By Michael Every of Rabobank

Perhaps nobody gets original Star Trek memes anymore, and I am showing my age. Then again, it seems nobody gets original logic anymore, and trying to use any also shows one’s age.

The market continues to price for a dream scenario of inflation having peaked then coming down sharply, but not overshooting to the downside; only the very mildest of recessions by any historical standards; a rise in US unemployment to ease wage pressures and supply-side overheating globally, but again the smallest ever seen in a recession; a near-term US rates peak below 5%, despite repeated Fed calls otherwise, then rapid rate cuts; that the US keeps cutting while the rest of the world hikes; and the rest of the world doesn’t cut rates even more than the US despite net exporting to it, and the historical record that when the US sneezes, everyone else catches cold… at a time when China is still catching Covid.

As a conversation yesterday noted, partly this is due to the relatively good news that has come out in 2023 so far against 2022’s ultra-gloomy backdrop and projections. However, as was also stressed, the range of scenarios ahead is truly broad, and yet the market seems to have settled for a happy median that seems the least likely to transpire.

Spock of course knows a thing or two about probability as well as logic:

• What if unemployment is sticky, and so core services inflation is sticky, and so we see a rates pause, but then they have to go up again in H2 2023?

• What if unemployment surges after a lag like it always has done in a US downturn so far, and we get a recession and deflation as the backdrop to those ‘nice’ rate cuts?

• What if supply-side goods inflation picks up again before services inflation cools? After all, China is reopening, and its appetite for commodities may grow again; the Ukraine war is about to enter a new phase, perhaps disrupting agri-commodity flows, as the US and Germany agree to both send tanks – but Germany is only sending 14(!), the kind of deliberate inaction that still risks a longer, grinding war with more destabilising effects; and won’t energy prices rise as the US Strategic Petroleum Reserve is rebuilt, and far more so if energy demand doesn’t fall back because we don’t have a recession?

• What if current market pricing for rate cuts pushes commodity prices higher as the US dollar falls, and as commodities emerge as a geopolitical/inflation hedge?

• What if the Fed actually wants to see lower asset prices and keeps acting until it does, the inverse of the past pattern?

• What if the US stumbles into recession, but others globally outright crumble?

None of this is being answered substantively by markets, where the possibly correct expectations for any one asset class are not being carried over with any kind of internal logic to all others. Then again, they can’t even get the NYSE to work properly now, so why listen to them anyway?

I don’t know how much more often or how much higher I can raise one eyebrow, original Nimoy-Spock style. (On which note, Nimoy wrote two autobiographies: “I am not Spock” in 1975, and “I am Spock” in 1995.) However, it seems I will have to keep practising as the market keeps indulging in highly illogical and improbable thinking. Indeed, let’s recall some classical logic errors evident almost every day in markets:

1. This is true because it has not yet been proven false.

2. This must be true because if it were false that would be horrible.

3. This is true because people say it’s true.

4. That idea is bad because bad people believe it.

5. This is true because that smart person says it’s true.

6. If this is not 100% true, then it must be 100% false.

7. This happened after that, therefore that caused this.

For one example, global yesterday’s PMIs can be seen as backing a stagflationary view of the world, not a happier outcome. That was not how they were dressed up by markets.

For a second example, in New Zealand we see a Bloomberg headline this morning saying, ‘Kiwi Bonds Surge After NZ CPI’. All well, and good. Except that CPI number was 1.4% q-o-q in Q4, down from 2.2%, but higher than the 1.3% expectation; y-o-y inflation was an unchanged 7.2%, a tick higher than expected; tradeable CPI was 1.4% q-o-q vs. just 0.8% expected, despite lower commodity prices in Q4 already being reversed in 2023 as China reopens; and only non-tradeable CPI was 2 ticks weaker than expected at a still staggering 1.5% q-o-q, so 6% annualised, or three times the RBNZ’s CPI target. Yet the tiny Kiwi bond market indeed surged before someone who has watched original Star Trek started to sell. How many of the above logic errors were made in that early trading and pre-release market consensus call?

For third example, Aussie Q4 CPI was far higher than expected, making a mockery of claims that Down Under inflation is over. Instead, we saw q-o-q CPI hit 1.9%, almost a y-o-y figure, and well above 1.6% consensus. The y-o-y rate hit 7.8%, up from 7.3%, and vs. a 7.6% expectation. More worrying, the trimmed mean was 1.7% q-o-q and 6.9% y-o-y, the weighted median was 1.6% q-o-q and 5.8% y-o-y, and December m-o-m CPI was 8.4% y-o-y vs. a 7.7% market call. Worse, this was all before China reopened, before commodity prices started to push higher again, and before yields dipped, breathing new life into local ‘buy the housing dip’ headlines. But don’t worry, Aussie rates will still peak at a low enough level not to harm the housing market,… right? Perhaps, but it’s both highly illogical and improbable, Captain.

If only I could give markets the Vulcan nerve pinch – but more Aussie data like today will do the job for me, I think.

Oil prices drifted sideways to modestly lower overnight after the notable builds reported by API, as mixed company earnings and weaker business activity spurred concerns about the US economy

While there’s expectation that China’s oil demand will rise after it ditched restrictive Covid rules, there’s still uncertainty about the strength of the rebound.

“After Brent found some resistance just ahead of the $90 mark yesterday, it looks like the market is taking a breather after the rally on Chinese demand optimism,” said Ole Sloth Hansen, head of commodities research at Standard Chartered.

“Products seem to have settled after cracks surged earlier in the week, which had also helped drive crude up. The market will be watching Cushing inventories, due to rising inventories widening the WTI-Brent spread.”

With API drains having stalled, commercial crude stockpiles have swelled by more than 27 million barrels in the prior two weeks. Today’s official data

API

• Crude +3.378mm

• Cushing +3.928mm – biggest build since April 2020

• Gasoline +620k

• Distillates -1.929mm

DOE

• Crude +533k

• Cushing +4.267mm – biggest build since April 2020

• Gasoline +1.763mm

• Distillates -507k

US crude inventories built for a 5th straight week, but only a small 533k barrels (well below API and expectations). However, Cushing stocks soared 4.267mm barrels last week – the biggest build since April 2020 (up 4 weeks in a row). Distillates stocks drew down for the 4th week in a row…

Source: Bloomberg

Total US crude stocks are at their highest since June 2021…

Source: Bloomberg

Cushing stocks are soaring, now at its highest since Dec 2021…

Source: Bloomberg

After a significant drop in the US oil rig count last week, US Crude production remained flat at 12.2mm b/d… we would expect it to fade given the lead from the rig count…

Source: Bloomberg

Notably Bloomberg has seen a change in trend? After years of drawing down inventory of drilled-but-uncompleted (DUC) wells, US oil producers have been increasing DUCs in the past two months.

Oil companies require a minimum number of these to optimize their field operations. However, drawing down DUC inventory lets them avoid incurring drilling costs — which would otherwise push up capital expenditures. If they need to rebuild DUC inventory, it would add to their 2023 capex and weigh on cash flows. However, it would benefit oilfield-service companies by increasing service intensities.

