US futures were mixed at the start of another busy week of earnings and key central bank decisions, after posting their best two-week rally since November 2020, with investors bracing for the Federal Reserve’s meeting and another busy earnings week. S&P 500 futures were down 0.4 as of 7:30 a.m. in New York, having dipped as much as 0.7% earlier, after the index closed 2.4% higher on Friday, while Nasdaq 100 futures fell 0.7%. Both gauges are set to pare gains for October, which has been the best month since July. The market drop was led by chipmakers and Chinese stocks. The 10-year Treasury yield hovered around 4.04% after surging by nine basis points on Friday, but has receded from about 4.25% in the past week; yields on UK gilts were steady ahead of what could be the Bank of England’s biggest interest-rate hike in more than 30 years. The dollar rose as the yen and pounds reversed much of last week’s gains. Crypto unexpectedly spiked.

Wheat soared after Russia pulled out of a grain-export deal even as vessels continued to depart from Ukraine.

Brazilian assets are set to weaken on Monday after Luiz Inacio Lula da Silva won the presidential election. The extent of the market drop will depend on whether President Jair Bolsonaro will concede as a contested election would likely trigger larger losses.

In premarket trading, U.S-listed shares of Brazilian oil firm Petrobras tumbled as much as 11% after Luiz Inacio Lula da Silva won the presidential election, amid concerns about how the left-wing politician will impact the firm. In other premarket moves, Chinese stocks listed in the US declined after Covid cases spiked across the country while factory and services activity weakened more than expected. US chipmakers fell after Foxconn Technology Group, the world’s largest maker of iPhones, said it may boost capacity at alternative sites to mitigate potential disruption at its main Covid-stricken plant in China. Other notable premarket movers:

• Y-mAbs Therapeutics (YMAB US) shares slumped as much as 38% in US premarket trading, as the stock was downgraded by Kempen and JPMorgan analysts after the drug developer’s cancer drug omburtamab failed to win a nod from an FDA panel, with Kempen not expecting the treatment to win FDA approval and Cowen calling the vote outcome “unfortunate.”
• Chinese stocks listed in the US decline in premarket trading after Covid cases spiked across the country while factory and services activity weakened more than expected.
• Alibaba (BABA US) falls 1.9%, Baidu (BIDU US) -2.8%, Pinduoduo (PDD US) -1.5%, Li Auto (LI US) -4.2%, Nio (NIO US) -1.4%
• Selina Hospitality (SLNA US) rises 36% in US premarket trading. Shares have been volatile since they debuted on Thursday following merger with BOA Acquisition Corp. Stock closed down 63% on Friday after a first session ended with the stock rising 348% from the price BOA closed at.
• Hanesbrands (HBI US) falls 3.6% in premarket trading after Wells Fargo double- downgrades to underweight based on rising risks from the macro outlook and the company’s balance sheet.
• Keep an eye on Ceridian (CDAY US) as Barclays raised the recommendation on the stock to equal-weight from underweight, citing the company’s international expansion strategy, shift to more cloud and product investments.
• Watch Gilead Sciences (GILD US) stock as it was raised to equal-weight from underweight at Barclays, which sees strong commercial execution justifying higher estimates. Meanwhile, the brokerage cut its rating on Amgen (AMGN US) to underweight from equal-weight.

Sparking debate about another split between fundamentals and technicals, US stocks ended last week with sizeable gains despite very disappointing earnings from tech giants including Meta, Amazon and Microsoft. That said, overall earnings season has been quite positive (thanks to sharp estimate cuts in recent weeks), with a majority of companies beating estimates, although fewer than in the past few seasons. Meanwhile, some economic data, including plunging home sales, indicated the Federal Reserve’s fight against inflation is working, fueling hopes of a sooner than expected pivot in rate policy.

“The market is pricing in by next spring a 5% Fed fund rate — this is a massive tightening cycle, one of the fastest in history, and I think essentially, it’s in the price right now,” said Yves Bonzon, Julius Baer Group CIO on Bloomberg TV, warning that even if the Fed pauses, the quantitative tightening actually continues.

Hopes for a Fed pivot rose after a lower-than-expected rate hike from the Bank of Canada last week and a perceived change of tone from the European Central Bank. Tweets from Nick Timiraos last Friday also sparked a dovish sentiment reversal. The WSJ’s Fed mouthpiece sought to reverse some of the euphoria over the weekend, however, as we discussed here.

“This week’s Fed meeting is critical for the rally to continue, pause or even end completely,” Morgan Stanley strategists led by Michael Wilson wrote in a note on Monday, noting macro-economic indicators “support a Fed pivot sooner rather than later.”
In Europe, the Stoxx 600 was little changed, with travel and financials outperforming, while consumer and commodities sectors fell. In Asia, stocks advanced, boosted by Hong Kong technology shares, with gains also seen from Japan to Australia.

Fed Chairman Jerome Powell “should be a bit less hawkish”at his press conference on Wednesday compared to after the last meeting, according to Yardeni Research. With the expectation that another 75 basis points is penciled in this week, “Powell will have to acknowledge that the federal funds rate is now further into restrictive territory and will be even more so come the FOMC’s December meeting,” it said in a note.

