By Heather Burke, Bloomberg markets live reporter and strategist

After a tepid start to the year, European stocks now face a tough earnings season amid a still-soft economic backdrop and a cautious consumer.  

Earnings-per-share for the Stoxx 600 are expected to rise 6.5% in 2024, according to Bloomberg Intelligence data. Analysts have lowered consensus EPS by 2.1% in the past three months, led by materials, tech and energy. The chart below shows how profit downgrades have outpaced upgrades the past few months, even as stocks gained.

European stocks’ profits partly hinge on the region’s economic growth, which looks to be picking up very slowly. Economic sentiment remains deeply negative, although improving, PMIs have contracted, and both economists and European Central Bank members are downbeat about the end of 2023. Executive Board member Isabel Schnabel said the near-term outlook looks soft, even if the worst of the downturn may be over.

While euro-area headline inflation is largely easing, margins are at risk if price pressures continue to fall.  And many European companies’ profits depend on what’s happening outside the region. The Stoxx 600 only gets about 40% of its revenue from Europe, with 20% from the Asia-Pacific, according to Goldman Sachs. And China’s economic recovery has stumbled.

The luxury sector, often considered Europe’s version of high-growth tech, has emerged as a weak spot. Burberry dropped Friday after cutting its profit forecast. While some problems are company-specific, the warning underscores how luxury has underperformed amid slowing consumer demand.

In November, Richemont’s CEO said moderating demand was to be expected; the watchmaker reports Jan. 18. UBS had predicted a weak luxury earnings season amid softer China demand. Meanwhile, Goldman Sachs cut its 2024 forecast for global luxury growth but sees improvement in the second half. Earnings estimates have fallen in the past few months and investors have reduced exposure.

German stocks, which tilt heavily toward cyclicals such as autos and industrials, could also be set for a difficult earnings season. DAX consensus index EPS fell 3.3% in the past three months, especially in autos and tech.

Autos look set for a challenging 2024 amid softer demand and competition in China. German car production is still below pre-pandemic levels; Porsche deliveries fell in China in 2023. Volkswagen plans cost cuts to boost returns at its underperforming namesake brand.

Retail, the best-performing European sector in 2023, may have a more subdued year. While Marks & Spencer’s holiday sales beat estimates, the department store chain didn’t raise its profit guidance and said the broader outlook for economic growth is “uncertain, with consumer and geopolitical risks;” shares fell. JD Sports slashed its profit forecast in part on cautious consumer spending.

Fresh headwinds could pressure earnings further into 2024. Shipping disruptions in the Red Sea may spur profit warnings from companies if the surge in container rates and supply-chain issues persist, according to Lazard Freres. Tesco said such disruptions could drive inflation on some consumer goods.

To be sure, companies can easily beat a low bar. Weakness in the Chinese and European economies may already be priced in to estimates. Other issues, such as inflation and central bank interest rate cuts, could overtake earnings.

But Burberry’s profit warning is unlikely to be isolated as the 4Q earnings season kicks off, easily derailing European stocks’ end-of-2023 rally.

US equity futures were steady on Monday as investors were displeased by hawkish comments from ECB’s Holzmann , who said there may not be any rate cuts this year which pushed European stocks to session lows, while also bracing for more earnings later this week. With cash stock markets closed for Martin Luther King Jr. Day and global liquidity especially thin, S&P 500 and Nasdaq 100 futures were down about 0.1% and unchanged, respectively, as 8:00 a.m. ET, after both underlying benchmarks gained last week as the earnings season kicked off.

Treasury cash markets are also closed on Monday, although TSY futures suggested yields are higher by about 4bps to 3.98%; the Bloomberg dollar index edged higher following weekend news that a government shutdown had been delayed until March

The market is taking a breather after it rallied in nine of the past 10 weeks, with the S&P trading near its all-time high on optimism that the Federal Reserve could start cutting interest rates as soon as March (although over the weekend Morgan Stanley warned this is unlikely as “it would take either some serious stress in financial markets or notable downside surprises to inflation, jobs, or both to get a rate cut in March“). But data released last week showed US headline inflation re-accelerated in December, boosting warnings that funding costs may stay higher for longer.

“Markets could be jumping the gun when it comes to the likelihood of March rate cuts,” said Michael Hewson, chief analyst  at CMC Markets in London.

European stocks fell as economic data from Germany underscored the ugly backdrop for corporate profits ahead of a raft of speeches by policy makers at the World Economic Forum in Davos this week. The Stoxx Europe 600 index dropped  0.3%, trading at session lows and extending a lackluster start to the year after a 13% rise in 2023. Consumer goods and carmakers led the decline after Germany’s economy dodged a recession, though the latest data showed it contracted for the first time since the pandemic last year. Germany’s 10-year yield rose about five basis points as bonds across the euro region fell as the ECB’s Holzmann.

“Today’s data could encourage the ECB to speed up monetary easing but we’re now getting at the stage when bad economic news no longer translates into good news for equity markets,” said Benoit Péloille, chief investment officer at Natixis Wealth Management. In the US, market pricing for as many as six quarter-point rate cuts “can be a stretch; bad economic news will start to hurt,” he said.

Among individual stock moves in Europe, Dassault Aviation SA slumped after the French aircraft maker reported a decline in 2023 jet orders. Delivery Hero SE and Just Eat Takeaway.com NV dropped after BNP Paribas Exane analysts recommended steering clear of Europe’s food delivery sector. Volvo Car AB extended a decline sparked Friday when it said it’s temporarily halting some production due to shipping delays caused by Red Sea attacks.