WTI was trading around $79.80 ahead of the official data and rallied on the smaller than expected crude build…

Finally, we note that the unusually large builds we are seeing in Crude (and at Cushing) are due to the contango in the WTI market makes it more attractive to put US crude in storage rather than on the water, and the current pricing structure shows the situation may last until the second half of 2023. As FGE wrote in a note today, contango – where near-term futures are cheaper than those for a later date – combined with the end of SPR releases, has driven down US crude exports in January by about 500k b/d from levels seen in December.

Current pricing shows WTI in contango until mid-2Q, continuing the incentive to store crude rather than export it.

Forward curve shows US crudes returning to backwardation in 3Q, which would remove the incentive to store, but “this is likely a function of the market pricing in higher US crude runs, rather than anticipating a pull on US crudes from outside of the region.”

All of which is leading to higher ‘raw material prices’… and that means higher gas prices at the pump…

Get back to work Mr.Biden!

Authored by Caden Pearson via The Epoch Times,

House Speaker Kevin McCarthy on Tuesday officially rejected Reps. Adam Schiff (D-Calif.) and Eric Swalwell (D-Calif.) for seats on the House Intelligence Committee after House Minority Leader Hakeem Jeffries (D-N.Y.) nominated them on Saturday.

McCarthy has publicly stated that he wants to remove Schiff and Swalwell from the panel, arguing that Schiff has “lied to the American public” and that Swalwell’s past connection to a suspected Chinese spy makes him a security liability.

“I appreciate the loyalty you have to your Democrat colleagues, and I acknowledge your efforts to have two Members of Congress reinstated to the House Permanent Select Committee on Intelligence,” McCarthy wrote in a letter to Jeffries he shared on Twitter. 

“But I cannot put partisan loyalty ahead of national security, and I cannot simply recognize years of service as the sole criteria for membership on this essential committee. Integrity matters more.”

“As such, in order to maintain a standard worthy of this committee’s responsibilities, I am hereby rejecting the appointments of Representative Adam Schiff and Representative Eric Swalwell to serve on the Intelligence Committee,” he continued.

I have rejected the appointments of Adam Schiff and Eric Swalwell for the House Intelligence Committee.

I am committed to returning the @HouseIntel Committee to one of genuine honesty and credibility that regains the trust of the American people. pic.twitter.com/ePxlbanxta

— Kevin McCarthy (@SpeakerMcCarthy) January 25, 2023

McCarthy told Jeffries the panel had been misused during the previous two Congresses, which had “severely undermined its primary national security and oversight missions—ultimately leaving our nation less safe.”

He added that he was committed to returning the panel to “one of genuine honesty and credibility that regains the trust of the American people.”

As speaker, McCarthy has the power to appoint “all select, joint, and conference committees ordered by the House,” according to the rules (pdf) of the House of Representatives. 

The House Intelligence Committee is a permanent select committee; Schiff and Swalwell served on it during the last Congress, with Schiff as chairman.

“Schiff has lied to the American public. He should not be on Intel,” chided McCarthy.

🔥 @SpeakerMcCarthy on Democrat Rep. Adam Schiff: “He can serve on a committee, but he will not serve on Intel because it goes to the national security of America — and I will always put them first. pic.twitter.com/4kZSjd0rPP

— RNC Research (@RNCResearch) January 25, 2023

‘Denial of Seats’

Over the weekend, Jeffries urged McCarthy to accept the return of Schiff and Swalwell to the panel, saying that denying them seats runs counter to the panel’s mission.

“I write today to submit for renomination two eminently qualified legislators to continue their service on the House Permanent Select Committee on Intelligence: Ranking Member Adam Schiff and Representative Eric Swalwell of California,” Jeffries wrote in a letter (pdf) on Jan. 21.

“It is my understanding that you intend to break with the longstanding House tradition of deference to the minority party Intelligence Committee recommendations and deny seats to Ranking Member Schiff and Representative Swalwell,” he continued.

“The denial of seats to duly elected Members of the House Democratic Caucus runs counter to the serious and sober mission of the Intelligence Committee.”

McCarthy indicated his intention to remove the pair in June last year if the GOP won the House, and in interviews with media on Jan. 9, said he’d remove Schiff, Swalwell, and Rep. Ilhan Omar (D-Minn.) from their committee assignments.

“Swalwell can’t get a security clearance in the private sector,” McCarthy told AP and Punchbowl, likely referring to reports that Swalwell was targeted by a suspected Chinese spy.

“I’m not going to give him a government security clearance.”

“The FBI was concerned about putting a Member of Congress on the Intel Committee — that has the rights to see things that others don’t — because of his knowledge and relationship with a Chinese spy.”

—@SpeakerMcCarthy on rejecting Democrat Eric Swalwell from the Intel Committee. pic.twitter.com/voUBDAzFsV

— RNC Research (@RNCResearch) January 25, 2023

Precedent Disputed

According to House rules, no more than 13 members of the same party can be on a panel. Typically, the speaker of the House has given the minority leader the power to choose members for the panel, but this time, McCarthy has not done so, claiming that Democrats set this precedent in the past.

“The Democrats have created a new thing where they’re picking and choosing who can be on committees,” McCarthy told Breitbart News on Jan. 9.

“Never in the history [of Congress] have you had the majority tell the minority who can be on committee. But this new standard, which these Democrats have voted for—if Eric Swalwell cannot get a security clearance in the private sector, there is no reason why he should be given one to be on Intel or Homeland Security. He will not be serving there.”

Jeffries addressed this reasoning in his Jan. 21 letter, arguing that the two Republican members were removed from their committee assignments by a bipartisan vote in the House for “directly inciting violence against their colleagues.”

“This action was taken by both Democrats and Republicans given the seriousness of the conduct involved, particularly in the aftermath of a violent insurrection and attack on the Capitol,” Jeffries wrote.

“It does not serve as precedent or justification for the removal of Representatives Schiff and Swalwell, given that they have never exhibited violent thoughts or behavior.”

In 2021, the House voted to remove Reps. Marjorie Taylor Greene (R-Ga.) and Paul Gosar (R-Ariz.) from their committee assignments because of social media posts they had made that were considered controversial.

Nancy Pelosi (D-Calif.), then-speaker, also rejected McCarthy’s nominations of Reps. Jim Jordan (R-Ohio) and Jim Banks (R-Ind.) for the Jan. 6 Committee, prompting McCarthy, then-minority leader, to withdraw the rest of his nominations in protest.

In his letter, Jeffries did not mention that dispute but said he believed there was a lack of consistency, as Rep. George Santos (R-N.Y.), who recently faced criticism for misrepresenting his education and work experience, has been given positions on two committees. Jeffries wrote that this inconsistency “risks undermining the spirit of bipartisan cooperation that is so desperately needed in Congress.”