In Europe, the Stoxx 600 was little changed, with travel and financials outperforming, while consumer and commodities sectors fell. Mining and energy stocks underperformed in Europe, where the benchmark fluctuated.Here are some of the biggest European movers:

• International Distributions Services rises as much as 8.7%, the most intraday in almost a year, after the UK government said it won’t take any further action under a national security law in relation to a potential stake increase by Czech billionaire Daniel Kretinsky’s Vesa Equity Investment.
• Credit Suisse shares climb as much as 5% after it announced expected terms for its capital increase and after the Saudi National Bank ruled out raising its stake further for the time being.
• UK bank stocks including NatWest and Lloyds rise after the Sunday Times reported that the UK government is unlikely to seek more windfall taxes on bank profits.
• Know IT gains as much as 7.8%, extending gains into a third day, after Swedish business daily Dagens Industri labeled the IT consultancy’s shares a “bargain,” saying the company will benefit greatly from “megatrends” such as the shift to digitalization.
• Loomis falls as much as 6.7%, before paring the drop, after Carnegie cut its recommendation for the Swedish cash handling firm to hold from buy after strong year-to-date performance, saying the shares are approaching fair value.
• Pandora falls as much as 2.7% after the Danish jeweler on Oct. 30 said a fire has affected its European distribution center in Hamburg, Germany.
• Exmar shares drop as much as 11%, erasing a post-earnings gain on Friday, after an analyst at ING writes that the total potential book gain on a divestment by the gas transporter may be lower than expected.
• Verbund falls as much as 5.3% after Credit Suisse says it expects the power firm to be negatively impacted by rising interest rates, as well as the risk of adverse political intervention and falling power prices.
• Fresenius SE gains as much as 4.6% after the German health care company published a better-than-feared quarterly figure.
• EMS-Chemie fell as much as 4.8% after Berenberg cut the stock to hold from buy, saying the chemicals firm’s valuation is “too expensive.”

Euro-area inflation surged to a fresh all-time high, while the bloc’s economy lost momentum — reinforcing fears that a recession is now all-but unavoidable. That’s after a core gauge of US inflation accelerated in September, bolstering the case for more tightening.

In Asia, stocks advanced, boosted by Hong Kong technology shares, with gains also seen from Japan to Australia, as optimism on corporate earnings and a lift from Apple offset disappointment with Chinese economic data. The MSCI Asia Pacific Index climbed as much as 1.1% before halving the advance in afternoon trading. Tech-heavy markets of South Korea and Taiwan saw indexes rise more than 1%, while key gauges in China and Hong Kong extended last week’s rout.  Samsung, TSMC and other Apple suppliers in Asia staged a rally after the iPhone maker jumped nearly 8% Friday, fueling gains on Wall Street. Apple’s results were seen as positive in contrast with disappointing recent announcements from other tech giants.

“Asian countries, especially Taiwan and South Korea, have a high portion of companies that supply to Apple so Asia can’t be left out of the Apple-led rally in the US,” said Lee Jae-Mahn, a strategist at Hana Financial Investment. Investors have already priced in a likely 75 basis point rate hike by the Federal Reserve this week, he added. Equities in mainland China and Hong Kong ended down after seeing big swings Monday, with the Hang Seng China Enterprises Index closing at its lowest since late 2005. Sentiment slumped as factory and services activity in Asia’s largest economy contracted in October amid tight Covid rules and an ongoing property slump, while China continued to impose lockdowns. Even with Monday’s gain, the key MSCI Asian stock gauge is poised for a loss of nearly 2% in October, its third-straight monthly decline. The index is trading near its lowest level since April 2020

The dollar rose and the yen fell as traders positioned for another large interest-rate hike by the Federal Reserve this week, widening the policy divergence with the Bank of Japan. The euro and the pound also declined

In rates, US Treasuries fell, pushing the two-year yield 6 basis points higher although off worst levels of the day leading into the US session; yields remain cheaper from front-end out to intermediates, flattening the curve. US 10-year yields cheaper by 3.5bp on the day at around 4.03% with bunds underperforming by additional basis point over early European session; losses have been pared into early US session after 10-year peaked at 4.075%. Long-end outperforms, flattening 5s30s by 4.2bp on the day with 30-year yields little changed from Friday’s close. Wider losses seen across the German curve while gilts outperform. The Dollar issuance slate empty so far; this week’s estimates are for $15b to $20b, front-loaded before Wednesday’s Fed rate decision. German bunds fell, lifting the 10-year bund yield 3.9 basis points higher and steepening the yield curve. UK gilts were mixed.

In FX, the Bloomberg Dollar Spot Index rose as much as 0.5%, extending gains from late last week as speculation cools that the Fed may signal a slower pace of monetary tightening. Such speculation earlier in October had prompted selling in the greenback, putting the index on track for its first month of decline since May.

Commodities are under pressure as the USD picks up and following weak Chinese PMIs and ongoing COVID concerns. WTI and Brent are lower by just shy of 1% amid the above factors and as focus increasingly turns to next week’s US midterms and remarks from US officials, including President Biden. US President Biden said that oil companies who complain he is picking on them ‘ain’t seen nothing yet’, according to Reuters. QatarEnergy CEO said discussions are ongoing with several Asian buyers as value-added partners on the North Field expansion and that western international oil company partners have all been announced, while the CEO said several supply agreements are being discussed related to the expansion and announcement will be made in due course, according to Reuters. US Energy Envoy Hochstein says the US has called on oil producers to increase output, speaking at ADIPEC; need more investment in the oil and gas sector right now and tomorrow. Both precious and base metals are lower given the USD’s upside and softer China trade

European natural gas fell after two days of gains as unseasonably warm weather reduces demand and eases concerns about shortages for the winter and oil edged lower as weak economic data from China fanned concerns about energy demand, but it was still set for the first monthly advance since May on OPEC+’s planned supply cuts.

Bitcoin is pressured on the session but resides within a narrow range circa. USD 400 above the USD 20k handle and as such is well within recent parameters.

