You know things are bad/corrupt/unspinnable when… a CNN legal analyst is forced to admit the malarkey occurring at the Department of Justice is “beyond anything I’ve ever seen.”

During a panel discussion on “CNN This Morning” about a New York Post headline that said, “What About The Bidens?”, CNN’s chosen few discussed comparisons between the rapidity and ferocity of the case being brought against former President Trump (over classified documents) and the slow-roll probe (sicne 2018) of Hunter Biden for alleged tax fraud and financial crimes, including lying on a federal firearm application.

CNN political correspondent Sara Murray said “I don’t think we are talking about an apples-to-apples comparison here,” but added, “I do think it is a fair question to say, you know, what are you guys going to do about the Hunter Biden investigation. This has been going on for a while.”

To which CNN legal analyst Elie Honig replied:

“Sara makes a great point about the Hunter Biden investigation at DOJ… This is preposterous!”

He went on…

“This has been pending, according to our reporting at CNN, since 2018, five years! And this, by the way, this investigation is not the laptop. This investigation is a tax issue.

Did Hunter Biden declare his income and a sort of obscure gun law, did he possess a gun while he was addicted to drugs, which you’re not allowed to do under federal law? Did he lie about that?”

“But five years, I mean, that’s a five-week investigation,” Honig continued.

“Somebody, and this spans the Trump administration and the Biden administration, someone’s got to make a call on this case. I don’t know what is going on, but it’s beyond anything I’ve seen before.”

Watch the full discussion below (the relative section begins at 4:10):

Joe Rogan didn’t hold back during a recent podcast, calling President Joe Biden a ‘cunt’ for a career full of lies and international corruption. Rogan also condemned the establishment for holding former President Trump to a different standard.

Rogan was replying to guest Theo Von, who suggested that the president’s handlers are to more blame for the sad, decrepit, national embarrassment Biden projects.

“It’s not cool to old people to do that to them,” said Von, to which Rogan agreed – but argued that Biden is lucid enough to understand what’s going on.

“He kind of does, and he’s kind of a cunt … He’s always been a cunt, though. You go back and listen to that guy lying about his education record and lying about his accomplishments and — like, he’s always been a problem.”

“All the f——g stuff with his son and the ties to Ukraine and China and the money. The family, they got paid millions of dollars and everyone was trying to obscure it because, ‘Well, better than Trump. Better than Trump,’” Rogan told comedian Theo Von, adding that he “can’t take it anymore.”

“If that guy was a Republican, they would be up his ass with a microscope.“

“I mean, it’s wild stuff, man. They even got the FBI involved in telling Twitter to censor the information about the laptop. It’s crazy,” Rogan continued, adding: “The media is overwhelmingly left-leaning, and if you have a left-leaning politician or a left-wing Democratic politician, and then you have this media that essentially works to support that person.“

Watch:

JOE ROGAN SPEAKING TRUTH!!! pic.twitter.com/TzOHrj9jtm

— il Donaldo Trumpo (@PapiTrumpo) June 7, 2023

As we noted last week (via Summit News), Rogan also went off on companies for pushing transgender clothing.

“People are going ‘ENOUGH, ENOUGH.’ Stop shoving this down everybody’s throat. When I go to Target I don’t want to see like fucking tuck pants, like they’re designed to help you tuck your dick…That’s not normal, I don’t want that right in front of everybody. It’s weird,” said Rogan.

“Target lost billions of dollars because they tried to have this pride selection. They had all these like pride children’s shirts,” Rogan emphasised, adding “this Bud Light thing with Dylan Mulvaney, they’ve lost $20+ billion.”

Rogan continued, “Can you imagine you’re just gonna send a fucking can to a confused person that ‘Day 365 of womanhood’ and you send that person a fucking can with their face on it and your company loses $20 billion?”