Schiff, Swalwell and Omar said in a statement that McCarthy “capitulated to the right wing of his caucus” and “struck a corrupt bargain in his desperate, and nearly failed, attempt to win” the Speakership.

“Despite these efforts, McCarthy won’t be successful. We will continue to speak out against extremism and doggedly defend our democracy.”

Boeing reported an unexpected loss to end 2022 as the planemaker grappled continued to grapple with high costs that threaten to slow further its already moribund recovery. The aerospace giant reported an adjusted EPS loss of $1.75 in the fourth quarter, missing estimates of a 26c profit on revenue of just under $20 billion, roughly in line (but below) the average estimate compiled by Bloomberg.

Here are the Q4 details:

• Loss per share $1.75, Adjusted loss per share $1.06; missing estimate +0.26
  • Revenue $19.98 billion, missing estimate $20.01 billion
  • Commercial Airplanes revenue $9.22 billion, beating estimate $9.1 billion
  • Defense, Space & Security revenue $6.18 billion, +5.4% y/y, missing estimate $6.27 billion
  • Global Services revenue $4.57 billion, beating estimate $4.54 billion
  • Boeing Capital revenue $49 million, missing estimate $66.9 million
• Operating cash flow $3.46 billion vs. $716 million y/y, beating estimate $3.32 billion
  • Commercial airplanes oper loss $626 million, -86% y/y, worse than estimate loss $177.3 million
  • Defense, space & security oper earnings $112 million vs. loss $255 million y/y, missing estimate $307.1 million
  • Global services oper earnings $634 million, missing estimate $717.3 million
  • Boeing Capital operating earnings $15 million, missing estimate $31.7 million
• Adjusted free cash flow $3.13 billion, beating estimate $2.89 billion
• Backlog $404 billion

“While we have made meaningful progress, challenges remain and we have more work ahead to drive stability in our operations and within the supply chain,” Boeing Chief Executive Officer Dave Calhoun said in a separate memo to employees. “This will be another important year for us as we look to steadily increase our production rates, further improve performance, progress in our development programs and deliver on our commitments.”

The disappointing Q4 results underscore the work Boeing still has to do to return its factories to full gear and fully capitalize on soaring demand for air travel. The US aviation titan has already endured a difficult few years marked by the grounding of the cash-cow 737 Max and Covid-19 pandemic, before recent signs of recovery.

On the other hand, Boeing made good on a cash-flow recovery promised by executives, generating $3.1 billion in the quarter thanks to a late-year flurry of jet deliveries. That was better than the $2.89 billion Wall Street had expected for the period, and lifted the company to its first positive cash flow on an annual basis since 2018. Boeing had burned through more than $28 billion over the three-year stretch before the 2022 rebound.

The free cash flow in 2022 was a welcome change, and while total debt was unchanged around $57BN, net debt declined thanks to a nearly $3 billion increase in cash and marketable securities to $17.2BN.

The planemaker said that it was starting to step up jet deliveries and chip away at its growing stockpile of hundreds of already-built Max, 787 Dreamliners and 777X jetliners. Boeing has been hobbled by shortages of critical components such as engines and too few trained workers on its production lines.

Increasing deliveries bolsters cash, although Boeing also faces the added expense of bringing the aircraft out of storage and making repairs so they meet the latest airworthiness standards, according to George Ferguson, an analyst with Bloomberg Intelligence. He estimated that the company had 229 undelivered Max in its storage lots as of December.

“When you start delivering airplanes that have already been built, obviously it turbocharges cash flow because you didn’t have to spend cash to build the airplane,” Ferguson said of Boeing’s cash surge in an interview before the earnings report. “But you have to spend some to get it out of inventory – before you can grab all that cash.”

As Bloomberg adds, airlines have been snapping up new jets as they emerge from Covid, and Boeing’s 737 Max has an opportunity to make headway against a rival Airbus SE model that’s largely sold out until 2029. But the US planemaker has been slow to crank up work in its factories as it contends with shortages of engines, particularly for its 737 Max, and supplier hiccups for everything from computer chips to lavatories.

Some more comments and context from the Q4 results, courtesy of Bloomberg:

• CEO: Demand Across Our Portfolio Is Strong
• 737 Program Stabilizing Production Rate at 31 Per Month
• 787 Program Continues at A Low Production Rate
• To Ramp 737 Production to 50/MO in 2025/2026 Timeframe
• Plans to Ramp 787 Program to 5/Month in Late 2023
• Total Co. Backlog at Quarter-End $404B
• Plans to Ramp 787 Production up to 10/Month in ‘25/’26
• Total Backlog Including Over 4,500 Commercial Airplanes
• Generates Positive Fcf for Year for First Time Since ‘18

Looking ahead, Boeing kept its financial objective unchanged, centered around a goal of $10BN in free cash flow in 2025/26.

The company forecast adjusted free cash flow of $3.0 billion to $5.0 billion, in line with the consensus estimate of $4.01 billion. It also sees operating cash flow $4.5 billion to $6.5 billion, which also is in line with the estimate of $5.54 billion.

There is more in the company’s Q4 presentation and press release.

The shares fell more than 3% as of 8:30 a.m. before the start of regular trading (when the NYSE may or may not have another freak out). The stock traded at $206, roughly where it traded a year ago. Through Tuesday’s close, Boeing’s stock had risen 11% this year.

Calhoun and CFO Brian West are expected to provide an update on the status of the undelivered jets, efforts to stem defense program losses and discuss another potential earnings catalyst — China’s reopening travel market — during an earnings conference call later Wednesday morning. The bulls will be hoping that Boeing won’t pull another Microsoft then.

U.S. oil refining margins, also known as the 3-2-1 crack spread, jumped to a three-month high on Tuesday — and that’s an indication the country faces an ongoing product shortage that might lead to higher gasoline and diesel prices at the pump. 

The 3-2-1 crack spread is a great indicator to gauge fuel product tightness. High spreads indicate gasoline, diesel, jet fuel, and other petroleum products are in short supply, while low spreads mean an abundance of supply. Spread direction is also important — if rising, it would mean fuel inventories are declining. 

The simple calculation of refining margins is for every three barrels of crude oil the refinery processes — it makes two barrels of gasoline and one barrel of distillates like diesel and jet fuel.

On Tuesday, the crack spread hit a three-month high of $42 a barrel. For some context, the five-year January average is $15.56.  

Reuters pointed out that refinery outages exacerbate fuel supply tightness. 

A diesel producing unit at PBF Energy’s (PBF.N) Chalmette, Louisiana, refinery was shut following a fire on Saturday. It could be out for at least a month. Exxon Mobil (XOM.N) said Monday it will perform planned maintenance on several units at its Baytown, Texas, petrochemical complex.

The ongoing refinery maintenance season could be much lengthier than usual, with many U.S. Gulf Coast refineries still running below capacity after Winter Storm Elliott knocked out some 1.5 million barrels per day of refining capacity in December. A Suncor refinery in Commerce City, Colorado, has remained offline since the storm.

