. Both seem true.
3. Warn of chaos. Biden allies are making plain in private conversations the perils of an open convention — and the risk of picking a Democrat even more unpopular than Biden, namely Vice President Kamala Harris. They know Biden just needs to make it to the Democratic convention in Chicago, which opens eight weeks from today. After that, unity is the only choice.
4. Limit dissent. Biden allies helped orchestrate the supportive tweets by former Presidents Clinton and Obama. Those happened after furious back-channeling by allies. Truth is, that was the easy part.
5. Keep elected leaders close. The White House knows Senate Majority Leader Chuck Schumer and House Democratic Leader Hakeem Jeffries are deeply concerned that an unpopular Biden could cost them seats on Election Day. Their members in tough races are scared, and several plan to run away from Biden. Former Sen. Tom Harkin, who served with Biden in the Senate for 20+ years, said in an email to supporters that the debate was “a disaster from which Biden cannot recover.”
6. Get the donor class to chill. Jeffery Katzenberg and other top Biden backers are working the phones to reassure the deep pockets, while the campaign and DNC keep turning out fundraising appeals and highlighting successes. Some donors are blaming the staff — not the man on stage. John Morgan, a Florida personal-injury-law magnate who’s a top Democratic donor, tweeted Sunday that Biden’s debate-prep team is guilty of political malpractice: “Format was a disaster for him and a plus for Trump. He over practiced and was drained.”
7. Prove vitality. Words can’t capture how elated top officials were that Biden was as vigorous as he was at a rally in North Carolina the day after the debate. They’re looking for as many opportunities as possible to show that he’s still on his game and not too old for the gig. They know words are useless — they need vitality in action.
8. Ignore/engage the media. On the one hand, Biden allies want everyone to ignore the prominent columnists who loved Biden and are now calling for his resignation. On the other, the campaign and White House are deeply engaged with reporters (like us) writing about presidential fitness.

Meanwhile, Biden donors are allegedly putting together a fund that would go to any Dem nominee except Biden.

So I’m hearing there are Democratic-aligned donors putting together a fund that would go to the Dem nominee – but not if the candidate is Joe Biden whom they regard as too likely to lose. It’s designed to show support for moving on from Joe.

— Andrew Yang🧢⬆️🇺🇸 (@AndrewYang) June 30, 2024

We can’t imagine what Andrew Yang is talking about – for just weeks ago the president of Media Matters, the arbiters of truth, suggested that it’s actually Trump who has cognitive decline.

Two weeks ago. The President of Media Matters:

The media is getting it all wrong. It’s actually Trump who has mentally declined. The debate is going to change everything once people see how bad Trump’s cognitive decline really is.

Media Matters🤣🤡 pic.twitter.com/lcNczKclyC

— MAZE (@mazemoore) June 30, 2024

For once a majority of democrats and republicans agree https://t.co/GgwepNpnTk

— zerohedge (@zerohedge) June 30, 2024

Ukrainian President Volodymyr Zelensky has in a fresh interview with The Philadelphia Inquirer admitted that peace talks are possible with Russia, and that they could be modeled on the UN and Turkey-brokered grain corridor deal which was agreed upon early in the war, in 2022.

He told the publication that the two warring sides “can find a model” for potential settlement, and he gave a brief outline of his vision for this. Until now Kiev has refused to sit down with Russia for talks, and Zelensky has many times in the past declared that he won’t do this so as long as Putin is still in power.

That’s why this particular interview represents a serious shift, coming after Ukraine’s severe manpower shortage and crisis which has garnered international attention. It also comes weeks after the Swiss-hosted Ukraine peace summit, which resulted in a vague document still based largely on Kiev’s insistence that it not concede territory.

“Ukraine can find a model in which solutions can be found according to relevant documents, steps, and modalities. Such a model was first applied on the example of the grain corridor, when Ukraine negotiated not with the blocking hand of Russia, but we negotiated with the UN and Turkey,” Zelensky said.

He then asserted this was a model that “worked”…

“They, in turn, took the responsibility to negotiate with us in a trilateral agreement, and then sign the corresponding agreement with the Russian side. Yes, it worked, two mirror agreements between the UN and Turkey, and a separate agreement with Russia.”

“So far, there is only this model,” Zelensky added, while also explaining that agreements on “territorial integrity, energy and freedom of navigation” could be struck according to the same format.

Zelensky said he’s open to other countries mediating as well. “No one should say that it is… just Europe and the US,” he said, referencing countries in Asia and South America.