As usual, @joerogan is spot on when discussing how @Target and @budlight have now lost billions of dollars for choosing to shove woke products down everyone’s throats like it’s normal 🫶🏽

Sound Up 🔊🔥 pic.twitter.com/09wObmCB19

— 🔥🇺🇸 KC 🇺🇸🔥 (@KCPayTreeIt) June 7, 2023

Authored by Michael Snyder via The Economic Collapse blog,

There is nothing wrong with being optimistic, but blind optimism can be a very dangerous thing. 

The reason why so many of the “experts” were shocked by the Great Recession of 2008 and 2009 is because they didn’t want to believe that such a thing could happen.  Unfortunately, we are witnessing a similar pattern now.  Even though we are absolutely drowning in debt, inflation is wildly out of control, our currency is being transformed into toilet paper, the housing market has started to crash and mass layoffs are being conducted all over the nation, a lot of the “experts” continue to insist that everything is going to be just fine.  For example, the following comes from a CNN article entitled “The case for a 2023 US recession is crumbling”…

Many CEOs, investors and economists had penciled in 2023 as the year when a recession would hit the American economy.

The thinking was that the US economy would grind to a halt because the Federal Reserve was effectively slamming the brakes to squash inflation. Businesses would lay off workers and inflation-weary Americans would slash spending.

Umm, I hate to interrupt CNN’s wishful thinking, but the reality is that businesses really are laying off workers.

In fact, the number of job cuts that have been announced through the first five months of this year is 315 percent higher than the number of job cuts that were announced through the first five months of last year.

And more workers are being laid off with each passing day.  Earlier today, I was saddened to learn that Spotify has just decided that yet another round of layoffs has become necessary…

Just a few months after announcing a significant wave of layoffs, Spotify plans to conduct another round of layoffs. This time, the job cuts will affect the podcast division as part of a corporate reorganization. In particular, the company plans to merge Parcast and Gimlet Studios.

In an internal memo, Sahar Elhabashi, Spotify’s head of the podcast division, announced that the company was making changes that would lead to a workforce reduction of 2%. This change will affect around 200 jobs and those who are impacted have already received an invitation to talk with someone from the HR department.

Just like in 2008 and 2009, a lot of people that are losing their jobs are falling out of the middle class because they don’t have any sort of a cushion to fall back on.

The ranks of the hungry and the homeless are rapidly growing, and this has created an unprecedented crisis in many of our largest cities.

The homeless that are truly destitute tend to live in tents, but those that have at least a little bit of money often live in RVs.  At this point, it is being estimated that over 11,000 homeless people are living in RVs in Los Angeles County alone…

There are, by the latest count, more than 11,000 people living in RVs across Los Angeles County. And that number has been rising. The Covid-19 pandemic forced more people into poverty. Some of the RV dwellers have jobs but either don’t want to pay apartment rent, or can’t afford to pay it, in a city where the average one-bedroom apartment costs around $2,500 a month.

Of course wherever there is a homelessness crisis there is almost always a drug crisis.

Open air drug markets now operate freely in communities all over the country, and there are some cities where drug abuse is so bad that authorities have completely given up on trying to control it.

One of those cities is San Francisco, and as a result real estate prices are falling there much faster than the national average…

The value of residential real estate in crime-ridden San Francisco has dropped significantly in recent years, with prices dropping by around 16.7%. This contrasts with a more moderate decline of 3.3% in the rest of the country, resulting in a difference of about 13.4 percentage points.

The decline in the housing market in San Francisco has resulted in an additional loss of approximately $260 billion in the value of residential real estate compared to what would have occurred if the city had followed the pattern shown nationally, according to the research center Hoover Institution.

Zillow, a real-estate marketplace company, projected that the value of San Francisco’s housing stock was close to $2 trillion before the price drop.

Needless to say, many addicts must steal stuff in order to fund their addictions, and so we have seen crime rates soar over the past several years.

In Chicago, things have gotten so bad that one Walgreens store has actually decided to put almost all of their merchandise “behind staffed counters”…

A Walgreens store in Chicago reportedly has been redesigned to allow customers to browse only two aisles of products – after they pass through anti-theft detectors.