Earlier in the session, the MSCI Asia Pacific share index climbed for a third session. Stocks advanced in Taiwan after the Democratic Progressive Party won the presidential election and the more China-friendly Kuomintang gained too few seats to control the assembly. Meanwhile, the gong show that is China continued, with the CSI 300 Index swinging between gains and losses amid speculation officials may lower the required reserve ratio after the People’s Bank of China unexpectedly left the rate on its one-year policy loans at 2.5% Monday. That was contrary to expectations among economists that it would trim the so-called medium-term lending facility by 10 basis points.

“Rate cuts are likely still on the cards, but China looks to be taking a more measured approach to policy easing,” said Marvin Chen, an analyst at Bloomberg Intelligence in Hong Kong. Well they better be because otherwise Beijing is looking at a mass revolt of a population facing a grim and recessionary economy and imploding capital markets.

In FX, the Bloomberg Dollar Spot Index rises 0.2%. The kiwi is the weakest of the G-10 currencies, falling 0.8% versus the greenback. The yen drops 0.6%.

In rates, bunds fall as economists still doubt the ECB will cut interest rates as much as market pricing currently suggests. German 10-year yields rise 3bp to 2.21%.

In commodities, oil prices decline, with WTI falling 0.8% to trade near $72.10, as the risk that air strikes by the US and allies against the Houthis would ignite a wider conflict and disrupt crude flows from the Middle East was balanced by soft fundamentals. Spot gold adds 0.2%.

The US is closed for the MLK day holiday today, and there are no official data releases. Looking at the week ahead, along with more US earnings reports, investors this week will be focused on inflation readings in Germany and the UK, as well as a swath of political leaders and officials including Chinese Premier Li Qiang attending the annual WEF. A speech by Federal Reserve Governor Christopher Waller, after officials last week attempted to temper any expectation of a looming rate cut, will also be closely watched.

Top Overnight News

• Japan’s two-year government bond yield declined below zero for the first time since July as global yields have fallen on expectations that major central banks from the Federal Reserve to European Central Bank will start cutting benchmark interest rates this year
• China’s central bank held a key interest rate steady on Monday while still pumping more cash into the financial system, bucking expectations that it would cut borrowing costs to support the economy
• The US economy is set for an unexpected fiscal boost if lawmakers back a potential deal for $70 billion worth of tax breaks for businesses and families
• Oil steadied as the risk that airstrikes by the US and allies against the Houthis would ignite a wider conflict and disrupt crude flows from the Middle East was balanced by softening fundamentals.
• Global shipping rates are surging as tensions rise in the Red Sea, after the US and UK conducted air-strikes against the Iran-backed Houthi militants in retaliation for their attacks on merchant ships.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were mostly rangebound after the lack of significant catalysts over the weekend and with global markets set for a quietened session on Monday owing to the extended weekend stateside.  ASX 200 lacked direction as strength in energy and telecoms offset the weakness in miners and defensives. Nikkei 225 continued on its upward trend and briefly reclaimed the 36,000 level for the first time since 1990. Hang Seng and Shanghai Comp were choppy after the PBoC refrained from cutting its 1-year MLF rate.

Top Asian News

• PBoC injected CNY 995bln (exp. 900bln) in 1-year MLF loans with the rate kept at 2.50% (exp. 10bps cut).
• China’s military, AI institutes and universities have over the past year bought small batches of Nvidia (NVDA) chips banned by the US from export to China, according to a Reuters review of tender documents.
• US Secretary of State Blinken had constructive discussions on a range of issues with a Chinese minister on Friday which included areas of potential cooperation and areas of differences, while Blinken emphasised the importance of resolving cases of American citizens wrongfully detained or subject to exit bans in China and raised US concerns about human rights abuses, according to Reuters.
• Taiwan ruling DPP’s William Lai won the presidential election with around 40% of votes which represents an unprecedented third consecutive presidential term for the DPP, although the party did not win a parliamentary majority. Furthermore, President-elect Lai said he can resume healthy and orderly exchanges with China and will use dialogue to replace confrontation, according to Reuters.
• US Secretary of State Blinken said the US is committed to maintaining cross-strait peace and stability, and peaceful resolution of differences, while he added the US will work with Taiwan to further a longstanding unofficial relationship, consistent with the US one-China policy, according to Reuters.
• China’s Foreign Ministry said US Secretary of State Blinken’s statement on the Taiwan election sent a seriously incorrect signal to Taiwan’s independence separatist forces and seriously violated US promises that it would only maintain cultural, economic and other non-official ties with Taiwan, according to Reuters.

The Stoxx Europe 600 extends earlier losses to fall as much as 0.4%, with autos and banks driving weakness. Among cyclical sectors: banks -0.8%, autos -0.7% and retail -0.7% the laggards; travel +0.7% is a rare bright spot. US futures slightly weaker, with S&P 500 contracts down 0.1%, Nasdaq 100 futures little changed; cash trading closed for a holiday

Top European News

• ECB’s Lane said they will have key data by June to decide on rates and that changing rates too fast can be harmful, while he added that once the ECB begins lowering rates, this would not be by a single decision of a rate cut and there would likely be a sequence of rate cuts, according to an interview with Corriere Della Serra.