He also in the interview laid out his vision for ‘victory’ – which means at the very least to “not to allow the full destruction of everything Ukrainian” by Putin.

The US outlet at one point asked him about the increasing reports that his government has cracked down on media and persecutes journalists and opposition figures. There has also been widespread acknowledgement of persecution of Orthodox church leaders who have not broken ecclesial ties with the Russian Orthodox church. 

Referencing Putin, Zelensky responded by saying “The President mentioned that Russia’s policies and intentions towards Kyiv are evident in the occupied territories. Moscow eliminates the use of the Ukrainian language, combats the Ukrainian Church, and teaching of Ukrainian history. Children are taught that Ukraine was never a rightful state.” Thus he sought to justify that Ukraine has every right to respond in the same way to Russian culture and language.

Last Friday, Zelensky had in a press conference stressed, “It is very important for us to show a plan to end the war that will be supported by the majority of the world.” He is reportedly working on a ‘comprehensive plan’ to present to allies and to the world.

US equity futures are higher boosted by a relief rally in French stocks and European bonds, where the result of the French parliamentary election (no outright majority for Le Pen) was not as bad as some had feared. As of 8:00am ET, S&P futures are up 0.3, trading near session highs,while Nasdaq futures gained 0.2% with Nvidia dropping as much as 2.8%, but off the lows. Major European markets are higher led by France and Italy after Le Pen’s National Rally led the first round of snap polls but failed to secure an absolute majority as some polls had suggested; CAC +1.4%. On macro data, Germany regional CPI suggests some cooling. We will receive the national German CPI at 8am ET. In Asia, PBOC signals possible government bond sales to cool market rally which pushed Chinese bond yields to record lows. Meanwhile bond yields in the US are 1-2bp higher, the 10Y TSY trading at 4.41%, following higher EU yields; the USD is lower. Commodities are higher led by oil and base metals. Today, the macro focus will be June ISM-Mfg where consensus expects a modest increase to 49.1 vs. 48.7 prior.

In premarket trading, Spirit AeroSystems rallied 6.3% after Boeing agreed to buy back the supplier in an all-stock deal that values it at $4.7 billion. Chewy shares soared 29% after influential investor Keith Gill disclosed a 6.6% passive stake in the online pet food and product retailer. Mega cap tech (ex. NVDA) are modestly higher: AMZN +39bp, GOOG/L +28bp, MSFT +26bp; Semis are weaker: NVDA -2.8%, MU -74bp, AMD -52bp. Her are some other notable premarket movers:

• Birkenstock rises 3% after UBS boosted its rating to buy, saying that the company can achieve stronger sales and margins over the long term.
• NIO ADRs climbs 4% after the Chinese EV maker reported a rise in June deliveries.

European stocks snapped a four-day losing streak and the euro rose as French election results suggested there’s a smaller probability of extreme policies coming from Le Pen’s RN. Traders interpreted the first round of legislative voting as an indication that Marine Le Pen’s party faces a tougher-than-expected road to overall victory, reducing the risks of spending plans that would rattle financial markets. The 10-year spread on French-German debt narrowed to a two-week low.

“Markets are quite content there’s no apparent absolute majority,” said Claudia Panseri, chief investment officer for France at UBS Wealth Management. “The most extreme scenarios for the spread have been excluded.”

France’s second round of voting will be held on July 7. The French political world is now embarking on a period of horse-trading. In constituencies where three people qualified for the runoffs, the third-placed candidate can withdraw to boost the chances of another mainstream party defeating the far right.

“It’s hard to argue that you’ve got a good outcome,” Sebastian Raedler, head of European equity strategy at Bank of America, said on Bloomberg Television. “Maybe you block a majority by the hard right. But in the best-case scenario, you get a hung parliament. That effectively means very little decision making, no ability to deal with a very wide budget deficit, and also the European integration story effectively put on hold.”