Also, the number of refinery overhauls is double the amount this spring. Many of these overhauls were postponed due to the pandemic. Some are due to record-high margins driving increased profitability for oil companies. 

There are at least 15 oil refineries plan maintenance ranging from two to 11 weeks through May, tallies by Reuters and refining intelligence firm IIR Energy show. By mid-February, U.S. refiners will drop some 1.4 million barrels per day of processing capacity, double the five-year average. 

“A lot of plants didn’t want to shut down last year when margins were strong, but they have to get this work done,” said John Auers, refining analyst with Refined Fuels Analytics.

Nine U.S. refineries operated by Marathon Petroleum, Valero Energy, Exxon Mobil, Phillips 66, and BP will shutter some of their fuel-producing units this spring, according to IIR and Reuters sources.

All of the outages and planned overhauls are going to make it difficult for refiners to catch up with demand as inventories are relative to historical levels. 

“If we aren’t hearing the alarm bells, it’s because we’re deaf after refining margins reached eye-watering levels in 2022, when the 3-2-1 crack spread briefly surged above $60. But from a historical perspective, current margins are sky-high, as well,” Bloomberg Opinion’s Javier Blas said. 

According to AAA data, gasoline and diesel prices at the pump are starting to move higher after months of declines following the rise in the 3:2:1 crack spread. 

And the ‘raw materials’ for the refining process are rising rapidly…

Perhaps the victory lap was a little premature? 

Since June, the average gas price has fallen by $1.60 – saving American families with two cars $170 a month.

— The White House (@WhiteHouse) January 23, 2023

Mission Accomplished 2.0?

Authored by Greg Orman via RealClear Wire,

Last week, CBS “Face the Nation” host Margaret Brennan asked Democratic Rep. Dan Goldman why President Biden would dispatch his personal attorney, who didn’t have proper security clearance, to his Delaware home to search for classified documents. Presumably, Brennan believed that when searching for classified documents, one should have the credentials to actually read them. Brennan’s focus on who was reviewing Biden’s papers touched on a potentially interesting line of inquiry. The question hanging in the air, however, relates to the discovery that started this whole process: Why would lawyers be “packing up” Biden’s office in the Penn Biden Center in the first place?

Not unlike other politicians, Joe Biden has done a terrific job of turning political success into a financial windfall. But someone who considered himself “middle-class Joe” for decades should realize the wastefulness of having lawyers perform a task that a trusted intern or aid could perform. As many big-time East Coast lawyers now routinely charge $1,000 an hour, it’s an awfully expensive packing crew – unless the intent wasn’t truly to “pack” but rather to purge. 

The timing here is suspicious as well. Apparently, this moving crew was at Biden’s University of Pennsylvania office a week before midterm elections that were widely anticipated to turn control of the House over to the Republicans. As Republicans had signaled that they were going to be spending considerable time wearing out the subpoena powers of various House committees to investigate Biden and his family, it would be an auspicious time to get rid of anything damaging. By using lawyers to carry out the document purge, Biden would be able to attach attorney-client privilege to their efforts, thereby avoiding damaging testimony about the contents of any shredded documents.

To be clear, there’s nothing illegal about getting rid of musty records in the absence of a valid document retention request. The Biden administration made it clear that it would not consider any such request valid until the new Congress was sworn in and the various committee chair gavels handed out. In a response to document requests made in December from Reps. Jim Jordan and James Comer, an administration lawyer responded, “Congress has not delegated such authority to individual members of Congress who are not committee chairmen, and the House has not done so under its current Rules.” In short, you’ll have to start over. Biden was effectively setting a hard deadline for when document purges go from being propitious to being illegal.

Unfortunately for the president, the attorneys tasked with shutting down his University of Pennsylvania office stumbled across top secret government documents and understood the consequences. Had they not made those discoveries, we likely would have never heard of these high-priced packers.

Republicans, including Donald Trump, have been quick to point out the timing of the initial discovery and the lack of prompt public disclosure. They believe the midterm elections might have been more favorable to Republicans if it was clear that Trump wasn’t the only one potentially breaking the law. Maybe. But the timing and process does lead to questions about what more the current president might have to hide.

For now, President Biden wants us to take him at his word that this whole classified documents mess is nothing more than an honest mistake. As he says, “There’s no there, there.” That may be true, but the activities that preceded the classified document discoveries raise different questions. From a man who campaigned on elevating the standards at the White House, this is disappointing to say the least.

US equity futures slumped on Wednesday after Microsoft started off the tech giants’ earnings parade by pulling off the old pump and dump, first jumping on Azure/Cloud results which beat estimates, but then erasing all gains and slumping during the company’s conference call after the company’s guidance disappointed, forecasting slower earnings and weaker demand (separately, hours later customers reported difficulties across multiple regions in accessing Microsoft 365 services, which the company attributed to networking issues). Earnings reports from companies such 3M, Boeing and chipmaker Texas Instruments also reinforced concerns about the health of corporate America and added to investors’ jitters as they await updates from the likes of Tesla and IBM. Fears also grew that a decision to send German and US tanks to Ukraine would provoke an escalation in the war.

As a result, contracts on the tech-heavy Nasdaq fell 1.3% at 7:15 a.m. ET while S&P 500 futures dropped 0.8%, and traded right around 4,000. The Bloomberg Dollar Spot Index was little changed, leading to mixed trading in Group-of-10 currencies. Treasuries edged higher, mirroring gains in most UK and German government bonds. Brent crude was little changed, while gold and Bitcoin fell.

In premarket trading, all eyes were on Microsoft which fell after saying revenue growth in its Azure cloud-computing business will decelerate in the current period and warned of a further slowdown in corporate software sales. Amazon and Alphabet also fell in sympathy, dragging other cloud stocks lower (Amazon.com -1.6% and Alphabet -1.1%; Snowflake -3.1%, Datadog -4.0%, Adobe  -1.4). Texas Instruments suffered its first sales decline since 2020 and gave a tepid forecast for the current quarter. Microsoft comprises about 12% of the Nasdaq 100, while Texas Instruments has a weighting of 1.4%. Here are other notable premarket movers:

• Enphase Energy (ENPH US) declines 4% after it was cut to neutral from overweight at Piper Sandler as demand for residential solar loans dipped more than the broker expected.
• Precigen (PGEN US) drops 16% after an offering of shares priced at $1.75 apiece, representing a 20% discount to the last close. Proceeds to be used to fund the development of product candidates and for other general corporate purposes.
• Block (SQ US) declines 4% as Oppenheimer cuts the stock to market perform from outperform, saying the firm looks less defensively-positioned than other payments names.
• Intuitive Surgical’s (ISRG US) falls 8.9% as the medical tech firm’s quarterly results are overshadowed by the company saying it won’t launch a new multiport robotic system in FY23, which analysts say removes a positive catalyst for the stock.
• Capital One’s (COF US) slumps 3.3% following the release of results. Its earnings slightly missed expectations and analysts flag a quicker-than-expected acceleration in net charge-offs for the company.
• Keep an eye on Stryker (SYK US) as it was initiated by KeyBanc at sector weight, which says the US med-tech firm’s valuation “reflects an above-average growth rate with some risk of mean reversion over time.”