The changes at the store on 2 E. Roosevelt Road in the South Loop area put most of the merchandise in aisles behind staffed counters, which customers can shop digitally through kiosks, according to Block Club Chicago.

Many other retailers are shutting down stores in cities such as Chicago, San Francisco and Portland permanently.

Our society is melting down right in front of our eyes, but don’t worry.

CNN says that everything is going to be just fine.

You believe them, don’t you?

The Chinese certainly aren’t buying it.  In recent months they have been stockpiling enormous amounts of gold…

China added to its gold reserves for a sixth straight month, extending a flurry of purchases as central banks around the world expand their holdings of bullion amid escalating geopolitical and economic risks.

China raised its gold holdings by about 8.09 tons in April, according to data from the State Administration of Foreign Exchange on Sunday. Total stockpiles now sit at about 2,076 tons, after the nation increased reserves by about 120 tons in the five months through March.

Central banks have purchased large amounts of gold in the past year to diversify assets, as well as to protect reserves from the impact of a weakening dollar and rampant inflation.

The reason why the Chinese are stockpiling gold is because they can see that a global economic crisis is coming.

And everyone else should be able to see it too.

Conditions in the short-term are going to steadily get worse, and in the long-term they are going to get really bad.

But most Americans are just going to continue to trust our politicians and the “experts” on television that are assuring them that we are going to be able to avoid a major meltdown somehow.

So they aren’t going to do anything to get prepared, and in the end they will be absolutely blindsided by an economic tsunami that they were absolutely convinced would never come.

*  *  *

Michael’s new book entitled “End Times” is now available in paperback and for the Kindle on Amazon.com, and you can check out his new Substack newsletter right here.

After a solid 3Y auction this morning, expectations were for smooth passage in the day’s second note sale at 1pm, when the Treasury would sell $32BN in a 9-Y 11-Month reopening of benchmark 10Y paper. The result was more or less in line with expectations… well, maybe a little less.

Pricing at a high yield of 3.791%, the suction tailed then When Issued 3.7765% by 1.5bps. This was the 4th consecutive tail in a row, and 13 of the past 16 auction that tailed the WI.

The bid to cover of 2.36, down from 2.45 last month, and below the recent (6-auction) average of 2.44.

The internals were on the soft side too, with Indirects awarded 62.3% of the auction, down from 67.5% last month and below the 66.4% average (it was the lowest since December). And with Directs taking down 19.9%, or in line with recent months, Dealers were left with 17.8% of the allotment, up from 13.0%, and above the recent average of 15.0%.

Overall, an ok auction, with demand coming light vs this morning’s 3Y issuance, but to be expected at a time when the Fed is expected to hike at least once more and when the Treasury is busy replenishing some $1 trillion in TGA cash.

Fox News has sent a “case and desist” letter to Tucker Carlson, after the former Fox host racked up a combined 169 million combined views in his first two episodes of his show on Twitter, Axios reports.

After ‘parting ways’ in April following the network’s historic settlement with Dominion Voting Systems, Fox notably refused to let Carlson out of his contract in which they have exclusive rights to his content through Dec. 31, 2024 – after the next presidential election. There was reported (but unconfirmed) claims that Carlson’s contract prohibits him from appearing on any network – not necessarily a social media platform.

Carlson has argued that he has a First Amendment right to post on Twitter, and asserts that Fox has committed material breaches of contract.

“Fox defends its very existence on freedom of speech grounds. Now they want to take Tucker Carlson’s right to speak freely away from him because he took to social media to share his thoughts on current events,” said Carlson’s lawyer, Bryan Freedman, in a statement to Axios last week after Fox notified attorneys for Carlson that the former host had violated his contract with his Twitter show.

Since Carlson’s ouster in April following Fox News’ $787 million defamation settlement with Dominion Voting Systems (which Carlson says a board member told him was part of the settlement), Carlson has accused Fox of fraud, accusing senior executives of reneging on promises made to him “intentionally and with reckless disregard for the truth.”