It’s a quiet start to the week, with just the October Chicago PMI, and Dallas Fed manufacturing activity on the calendar. Central bank speakers include ECB’s Visco and Lane speak with the Fed still in blackout period ahead of Wednesday’s FOMC. We get earnings from Stryker, NXP Semiconductors

Market Snapshot

• S&P 500 futures down 0.7% to 3,885.50
• STOXX Europe 600 down 0.2% to 410.02
• MXAP up 0.5% to 136.23
• MXAPJ up 0.1% to 433.17
• Nikkei up 1.8% to 27,587.46
• Topix up 1.6% to 1,929.43
• Hang Seng Index down 1.2% to 14,687.02
• Shanghai Composite down 0.8% to 2,893.48
• Sensex up 1.0% to 60,575.58
• Australia S&P/ASX 200 up 1.1% to 6,863.46
• Kospi up 1.1% to 2,293.61
• German 10Y yield up 1.7% to 2.14%
• Euro down 0.4% to $0.9924
• Brent Futures down 0.5% to $95.34/bbl
• Gold spot down 0.5% to $1,637.02
• U.S. Dollar Index up 0.40% to 111.20

Top Overnight News from Bloomberg

• Luiz Inacio Lula da Silva won Brazil’s presidential election in a dramatic comeback for the left-wing politician who was languishing in a jail cell for corruption just three years ago.
• Euro-area inflation surged to a fresh all-time high, while the bloc’s economy lost momentum — reinforcing fears that a recession is now all-but unavoidable.
• Wheat worries and weak China PMIs reminded Monday’s markets that not all is well. However, with Fed Chairman Powell likely to confirm hopes of a December step-down in the pace of rate hikes, the mood could be sanguine until the US jobs data on Friday.
• For months, investors have been eagerly awaiting a Federal Reserve policy pivot. But now, at least for some, it might come too soon.
• European stocks fluctuated and US equity futures fell at the start of another busy week of earnings and key central bank decisions.
• Asian stocks tracked Friday’s gains in the US amid optimism over corporate earnings in the region. The dollar climbed as traders positioned for another large interest rate hike by the Federal Reserve this week.

A more detailed look at global markets courtesy of Newsquawk

Asia-Pacific stocks traded mostly positive with momentum from last Friday’s rally on Wall St although some of the gains were capped by disappointing Chinese PMI data and lingering COVID-19 woes, while participants are also bracing for a week laden with risk events including the latest FOMC meeting and NFP jobs data. ASX 200 traded positively with advances led by outperformance in tech but with further upside limited by weakness in the commodity-related sectors and as participants await tomorrow’s RBA policy meeting. Nikkei 225 was boosted after Japan’s Cabinet formally approved a JPY 71.6tln economic stimulus package on Friday and with the index shrugging off mixed Industrial Production and Retail Sales data. Hang Seng and Shanghai Comp were mixed with the mainland pressured after Chinese PMI data showed surprise contractions in both factory and services activity, while Hong Kong was somewhat choppy amid a plethora of earnings releases including the big 4 banks and with casino names hit after Macau imposed three days of rapid COVID testing and locked down the MGM Cotai resort.

Top Asian News

• PBoC Governor Yi reiterated that China will continue with its prudent monetary policy to keep the value of the yuan stable and said that China has the conditions to maintain conventional monetary policy for as long as possible, while Yi also reaffirmed to step up support for the real economy, according to Caixin and Reuters.
• China’s State Council reiterated support for China’s digital economy and proposed an eight-pronged approach, according to SCMP.
• China named Chen Yixin, who is a long-time confidant of President Xi, as the new state security minister in the latest leadership shake-up, according to SCMP.
• US Secretary of State Blinken spoke with China’s Foreign Minister Wang Yi today and discussed the need to maintain open lines of communication and responsibly manage the US-China relationship, while Blinken raised the subject of Russia’s war in Ukraine and the threat it poses to global security and economic stability, according to the State Department.
• Shanghai Disney Resort suspended operations today due to COVID controls, according to Global Times.
• Macau required residents to undergo three days of rapid Covid tests and locked down MGM China’s (2282 HK) Cotai casino resort although it was also reported that residents from mainland China will be able to travel to Macau from November 1st via the smart visa process, according to Reuters.
• Macau is to commence mass COVID nucleic acid testing on November 1st, via Bloomberg.
• Foxconn’s (2354 TT) Zhengzhou plant may see up to 30% of the factory’s November shipments of Apple (AAPL) iPhones impacted by the COVID-19 situation and it is working to increase iPhone production at its Shenzhen factory, according to a source
• Japan is to establish a new joint command to manage operations of land, sea and air self-defence forces with the government aiming to establish the new self-defence forces joint command in 2024, according to Nikkei. It was also separately reported that Japan is mulling extending its high-speed missile range to defend the Senkaku/Diaoyu Islands, according to SCMP.
• At least 153 people died and 150 others were injured during a stampede after large crowds surged into a narrow street in Seoul’s Itaewon nightlife district, according to a fire official cited by YTN. South Korean President Yoon declared a national day of mourning and said he would come up with measures to prevent a recurrence of similar incidents, according to Yonhap.
• At least 132 people died and many are still missing after a suspension bridge collapsed in India’s Gujarat state, according to BBC.
• RBNZ said bank solvency stress test shows resilience to a stagflation scenario and although capital buffers would be reduced in a stagflation scenario, they would still remain above the regulatory minimum, according to Reuters.

European bourses began the week modestly firmer, though this proved shortlived and the complex has pivoted to being mixed overall in-fitting with the APAC handover amid PMIs, COVID, month-end and ahead of a busy week. Specifically, Euro Stoxx 50 +0.10% while sectors are similarly mixed and feature some outperformance in defensives while Energy & Basic Resources lag amid COVID concerns and pressure in Glencore. Stateside, futures are under more pressure, ES -0.5% as yields pickup a touch, NQ -0.7% lags slightly, ahead of Wednesday’s FOMC where a 75bp hike is expected and as corporate updates continue.

Top European News

• UK PM Sunak is reportedly considering freezing foreign aid for two additional years to help balance UK government finances, according to The Telegraph.
• UK government quashed suggestions that it is considering a windfall tax on banks as one of the measures to plug a hole in its finances at next month’s budget, according to The Sunday Times.
• UK Home Secretary Braverman is under increasing pressure regarding security breaches after it emerged she took several hours to alert the UK’s top civil servant of an “error of judgement” regarding sensitive documents, according to FT.
• UK housing developers warned that new rules and taxes will add GBP 4.5bln to annual costs, according to FT citing a report by the Home Builders Federation.
• UK rail companies and unions are to hold talks to prevent more strikes, according to FT.
• UK’s ONS has concluded the classification review of the Energy Price guarantee. Payments will be classified as subsidies on products, paid by gov’t to suppliers. Reduced energy unit prices will push inflation lower than if the scheme did not exist.
• Irish PM Martin said political deadlock in Northern Ireland which led London to announce that it will call fresh elections in Northern Ireland, demonstrates that the governance system for the system is not fit for purpose and should be reformed, according to FT.
• ECB’s Knot said the ECB is not done with normalising monetary policy and that the ECB will significantly increase rates again in December which could be by 75bps but noted the next interest step will probably be between 50bps-75bps. Knot added the following interest rate steps will probably be smaller from early 2023, while he added that the ECB is not even at half-time of its fight against inflation and that the prospect of a recession in the Eurozone has become increasingly likely, according to Reuters.
• EU officials have proposed a far-reaching ban on the sale of goods made with forced labor, the plan is in early days and could take years to come into force, WSJ reports.