Geopolitics: Middle East

• Israeli PM Netanyahu reiterated that no one will stop Israel from fighting in Gaza until victory and they will not end the war without closing the hole on the border with Egypt, while he added they must close Gaza’s border with Egypt and are considering several ways to do this, according to Reuters.
• Israeli military chief said it will consider letting Palestinians displaced from north Gaza to return when there is no danger to them, according to Reuters.
• Hamas armed wing spokesman Abu Ubaida said any talks before stopping Israeli aggression are worthless and the fate of many hostages has become unknown, while the spokesman added many have been killed and blamed their fate on Israel. Furthermore, the spokesman said they have been told by several parties on resistance fronts that they will expand their strikes in the coming days, while it was also reported that Hamas aired a video showing three Israeli hostages appealing to be freed and Hamas said the fate of hostages will be disclosed on Monday, according to Reuters.
• US President Biden and other senior US officials are reportedly becoming increasingly frustrated with Israeli PM Netanyahu and his rejection of most of the administration’s recent requests related to Gaza, according to four US officials with direct knowledge of the matter cited by Axios.
• White House’s Kirby said a lower intensity phase of operations in the Israel-Hamas war is approaching soon.
• US military announced US forces conducted a strike against a Houthi radar site in Yemen and said strikes are designed to degrade the Houthi’s ability to attack maritime vessels, while a Houthi spokesman said US strikes on Yemen including the latest one on a military base in Sanaa are ineffective, according to Reuters.
• US President Biden said the US delivered a private message to Iran about Houthi attacks and the US is confident that it is well prepared. It was separately reported that Iranian President Raisi condemned US air strikes on Yemen and said that Washington’s move revealed its true nature which is aggressive and against human rights, according to Reuters and IRNA.
• Egypt and China are closely following up on developments in the Red Sea and expressed concern over the expansion of the conflict in the region, while they emphasised the importance of uniting international and regional efforts to stop the attack on Gaza, according to a joint statement.
• Lebanon’s Hezbollah head said it is wrong and ignorant if US President Biden thinks the Yemenis will stop confronting the Israelis in the Red Sea, while he added that what the Americans did in the Red Sea will harm all maritime navigation, according to Reuters.
• US Central Command said an anti-ship cruise missile was fired on Sunday from the Iranian-backed Houthi military area of Yemen towards USS Laboon operating in the Red Sea, while the missile was shot by a US fighter aircraft and there were no injuries or damage.
• Iraqi armed factions said they attacked three American bases in Iraq and Syria, according to Al Arabiya.
• Turkey’s military said it launched air strikes against Kurdish militant positions in Northern Syria and Iraq which destroyed 24 militant targets, according to Reuters.

Geopolitics: Other

• Ukraine promoted a peace plan at Davos on Sunday ahead of the World Economic Forum although China decided not to attend and Russia was not invited to the meeting, according to FT.
• North Korea fired an intermediate-range ballistic missile which landed outside of Japan’s exclusive economic zone, while North Korea said that it successfully launched a mid- to long-range solid fuel ballistic missile which was equipped with a hypersonic manoeuvring unit and that the launch did not pose a threat to countries around it, according to Yonhap.
• North Korea’s Foreign Minister travelled to Russia and led a delegation which left Pyongyang on Sunday, according to KCNA.

FX

• DXY remained within a tight range of between 102.30-102.55 amid the US holiday closure.
• EUR/USD traded indecisively around 1.0950 after last week’s whipsawing and lack of pertinent drivers.
• GBP/USD price action was limited following a very quiet weekend of newsflow from the UK.
• USD/JPY was marginally higher and reclaimed the 145.00 status amid outperformance in Japanese stocks.
• Antipodeans were mixed on cross-related flows and after the PBoC disappointed calls for a MLF rate cut.
• PBoC set USD/CNY mid-point at 7.1084 vs exp. 7.1684 (prev. 7.1050)

Fixed Income

• 10yr UST futures were lacklustre and traded rangebound with US cash markets to remain closed on Monday.
• Bund futures traded uneventfully in the absence of any major pertinent catalysts for Europe over the weekend.
• 10yr JGB futures extend on recent gains amid the presence of the BoJ in the market for almost JPY 1.2tln of JGBs, while 2-year JGB bond yields briefly returned to negative territory and printed its lowest since July 2023.

Commodities

• Crude futures were rangebound as demand-related woes offset the geopolitical risk premium.
• Iraq set February Basrah medium crude OSP to Asia at minus USD 0.80/bbl to Oman/Dubai average and to Europe at minus USD 5.15/bbl vs dated Brent, while it set the price to North and South America at minus USD 1.00/bbl vs ASCI, according to SOMO.
• Iraq’s Oil Minister said the oil market suffers from many challenges that affect its stability and that OPEC+ is working to limit these factors by taking the measures necessary, according to Reuters.
• Qatar appears to have halted sending LNG tankers through the Bab el-Mandeb Strait after US-led airstrikes on Houthi targets raised risks in the key waterway, according to Bloomberg.
• Spot gold edged marginal gains amid an uneventful dollar and with US participants on an extended weekend.
• Copper futures nursed some of last week’s losses but with the rebound capped by PBoC-related disappointment.

DB’s Jim Reid concludes the overnight wrap

It’s a US holiday today (Martin Luther King Day), so it will be a very quiet start to the week. My wife was away at a spa weekend so I’m worn out from shouting at the kids non-stop for 2 days so its a shame I’m not in the US for a break. Although it’ll be quiet, we do have the Iowa Caucus during what is a brutally cold spell in the state with -25C forecast for the vote tonight that traditionally kick-starts the election campaign. The key things to watch are whether Donald Trump can get above the psychological 50% share of the Republican vote (the level recent polls suggest he’s hovering around in the State), and/or how close either Ron DeSantis or Nikki Haley can get to him. While there is clearly a long way to go until November, this will give us some early idea of how successful and deep into the primaries Donald Trump’s opposition for the nomination might go.

Staying with politics, on Saturday, Lai Ching-te of the incumbent DPP won the presidential election in Taiwan, as expected, with 40.1% of the vote, ahead of KMT’s Hou Yu-ih. Attention is likely to turn to the risks of increased tensions between Taiwan and mainland China, with Bejing’s officials having referred to Lai as a “troublemaker” and “separatist” ahead of the election. So far there hasn’t been any escalating rhetoric from the winning party or from China so markets will probably see the immediate tail risk as reduced although this is something that probably bubbles under the surface for a long time ahead. For more information on the context of what is at stake, Marion Laboure and Cassidy Ainsworth-Grace published a presentation pack on the election and surrounding issues last week. See the full report here . The other geopolitics to watch out for are those around the US/UK strikes against Houthi rebels in Yemen towards the end of last week.