A weak earnings outlook, fears of US recession as well as the potential escalation in the Ukraine-Russia war were all contributing to the market pullback, according to Kenneth Broux, a strategist at Societe Generale. “The market is definitely worried about slowing earnings growth especially on tech, so there has been a sense the market wants to keep selling tech and the dollar,” Broux said. “But a huge tail risk now is what happens in Ukraine, if there is an escalation in the conflict and Europe gets drawn into the conflict.”

While today’s drop will hurt, the Nasdaq 100 Index has surged 8.3% this year, on track for the best January since 2019. Expectations that the Federal Reserve will soon pivot away from its hawkish policy have aided the rally, though strategists are increasingly preferring non-US equities this year as they hunt for cheaper valuations and grow concerned about a US recession. Investors are now parsing earnings statements for the impact of the economic slowdown on results.

“The main focus is clearly on US big tech,” said Fabio Caldato, a partner at Olympia Wealth Management. “How can those bulls in a China shop reassure the financial community? Just showing growth. We remain very cautious on this aspect and prefer to underweight the whole sector.”

Next, all eyes will be on Tesla when the electric-car maker reports results after the market closes on Wednesday. Investors will focus on demand, profitability and 2023’s expected pace of deliveries. They are also keen to learn whether Chief Executive Officer Elon Musk will name a new CEO of Twitter.

In Europe, the Stoxx 600 was down 0.6% and on course for its first back-to-back declines of the year. Shares in major European software firms such as SAP SE and Sage Group Plc. feeling the heat from Microsoft and Dutch chip-tool maker ASML Holding NV falling after posting a profit miss. Here are the most notable European movers:

• EasyJet shares rise as much as 12% after the budget carrier reported 1Q revenue that was 8% ahead of consensus and projected strong trends will continue into the second quarter
• Aviva shares gain as much as 3.5%, the most since October, with JPMorgan saying the general insurance underwriting update from the group will provide some reassurance
• Caverion shares rise as much as 4.1% after the Bain-led consortium increased its offer for the Finnish building-maintenance-services firm following a rival bid from private equity firm Triton
• Hill & Smith rises as much as 2.2% after delivering an unscheduled trading update guiding to operating profit above expectations, which Jefferies describes as “pleasing to read”
• ASML shares fall as much as 2.3%, trimming a recent rally, after the Dutch chip-tool giant’s profitability target missed higher Street expectations despite its bullish sales growth forecast for 2023
• Netcompany shares plunge as much as 23%, the most on record, after the Danish IT consultant’s Ebitda margin guidance for 2023 missed expectations
• Aroundtown shares dropped as much as 7.4% after Societe Generale cut its recommendation to sell from buy as part of a more cautious view on REITs
• Gjensidige shares fall as much as 9.9% with analysts saying the Norwegian insurer’s results were weak across the board and that the lack of a special dividend will disappoint

Earlier in the session, Asian stocks headed for a fourth straight daily gain as tech stocks rose amid lighter trading volumes and holidays in China and Hong Kong. The MSCI Asia Pacific Index advanced as much as 0.4% to its highest since early June. Samsung Electronics and SK Hynix were among the biggest contributors to the gauge’s advance as Korea traders returned from the Lunar New Year holidays. “With the global growth outlook narrative shifting more toward a soft landing rather than recession, we are seeing the tech sector come back in favor for now,” said Charu Chanana, strategist at Saxo Capital Markets. “But caution is warranted as inflation risks are back on the horizon with China’s reopening.” 

Tech investors also assessed Microsoft’s second-quarter earnings release, which showed profit beat estimates although the company gave a downbeat revenue forecast. Traders are now turning their attention to Tesla’s result announcement later Wednesday. Singapore stocks led gains in Asia Pacific alongside their South Korean peers.

Japanese stocks rose as investors continued to assess the overall economy and shifted their focus to upcoming earnings. The Topix rose 0.4% to 1,980.69 at the close in Tokyo, while the Nikkei advanced 0.4% to 27,395.01. The yen weakened 0.2% to 130.44 per dollar. Keyence contributed the most to the Topix’s gain, increasing 1.7%. Out of 2,161 stocks in the index, 1,342 rose and 699 fell, while 120 were unchanged.  “Global economic recession risk has declined sharply as China and Europe demand is expected to improve this year,” said Daniel Yoo, head of global asset allocation at Yuanta Securities Korea. “Overall tech demand including capex investments of global corporations isn’t slowing down much.”

Stocks in India fell ahead of the expiry of monthly derivative contracts on Wednesday. Adani Group shares were among major decliners after activist investor Hindenburg Research shorted the group. The S&P BSE Sensex slid 0.9% to 60,404.47, as of 11:09 a.m. in Mumbai, while the NSE Nifty 50 Index declined 1%. All but one of BSE Ltd.’s 20 sector sub-indexes declined, led by a gauge of service industry stocks.  HDFC Bank contributed the most to the Sensex’s decline, decreasing 1.8%. All but three of 30 shares in the Sensex dropped.  All stocks controlled by Adani Group fell after Hindenburg Research accused firms owned by Asia’s richest man of “brazen” market manipulation and accounting fraud. Representatives for the Adani Group didn’t immediately respond to calls and emails seeking comment, saying the company would issue a statement in response later.

Meanwhile, Australian stocks dropped after data showed that domestic inflation accelerated to the fastest pace in 32 years in the final three months of 2022. Trading volumes have been light in Asia this week as markets in China, Hong Kong, Taiwan and Vietnam remain closed for the new-year break. A blackout period on communications ahead of the Federal Open Market Committee’s policy meeting next week has supported risk appetite, with the MSCI Asia gauge up about 25% from an October low

In FX, the Bloomberg Dollar Index was little changed even as the greenback advanced against most of its Group-of-10 peers, with notable outperformance in the Aussie dollar after CPI surprised to the upside. Kiwi dollar is the weakest among the G-10’s.

• The pound fell for a third day and gilts rose, led by the belly, after data showed UK factories’ fuel and raw material costs rose at the slowest pace in almost a year. Input prices rose 16.5% in December from a year ago, down from a peak of 24.6% in June. Money markets went to fully price in a 25-basis point rate cut by the Bank of England before the end of the year
• The euro fell a first day in six against the US dollar, though moves were limited to a narrow range. Bunds advanced, outperforming Italian notes.
• The Canadian dollar was little changed while overnight volatility in dollar- loonie rose to its highest level since Jan. 12 as traders position for the Bank of Canada policy decision. The implied breakeven of around 84 pips may be understating the possibility of outsized swings in the pair.
• Australian dollar rose against all of its G-10 peers, to trade at the highest level since August versus the greenback, and the nation’s bonds tumbled after 4Q inflation accelerated to the fastest pace in 32 years in the final three months of 2022. The outcome of 7.8% from a year earlier exceeded forecasts of 7.6% and prompted money markets to price in an interest-rate hike at next month’s central bank meeting.
• Kiwi dollar was the worst G-10 performer as New Zealand inflation held near three-decade high at 7.2% but undershoot RBNZ’s forecast.