In any case, the kneejerk reaction was a clear relief rally as France’s CAC 40 Index jumped as much as 2.8% before retracing some gains. Banking stocks led the advance in Europe’s Stoxx 600 Index, as French lenders Societe Generale SA, BNP Paribas SA and Credit Agricole SA all surged by more than 5%. The euro climbed to its strongest level since mid June.  Here are the biggest movers Monday:

• Renault rises as much as 4.1%, buoyed by Saudi Aramco’s decision to acquire a 10% stake in Horse Powertrain, the French carmaker’s joint venture with China’s Geely
• Zalando gains as much as 6.6%, the most since May 7, as JPMorgan (neutral) reiterates its positive catalyst watch on the German online clothing retailer, ahead of August’s quarterly results
• Aurubis shares rise as much as 6.4% after analysts at Bankhaus Metzler raised their price target for the German copper smelter to €91, the highest among analysts tracked by Bloomberg, citing higher metal prices
• Gubra jumps as much as 21% after the Danish pharmaceuticals firm announced it and partner Boehringer Ingelheim  have started clinical testing of BI 3034701, a long-acting triple agonist peptide with a potential to become a next-generation and first-in-class obesity treatment
• Matas shares gain as much as 5.2%, the most since May 28, after Swedish business daily Dagens Industri recommends the Nordic cosmetics retailer in its stockpick-of-the-week column
• Clariant gains as much as 4.7% after Goldman Sachs raised its recommendation to buy from neutral, saying the Swiss chemical company’s new consumer-focused strategy should allow it to close its valuation gap with peers
• Aperam shares gain as much as 5.5% after Morgan Stanley says the steelmaker’s market update points to “modest upside” to the second quarter adjusted Ebitda on small inventory valuation gains
• Anglo American drops as much as 4% in London after a fire halts production at its Grosvenor site, the company’s biggest metallurgical coal project in Australia. The miner said it will take months for the blaze to be extinguished
• Bechtle shares fall as much as 5.7% to the lowest since October, after Exane downgraded the stock to underperform from neutral, saying the IT firm likely faces continued weak demand among small- and medium-sized firms in Germany

Meanwhile, back in the US, investors prepare for the second-quarter reporting season, Goldman Sachs strategists said Corporate America faces the highest earnings bar in almost three years. Single-stock analysts predict profits at S&P 500 firms rose 9% on average in the April-June period — the biggest year-over-year increase since the fourth quarter of 2021, Goldman strategists led by David Kostin wrote in a note.

“The magnitude of earnings-per-share beats is likely to diminish as consensus forecasts set a higher bar than in previous quarters,” Kostin said. “We expect the outperformance ‘reward’ for stocks beating estimates will be smaller than average again this quarter.”

Earlkier, Asian equities started the week on a positive note after a rally in Japanese stocks and as Chinese shares reversed earlier losses. The MSCI Asia Pacific Index climbed as much as 0.3%, with Hitachi, Mitsubishi Corp. and BHP Group contributing the most. Stock benchmarks gained in Taiwan and South Korea, while they fell in Australia. Japanese shares rallied as the decimation of the yen resumed. Financial companies were among big gainers in the country, boosted by bets on a Bank of Japan rate hike. Shares also were helped by survey data that showed confidence among the country’s large manufacturers rose from a quarter ago. The survey “confirmed that an inflationary trend is in place, with business sentiment strong and manufacturing passing on rising costs,” said Kohei Onishi, a senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities Co. Companies’ yen exchange rate assumptions suggest earnings will likely be upgraded, he said. In China, mainland equities reversed earlier losses after a private gauge of factory activity rose to a three-year high, even as data showed that confidence among manufacturers is sagging. Hong Kong stock trading was closed for a holiday.

In emerging markets, South African assets rallied after President Cyril Ramaphosa announced a new cabinet that includes members of the opposition Democratic Alliance, considered business-friendly by investors.

In FX,  the Bloomberg Spot Dollar Index was little changed while the euro outperformed most of its G10 peers on signs Marine Le Pen’s far-right party appeared to win the first round of France’s legislative election with a smaller margin of victory than some polls had indicated.

• EUR/USD climbed as much as 0.6% to 1.0776, the highest since June 12. One-month implied volatility in USD/JPY rises above 10% for the first time since May 6 as the tenor now captures the July 31 policy decisions by the Federal Reserve and the Bank of Japan.
• EUR/CHF rose as much as 0.5%, in a sign investors took heart in the French voting result. The franc is typically the preferred haven play for political risk in Europe

Treasuries slightly cheaper from belly out to long-end of the curve which underperforms, adding to Friday’s aggressive steepening that accelerated into the month-end close. European bonds lag significantly as haven demand is unwound with the first round of voting in France pointing to no single party gaining an absolute majority. US session highlights include ISM manufacturing gauge, while Fed Chair Powell is scheduled to speak in Sintra Tuesday.    