FX

• USD is bolstered by the general risk tone, Yuan pressure post-PMIs and the latest piece from WSJ’s Timiraos; DXY to a 111.20+ peak, though it has eased slightly and holds just above the figure.
• USD/JPY lifted beyond 148.00 amid USD strength with little impetus from its own data inputs, though upside has seemingly been capped ahead of 148.50.
• EUR is pressured given the above action, though saw little reaction to hotter-than-expected EZ CPI for October, with market pricing steady at around a 90% chance of 50bp in December; single currency between 0.9915-0.9965.
• After the JPY, GBP has borne the brunt of the USD’s advances with EUR/GBP modestly bid as such with UK politics very much in focus as we count down to the BoE; currently, Cable holds around the session’s 1.1550 trough.
• Petro-FX dented on softer benchmark pricing while the antipodeans are sensitivity to APAC pressure particularly in China though the Kiwi is deriving some support from domestic stress tests.
• Brazil’s former President Lula has won the Brazilian presidential election run-off with 50.9% of votes vs Bolsonaro at 49.1% of votes, according to BBC.

Fixed Income

• Core benchmarks are pressured as we enter a week dominated by numerous Central Bank updates.
• USTs are lower by 13 ticks with the 10yr yield surpassing Friday’s 4.05% best and nearing Thursday’s 4.08 peak before 4.10%; action that occurs ahead of the Wednesday FOMC and following the latest WSJ piece.
• Bunds lag amid the above factors and following better-than-expected domestic retail data before another hot EZ CPI print, though reaction to the latter was limited after last week’s German release; currently, holding around 20 ticks above the 138.20 trough.

Commodities

• Commodities are under pressure as the USD picks up and following weak Chinese PMIs and ongoing COVID concerns.
• Specifically, WTI and Brent are lower by just shy of 1% amid the above factors and as focus increasingly turns to next week’s US midterms and remarks from US officials, including President Biden.
• US President Biden said that oil companies who complain he is picking on them ‘ain’t seen nothing yet’, according to Reuters.
• QatarEnergy CEO said discussions are ongoing with several Asian buyers as value-added partners on the North Field expansion and that western international oil company partners have all been announced, while the CEO said several supply agreements are being discussed related to the expansion and announcement will be made in due course, according to Reuters.
• US Energy Envoy Hochstein says the US has called on oil producers to increase output, speaking at ADIPEC; need more investment in the oil and gas sector right now and tomorrow.
• Both precious and base metals are lower given the USD’s upside and softer China trade; spot gold remains below the USD 1650/oz handle while LME copper has slipped beneath USD 7.5k/T.

Geopolitics

• Ukrainian official sources says three missiles fired from Belarus were shot down on the Volyn province, in the west of the country, via Al Jazeera.
• Russia announced it is suspending the UN-brokered grain agreement with Ukraine after accusing Ukraine of a massive drone attack on the Black Sea Fleet in Sevastopol, Crimea. Russia’s Defence Ministry stated that the drones used to attack Russia’s Black Sea Fleet were recovered and analysed, while it alleged that the drones used Canadian-made navigation modules and were launched by Ukraine near Odesa, according to Reuters.
• Ukrainian President Zelensky said Russia’s suspension of the grain export deal needs a strong international response from the UN and the G20, while he suggested that Russia doesn’t belong in the G20 as it is deliberately trying to provoke starvation. Furthermore, Zelensky separately commented that Ukrainian forces repelled a fierce offensive by Russian forces in the Donetsk region.
• Ukrainian President’s Chief of Staff accused Russia of blackmail and faking terror attacks on its own facilities in response to Russian accusations that Ukraine was behind explosions in Crimea on Saturday, according to Reuters.
• US President Biden said Russia’s decision to suspend participation in the grain deal is outrageous, according to Reuters.
• NATO called on Russia to reconsider its decision and renew the grain deal urgently, while it said that Russian President Putin must stop weaponising food and end the illegal war on Ukraine, according to Reuters.
• UN Secretary-General Guterres delayed his departure for the Arab League Summit in Algiers by a day to focus on the Black Sea grain deal and continues to engage in intense contacts aimed at ending Russia’s suspension of participation in the deal, according to a spokesperson cited by Reuters.
• UN said Ukrainian, Turkish and UN delegations agreed on Sunday for a movement plan for 16 vessels on October 31st under the Black Sea grain initiative and agreed for inspections to be provided on Monday to 40 outbound vessels, while the UN added that the Russian delegation has been informed of both plans, according to Reuters.
• Turkey’s Defence Minister is in talks with counterparts in Kyiv and Moscow to resume the grains deal and reminded the parties of the importance of continuing the grain deal for all humanity, while Turkey will continue to do its part for the restoration of peace in the region, according to the Defence Ministry cited by Reuters.
• Russian Foreign Minister Lavrov said the Russian leadership, including President Putin, remains ready to negotiate on Ukraine, according to Anadolu Agency.
• Russia will reportedly take into account the modernisation of US nuclear bombs in Europe in its military planning, according to RIA citing Deputy Foreign Minister Grushko.
• Russian Defence Ministry alleged that representatives of a UK navy unit blew up the Nord Stream gas pipelines although didn’t provide any evidence for its claims, while the UK Defence Ministry said that these were ‘false claims of an epic scale’ and that Russia is making false claims to detract from its disastrous handling of the illegal invasion of Ukraine. Furthermore, the French Foreign Ministry also stated that Russian accusations against Britain have no basis and are part of a strategy to turn attention away from Moscow’s sole responsibility for the war in Ukraine, according to Reuters.
• US government was urged to open an investigation regarding allegations of a hacking of former PM Truss’s phone while she was Foreign Secretary, while The Mail on Sunday reported that agents suspected of working for Russia were responsible for the alleged hacking, citing unnamed sources.