In rates, the risk-averse tone benefited bonds, with UK and German 10-year yields falling by 8bps and 6bps respectively. Treasuries also rose as the Treasury curve bull-flattened modestly and as futures extending through Tuesday’s highs, following wider gains across gilts after soft UK factory price inflation data.  Treasury yields richer by around 2bp from belly out to long-end with 10-year at 3.42%, lagging gilts by almost 4bp in the sector after sharp rally across UK bonds. The US auction cycle resumes at 1pm with $43b 5-year sale, before Thursday’s $35b 7-year notes; strong 2- year auction Tuesday traded through the WI by 1.3bp.

In commodities, oil prices are little changed with WTI hovering around $80.10. Spot gold falls roughly 0.6% to trade near $1,926/oz

Bitcoin is back below the USD 23k mark, though remains just above the WTD trough set on Monday at USD 22.3k.

On today’s calendar, we get data on US mortgage application (up 7.0%, vs up 27.9% last week). The EIA will release figures on oil inventories at 10:30 a.m. The US will sell $24 billion of two-year floating-rate notes and $36 billion of 17-week bills at 11:30 a.m., followed by $43 billion of five-year notes at 1 p.m. From central banks, the main highlight will be the Bank of Canada’s latest policy decision. Finally, earnings releases include Tesla, Boeing, IBM, AT&T and Abbott Laboratories.

Market Snapshot

• S&P 500 futures down 0.5% to 4,011.25
• MXAP up 0.3% to 169.09
• MXAPJ up 0.2% to 553.07
• Nikkei up 0.4% to 27,395.01
• Topix up 0.4% to 1,980.69
• Hang Seng Index up 1.8% to 22,044.65
• Shanghai Composite up 0.8% to 3,264.81
• Sensex down 1.3% to 60,174.06
• Australia S&P/ASX 200 down 0.3% to 7,468.30
• Kospi up 1.4% to 2,428.57
• STOXX Europe 600 down 0.3% to 451.94
• German 10Y yield little changed at 2.11%
• Euro little changed at $1.0884
• Brent Futures up 0.5% to $86.56/bbl
• Gold spot down 0.3% to $1,930.94
• U.S. Dollar Index little changed at 101.93

Top Overnight News from Bloomberg

• A gauge of German business expectations by the Ifo institute rose to 86.4 in January from 83.2 the previous month. That’s the fourth consecutive improvement and a bigger increase than economists had anticipated. A measure of current conditions slipped, however
• European natural gas headed for a third day of declines as ample supplies and reserves, along with the return of milder weather, help to ease the region’s energy crisis
• With the Federal Reserve’s Feb. 1 interest-rate decision a week away, traders in the options market are contemplating a scenario in which the rate hike it’s expected to deliver ends up being the last one of the tightening cycle
• Japan’s broken bond market continued to throw up anomalies with central bank ownership of some government debt exceeding the amount outstanding, according to its latest data
• Japan’s government cut its monthly view of the economy for the first time since February 2022, reflecting gathering concerns over the outlook for the global economy

A More detailed look at global markets courtesy of Newsquawk

APAC stocks were mixed after the indecisive performance stateside owing to the varied data releases and geopolitical tensions, while the region also digested firmer-than-expected inflation data from Australia and New Zealand. ASX 200 failed to sustain an initial foray above 7,500 with the index subdued by hot CPI data which printed its highest since 1990 and boosted the market pricing for the RBA to continue with its hiking cycle next month. Nikkei 225 gradually edged higher with trade uneventful in the absence of any pertinent drivers although Dai Nippon Printing outperformed after Elliot Management built a stake in the Co. of slightly under 5%. KOSPI was among the biggest gainers on return from the Lunar New Year holiday with the index also driven by strength in top-weighted stock Samsung Electronics.

Top Asian News

• US Secretary of State Blinken is likely to warn China against aiding Russia when visiting Beijing, according to SCMP.
• Australian PM Albanese said there is increased engagement at different levels between Australian and Chinese agencies, according to Reuters.
• North Korea ordered a 5-day lockdown of its capital Pyongyang due to increasing cases of an unspecified respiratory illness, according to South Korean-based NK News.
• Japan lowers its overall economic view in January; first time in 11 months.
• Japanese Gov’t official, citing BoJ’s Kuroda, says the BoJ will resolutely keep monetary environment easy; BoJ aims to regain market functionality by tweaking YCC operations and maintaining an easy monetary environment.

European bourses are pressured across the board, Euro Stoxx 50 -0.6%, after a sluggish post-MSFT start to the session and thereafter a further waning in the general risk tone. Within Europe, a strong update from ASML has been overshadowed by the MSFT pressure, while the likes of Ryanair and IAG are buoyed by easyJet. Stateside, futures are all in the red with the NQ -1.2% lagging and the ES Mar’23 below 4k and its 200-DMA at 3999, to a 3996.5 session trough. NYSE said it is thoroughly examining the glitch and that the exchange ended Tuesday with a normal close, while a regular open is expected on Wednesday, according to Reuters.

Top European News

• German Economy Minister sees 2023 German GDP at 0.2% (vs -0.4% in Autumn forecast); 2023 inflation seen at 6% (vs prev. 7%); “we do not see signs of marked recession as feared by many observers”. In-fitting with earlier reports via the likes of Bloomberg and Reuters in recent sessions.
• French Regulator Set to Provisionally Close Government EDF Offer
• Traders Reverse Course to Bet BOE Will Cut Rates Before Year-End
• UK’s Growth Potential Falls, Reducing Hunt’s Room for Tax Cuts
• Renault Gets Two Upgrades, Shares Rise as Nissan Deal Nears
• Ukraine Latest: Allies to Send Tanks; Kishida Pressed to Visit
• UK Parliament Seeks Power to Scrutinize Finance Regulators

Notable US Headlines

• US House Speaker McCarthy said they need to have a responsible debt ceiling and called for eliminating wasteful spending, while he added debt is the greatest threat to the nation and that President Biden needs to stop playing politics on the debt ceiling.
• US President Biden is close to naming the next National Economic Council head, Fed Vice Chair Brainard has emerged as the top contender, according to Washington Post sources; current NEC Director Deese is expected to leave soon, no decision made yet.
• US Senator Manchin is to reportedly introduce a bill to delay EV tax credit due to disagreements over how to implement the programme, according to WSJ.