Carlson’s legal team have also argued that Fox broke their promise to him not to settle with Dominion “in a way which would indicate wrongdoing” on the part of the former host.

More via Axios;

Behind the scenes: Carlson’s first two Twitter episodes were straight-to-camera monologues. He plans to keep iterating with longer, more varied episodes and the addition of guests, Axios is told.

• We hear some big names have been lined up.
• Justin Wells, Carlson’s executive producer, tweeted yesterday: “Next Episode of Tucker on Twitter coming Tuesday: Tucker’s response to the indictment of President Donald Trump.“

What they’re saying: Harmeet Dhillon, a lawyer who represents Carlson along with Bryan Freedman, said in a statement to Axios: “Fox News continues to ignore the interests of its viewers, not to mention its shareholder obligations.”

“Doubling down on the most catastrophic programming decision in the history of the cable news industry, Fox is now demanding that Tucker Carlson be silent until after the 2024 election,” reads the statement from Dhillon. “Tucker will not be silenced by anyone… He is a singularly important voice on matters of public interest in our country, and will remain so.”

Authored by Martin Young via CoinTelegraph.com,

Data analytics platforms have reported billions of dollars in outflows from Binance over the last week, but this can be misinterpreted, argues Changpeng Zhao.

While data suggests that crypto assets have been flowing out of centralized exchanges at an accelerated pace over the last week, Binance CEO Changpeng Zhao argues it may not be as bad as it appears. 

Leading analytics platforms such as Nansen and DefiLlama have all measured increased exchange outflows from Binance over the past seven days after news of the Securities and Exchange Commission’s lawsuit against the firm hit the airwaves.

According to Nansen, there has been a net outflow of $2.36 billion from Binance over the past seven days, along with $123.7 million flowing out of Binance.US.

DefiLlama reported an even larger figure of $3.35 billion in outflows from Binance, while Glassnode data shows the exchange’s balance having declined by 5.7% or around $1 billion over the past seven days.

CEX asset flows. Source: DeFiLlama

However, in a June 10 Twitter post, CZ argued that some exchange outflow data can be skewed as some third-party analytics measure change in assets under management as “outflow,” which would include times when crypto prices decline.

According to our data, last 24hrs, @Binance net outflow is about $392m.

Our wallet addresses are public. Some 3rd party analytics measure Change in AUM (asset under management) in USD equivalent as outflow. This would include crypto price drops (which decrease AUM) as “outflow”.…

— CZ 🔶 Binance (@cz_binance) June 10, 2023

CZ instead claimed the firm’s outflow over the past 24 hours on June 9 was around $392 million, which pales in comparison to the $7 billion in one-day outflow that was recorded last year in November, around the time of FTX’s collapse.

CZ continued to explain that large inflows and outflows are perfectly normal during times of volatility.

“Some even only measure outflow, not inflows. On a sharp price movement day like today, many arbitrage traders move a lot of funds between exchanges, usually exponentially more than on normal days.”

Since the SEC’s lawsuits against Binance and Coinbase on June 5 and 6, the total crypto market capitalization has declined by 7%, or more than $80 billion, according to CoinGecko.

On June 9, Cointelegraph reported that decentralized finance volumes surged more than 400% following the twin lawsuits targeting thecentralized exchanges.

Last week we shared new troubling forecasts that showed wildfire risks are set to explode to “above normal” conditions across portions of the Northeast this summer. This could be due to the emerging El Nino weather phenomenon. 

Axios reported 435 wildfires were burning across Canada this past weekend. As of Monday morning, most Mid-Atlantic and Northeast cities recorded air quality levels at “unhealthy” levels despite some relief from the wildfire smoke in recent days. 

Wildfire smoke still blankets many states on the East Coast. 

Air quality across many East Coast metro areas is unhealthy as of 0900 ET. 

The air quality index is over 100 — unhealthy — for NYC this morning. 