In rates, US long-end yields cheaper on the day by about 1.5bp, steepening 2s10s, 5s30s spreads; 10-year yields around 4.41% with bunds and gilts lagging by 6bp and 3.5bp in the sector. French bonds outperform in Europe after Marine Le Pen’s National Rally failed to record a decisive win in the first round of France’s snap parliamentary elections. European bonds elsewhere lag significantly as haven demand is unwound with the first round of voting in France pointing to no single party gaining an absolute majority.    

In commodities, oil rose as traders assessed economic outlook and geopolitical risks in Europe and the Middle East. Iron ore rose amid tentative signs of recovery in China’s steel-intensive property market, and speculation that Beijing could do more to support the sector.

Looking at today’s calendar, US economic data slate includes S&P Global June final manufacturing PMI (9:45am), May construction spending and June ISM manufacturing (10am). JOLTS, ADP employment change, ISM services gauge and June jobs report are ahead this week, No Fed speakers scheduled for the session; Powell talks Tuesday on a panel with ECB President Christine Lagarde and Brazil’s Roberto Campos Neto in Sintra

Market Snapshot

• S&P 500 futures up 0.2% to 5,532.75
• STOXX Europe 600 up 0.6% to 514.68
• MXAP up 0.2% to 180.89
• MXAPJ little changed at 567.36
• Nikkei up 0.1% to 39,631.06
• Topix up 0.5% to 2,824.28
• Hang Seng Index little changed at 17,718.61
• Shanghai Composite up 0.9% to 2,994.73
• Sensex up 0.5% to 79,457.06
• Australia S&P/ASX 200 down 0.2% to 7,750.74
• Kospi up 0.2% to 2,804.31
• Brent Futures up 0.7% to $85.60/bbl
• Gold spot down 0.1% to $2,324.93
• US Dollar Index down 0.34% to 105.51
• German 10Y yield little changed at 2.57%
• Euro up 0.5% to $1.0765
• Brent Futures up 0.7% to $85.60/bbl

Top Overnight News

• US President Biden’s family is urging him to stay in the race and keep fighting despite last week’s disastrous debate performance, according to NYT.
• European stocks and the euro rallied on speculation Marine Le Pen’s far-right party will struggle to win an outright majority in French elections, easing investor concern that the region’s second-largest economy was headed for a radical policy shift.
• French President Emmanuel Macron’s centrist alliance and the left-wing New Popular Front are weighing whether to pull candidates from the second round of the legislative election on Sunday to keep the ascendant far-right National Rally out of power.
• French markets rebounded after Marine Le Pen’s National Rally party finished with a smaller margin of victory than indicated by polls, spurring a relief rally across the nation’s assets.
• President Joe Biden’s campaign is going on the attack against a chorus of donors, consultants, officials and media voices calling on him to drop out of the 2024 race after his devastating debate performance.
• The growing prospect of a Trump presidential victory is making yield curve steepeners an attractive bet as growth will likely slow and inflation quicken under such a scenario, according to Morgan Stanley.
• The People’s Bank of China said it will borrow government bonds from primary dealers, a sign it may be contemplating selling securities to cool down a market rally.
• Boeing Co. agreed to buy back Spirit AeroSystems Holdings Inc. for $37.25 a share in an all-stock deal that values the supplier at $4.7 billion, unwinding a two-decade separation as the embattled US planemaker tries to fix is manufacturing defects.
• EU plans to charge Meta Platforms over its ‘pay or consent’ model, FT reports citing sources; regulators are concerned the model offers consumers a misleading choice, potentially forcing consent to personal data tracking for ads due to financial barriers. Penalties could reach 10% of global turnover, rising to 20% for repeat violations.