FX

• The DXY has spent the morning in close proximity to the 102.00 mark and has most recently extended to fresh session highs of 102.12 amid a general decline in the risk tone.
• AUD is the standout outperformer after much hotter-than-expected CPI while the NZD was only able to derive fleeting support from its own inflation data, at best AUD/USD and NZD/USD above 0.71 and 0.65 respectively.
• JPY has settled down somewhat after Tuesday’s pronounced action and was relatively resilient to Japan downgrading its economic assessment for the first time in almost a year.
• The aforementioned decline in sentiment that bolstered the USD did so at the expense of Cable and EUR/USD which moved below and further below 1.23 and 1.09 respectively.

Fixed Income

• Core EGBs have continued to extend with the Bund comfortably above 139.00, though the upside seemingly stalled after a brief breach of Fib resistance.
• An easing/pullback that was perhaps spurred by mixed German auction results; though, benchmarks remain elevated overall with Gilts once again outperforming and closer to 106.00 vs 105.08 low (current high 105.79).
• Stateside, USTs are firmer though lagging their EZ peers a touch ahead of a USD 43bln 5yr outing.

Commodities

• WTI and Brent front-month futures trade with no firm direction in early European hours, similar to yesterday’s price action, as market participants await the next catalyst for the complex.
• US Energy Inventory Data (bbls): Crude +3.4mln (exp. +1.0mln), Cushing +3.9mln, Gasoline +0.6mln (exp. +1.8mln), Distillate -1.9mln (exp. -1.1mln)
• US Treasury issued a license allowing Trinidad and Tobago to develop Venezuela’s Dragon offshore gas field.
• Spot gold and base metals have been impacted by the general risk tone with the yellow metal unable to glean any haven support as the USD remains firm.

Geopolitics

• Ukrainian President Zelensky said Russia is readying for new aggression and that Ukraine will prevent further Russian actions, while he added Russia is intensifying its offensive towards Ukraine’s Bakhmut.
• Russian Ambassador to the US said Washington’s possible deliveries of tanks to Ukraine would be a blatant provocation and it is clear Washington is trying to inflict a strategic defeat on us, according to Reuters.
• EU ambassadors have now formally given green light to roll over all the EU’s economic sanctions on Russia for an additional six months, via Radio Free Europe’s Jozwiak.
• German government is to send Leopard 2 tanks to Ukraine, Germany is to approve re-export of Leopard 2 tanks.

US Event Calendar

• 7am: U.S. MBA Mortgage Applications, 7.0%, prior 27.9%

DB’s Jim Reid concludes the overnight wrap

There’s been a little bit of a bias towards risk-off sentiment over the last 24 hours, thanks partly to some weaker-than-expected earnings releases that added to growing concerns about a potential US recession. The S&P 500 (-0.07%) came off its 7-week high from the previous day, oil prices took a sharp turn lower, and sovereign bonds rallied on both sides of the Atlantic. After the close, Microsoft did report better-than-expected earnings due to strength from their cloud-services business (Azure) even as their consumer businesses faltered. Their shares initially traded 4.5% higher before reverting late last night and are now down -1% in after-market trading after news came out during the earnings call that Azure sales could slow in Q1. S&P and NASDAQ futures are -0.46% and -0.78% down respectively as I type.

Those small equity losses in the normal trading session came as the flash PMIs for the US showed the economy still in contractionary territory at the start of the year. To be fair, the numbers were a bit better than expected, but even with the upside surprise the composite PMI was only at 46.6 (vs. 46.4 expected), which is its 7th consecutive month beneath the expansionary 50-mark. Looking at the details, the US PMIs also showed that input price rises had increased in January after 7 months of moderating, so that adds to some other indicators so far this quarter suggesting price pressures might be a bit more resilient than thought. The more negative tone from the data was then cemented by the Richmond Fed’s manufacturing index, which came in at a post-Covid low of -11 (vs. -5 expected).

Although the US numbers continued to point towards contraction, there was some better news from the Euro Area as the flash composite PMI came in at 50.2 (vs. 49.8 expected). That’s the first time it’s been above 50 since June, and came amidst upside surprises in both the services (50.7 vs. 50.1 expected) and manufacturing PMIs (48.8 vs. 48.5 expected) as well. The readings offer yet more evidence that the European economy has been faring better over recent months, echoing the rise in consumer confidence we saw the previous day.

With all this positive news out of Europe lately, our economists updated their forecasts yesterday (link here) and are no longer expecting a recession in 2023 as flagged in our German upgrade two weeks ago. That comes amidst falling gas prices, lower inflation, and declining uncertainty, which means our economists now expect the Euro Area to grow by +0.5% in 2023. They’ve also lowered their headline inflation outlook for 2023 to 5.8%, and now see 2024 at just 1.8%. Nevertheless, they don’t think the ECB can take their foot off the hawkish pedal just yet, since an improved growth outlook and stronger domestic demand raises the threat of more persistent underlying inflation.

Speaking of the ECB, yesterday saw a fresh round of commentary as the Governing Council debate how long to keep hiking rates by 50bps. On the one hand, Lithuania’s Simkus said that “there’s a strong case for staying on the course that’s been set for the coming meetings of 50 basis-point increases.” However the Executive Board’s Pannetta, one of the biggest doves on the council, said that beyond the next meeting in February “any unconditional guidance … would depart from our data-driven approach”. For now, investors are continuing to price in two 50bp moves as the most likely outcome, with +92.1bps worth of hikes priced over the next couple of meetings.

As this debate was ongoing, sovereign bonds rallied strongly on both sides of the Atlantic, with yields on 10yr Treasuries down -5.7bps to 3.45%. That was led by a sharp decline in real yields, which fell -7.6bps on the day. However, near-term policy expectations from the Fed were little changed ahead of their meeting a week from today, and the terminal rate priced for June was down just -0.1bps, whilst the 2yr Treasury yield fell -1.7bps to 4.21%. In Asia 10yr Treasury yields have moved back +1.29bps higher as we go to press. Back to yesterday, and there was a stronger rally in Europe, with yields on 10yr bunds (-5.1bps), OATs (-6.9bps) and BTPs (-11.1bps) all seeing a sharp decline.

As mentioned at the top, it was a bit of a battle for equities, with the major indices struggling to gain much traction after their recent rally. That left both the S&P 500 (-0.07%) and Europe’s STOXX 600 (-0.24%) with modest declines, although that was partly down to a drag from energy stocks after prices took a significant hit yesterday. For instance, Brent crude oil prices (-2.34%) had their worst day in nearly three weeks, falling to $86.13/bbl, whilst natural gas prices in Europe fell -11.71% to €58.27 per megawatt-hour as they closed in on the lows from last week. In the US, one of the worst performing industries for the S&P was Media & Entertainment (-1.02%), whose losses were partially due to the -2.09% pullback by Alphabet as the US Department of Justice did indeed sue the ad-giant under US anti-trust laws. This is the second such suit and a resolution could take years according to legal experts cited by Bloomberg.