While the smoke is dissipating from the dangerously hazardous levels of last week, the federal agency Natural Resources Canada warned of new forecasts of above-normal fire risks through September. 

“This is a first in the history of Quebec to fight so many fires, to evacuate so many people,” Quebec Minister of Public Security Francois Bonnardel said on Saturday.

Bonnardel noted, “We are going to have a fight that we think will last all summer … we haven’t yet won the battle.”

So, this means that the apocalyptic Blade Runner 2049-esque scenes from Washington, DC, to New York City, might not be over for another three months. And, of course, smoke pouring into the Northeast from Canada depends on the winds. 

Fire risks are also spreading across the Northeast. The National Significant Wildland Fire Potential Outlooks showed above-average fire risks for several states in the Northeast from July to August. 

July

August

The wildfires and ominous forecasts for this summer come as El Nino has arrived. What does this mean for the Northeast? Well, dry and hot conditions… 

As the corporate media automatically defaults to global warming as the culprit for the wildfires, telling average folks they need to stop driving their cars and ditch meat for bugs, we must highlight all this weather chaos might not be entirely due to fossil fuels. 

 “No, El Niño and La Niña are naturally occurring climate patterns and humans have no direct ability to influence their onset, intensity or duration,” the United Nations Office for the Coordination of Humanitarian Affairs has stated.

Are we even allowed to ask if arsonists started some of the wildfires? 

Authored by Steve Watson via Summit News,

During a speech in North Carolina this past weekend, President Trump promised to “demolish the deep state” in what will be “a final battle.”

“We are a failing nation. We are a nation in decline. And now these radical left lunatics want to interfere with our elections by using law enforcement. It’s totally corrupt and we can’t let it happen,” Trump told the crowd.

“This is the final battle,” he further urged, adding “With you at my side, we will demolish the Deep State, we will expel the warmongers from our government, we will drive out the globalists, we will cast out the communists, we will throw off the sick political class that hates our country.”  

Trump continued, “We will roll out the fake news media, we will expose the RINOs for what they are, we will defeat Joe Biden and we will liberate America from these villains once and for all.”

“We’re going to liberate our country. The silent majority is rising, and under our leadership, the forgotten man or woman will never be forgotten again,” Trump vowed.

Watch:

President Trump: “This is the final battle. With you at my side, we will demolish the Deep State, we will expel the warmongers from our government, we will drive out the globalists, we will cast out the communists, we will throw off the sick political class that hates our… pic.twitter.com/1MYe2w27JP

— MAGA War Room (@MAGAIncWarRoom) June 11, 2023

Here is the full event:

*  *  *

Brand new merch now available! Get it at https://www.pjwshop.com/

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After a very quiet week for markets and newsflow, this week steps up the action with the FOMC on Wednesday the obvious highlight, although tomorrow’s US CPI print is probably the event of the week in terms of potential vol as it could impact final pricing for the FOMC and impact terminal pricing as well. The ECB (Thursday) and the BoJ (Friday) are also making policy decisions.

Rounding out the week’s main events, DB’s Jim Reid writes that in Asia investors will be hotly anticipating China’s key monthly activity indicators (Friday) including industrial production and retail sales after recent disappointing data releases. In other US data, the key releases outside of CPI are PPI (Wednesday), retail sales and industrial production (Thursday) and the UoM Michigan survey (Friday) with the important inflation expectations series thrown in for good measure. Key European data releases include UK GDP and labor market indicators and the German ZEW survey (both tomorrow).

Going through some of this in more detail, there is around a 30% probability priced into the FOMC this week. DB expect them to hold but raise rates in July (we will do a full preview tomorrow). Economists expect the meeting statement, Summary of Economic Projections (SEP), dot plots, and Chair Powell’s press conference to skew hawkish, signalling the likely need for further policy tightening as soon as the July 26 meeting.