French Election

• French Election 1st Round: National Rally makes significant gains but the odds of another hung parliament have likely increased.
• Exit polls have National Rally (RN) on 34.5%, the New Popular Front (NFP) on 29%, Macron’s Ensemble (ENS) on 21-23% and Les Republicans (LR) on 10%. When extrapolated into seat projections, there is a slight discrepancy between vendors with the forecast range for RN not encapsulating the 289 majority mark via the IFOP survey and France Televisions-Radio’s calculations; however, estimates from Elabe have an RN majority within the forecast range.
• Immediately after the exit polls dropped, PM Attal outlined a broad call to the centre and left-wing. Calling for voters to prevent RN from winning a second-round majority, to facilitate this he has pledged to stand down ENS candidates who have no chance of winning in the second round to give the non-RN candidate the best chance of victory.
• Into the second round, there are now three main points to look for: Whether Macron shows any sign of wavering from his pledge to stay as President irrespective of the result; The reception of NFP to the call from ENS to cooperate to prevent an RN outright majority, i.e. if they demand the appointment of an ENS PM or similar; Any signs of the non-RN friendly contingent of LR wavering from their position and joining forces with RN, as the addition of their 41-61 projected seats could be enough to secure an outright RN majority.
• Reminder, the second round occurs on 7th July. Exit polls are to be released from 19:00BST/14:00ET with official results emerging from some constituencies immediately but the full picture will not be known until early-Monday.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks began the new quarter somewhat varied as participants digested key data releases and markets braced for a busy week ahead culminating in the latest NFP report on Friday. ASX 200 was led lower by underperformance in tech amid headwinds from firmer yields although the index was off worst levels owing to resilience in mining stocks. Nikkei 225 gained at the open amid initial currency weakness although some of the gains were then faded as participants digested a mixed BoJ Tankan survey. Shanghai Comp. swung between gains and losses with price action choppy in early trade after mixed PMI data from China which showed official Manufacturing PMI remained in contraction territory and Non-Manufacturing PMI missed estimates, but Chinese Caixin Manufacturing PMI topped forecasts to print its highest in three years. Meanwhile, Hong Kong markets were shut for a holiday which also meant the absence of Stock Connect flows.

Top Asian News

• Indonesia is to impose safeguard duties of 100% to 200% on imports ranging from footwear to ceramics, while it mainly imports apparel and clothing accessories from China, Vietnam and Bangladesh, according to Nikkei.
• India’s government source said it is monitoring cheap Chinese imports, while India’s steel ministry is in talks with the commerce ministry over rising imports and the industry has sought a probe.
• China’s Vice Premier is to hold a symposium related to foreign investments on Monday, according to State Media; says China will further expand market access and break unreasonable limit for foreign investments.

CAC 40 (+1.8%) is the marked outperformer after the 1st round of the French legislative election, with the rally coming despite marked RN gains as the projections potentially point to increased odds of another hung parliament i.e. no RN majority. Though, initial upside has trimmed somewhat given we have another week of political uncertainty ahead and the fiscal situation remains tense and unfavourable for France. Stoxx 600 (+0.3%) and European generally are firmer, but have also trimmed modestly off best levels with newsflow ex-France light or not having much impact. Sectors much the same with the breakdown largely a reflection of the respective weighting of French stocks within the sectors as opposed to a broad trend. Stateside, futures are generally in the green (ES +0.1%, NQ -0.1%, RTY +0.3%) as we began a holiday shortened week that is firmly weighted towards NFP on Friday; note, NQ has slipped just into the red amid relatively pronounced pre-market pressure in Nvidia (-2.5%) though seemingly without a fresh fundamental driver.

Top European News

• European Commission President von der Leyen said European companies are signing deals or MOUs worth over EUR 40bln at the Egypt-EU investment conference, according to Reuters.
• Austria’s far-right Freedom Party chief Kickl said they are forming a new political alliance with Orban’s Fidesz in Hungary and Babis’s Czech ANO party, according to Reuters.
• The Sunday Times newspaper endorsed the Labour Party for the upcoming UK election.

FX

• DXY weighed on by the firmer EUR. Index down to a 105.42 base, holding above the 25th June low at 105.37. Docket for today is features ISM Manufacturing PMI and Fed’s Williams, the pricing component from the PMI and any commentary from Williams on PCE will be keenly sought.
• EUR the outperformer, in a relief-rally after the weekends’ French results which show that the far-right may struggle to form a Parliamentary majority, EUR/USD at a 1.0776 peak ahead of the 1.08 figure, a point it has been below since 14th June. Hefty OpEx features on today’s NY Cut.
• Cable benefitting from the encouraging risk environment and strengthening to a 1.2689 peak into this week’s UK election; however, GBP is softer vs the EUR.
• USD/JPY holding just above 161.00 with havens generally struggling in the morning’s risk environment. Last week’s multi-year peak stands at 161.28.
• Antipodeans firmer continuing the upside seen in the tail-end of last week, no real follow-through from Chinese PMIs overnight.
• PBoC set USD/CNY mid-point at 7.1265 vs exp. 7.2558 (prev. 7.1268).
• South African President Ramaphosa reappointed Enoch Godongwana as Finance Minister, while he appointed John Steenhuisien as Agriculture Minister and Ronald Lamola as Minister of International Relations and Cooperation, according to Reuters.