Asian equity markets are continuing with their winning streak even with US futures lower. As I type, the KOSPI (+1.27%) is surging as trading has resumed after the Lunar New year holiday while the Nikkei (+0.43%) has rebounded after opening lower in morning trade. Markets in China and Hong Kong remain closed for the holidays. Elsewhere, the S&P/ASX 200 (-0.12%) is in negative territory following disappointing inflation data out from Australia.

Australian inflation rose to +8.4% y/y in December from +7.3% in November while surpassing market expectations for a rise of 7.7%. With inflation pressures broadening, its implication for policy rates pushed 10yr bond yields sharply higher (+5.2 bps) to settle at 3.52%, as we go to print. Meanwhile, the Australian dollar (+0.75%) is trading higher, hitting a 5-month high against the US dollar to trade at $0.7099.

Back to yesterday’s data, and the flash PMI releases were the main data highlight, but we did also get the UK’s public finance statistics for December. That showed public sector net borrowing (ex-banking groups) at £27.4bn (vs. £17.3bn expected), which was driven by more spending on energy support along with higher debt interest. Meanwhile, the latest flash PMIs from the UK weren’t as optimistic as their counterparts in the Euro Area, with the composite PMI falling to 47.8 (vs. 48.8 expected). That’s the lowest reading on that measure in two years, back when the economy went into lockdown again at the start of 2021.

To the day ahead now, and data releases include the Ifo’s business climate indicator for January from Germany. From central banks, the main highlight will be the Bank of Canada’s latest policy decision. Finally, earnings releases include Tesla, Boeing, IBM, AT&T and Abbott Laboratories.

The public has been bombarded with a stream of news stories in recent months seeking to explain the steady rise of heart attacks in western countries in the past two years.  The epidemic is most concerning due to the large number of young and otherwise healthy people that are being stricken with heart problems otherwise reserved for older or clinically obese patients.  

Explanations for the trend blame everything from video games to climate change.  Of course, these scapegoats do not explain the statistical leap in heart failure in the past two years.  The most common narrative is that the covid virus is the cause – The problem with this theory is that there is zero evidence to support the claim that covid causes potential heart ailments.  In fact, studies show that there is no such thing as “covid heart”, a false concept spread by the mainstream media at the onset of the pandemic.

Are the “experts” baffled?  Or, are they trying to avoid the obvious culprit.

Australia is reporting a 17% increase in heart attacks in the first eight months of 2022 alone, and establishment paid researchers seem to be deliberately avoiding any mention of the covid mRNA vaccines.  Instead, they are continuing to blame covid infection along with numerous peripheral and indirect triggers associated with the lockdowns.  

Australia sees a 17% increase in deaths from heart attacks and experts are dumbfounded. pic.twitter.com/sH4Zh7a2tx

— Aaron Ginn (@aginnt) January 22, 2023

Multiple studies now show a direct relationship between vaccine status and Myocarditis, specifically in young people, and the attempts to suppress such information by Big Pharma and governments are failing.  If side effects are related to developing auto-immune disorders triggered by mRNA as some researchers suspect, then symptoms in many vaccinated people may not become visible for months or years.  But, as time passes, the extent of the damage will become clear to the public. 

Pro-vaccine studies related to the dangers often do not include unvaccinated people as a control group for determining side effects, which suggests a desire to hide health risks associated with covid vaccination.  Eventually the questions and the deaths are going to become too prominent for the mainstream to ignore.  Are torches and pitchforks the inevitable end for vaccine enforcers and Big Pharma?                

By Gallup,

The COVID-19 pandemic severely disrupted people’s mobility worldwide, but it didn’t stop them from wanting to move. In fact, Gallup surveys show that in the second year of the pandemic, people’s desire to migrate reached its highest point in a decade.

In 2021, 16% of adults worldwide — which projects to almost 900 million people — said they would like to leave their own country permanently, if they could.

Gallup’s latest update on adults’ desire to move to another country is its first global estimate available since 2018. The 2021 figures are based on interviews with nearly 127,000 adults in 122 countries.

The analysis period coincides with the slow reopening of the world in 2021 after international migration growth dropped by as much as 27% from mid-2019 to mid-2020, according to United Nations estimates. In the 38 wealthy countries that make up the Organization for Economic Cooperation and Development (OECD), migration dropped by more than 30% in 2020 — the lowest level observed since 2003.

Desire Increases in Sub-Saharan Africa, Latin America, Parts of Asia

While there are signs that migrant flows are continuing to rebound from their 2020 levels, particularly across the OECD, in many parts of the world, people’s desire is higher than it has been in a decade.

Desire to migrate rose to decade-high levels in regions that are already well-known for sending migrants, such as Latin America and the Caribbean, sub-Saharan Africa, Southeast Asia, South Asia, and the Commonwealth of Independent States.

However, this was not the case in all parts of the world. After almost a decade of stability, aspirations to migrate fell to decade lows in both the European Union and East Asia — largely thanks to significant declines in countries such as France and Germany in the EU and South Korea and China in East Asia.

In 13 countries, about half or more of the adult population would like to move to another country if they had the chance. These countries represent nearly every region of the world — except for Northern America and the EU. Many of these countries have consistently shown up on this list year after year.

Lebanon made this list for the first time in 2021 after people’s desire to migrate skyrocketed from 26% in 2018 to 63% amid the country’s economic and political crisis.

U.S. Still Top Desired Destination, but Less Attractive Today

The list of countries where potential migrants say they would like to move — if they could — has generally been the same since Gallup started tracking these data in 2007, with the U.S. topping the list of the most desired destinations every year.

This was true in 2021 as well. Just under one in five potential migrants (18%) — or about 160 million adults worldwide — named the U.S. as their desired future residence. However, this figure is down from where it was in all years leading up to 2017, which suggests that policy changes and anti-immigrant rhetoric during the Trump administration likely had a lasting chilling effect on potential migrants’ desire to come to the country.

As potential migrants cooled toward the U.S., and actual migration levels to the country slumped, they warmed to its neighbor to the north. In 2021, Canada achieved its highest level of immigration in its history. And Gallup survey figures show that 8% of potential migrants — or about 74 million people worldwide — would like to relocate to Canada.

Implications

While the increase in the desire to migrate may set off alarms among those who are happy that the pandemic curtailed global migration, it’s important to note that Gallup typically finds that the percentage of those who have plans to move is much lower than the percentage who would like to move. Desire to migrate is not the same as intent to move. Not everyone who wants to move can move, or ever will.

Gallup’s data suggest the COVID-19 pandemic did not dampen people’s desire to move — which is likely an important factor in why migration has been able to rebound so quickly in many places, including in countries such as the U.S. From 2021 to 2022, net international migration exceeded 1 million residents, suggesting that migration patterns may be returning to their pre-pandemic norms.

Further, countries such as Canada are banking on people’s increased desire to come to their country. Canada’s government announced plans late last year to take in nearly 1.5 million more migrants by 2025 to offset its aging population and ease labor shortages.

In the coming months, Gallup will be updating these metrics from our global surveys in 2022.