The last swing factor for the FOMC will clearly be CPI tomorrow. Here consensus expects a +0.2% month-over-month advance for headline CPI (vs. +0.37% previously) and a +0.4% increase for core (vs. +0.41%). This would lead the former to drop by about a full percentage point to 4.1% YoY, with the latter down -0.3% to 5.2%, with the 3, 6 and 12 month core readings all still struggling to gain much downward momentum below 5% at the moment. For PPI the day after, DB expect the headline series (-0.2% vs. +0.2) to underperform the core component (+0.2% vs. +0.2%) due to energy prices.

Staying with prices, another insight into inflation pressures will come from the University of Michigan’s consumer survey for June, with inflation expectations especially in focus after the gauge for the next 5-10 years climbed to an 11-month high of 3.1% last month, albeit revised down (as it often is) 0.1pp from the first print. For the sentiment index itself, consensus sees a 60.1 reading, a jump from 59.2 in May but still below the 63.5 reading in April.

On the other side of the Atlantic, the ECB is expected to deliver another +25bps hike, followed by an additional one in July that would take the terminal rate to 3.75% with the risk of moving towards 4.00-4.25% in the autumn and more hawkish messaging.

According to Rabobank, “unlike the Fed, the ECB is widely expected to continue its streak of rate hikes – it is still lagging a few steps, of course. So here too, the actual rate decision will draw less attention than the central bank’s communication about the path forward. The new staff projections may help in this communication effort. Given our current economic outlook, we like the market-implied pricing of a 3.75% terminal rate, and we mainly disagree with the markets pricing in rate cuts very early in 2024. The ECB seems to be of a similar mind, and keeping the medium-term inflation forecast a smidge above 2% may help signal that markets are pricing rate cuts too early.”

But the ECB’s peak rate also remains subject to upside risks. One of the reasons we expect that the Governing Council can soon stop tightening policy further is the expected headwinds from abroad. So, if the US recession does not materialise as early as expected, that might not only force the Fed to go higher; it could also put more pressure on the ECB, if it adds to the strength of Eurozone activity.

The BoJ will round out the busy week for central banks on Friday. Virtually nobody expects changes to the current policy. Given there won’t be an Outlook Report, the central bank is likely to continue to focus on downside inflation risks while inflation and currency are among key catalysts for a policy change.

The one central bank that may be bucking the trend of racing to the top is the PBOC. Speculation that the Chinese central bank may cut its MLF rate by 5-10 basis points this Thursday already is increasing. In addition to the several structural challenges facing the Chinese economy, the latest inflation data hinted at a further deceleration of both consumer and producer prices. Rabobank’s China strategist does not expect a cut in June quite yet, but it does have two rate cuts pencilled in for early Q3 and Q4; this has already contributed to CNY weakness. Indeed, the PBOC’s room to cut rates may be somewhat limited by the remaining upside potential for US policy rates, and the impact that further widening of rate differentials would have on the currency

Courtesy of DB, here is a day-by-day calendar of events

Monday June 12

• Data: US May monthly budget statement, Japan May PPI, machine tool orders Central banks: ECB’s Simkus speaks, BoE’s Mann speaks
• Earnings: Oracle

Tuesday June 13

• Data: US May CPI, NFIB small business optimism, UK May jobless claims change, April average weekly earnings, ilo unemployment rate 3mths, Italy Q1 unemployment rate quarterly, Germany June ZEW survey, April current account balance, Eurozone June ZEW survey
• Central banks: BoE Governor Bailey testifies to House of Lords, BoE’s Greene testifies to Parliament

Wednesday June 14

• Data: US May PPI, UK April trade balance, monthly GDP, manufacturing production, index of services, construction output, Germany May wholesale price index, Eurozone April industrial production
• Central banks: Fed’s decision

Thursday June 15

• Data: US May retail sales, industrial production, capacity utilization, import and export price index, June Philadelphia Fed business outlook, Empire manufacturing index, April business inventories, initial jobless claims, China May industrial production, retail sales, property investment, new home prices, Japan May trade balance, April tertiary industry index, core machine orders, Italy April general government debt, Eurozone April trade balance, Canada May housing starts, existing home sales, April manufacturing sales
• Central banks: ECB decision, ECB’s Villeroy speaks, BoE’s Cunliffe speaks
• Earnings: Adobe, Kroger