Fixed Income

• OATs saw gains in excess of 20 ticks at best which alongside pressure in Bunds saw the OAT-Bund 10yr yield spread narrow to 72.4bps from an 80.1bp close on Friday. However, OATs have since come under pressure and are lower by around 20 ticks as the initial relief rally dissipates, a move which has re-widened the spread somewhat to 75bps.
• Bunds pressured as they trim recent strength seen into the French election, down to a 130.55 base. No real reaction to the numerous data points from Germany, with state CPIs broadly chiming with the mainland consensus.
• Gilts weighed on in-line with the above, at an initial low point of 97.14 which printed around the Final Manufacturing PMI that was revised lower and provided some support. Though, internal commentary factored on the hawkish side and has seen the benchmark slip to a fresh 97.07 base.
• US Treasuries are directionally in-fitting with other core players; just off a 109-15 base but remain towards the low-end of a 10 tick range

Commodities

• Crude bid across the board given the broader risk appetite and weaker USD. Crude-specific newsflow has been light this morning but as the US hurricane season nears, the desk is keeping an eye on Hurricane Beryl.
• WTI August trades within a USD 81.38-82.29/bbl range, Brent September sits in a USD 84.54-85.74/bbl parameter.
• Saudi Aramco’s strategic gas expansion reportedly progresses with USD 25bln of contract awards.
• Mixed trade across precious metals with spot gold biding time ahead of this week’s macro risk events whilst spot silver is underpinned by the softer Dollar.
• Base metals are mostly firmer, though off best, with the softer USD and risk tone assisting, though the magnitude of gains has trimmed alongside a moderation in broader risk appetite.
• NHC says Hurricane Beryl is taking aim at the windward islands, with life-threatening winds and storm surge expected to begin this morning.

Geopolitics – Middle East

• US proposed new language in an effort to reach a Gaza hostage-ceasefire deal, according to Reuters.
• Hamas officials said there is no progress in ceasefire talks with Israel but it is still ready to deal positively with any ceasefire proposal that ends the war in Gaza, according to Reuters.
• Iraq’s Islamic Resistance reportedly hit an Israeli port with a drone, according to IRNA.
• Israel’s Finance Minister extended the waiver allowing cooperation between Israeli and Palestinian banks in the West Bank for four months, according to a spokesperson cited by Reuters.
• Iran’s UN mission said an obliterating war will ensue if Israel attacks Lebanon and that all options including the full involvement of resistance fronts are on the table.
• Iran will hold a presidential election run-off on July 5th as no candidate secured 50% of votes.
• Israeli Media reports “The end of the war in its current form within 10 days”, via Sky News Arabia citing Channel 13.

Geopolitics – Other

• Russia took control of the settlement of Shumy in Ukraine, while Russian forces also took over Spirne and Novooleksandrivka in Ukraine’s Donetsk region, according to RIA citing the Defence Ministry. It was separately reported that a Ukrainian drone attack killed five people in Russia’s borderline Kursk region, while Russia’s Emergency Ministry said four of its employees were injured in Ukraine’s shelling of Donetsk.
• North Korea condemned ‘Freedom Edge’ joint military drills by the US, South Korea and Japan as provocation, while it said it will make an important announcement and will protect regional peace with an aggressive and overwhelming response, according to KCNA. It was also reported that North Korea conducted a missile launch of a short-range ballistic missile and another ballistic missile, according to Yonhap citing the South Korean military.
• US military raised the alert level of several bases in Europe to its second-highest level, according to the Times of Israel citing multiple American media outlets.

US Event Calendar

• 09:45: June S&P Global US Manufacturing PM, est. 51.7, prior 51.7
• 10:00: May Construction Spending MoM, est. 0.2%, prior -0.1%
• 10:00: June ISM Manufacturing, est. 49.1, prior 48.7
  • June ISM Employment, est. 50.0, prior 51.1
  • June ISM New Orders, est. 49.0, prior 45.4
  • June ISM Prices Paid, est. 55.8, prior 57.0

DB’s Jim Reid concludes the overnight wrap

The biggest shock in Europe on Sunday, after a hugely anticipated battle, was that England football team managed to find a way of winning through to the last 16 in what was one of the most woeful and undeserved victories of all time. As this was unfolding the first round of the French elections perhaps delivered a slightly less convincing victory for the far-right than final polls suggested and with other parties now seemingly open to form alliances in the second round, this is likely to further reduce the far-right’s chance of an overall majority in parliament. This has helped the Euro to move +0.40% higher overnight to trade at 1.0756 against the dollar, with Euro Stoxx futures climbing +1.2% as I type.