In terms of the rest of the week ahead, the highlight is likely to be US December retail sales on Wednesday which will have a impact on Q4 GDP forecasts and momentum into Q1. Housing starts and permits (Thursday) and existing home sales (Friday) will also sharpen those forecasts. The latest UoM consumer survey is out Friday, including the latest inflation expectations series which has moved markets in recent months. Our economists point out that in a week of lots of Fed speak, Waller tomorrow (11am EST) might be the most important as his dovish shift in November helped spark the momentum towards the Fed’s dovish pivot. Earnings season will also slowly build in the US too this week. In addition, US lawmakers will vote after today’s holiday on yet another stopgap spending bill to avert a partial government shutdown this Saturday. It seems they are pushing this into March. So no doubt we’ll be in a similar position again then.

In Europe, UK labour market indicators (tomorrow), inflation data (Wednesday) and retail sales (Friday) will be of interest, especially the CPI data. Over in the continent, notable indicators will include industrial production for the Eurozone today and the ZEW survey for Germany tomorrow. Davos also kicks off today so expect lots of headlines and Canada Goose jackets on your business TV screens.

Moving on to Asia, the focus in Japan will be on the national CPI release on Thursday and China’s Q4 GDP and December economic activity indicators on Wednesday. Check out the full week ahead calendar at the end as usual with key data, speaker and earnings releases flagged.

Asian equity markets are mostly trading higher this morning with the Nikkei (+1.16%) again leading gains, while Chinese stocks are recovering from earlier losses with the CSI (+0.17%) and the Shanghai Composite (+0.36%) moving higher even after the PBOC left its medium-term policy loans rate unchanged (more on this below). Elsewhere, the KOSPI (-0.07%) is swinging between gains and losses with the Hang Seng (-0.15%) seeing minor losses. US stock futures are flat with cash Treasury trading closed due to today’s holiday.

Coming back to China, the PBOC defied market expectations for a cut as it held the rate on some 995 billion yuan ($139 billion) worth of one-year medium-term lending facility (MLF) loans intact at 2.50%. The MLF was last cut in August 2023, from 2.65%.

Recapping last week now. Despite the upside surprise to the CPI on Thursday, investors grew increasing confident that the Fed is likely to cut rates soon, with the CPI details suggesting more moderate PCE inflation, the Fed’s preferred gauge. This momentum continued on Friday after data showed a greater-than-expected decline in the PPI. US December PPI fell -0.1% (vs 0.1%) month-on-month and rose 1.0% in year-on-year terms (vs 1.3% expected). With some measures in the PPI, like healthcare and portfolio management, also captured in the core PCE, a weaker PPI therefore implies a softer core PCE print and greater justification for the Fed to cut rates. Off the back of this, investors raised their expectations of a 25bps Fed cut by March, rising from 78% to 83% on Friday, up from 63% at the start of the week. And 168bps of cuts are now priced it by end-2024, 30bps more than a week earlier. So that’s nearly seven 25bps cuts now expected by the market from the Fed this year.

With the soft producer price data reinforcing Fed cut bets, 10yr Treasury yields declined by -2.6bps on Friday, and -10.6bps on the week to 3.94%. The short-end outperformed, as 2yr yields fell -10.2bps to 4.15% (-23.7bps week-on-week), their lowest level since last May. The bond rally was driven by real rates, with the 10yr real yield down -15.7bps and the 2yr -32.2bps on the week. By contrast, 10yr breakevens (+4.1bps Friday and +5.1bps over the week), reached their highest level since November at 2.28%. Over in Europe, 10yr bund yields fell -5.0bps on Friday but rose +2.8bps in weekly terms.

Equities fluctuated on Friday but rallied over the week, supported by the rates rally. The S&P 500 gained +1.84% last week (+0.08% Friday), ending the week just 0.3% below its record high at the start of 2022. Soft earnings releases by several US banks on Friday drove the S&P 500 Banks index down -1.27% on Friday, and -3.37% in weekly terms. The tech-heavy NASDAQ outperformed, up +3.09% over the week (+0.02% on Friday) in its largest weekly move up since the start of November. Gains were largely driven by the tech giants, as the Magnificent Seven index of megacap stocks rose +4.25% (-0.16% on Friday). In Europe, the STOXX 600 jumped +0.84% on Friday but traded near flat (+0.08%) on the week.

Lastly in commodities, geopolitical risks returned to the fore after the US and UK launched air strikes against Houthi rebels in Yemen. With risks escalating for Red Sea commercial shipping, Danish fuel-tanker company, Torm, announced its intention to pause transits through the Southern Red Sea on Friday. These developments drove Brent Crude prices above $80/bbl in early trading on Friday, before finishing the day at $78.29/bbl (+1.14% on the day). That said, they were down slightly (-0.60%) on the week after an earlier decline on news of Saudi Arabia lowering its selling price. WTI crude similarly rose +0.92% on Friday to $72.68/bbl but was down -1.53% on the week. Rising geopolitical risks in the Middle East also saw gold rally +1.72% on Friday (+0.18% on the week)

Authored by Sam Bourgi via CreditNews.com,

Young adults used to dream of moving out of their parents’ homes and into their own apartments, but living alone has become a luxury not everyone can afford.

According to a recent study by Intuit Credit Karma, 31% of Gen Zers are living with their parents because they can’t afford to rent or buy their own place. Overall, 11% of American adults still live at home with their parents.