US Event Calendar

• 09:45: Oct. MNI Chicago PMI, est. 47.0, prior 45.7
• 10:30: Oct. Dallas Fed Manf. Activity, est. -18.5, prior -17.2

DB’s Jim Reid concludes the overnight wrap

The most unoriginal intro I can use this morning given today’s date is to speculate as to whether the Fed will offers tricks or treats this week. Indeed a week with the latest FOMC and payrolls is unlikely to be dull, and could “spook” the market, especially after a 10-day period that was mostly made of up dovish pivot talks. However this momentum stalled a bit after runaway European inflation on Friday tempered some of the enthusiasm for the trade. So all to play for. We also have a BoE meeting (Thursday) that although less pivotal than it could have been a few weeks back is still something that can influence global markets. Remember that the following week sees US mid-terms (Tuesday) and CPI (Thursday). So quite a run of big events coming up as we hit the last day of the month.

Other key data releases include the ISM indices in the US (tomorrow and Thursday). Industrial activity and labour market indicators will be also released in Europe. Corporate earnings will feature Saudi Aramco, BP, Pfizer, Starbucks, Toyota and Qualcomm after last week’s disappointing results from Big Tech firms.

Over the weekend, Russia announced that it is exiting from the internationally brokered arrangement that allowed grain ships to leave Ukrainian Black Sea ports, in response to what it called a major Ukrainian drone attack near the port of Sevastopol in Crimea. The abrupt move by Russia has caused international outcry as the decision undermines efforts to ease a global food crisis. Moscow has requested a meeting with the UN’s security council today to discuss the issue. Grain markets have reacted to this development with Chicago wheat futures rising +5.47% to $8.75 a bushel after hitting a high of $8.93 a bushel in early trade. Additionally, Corn (+2.2%) and soybeans (+0.75%) have also moved higher. So one to watch.

Moving on to political news, Brazilian left wing leader Lula narrowly defeated the far-right incumbent Bolsonaro in an extremely tight election to become the next president with 50.9% of votes against 49.1% for Bolsonaro. Lula will be sworn in on 1 January 2023.

Back to this coming week and with regards to the Fed, a fourth successive 75bps has long been pretty much nailed on but the subsequent path of hikes is now up for grabs and will be the key focus from this week’s meeting. It feels inconceivable to us, given how spectacularly forward guidance has broken down across the global markets over the last 12 months, that Powell will try to guide too aggressively for December, especially with two payrolls (one this week) and two CPIs to come before they meet again. Our economists currently believe that 75bps is still likely in December (see “Denying the Fed its December downshift”), but that January could mark a downshift whilst still seeing upside risks to their terminal rate expectation of 5% given the recent inflation data and evidence that r-star has risen (see “(R-)Star gazing: Macro drivers suggest real neutral rate may have risen”). Even WSJ Timiraos tweeted at the weekend “Consumers have a big cushion of savings. Corporations have lowered their debt-service costs. For the Fed, a more resilient private sector means that when it comes to rate rises, the peak or “terminal” policy rate may be higher than expected.” To be fair in his WSJ article that went viral 10 days ago he did mention that 2023 Fed forecasts could be upgraded. However the market mostly focused on the near-term downshift possibilities.

The downshift debate will still carry on right up to the meeting though with a few bits of important data for the Fed to throw into the mix prior to their final statement and subsequent tone in the press conference. The Chicago PMI (47.6 forecast vs. 45.7 previously) today will tweak estimates for tomorrow’s manufacturing ISM (DB at 49.8 vs. 50.9 last). The latter could drop below 50 for the first time since May 2020. Our economists note that the employment series of both will be important, especially in payrolls week. Last month the employment component of the Chicago PMI plunged 14.4 points to 40.2 – the largest month-over-month decline on record, while the equivalent in the manufacturing ISM fell by 5.5 points to 48.7 last month. Staying with jobs, tomorrow’s JOLTS is always a key indicator of the tightness of the labour market, albeit a month behind other releases. After the FOMC, the services ISM (DB at 55.3 vs. 56.7 last) could also tweak payrolls estimates. The employment component bounced from 50.2 to 53 last month but the flash services PMI indicates that the risks to the employment outlook are to the downside.

In terms of payrolls, the headline consensus is at +190k (DB at +225k vs. +263k previously) with private at +195k (DB at +225k vs. +288k previously). DB expect the unemployment rate to stay at 3.5% but the consensus expects it to tick up to 3.6%. Average hourly earnings is expected by the street to dip from 5% to 4.7% (DB at 4.6%)

Back here in Europe, the BoE’s decision on Thursday will be in the spotlight after a tumultuous month since its latest rate hike on September 22. Our UK economists preview the meeting here and expect the central bank to hike by +75bps, taking the Bank Rate to 3%. Beyond Thursday’s meeting, the team sees a terminal rate of 4.5% amidst growing fiscal consolidation. Their expected sequence of hikes beyond Thursday has +50bps in December and February and +25bps in March and May. For the ECB Lagarde speaks twice (Thursday and Friday) and she can firm up or row back on the slightly more dovish meeting last week than expected. Will she be influenced by Friday’s shocking European inflation numbers that saw German inflation at 11.6% YoY against 10.9% expectations, Italy at 12.8% vs. 9.9% expected and France 7.1% vs. 6.5% expected? Italy’s PPI was at 53.0% YoY vs. 50.5% expected. It wasn’t just energy related and core estimates for the full EA reading will likely have been upgraded given Friday’s numbers. Chief Economist Lane speaks today as well.