To recap, Le Pen’s National Rally look set to win around 34.2% of the vote, slightly underperforming the final poll of polls which had them at 36.2%. The left-wing NPF coalition are expected to be at around 29% slightly outperforming their final poll of polls of 28.3%. Macron’s party is on track for around 21% also a bit above the final poll of polls of 20.4%.

In terms of what happens next, all those candidates that have an absolute majority of votes and a vote greater than 25% of the electorate is elected. For those not crossing the threshold, the second round this coming Sunday is a run-off between the top two candidates plus any other candidates who polled more than 12.5% of registered voters. Then the one with the most votes is elected.

The left alliance has said it will remove candidates that are in third place which will be problematic to the Far Right’s chances of a majority. Over half the 577 parliamentary seats, a historically very high number, are expected to go to the second round with lots of tactical voting now likely. The deadline for filing papers to accept the opportunity to be on Sunday’s second round is at 6pm tomorrow. So we’ll have a good idea of tactical alliances then.

Our economics and rates strategy teams, alongside our traders, will be doing a webinar this morning at 10am London time to discuss the implications of these election results. Register Here to watch.

Moving on and as it’s the start Q3 today, we’ll shortly be releasing our performance review for the quarter just gone. On the plus side, Q2 saw equities continue to advance, and the S&P 500 hit many more fresh new highs thanks to further gains for the Magnificent 7. But the gains remained narrow, with the equal-weighted S&P 500 actually losing ground in Q2. Meanwhile, sovereign bonds struggled in Q2 as investors generally priced in slower rate cuts, even as the ECB cut for the first time since the pandemic in a June that saw a more dovish pricing for rate expectations. Politics and geopolitics were also back in focus, not least in France where there was a notable selloff after the snap election announcement. See the full report in your inboxes shortly.

In terms of this week, it will be quite a busy one considering its a US holiday. Thursday is Independence Day which means Friday will likely see a skeleton staffing for the latest employment report with the all-important payrolls number.

Elsewhere on a day-by-day basis the main highlights are as follows. Today brings the US ISM and German CPI and the start of the annual ECB Sintra central bank conference with Lagarde speaking for the first amongst many appearances this week. Tomorrow brings the US JOLTS report, Eurozone CPI and both Powell and Lagarde on a panel at Sintra. Wednesday brings US services ISM, the ADP report, initial jobless claims a day earlier than usual and the trade balance data. The FOMC minutes are also released. We’ll also see China’s Caixin services PMI and the Eurozone PPI. Thursday sees the UK election and Swiss CPI with Friday seeing German and French IP, Eurozone and Italian retail sales and the Canadian job report to go alongside the US equivalent.

Previewing the US employment report on Friday, our economists expect headline (+225k forecast vs. +272k previously) and private (+195k vs. +229k) payrolls to be above the +190k and +163k expected by the consensus. The three-month averages are +249k and +206k, respectively. Our economists and consensus expect unemployment to stay at 4% although our economists think the risk is more skewed to rounding down to 3.9%. Remember last month saw the first print above 4% in nearly 2 and a half years but there is more uncertainty over the current accuracy of the household survey which the unemployment rate comes from than their establishment survey which payrolls comes from. Remember as ever that the JOLTS data (tomorrow) should be a better gauge of how tight the labour market is but as always is a month behind the employment report.

Asian equity markets are relatively quiet this morning after mixed Chinese PMIs. As I check my screens, the Nikkei (+0.18%), the KOSPI (+0.20%) and the Shanghai Composite (+0.30%) are seeing minor gains while the CSI (-0.19%) is edging lower. Hong Kong is closed for a public holiday. S&P 500 (+0.27%) and NASDAQ 100 (+0.35%) futures are trading higher, likely helped by news from the French election. Meanwhile, yields on the 10yr USTs are around a basis point lower, standing at 4.39% as we go to print, after a surprise month-end surge on Friday that we’ll discuss below.

Over the weekend, data showed that the official Chinese manufacturing PMI contracted for a second consecutive month at 49.5, flat with the figure in May and inline with expectations while the official non-manufacturing PMI came in at 50.5 in June (v/s 51.0 expected) as against a reading of 51.1 in May. But by contrast the private Caixin manufacturing PMI rose to 51.8 in June (v/s 51.5 expected) from 51.7 in May, the fastest pace for more than 3 years.