“The current housing market has many Americans making adjustments to their living situations, including relocating to less-expensive cities and even moving back in with their families,” said Courtney Alev, a consumer financial advocate at Intuit Credit Karma.

Even young adults who live alone are reconsidering their living arrangements because costs are too high.

About a quarter (27%) of Gen Zers reported that they could no longer afford rent and 25% said they’ll have to move back in with family to make ends meet.

Millennials are in the same boat: 30% say rent is unaffordable, and 25% are thinking about moving back in with their parents.

The research is consistent with a 2021 study conducted by the U.S. Census Bureau, which showed that one in three adults ages 18 to 34 live with their parents.

In a 2022 study, Pew Research also found that the percentage of Americans living with their parents has increased steadily since 2000. Pew calls these living arrangements “multigenerational households,” and said young adults ages 25 to 29 are most likely to cohabit with their parents.

Different studies, but all tell the same story: Finances are the top reason young adults are still living with family.

Housing and rental costs rise

It’s hardly surprising that young adults are struggling to make ends meet. Housing costs and living expenses have skyrocketed since the pandemic, and younger generations have faced the most financial hardship.

As Creditnews Research reports, Millennials and Gen Zers have been locked out of homeownership due to rising home prices, elevated interest rates, and stagnant real wages (adjusted for inflation).

For example, in 2023, Millennials accounted for only 28% of homebuyers despite being in their prime home-buying age. Gen Zers barely made a dent in the housing market, accounting for a paltry 4% of all buyers.

According to Fed data, average home prices were $431,000 as of the third quarter of 2023.

The rental market isn’t much better. Although rent costs have declined for three straight months, landlords are still asking for $1,964 per month on average, per Redfin data. Average rents were below $1,650 at the start of Covid.

But the problem of surging rents goes back much longer than that. According to a report from Moody’s Analytics, rent prices grew 135% between 1999 and 2022, while average incomes for all age groups were up 77% over the same period.

In terms of earning potential, younger generations are at the lower end of the totem pole, so they’re more likely to be affected by rising rent prices.

Where’s the “strong economy” everyone always talks about?

While the U.S. economy has steered clear of recession and unemployment remains near historic lows, Americans are still struggling to afford basic expenses. This is especially true for younger generations.

A 2023 study conducted by Deloitte found that more than half of Millennials and Gen Zers were living paycheck to paycheck. Perhaps shockingly, 37% of Millennials and 46% of Gen Z reported taking another part-time or full-time job just to afford their bills.

As it turns out, people working multiple jobs could be inflating the seemingly rosy job numbers.

Working longer hours and barely scraping by is one of the main reasons why younger adults feel they’re worse off financially than their parents were at their age.

An August 2023 study conducted by The Harris Poll found that 74% of Millennials and 65% of Gen Zers believe they are starting further behind financially than previous generations.

“They’re telling us they can’t buy into that American dream the way that their parents and grandparents thought about it—because it’s not attainable,” said The Harris Poll CEO John Gerzema.

Authored by Steve Watson via Modernity.news

Civil servants in the UK, people working for the government, have been issued guidance that tells them they should show support to transgender identifying colleagues by “thinking of the person as being the gender that they want you to think of them as.”

The Daily Mail reports that the Information Commissioner’s Office, which deals with data protection and privacy laws, shared a memo with staff that essentially noted just using preferred pronouns is not going far enough, and that civil servants must think of trans women as biological women.

The guidance also claims that trans women, biologically male, actually go through the menopause, and that they should never be asked what their ‘real’ or ‘birth’ name is.

Here is a screenshot of part of the memo:

The section on the menopause states that it “is a natural hormone transition that every woman and some trans men, trans women and non-binary people will experience.”

This is a further step beyond government workers previously being told they must check the preferred pronouns of their colleagues and not assume their gender.

Director of the Free Speech Union Toby Young commented “The ICO is supposed to be responsible for protecting people’s privacy. How can it be taken seriously in that role if it’s dictating to its employees what they can and can’t think?”

He continued, “This is like something out of [George Orwell’s novel] 1984, telling people they must not commit thought crime.”

Conservative Party MP Lia Nici added “Why do we need organisations like the ICO to produce guidance to tell people what they should be thinking? We already have protection for everyone in the workplace since the Equality Act was introduced in 2010.”

A statement from the ICO claimed that it is upholding a “commitment to inclusivity for employees,” and that “treating everyone with dignity, respect and compassion is fundamental to the ICO’s work to uphold and protect information rights.”

Don’t you dare engage in wrong think though!

*  *  *

Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews

A key reason that Yemen’s Houthis are unlikely to halt their attacks on Red Sea shipping as well as Western warships parked there is because immense pressure on the global transit waterway can be kept up, while it costs little to persist with such launches.

Many of the Houthis drones which are capable of reaching vessels far off the Yemeni coast have been estimated at not more than $20,000. Some of them are as low as a few thousand dollars to build. They can easily be intercepted by US and UK coalition warships, but at an immense cost for these Western militaries. 

Anti-air missiles fired from coalition ships are commonly estimated at over $1 million each. This means the Houthis can keep the attacks coming, and on the cheap while watching Western warships blow through expensive arsenals.

This trend has been highlighted in a recent DefenseNews report which explored the high cost to the French navy of defeating the low-tech Houthi drones: 

France’s maritime commander for the Indian Ocean defended the use of million-euro missiles to down drones used by Yemen’s Houthi rebels to attack shipping in the Red Sea, citing the value of the lives and assets protected, and the sophistication of the threat.

The Languedoc frigate patrolling in the southern Red Sea in December shot down multiple drones using Aster 15 missiles, at a cost that defense analysts estimate at around €1 million (U.S. $1.1 million) per missile. The British Royal Navy’s HMS Diamond has also used the missiles to fend of drone attacks in the area.