Turning to earnings now, with 255 of S&P 500 members now reported and after Big Tech’s disappointing releases, this week’s busy line-up of results include key numbers from key oil & gas, healthcare and consumer firms. It’s been an interesting season so far as our equity strategists reviewed over the weekend here. They comment that the breadth and size of Q3 earnings beats are near historical averages but these are off estimates that have continued to be cut. The blended estimate for Q3 earnings (combining actuals plus consensus for those yet to report) as a result has barely ticked higher and is significantly below the typical upward trajectory at this stage of the earnings season. In addition, consensus estimates for Q4 have fallen over -2% since the beginning of this earnings season, much larger than the typical -1%, and follow cuts of -6% in the prior three months. 2023 estimates have fallen by -2% this earnings season bringing the cuts since April to -7%. 2023 EPS consensus is now at $234, still significantly higher than our team’s forecast of $195 which incorporates a recession forecast next year. The consensus forecast on the other hand looks to embody a soft landing.

In terms of this week, for oil and gas, we will hear from Saudi Aramco and BP tomorrow, followed by ConocoPhillips, Cheniere, Enel and EOG on Thursday. In healthcare, results will be due from Eli Lilly, Pfizer (tomorrow), Novo Nordisk (Wednesday) and Moderna (Thursday), among others. After some strong performance from staples this week, earnings from Mondelez (tomorrow) and Starbucks (Thursday) will be in focus. Automakers outside the US will announce too, including Toyota (tomorrow), Ferrari (Wednesday) and BMW (Thursday). Tech firms reporting will include AMD, Sony and Uber tomorrow, Qualcomm and eBay on Wednesday and PayPal on Thursday. Other notable earnings releases will include Booking, Maersk (Wednesday) and Marriott (Thursday). See the full day by day week ahead at the end for all the key data and earnings releases.

Asian equity markets are trading mostly higher this morning extending Friday’s rally on Wall Street. Across the region, the Nikkei (+1.67%) is leading gains with the KOSPI (+1.10%) and the Hang Seng (+0.89%) also creeping higher. Elsewhere, stocks in mainland China are trading in negative territory with the CSI (-0.15%) and the Shanghai Composite (-0.27%) both edging lower following the release of weak PMI data (more below). In overnight trading, US equity futures are indicating a slightly negative start with contracts on the S&P 500 (-0.14%) and NASDAQ 100 (-0.20%) slightly lower ahead of the final day of October. Meanwhile, yields on 10yr USTs (+1.65 bps) are slightly higher, trading at 4.03% as I type.

Early morning data showed that China’s official manufacturing PMI fell to 49.2 in October from 50.1 in September, as softening global demand and strict domestic COVID-19 curbs hit the world’s second biggest economy. Separately, the non-manufacturing PMI unexpectedly contracted to 48.7 from 50.6 in September. Moving on to Japan, we have seen mixed data with the September industrial production (-1.6% m/m) falling for the first time in four months (v/s +3.4% in August, -0.8% market consensus). In contrast, retail sales extended its gain for the seventh consecutive month after it advanced +1.1% m/m in September (v/s +0.8% expected) raising expectations for a sustainable boost in consumption as the increase in tourist activity coincided with the relaxing of Covid-19-related restrictions. It followed August’s downwardly revised increase of +1.3%.

Looking back to last week now. 10yr Treasury and Bund yields fell -20.4bps (+9.4bp Friday) and -31.4bps (+14.1bps Friday) over the week, as markets seized on hopes for a coordinated central bank pivot. Friday’s inflation data out of Europe discussed above and the fact that US core PCE still above 5% on a YoY basis, and thus not enabling a true pivot, took some steam out of the rally. We’ll see what the Fed’s comms this week do to it. 10yr yields in the UK (-57.6bps, +7.5bps Friday) and Italy (-57.2bps, +16.7bps Friday) outperformed. The former can be attributed to the appointment of Rishi Sunak as Prime Minister, which not only resolves some political risk, but marks someone with markets experience who warned about the impact of former Prime Minister Truss’s economic plan which drove such a large selloff. Italy outperformed following less progress on QT discussions out of the ECB meeting than was anticipated, leading to a rollout farther in the future.

Risk assets enjoyed a boost from the perceived policy pivot, with the S&P 500 (+3.95%, +2.46% Friday) and STOXX 600 (+3.65%, +0.14% Friday), both gaining. The S&P 500 also saw strong earnings results from a number of bellwethers including Coca Cola, General Motors, Universal Health, Hess, Visa, Caterpillar, Honeywell, McDonald’s, and UPS beat estimates. However, big tech earnings were not nearly as strong, with even the companies beating estimates for the quarter gone revising guidance lower for the quarter ahead. That saw the FANG+ index severely underperform, falling -4.12% (+1.25% Friday), marking the largest weekly outperformance of the S&P 500 above the FANG+ index since Bloomberg started publishing data on the latter in late 2014.

The European Union has frozen assets worth around 17 billion euros from Russian “oligarchs and other entities,” EU Justice Commissioner Didier Reynders said in a Saturday interview.

The figure is roughly 3.2 billion euros higher than in July, when the EU had seized around 13.8 billion euros, primarily across five countries, the Sun Daily reports.

Ukrainian officials, meanwhile, say the funds should be used to rebuild their country after the Russian invasion.

Reynders said that if the frozen assets are “criminal money confiscated by the EU” that it could be transferred to a Ukraine compensation fund.

“This amount is far from being sufficient to finance reconstruction,” he added.

“So far, the assets of 90 people have been frozen, more than 17 billion euros in seven member states, including 2.2 billion euros in Germany,” Reynders told German media group Funke, including the Westdeutsche Allgemeine Zeitung daily.

The sums totalling 17.5 billion euros were chiefly frozen by Austria, Belgium, Germany, France, Luxembourg, Ireland and Italy, a spokeswoman for the European Commission told AFP, without giving further details.