Before we review last week, Adrian Cox recently held a webinar on “how can you use AI and machine learning in financial decision-making?” This gave an overview on how to separate the fact from the hype, followed by our Equity Quantitative Investment Solutions team explaining how Deutsche Bank is putting AI and machine learning to work in systematic strategies. Watch the replay here. ***

Now recapping last week, new data on Friday added to the amassing evidence of inflation cooling in Q2. The headline PCE index moved sidewards in May (+0.0% as expected) month-on-month, bringing the year-on-year rate to +2.6% (as expected) from +2.7%. Core PCE decelerated to +0.1% on the month, in line with consensus but a soft +0.08% unrounded. The +2.6% year-on-year core PCE pace (also as expected) was the lowest since April 2021. The data also sent a mostly healthy signal on the US consumer, with the personal income indicator rising to 0.5% (vs 0.4% expected) while real personal spending rose from -0.1% to 0.3% (as expected).

While markets initially rallied following Friday’s encouraging data, US Treasuries ended up seeing a sizeable month-end sell-off. 10yr yields were up +11.0bps to 4.40% (and +14.0bps over the week), while 30yr yields rose +13.3bps on Friday, their sharpest daily increase since November. The move was more muted on the front-end, with 2yr yields up +4.2bps (and +2.1bps on the week). So very much one of those unexplainable month-end moves.

Month-end moves also saw US equities end the week on a soft footing, with the S&P 500 sliding -0.41% (-0.08% on the week). This actually made Friday its worst day of June, a month in which the S&P 500 was still up +3.47%. Tech stocks led Friday’s correction, with the NASDAQ down -0.71% and the Magnificent 7 down -1.41%, but these were still +0.24% and +1.55% higher on the week respectively. Nvidia was -0.36% lower on Friday and -2.39% on the week.

In Europe, fixed income struggled in the lead up to the first round of the French election that took place Sunday. The 10yr French OAT yield was up +8.9bps (and +3.0bps on Friday) to 3.30%, its highest level since mid-November. Yields were up elsewhere in Europe, with yields on 10yr bunds and 10yr gilts also up by +8.9bps on the week (+4.9bps and +4.2bps on Friday respectively).

European equities underperformed over the week. The French CAC 40 fell -1.96% (and -0.68% on Friday) to its lowest level since late January. The selloff was not solely reserved for French stocks, as the STOXX 600 index also fell -0.72% (and -0.23% on Friday),though Germany’s DAX posted a gain of +0.40% (+0.14% Friday).

Chewy Inc. spiked again after pumping and dumping last Thursday when ‘meme’ stock trader Keith Gill, known as Roaring Kitty, posted an image of a cartoon dog on X. 

The second pump occurred Monday morning in premarket trading in New York after a disclosure with the US Securities and Exchange Commission shows that Gill owns 9 million Class A shares, valued at about $245 million based on Friday’s closing price. This equates to about a 6.6% passive stake in the online pet food and product retailer.

Things are getting so weird, next thing GME and Chewy will spinoff into a company that sells games to animals,.

— Jamie (@GoEBBE) July 1, 2024

Here’s more from Bloomberg on Gill’s Chewy filing:

Monday’s filing lists June 24 as the date of event and contained a tongue-in-cheek reference to Gill’s Roaring Kitty persona. The document submitted to the SEC’s Edgar database of corporate filings includes a section for the reporting person to “designate whether you are a cat.” It’s followed by two check boxes, one that reads “I am a cat.” and the other — which is marked — reads “I am not a cat.”

Gill, known for his bullish stance on the struggling video game retailer GameStop (basically squeeze bearish hedge funds), is now going uber long in a heavily shorted pet foods company. The link between the companies is Ryan Cohen, GameStop’s CEO, who also co-founded Chewy.

And if history serves as any guide, such as Gill’s most recent GameStop pumps, which allowed Cohen to dump 75 million shares into retailer traders, allowing the company to raise more than $2 billion, then Chewy could be imminently preparing to capitalize on meme frenzy. 

CHWY about to issue more stock https://t.co/Nwn6Hy28Cb

— zerohedge (@zerohedge) June 27, 2024

Shares jumped as much as 29% in premarket trading. 

There are many questions…

$CHWY $GME It seems pretty clear now: Keith Gill investing $200 mil in Chewy? Unlikely this is his own money. Even selling all his GameStop without paying taxes, it just doesn’t add up. Remember, investing is always at your own risk. If you’re looking for aggressive buys Warren…

— Citron Research (@CitronResearch) July 1, 2024

Sigh.