The report further underscored that “The economic calculus of ultra-capable interceptors, designed to counter expensive expensive anti-ship missiles or manned aircraft, quickly loses its appeal against drones costing thousands of dollars, analysts have warned.”

Still, commanders in the coalition are defending using these ultra-expensive missiles, saying all of this should be weighed in light of the necessary act of protecting valuable shipping lanes for Western economies.

Likely, the more sophisticated drones within the Houthi arsenal come directly from Iran. Tehran also has an interest in seeing Western navies bogged down in the Red Sea, and all the while they can use proxies to do it.

The Houthis don’t need to sink or even strike a single ship to accomplish their goals. The Red Sea remains closed to Western shipping, Israel is effectively under a blockade, and the US and UK are depleting their costly stocks of weapons to bat away cheap drones and missiles. https://t.co/AwUTvAy2XX

— Jeff Wells (@JeffWellsRigInt) January 10, 2024

US officials have lately accused the Iranians of directly assisting the Houthis with targeting in the Red Sea. There’s at least one Iranian surveillance ship believed to be patrolling these waters at the moment. The situation is a ‘win-win’ for both the Houthis and Iranians, even after the recent rounds of Western airstrikes on Yemen.

Authored by Jonathan Turley,

Senior Finnish politician Päivi Räsänen has been acquitted twice after the Finnish government prosecuted her for quoting the Bible.

Now, however, the Finish Public Prosecutor is seeking to appeal the November 2023 decision supporting her faith and free speech.

Even with the widespread attacks on free speech across Europe, Finland is now a standout for its intolerance and extremism in defining opposing views “hate speech.”

We have previously followed the case and the chilling effort to criminalize religious speech as hate speech. It is equally troubling to see a leading politician subjected to such investigation and prosecution, sending a chilling message to all citizens that their own free speech will not be tolerated in Finland.

Räsänen is a long-standing member of Parliament, former leader of the Finnish Christian Democrats Party, and former national interior minister. She is also a physician and mother of five who is highly critical of homosexuality, which she describes as a “disorder of psychosexual development.”

In 2019, she questioned her church’s sponsorship of an LGBT pride event.

On June 17th of that year, she proceeded to post a statement on Twitter questioning how the sponsorship was compatible with the Bible, linking to a photograph of a biblical passage, Romans 1:24-27, on Instagram. She also posted the text and image on Facebook.

She later said that “[t]he purpose [of] my tweet was in no way to insult sexual minorities. My criticism was aimed at the leadership of the church.”

She was charged under a law concerning “war crimes and crimes against humanity.”

In 2022, the District Court of Helsinki unanimously acquitted Räsänen on the hate speech charges and held that “it is not for the district court to interpret biblical concepts.”

Rather than rethink its attack on free speech, the Finnish government then appealed to the Helsinki Court of Appeal.

The government again lost unanimously.

Now the Public Prosecutor is appealing to the Supreme Court in what seems more like a blind rage than reasoned lawyering.

It is a glimpse of the slippery slope that awaits this country if our own anti-free speech movement takes hold.

Authored by Jeffrey Tucker via DailyReckoning.com,

Just Say No

The train wasn’t scheduled for another 20 minutes, so I had a chance to contemplate the official sign on the door of the huge elevator leading to the platform.

It said that only four people are allowed in because we must all practice social distancing. There was a helpful map of the interior of the elevator with stick figures telling people exactly where to stand.

Yes, these stickers are still everywhere. I recall when they first went up, sometime in April 2020. They seemed oddly uniform and appeared even permanent. At the time I thought, oh, this is a huge error because within a few weeks, the error of the whole of this idiocy is going to be known by all.

Sadly, my worst fears came true: It was designed to be a permanent feature of our lives.

Same with the strange arrows on the ground telling us which way to walk.

They are still everywhere, stuck on the floor, an integral part of the linoleum. If you walk this way, you will infect people, which is why you have to walk that way, which is safe.

As for masks, the mandates keep popping up in strange places and strange ways. My inbox fills with pleas for how people can fight this stuff.

Orwell Couldn’t Even Imagine It

The essential message of all these edicts: You are pathogenic, a carrier, poisonous, dangerous, and so is everyone else. Every human person is a disease vector. While it’s fine you are out and about, you must always create a little isolation zone around you such that you have no contact with other human beings.

It’s so odd that no dystopian novel ever imagined a plot centered on such a stupid and evil concept. Not even in 1984 or The Hunger Games or Equilibrium or Brave New World or Anthem, was it ever imagined that a government would institute a rule that all people in public spaces must stand six feet away in all directions from any other person.

That some government would insist on this was too crazy for even the darkest imaginings of the most pessimistic prognosticator. That 200 governments in the world, at roughly the same time, would go there was unimaginable.

And yet here we are, years after the supposed emergency, and while governments are not enforcing it, for the most part, many are still pushing the practice as the ideal form of human engagement.

Except that we’re not doing it.

No One Takes It Seriously

In this train station, no one paid any attention to any of the signage. The exhortations were entirely ignored, even by those who are still masked up (and, one presumes, boosted seven times).

When the moment arrived for people to get into the elevator, a crowd began to pour in, quickly beyond four, then eight, then 12. I stood there shoulder to shoulder with fully 25 other people in one elevator with a sign that demanded only four people get in at any one time.

I sort of wanted to ask the crowd if they saw the sign and what did they think. But that would have been absurd, because, actually, no one even cares. In any case, one guy asking a crowded elevator such a question would have raised suspicions that I was deep state or something.

It was never clear in any case who was enforcing this. Who issued the rule? What are the penalties for not complying? No one ever said. Sure, there was in the past usually some flunky bureaucrat or Karen who yelled at people and said do this and don’t do that. But those people seem long ago to have given up.