Reynders noted that Western sanctions have also led to the “freezing of 300 billion euros” of Central Bank of Russia foreign exchange reserves around the world, saying this could be used as a guarantee. -Sun Daily

“From my point of view, it is at least possible to keep these 300 billion euros as a guarantee until Russia voluntarily participates in the reconstruction of Ukraine,” he said.

Authored by Dr. Sean Lin via The Epoch Times (emphasis ours),

The creation of a new recombinant COVID-19 virus at Boston University, viewed as a “Frankenstein virus” by many, has raised a public uproar. This is not merely a risky gain-of-function experiment on “enhanced potential pandemic pathogens (ePPPs)”, it is a creation of an enhanced pandemic pathogen.  NO “potential” here.  

What is the rationale for this statement? What is the chimeric virus that we talk about here? 

A team of researchers at Boston University’s National Emerging Infectious Diseases Laboratories posted a paper on October 14, 2022, on BioRxiv, a preprint server for biology, revealing that they had created a lab-made COVID-19 chimeric virus with reverse genetics technology. 

Specifically, they’ve swapped the S gene of the spike protein in the original SARS-CoV-2 Wuhan strain with the corresponding S gene from the Omicron variant.  So, the lab-made Chimeric virus (Wuhan-Omi-S chimeric virus) has all the genes from the Wuhan strain, which is much more pathogenic than the Omicron strain, except the S gene, which is from the highly transmissible yet relatively mildly pathogenic Omicron strain. 

According to the preprint paper, the Omicron spike-bearing virus is able to effectively and robustly escape vaccine-induced humoral immunity just like the Omicron variant. In addition, unlike the naturally occurring Omicron variant, the Wuhan-Omi-S chimeric virus efficiently replicates in cell lines and primary-like distal lung cells. 

Furthermore, it has killed at least 80 percent of infected K18-hACE2 mice (a type of transgenic mice expressing human ACE2 receptors), whereas the mortality rate of the Omicron variant was zero while the Wuhan strain caused 100 percent death in two weeks in control experiments in the same transgenic mice. This 80 percent mortality in the mice model by the Wuhan-Omi-S chimeric virus was observed in a two-week period.  The paper did not provide any further observations on whether the surviving 20 percent of mice eventually died faster than the control mice group infected with Omicron variants.  

The defenders for this risky study stated that the chimeric virus product showed reduced pathogenicity (100 versus 80 percent mortality) when compared to Wuhan strains, so it is not a gain-of-function study.  However, this is an unjustifiably optimistic statement. The study did not provide any detailed or comprehensive pathology exam of different organs in the transgenic mice infected with the Wuhan-Omi-S virus. For example, do we know that this chimeric virus has the same neuropathogenesis as the Omicron or Wuhan viruses?  This study did not provide any data on that. 

In addition, although this experiment was presented as a swap of the S gene on the backbone of the Wuhan strain, it could also be viewed as swapping other viral genes on the backbone of the Omicron strain, considering the overall high genome homology among different variants of SARS-CoV-2 viruses. Rather than study individual gene motifs that might have influenced the Omicron variant’s pathogenicity,  researchers at Boston University instead swapped all the pathogenicity-related viral gene motifs/sites from the Wuhan strain into the Omicron strain.

Then, this study is a bonafide proven gain-of-function study: it makes the Omicron virus obtain more virulent factors, enhancing its infectivity and pathogenicity in in vitro and in vivo experiments.  And this publication did not reveal any study to test the transmissibility of the chimeric lab-made virus in animal models. Is the Wuhan-Omi-S virus more or less transmissible in animal models?  Can any of the researchers in this study 100 percent guarantee that this new chimeric virus is not more transmissible in different animal models, e.g. golden hamsters, ferrets, and primates?  

This study presented the main conclusion: “while the vaccine escape of Omicron is defined by 53 mutations in S, major determinants of viral pathogenicity reside outside of S.” However, it is a known fact that other genes outside S are involved in viral-host interactions at different steps of the viral life cycle and many genes outside S are relevant to viral pathogenicity in different tissues, organs, and animal hosts. So, by combining the pathogenicity-related components of the ancestral Wuhan strain and Omicron’s spike protein, the researchers would surely expect to create a virus that’s both highly deadly and highly transmissible. Even though it might be lucky that the final chimeric virus strains are less deadly and/or less transmissible than the Wuhan and/or Omicron strains, there is no guarantee that the degree of the risks or threats cannot be precisely controlled or assessed. The researchers at Boston University are intentionally playing with fire with clear knowledge of the risks involved. 

So, in essence, Boston University researchers created a lab-made Omicron variant with enhanced pathogenicity. As Omicron is a clear pandemic pathogen, taking over Delta and other COVID-19 virus variants, this study has created an enhanced pandemic pathogen. Not an “enhanced pandemic potential pathogen.”  

It is true that we don’t know whether this lab-made chimeric virus can out-compete natural omicron variants when co-circulating in human society. And defenders of this gain-of-function study also argued that similar recombinant variants existed early this year, the Deltacron, which contains a Delta variant backbone with an Omicron S gene. They argued that the Deltacron did not generate a pandemic wave and was quickly replaced with Omicron variants, and therefore, this experiment at Boston University did not generate additional risk. So, are these defenders arguing that humankind was simply too lucky and we need to create additional risks ourselves?  

This study is absolutely playing with fire and should be totally forbidden. It is unbelievable that Boston University allowed this research to be carried out. It is an ultimate failure of the bioethics committee that evaluates biomedical research projects at Boston University. 

Furthermore, this gain-of-function research project is partially funded by the National Institutes of Health’s National Institute of Allergy and Infectious Diseases (NIAID), which has denied its knowledge of these experiments. As the related grant documents and the communication between Boston University and NIAID are not currently released to the public, it is surely unverifiable whether NIAID was aware of these experiments during the whole process. Nevertheless, it suggests that the oversight mechanism to review grants related to “enhanced potential pandemic pathogens (ePPPs)”, set up by NIAID after the 2014 pause of all gain-of-function studies, did not work at all in this incidence. 