Friday June 16

• Data: US June University of Michigan survey, New York Fed services business activity, Italy April trade balance, Eurozone Q1 labour costs, Canada April wholesale trade sales
• Central banks: BoJ’s decision, BoE’s inflation attitudes survey, ECB’s Villeroy and Holzmann speak

* * *

Finally, looking at just the US, Goldman writes that the key economic data releases this week are the CPI report on Tuesday and the retail sales and Philly Fed manufacturing reports on Thursday. The June FOMC meeting is this week, with the release of the statement at 2:00 PM ET on Wednesday, followed by Chair Powell’s press conference at 2:30 PM.

Monday, June 12

• There are no major economic data releases scheduled.

Tuesday, June 13

• 08:30 AM CPI (mom), May (GS +0.21%, consensus +0.2%, last +0.4%); Core CPI (mom), May (GS +0.44%, consensus +0.4%, last +0.4%); CPI (yoy), May (GS +4.19%, consensus +4.1%, last +4.9%); Core CPI (yoy), May (GS +5.32%, consensus +5.2%, last +5.5%): We estimate a 0.44% increase in May core CPI (mom sa), which would nonetheless lower the year-on-year rate by two tenths to 5.3%. Our forecast reflects a 3% increase in used car prices reflecting the auction-price strength in the spring, as well as large start-of-summer price increases for hotel and recreation categories. We also expect another gain in the car insurance category as carriers continue to offset higher repair and replacement costs. However, we look for a second straight decline in new car prices due to rebounding incentives. We also believe the March/April slowdown in shelter categories was genuine—reflecting a waning boost from post-pandemic lease renewals—and we look for additional slowing in May (we estimate +0.50% for both rent and OER). We estimate a 0.21% rise in headline CPI, reflecting higher food (+0.5%) and lower energy (-3.0%) prices.

Wednesday, June 14

• 08:30 AM PPI final demand, May (GS -0.1%, consensus -0.1%, last +0.2%); PPI ex-food and energy, May (GS +0.2%, consensus +0.2%, last +0.2%); PPI ex-food, energy, and trade, May (GS +0.2%, consensus +0.2%, last +0.2%): We estimate a 0.2% increase for PPI ex-food and energy and PPI ex-food, energy, and trade. We estimate that headline PPI declined 0.1% in May.
• 02:00 PM FOMC statement, June 13-14 meeting: As discussed in our FOMC preview, we expect the FOMC to pause at its June meeting next week before it considers another rate hike. The Fed leadership has signaled that it sees pausing as the prudent course because uncertainty about both the lagged effects of the rate hikes it has already delivered and the impact of tighter bank credit increases the risk of accidentally overtightening. Still, we expect the Summary of Economic Projections to show higher GDP growth (+0.6pp to 1%), a lower unemployment rate (-0.4pp to 4.1%), and high core PCE inflation (+0.2pp to 3.8%) in 2023, reflecting the stronger activity and labor market data and the firmer inflation numbers since the March SEP. We expect the median dot to show one additional hike to a new peak of 5.25-5.5%, in line with our own forecast. Our best guess is that 6 participants will project one more hike, 6 participants will project more than one, and 6 participants will project a flat path through the end of 2023.