It’s not even a thing anymore. And yet the signs still exist. Probably they will stay forever.

There is an enormous disjunction that still persists between what we are told to do and what we actually do. It’s as if incredulity toward official diktat is now baked into our daily lives.

Making Sense of It All

My first thought is that it doesn’t make much sense at all, even from the point of view of those who aspire to control our lives, to issue commands to which no one listens or obeys.

On the other hand, there might be some meta-rationale for this, as if to say, “We are nuts, you know we are nuts, we know you know we are nuts, but we are in charge and can continue to do this anyway.”

In other words, edicts to which no one complies serve a certain purpose.

They’re really a visual reminder of who is in charge, what those people believe, and the presence of a Sword of Damocles hanging above the whole population: At any point, anyone can be snatched away from normal life, made a criminal, and be forced to pay a price.

The nuttier the edicts, the more effective the message.

Thus do we live in insane times. There seems to be a huge and widening gulf separating the rulers from the ruled, and this gulf pertains to values, aims, methods and even vision for the future.

Whereas most of the population aspires to live a better life, we cannot shake the sense that someone out there who has more power than the rest of us aspires for us to be poorer, more miserable, more afraid, more dependent and more compliant.

After all, we are just barely shaking off the most grandiose experiment in universal human control in the historical record, the attempt to micromanage the whole of everyone belonging to the human race in the name of gaining control over the microbial kingdom.

The effort petered out over time but how in the heck does anyone with ruling-class power expect to maintain any credibility after such a destructive experiment?

They’ll Never Admit They Were Wrong

And yet there is a reason we have heard precious few concessions that it was all bogus and unworkable, and why there is still a dripping sound of papers telling us that the whole scheme worked pretty well and that people who say otherwise are disseminators of disinformation.

There are still publishing opportunities out there to trash repurposed generics and praise the shots and boosters. The power is still with the crazy people, not with those who question them.

And the people who threw themselves into COVID controls as the greatest years of their lives are still at it. Hardly a day goes by when there is not a freshly written hit piece on the resistance and efforts to trash those with enough sagacity to see through all the baloney.

Far from being rewarded, those who protested and opposed are still living under a cloud that comes with being an enemy of the state.

We all know that it is not just about these dumb stickers and these virus controls. There is more going on.

Noncompliance Is the Answer

Coincident with the pandemic restrictions came the triumph of woke ideology, the intense push for EVs, a wild ramp-up in weather paranoia with the discovery that climates change, a rampant gender dysphoria and denial of chromosomal reality, an unprecedented refugee flood that no one in power is willing to mitigate, a continued attack on gas including even stoves and a host of other inane things that are driving rational people to the brink of despair.

We long ago gave up the hope that all of this is random and coincidental, any more than it so happened that nearly every government in the world decided to plaster social distancing signs everywhere at the same time.

Something is going on, something malevolent.

The battle of the future really is between them and us but who or what “them” is remains opaque and too many of “us” are still confused about what the alternative is to what is happening all around us.

Noncompliance is an essential start regardless.

That crowded elevator, assembling spontaneously in open defiance to the blasting signage, is a sign that something in the human longing to be free to make our own decisions still survives.

There are cracks in the great edifice of control.

Iowa Democrats and independents have a plan to make a dent in former President Donald Trump’s massive lead over the rest of the GOP field – help Nikki Haley by becoming “Republicans for a day” during the Iowa caucuses.

According to Axios, “crossover” voting is a low-key tradition in the Iowa event, as the state allows day-of party registration for voters, while Democrats aren’t holding in-person presidential  caucuses this year – providing the perfect opportunity for uniparty Democrats to support yet another perpetual war candidate.

As Don McLeese of west Des Moines told Axios, the crossover voting scheme gives anti-Trumpers “a chance to diminish Trump’s inevitability,” adding “I’ll hold my nose and caucus for Haley.“

Iowa Republican precinct captain for Haley, Lyle Hansen, acknowledged that “there could be a good crossover” vote for Haley, because Democrats “get to come over and pick the candidate for Biden to oppose.”

Des Moines Democrat Jonathan Neiderbach told the outlet “I believe all Americans should cast a vote against Donald Trump every chance we have.”

Reality bites…

As Axios notes, the crossover votes are “are highly unlikely to help Haley catch Trump, who’s consistently had a big lead in Iowa polls.”

• But GOP strategist David Kochel said that if crossovers see Haley as the best Republican alternative to Trump, they could help her finish a solid second in Iowa, ahead of Florida Gov. Ron DeSantis.
• “If you even had 5,000 or 7,500 people across the state cross over for her, that might be the difference between her and Ron DeSantis,” Kochel said.

The intrigue: There’s some risk for Iowa’s Democratic Party if many of its members cross over to vote with Republicans.

• People who switch parties to participate in a caucus sometimes don’t switch back, Tim Hagle, a political scientist at the University of Iowa, tells Axios.

Responding to the ‘threat,’ Trump senior adviser Chrris LaCivita brushed aside any concerns. 

“If that is something they are relying on to get through the night, then poor people, I feel bad for them,” he told Axios.

Authored by Todd Hayen via Off-Guardian.org,

“We must all be alike. Not everyone born free and equal, as the constitution says, but everyone made equal…”

Ray Bradbury, Fahrenheit 451

A recurring theme in movies, television, and literature, is the “big lie.”

We’ve always heard the adage, “if you tell a lie big enough, and keep repeating it, more people will believe it.” I think the original version of that quote is attributed to the Nazi propagandist Joseph Goebbels. Although like with most historical references, Goebbels may never have said this.

Anyway, might as well say he did, eh? Easy enough.