Thursday, June 15

• 08:30 AM Retail sales, May (GS -0.6%, consensus -0.1%, last +0.4%); Retail sales ex-auto, May (GS -0.3%, consensus +0.1%, last +0.4%); Retail sales ex-auto & gas, May (GS -0.1%, consensus +0.3%, last +0.6%); Core retail sales, May (GS flat, consensus +0.2%, last +0.7%): We estimate core retail sales were unchanged in May (ex-autos, gasoline, and building materials; mom sa). Our forecast reflects mixed high-frequency consumer spending data, another month of flat-to-down grocery spending due to the expiration of pandemic food stamp benefits, and potentially unfavorable seasonal factors. We estimate a 0.6% drop in headline retail sales, reflecting lower auto sales and gasoline prices.
• 08:30 AM Initial jobless claims, week ended June 10 (GS 245k, consensus 250k, last 261k); Continuing jobless claims, week ended June 3 (consensus 1,787k, last 1,757k): We estimate initial jobless claims declined to 245k in the week ended June 10.
• 08:30 AM Philadelphia Fed manufacturing index, June (GS -10.4, consensus -13.0, last -10.4): We estimate that the Philadelphia Fed manufacturing index was unchanged at -10.4 in June, reflecting the lackluster rebound in East Asian trade and industrial activity.
• 08:30 AM Empire State manufacturing survey, June (consensus -15.1, last -31.8)
• 08:30 AM Import price index, May (consensus -0.6%, last +0.4%)
• 09:15 AM Industrial production, May (GS flat, consensus +0.1%, last +0.5%); Manufacturing production, May (GS +0.1%, consensus +0.2%, last +1.0%); Capacity utilization, May (GS 79.6%, consensus 79.7%, last 79.7%): We estimate industrial production was flat in May, as strong natural gas utilities and oil and gas extraction are offset by weak auto production and mining. We estimate capacity utilization edged down to 79.6%.

Friday, June 16

• 10:00 AM University of Michigan consumer sentiment, June preliminary (GS 60.0, consensus 60.0, last 59.2); University of Michigan 5–10-year inflation expectations, June preliminary (GS 3.0%, consensus 3.1%, last 3.1%): We estimate that the University of Michigan’s consumer sentiment index edged up to 60.0 in the preliminary June report. We expect that the report’s measure of long-term inflation expectations pulled back a tenth to 3.0%, reflecting lower gasoline prices and diminished uncertainty related to banking stress.

Source: DB, Goldman, BofA

Oil prices are plunging this morning, erasing all of the pre-Saudi production cut rumor rally gains with WTI back to a $67 handle.

The drop appears driven by  weak growth in major economies and shrugs off OPEC+’s attempts last week to stabilize prices by extending more than 1.1-million barrels per day of production cuts through 2024, while Saudi Arabia will cut output by one-million bpd in July as it continues to battle short sellers it blames for weak prices.

“Saudi’s Energy Minister … reiterated his view a discrepancy exists between the futures market and the physical market. A gap that in our opinion will persist until the macroeconomic outlook stabilises,” Saxo Bank noted.

Today’s weakness comes after Goldman Sachs slashed its year-end oil price forecast to $86 per barrel Brent, down from a previous projection of $95, as it sees higher supply from sanctioned oil exporters offsetting the recent OPEC+ and Saudi cuts amid potentially underwhelming demand. 

Goldman analysts have been bullish on oil in recent months, expecting tight markets in the second half of the year. Less than two weeks ago, the Wall Street bank said it expects a rally in oil and commodities, after the biggest-ever destocking in commodities that is currently underway. But even back then, Goldman’s analysts acknowledged their price calls had been wrong so far this year. 

“Bulls, like ourselves, find comfort in the fact that end-use demand across the commodity complex has not shown recessionary signs and investment in supply remains elusive,” Goldman’s analysts said in the note at the end of May, as carried by Bloomberg.

“But this misses the point that we were wrong on price expectations.”

As OilPrice.com reports, despite the unilateral Saudi cut and the extended production reductions at the broader OPEC+ group, Goldman Sachs now sees little chance of an oil price spike later this year, expecting Brent at $86 a barrel in December, and WTI Crude at $81, down from $89 per barrel in the previous forecast.

Resilient Russian oil supply and higher-than-expected supply from Iran and Venezuela will weigh on prices, according to the bank.

However, Goldman analysts expect commodities to come roaring back should recession concerns prove to be misplaced.

“The absence of a recession would likely lead to higher oil and commodity prices as well as higher rates, to which equities would likely react poorly,” they said.