“Diversity” and the efforts toward achieving it, as described by the agenda, is a lie. A Big Lie. So is “inclusion” and “equity”—nice ideas, and in a sane world, nice ideals to work toward. But in our current “Bizarro World,” all lies. In fact, as you well know, most of everything out there instigated and implemented by the “government” are lies. Big ones.

Sad but true.

Why are these things labelled “Big Lies” and not just plain ‘ol little lies?

The “woke culture” calls anyone who points out diversity as a bigot or racist. For example, if a person comments on the unique apparel of an ethnic group he runs the risk of being called a racist. A person who comments on an attribute of a particular race (good or bad), he is called a profiling bigot. If someone recognizes diversity and points it out, he is a racist. You don’t honour diversity by cancelling anything that is culturally diverse. That doesn’t make sense. Since these things have worked their way into the culture so deeply, identifying them and labelling them the way the culture does, qualifies as a big lie.

I wrote a previous article about this titled: “Pseudo-diversity”. The points I made then are slightly different than the points I am making now, but all similar. Here is a quote from that article that falls more in alignment with today’s thoughts:

It seems I am stumbling with the term “diversity.” Isn’t that what all the fuss is about these days? Everyone seems to want to be identified and seen as unique, but at the same time they wish to have no uniqueness at all. The culture seems to be wanting to cancel out any thought, thing, idea, concept, skill, culture, biology, gender/sex, that claims uniqueness, a strength or weakness, a difference good or bad, but at the same time wants a unique title for all this as well as a recognized exclusivity. Inclusivity and exclusivity: there seems to be no tolerance for sameness, but also no tolerance for difference. Now THAT’S the formula for a mess.

At the time that I wrote this, I was a bit perplexed as to why such a thing was happening. As with most stuff happening these days, it just didn’t make sense. Why would they say one thing and then do another?

Why would the “woke culture” be so ready to decimate someone for a “non-inclusionary” remark, yet at the same time advocate the blind acceptance of such unique and eclectic views, not understanding that such unique and eclectic people are by their very nature are “not included.”

Am I the only one who sees this paradox?

For a culture to truly be accepting of diversity, that culture must first allow diversity and not be so focused on making everyone the same—and thus unnoticeable. There is a fine line between bigoted prejudice and tolerance.

Tolerance is the operative word in a stabilized society.

Tolerance, flexibility, and resilience are on the side of the “unique, diverse, individual or group.” As well as with the “majority” group which may be accused of cultural bigotry.

Yes, hateful prejudice is a trait to attempt to eliminate, but not a realization that people are different. We must encourage an awareness of differences, and along with awareness of differences, people should be allowed, within reason, to express their awareness of those differences. “Oh look, that man is black, that person has a penis but is dressed like a woman, these people are different than I am, I notice that, and I accept it, but some of it may make me uncomfortable.”

Maybe some of it I don’t like, and if I feel it encroaches on my own quality of life, I may express that fact without violence or hate.

(A clear example of this is the plethora of trans “storytelling” events in elementary schools. Cannot we reject such activities without being labelled hateful toward trans persons?)

To force people (through shaming) to love every lifestyle choice people make, and if they don’t, to then be accused of being bigots, or worse, are arrested for a human rights violation, is not a good thing. People should be allowed to be different. This axiom does not only apply to people who are attempting to be contrary to the “middle of the bell curve majority,” but also to people who are in the “middle of the bell curve majority.” They have just as much right to be accepted for who they are, including their own beliefs about self and worldview, and not be bullied or legally threatened into agreeing with choices they simply do not agree with (such as a requirement to address people by their chosen pronoun.)

Yes, there is a grey area with all of this, and I do not mean to be bulldozing through this grey area with my sweeping comments. Although in my own personal worldview, I believe people even have the right to be racist, as long as they do not hurt anyone through their bigotry. I also believe a “better society” is created if these bigotries are eliminated. I believe the core of bigotry is a natural suspicion of differences. More integrated humans are less threatened by other people’s differences. Although we may have a “right” to be threatened, it generally makes for a better society if we are not.

“Live and let live” is the fundamental model for peaceful co-existence here. And we have, throughout our human history, tried to make a go of it. It is only recently that we seem to be making some serious inroads in this regard—until the agenda came along and mucked it all up. In other words, I do not believe that what we are experiencing regarding this insane “woke” crap is a natural organic phenomenon. The devil is making us do it, maybe quite literally.

Once again, the carrot-to-stick tactic is being used. The carrot is the noble ideal of diversity, equity, and inclusion to all people of all cultures and ethnicities. Yeah, that’s nice, we can go along with that! But then tell us all that we are despicable human beings for thinking men with penises and testicles should not be competing in women’s sports, or that a person of colour should not get the top brain surgeon position when they are not the most competent.

Tell us we are bigots and transphobic if we don’t believe we should be required to guess someone’s fantasy pronouns and wind up in jail or with a hefty fine if we fail. Tell us we are wrong to think of certain cultures as having certain identifiable traits, particularly from different periods in history (such as a person born and raised in the Chinese tradition having particular dress attributes) without being accused of extreme insensitivity and a disgusting violator of diversity, equity, and inclusion.

Then we are punished for actually recognizing that people are different.

And we are being punished for believing that not everyone is entitled to every prize out there, but indeed some people who have worked hard, or shown a particular skill are “included” in a special group exploiting those gifts, and others are indeed excluded.

That is equity.

Where is the equity in making everyone the same, everyone, regardless of their specialness or uniqueness or skill or talent or hard work, being herded into a singular “sameness” with everyone else?

Don’t fall for this DEI carrot. It is a big lie and a nasty one at that. It creates resentment, anger, frustration, confusion, and sadness. And above all, it creates the opposite of what it claims to create.

Just what the doctor ordered, and we all know where orders from the doctor lead us.