Read more here…

Western sanctions against Russia have been considered a powerful foreign policy tool by the US and the EU to paralyze Moscow back to the ‘stone age.’ Though sanctions against Moscow have entirely backfired, sparking the worst cost-of-living crisis for Europeans in a generation. 

In early September, we first noticed a wave of discontent sweeping across Europe as tens of thousands of people took to the city streets to protest soaring electricity bills and the worst inflation in decades. Some countries delivered relief packages to citizens to tame the anger, while other countries did not have the financial capacity to hand out checks. 

Tens of thousands of people have marched across metro areas in France, Belgium, the Czech Republic, Hungary, and Germany — many of them are fed up with sanctions on Russia that have sparked economic ruins for many households and businesses — but also very surprising, support for NATO’s involvement in Ukraine is waning. 

There has been increasing awareness and dissent among Europeans about their countries’ leaders prioritizing NATO’s ambitions in Ukraine over their own citizens. The prioritization has been in the form of sanctions against Moscow, sparking energy hyperinflation and supplying weapons to Ukraine, which has made Moscow displeased with any country that does so. Some Europeans are now demanding NATO negotiate with Moscow to end the war so that economic turmoil can abate. 

Here are the latest protests across Europe of tens of thousands of people (if not more) frustrated with high inflation and crying out anti-NATO slogans. 

Otra multitudinaria Manifestación sucedió hoy en Francia 🇫🇷.
“Let’s get out of NATO!”

Another massive protest against NATO and the EU on the streets of Paris, France today. pic.twitter.com/1CRwhzBhzx

— Joel la Rosa (@Pedrola51624238) October 23, 2022

Another massive #protest against #NATO and the #EU on the streets of #Paris, France today. #MSM pretend it didn’t happen. pic.twitter.com/XPHqKRve5V

— Axel Le Reer (@AxelLeReer) October 22, 2022

Mass protests continue in #Moldova calling for the removal of the pro-EU regime of Maya Sandu.

The Western media has completely blacked out these mass protests in Moldova. They are peddling the CIA nonsense instead blaming Russia for this. pic.twitter.com/kpvPQEk0aZ

— UkraineNews (@Ukraine66251776) October 28, 2022

On October 28, local time, Czech people took to the streets to protest and demonstrate, advocating to withdraw from the European Union and #NATO: “Russia is not our enemy, the belligerent Czech government is” slogan!#Russia #Ukraine #NEWS #新闻 #World #UN #Asia #Europe #EU pic.twitter.com/0ihSnJJLuN

— China-News (@China_News12) October 29, 2022

Mass protest in Prague, for Peace, elections and the right not to freeze for NATO. https://t.co/4SuAfzHnvz

— Caractacus Mann (@CaractacusMann) October 29, 2022

🧵Thread of protests that are erupting all over Europe against EU, NATO, inflation, politicians, governmental control, arm sales, etc about which mainstream media is completely silent 🧵 pic.twitter.com/U8BK2veelm

— mohamed.emam (@mohamed42811653) October 26, 2022

Thousands of Germans in Dresden to end sanctions on Russia, they want to remain neutral. Europeans don’t want to starve and freeze for Zelensky and Ursula von der Leyen. EU media censor these demonstrations, they want war. pic.twitter.com/Lio07Yx8NG

— RadioGenova (@RadioGenova) October 30, 2022

Post by Juan Sinmiedo on telegram. Rome, Italian’s protest Nato and their sanctions on Russia pic.twitter.com/sWUxnbGN0B

— Monet Van Gough (@GoughMonet) October 30, 2022

Germany 🇩🇪 HAMBURG Peace and Freedom Demonstration 🔥🔥🔥 in Protest against the Governments Restrictions, Mandates, Anti-NATO, Inflations cost of Living and Energy (29/10/2022) pic.twitter.com/EMcEruW9Ww

— Holy Troller (@IscoPar5) October 29, 2022

WSJ pointed out that a majority of Germans strongly support Kyiv and Russia policy of Chancellor Olaf Scholz’s government, though the popularity of the Alternative for Germany, or AfD, has been increasing as they benefited from the souring mood of the people who have been crushed into energy poverty. AfD has called for the lift of sanctions against Russia. Their popularity has risen from 10% to 15% in 9 months. 

“This is merely the silence before the storm—the discontent is great, and people do not have any sense that the government has a plausible strategy to master the crisis,” said Manfred Güllner, head of Forsa, a pollster.

Worse, the sanctions have sparked a further weakening of the economy where a recession might not be avoided this winter. Efforts by the European Central Bank to rapidly tighten its monetary policy and increase interest rates to quell inflation also have their risks. 

We recently penned two pieces, the first “”Worst Has Yet To Come”: Civil Unrest Set To Surge Worldwide As Socioeconomic Pressure Builds, Report Warns” and “IEA Head Warns “Wild West” Energy Scenario Could Unravel Europe” that both outline the rising risks of social unrest in Europe if inflation remains high and the energy crisis doesn’t abate. 

As rumors abound across social media, new details have emerged in the hammer assault on Paul Pelosi, husband of Speaker of the House Nancy Pelosi — including the eyebrow-raising news that Pelosi referred to his assailant as a “friend” when calling police. 

Paul Joseph Watson summarizes it all in 5 short words: “it seems a bit odd…”

Here’s an updated account as it’s been reported by the Los Angeles Times and various other media outlets citing police sources — along with some perspective on popular speculation about the incident. 

After reportedly breaking through a rear door in the very early hours of Friday morning, DePape entered the house and at some point confronted Pelosi.

Pelosi excused himself from DePape by saying he needed to use the bathroom. There, he made a surreptitious 911 call on his cellphone, close to 2:30 am. Politico cites sources who say the phone had been charging there. 

When directing the police response, the San Francisco Police dispatcher relayed what Pelosi said, referring to him as “RP,” which is police jargon for “reporting party”: 

“RP stated that there’s a male in the home and that he’s going to wait for his wife. RP stated that he doesn’t know who the male is, but he advised that his name is David and that he is a friend. RP sounded somewhat confused.” 

Police dispatch to Paul Pelosi home:

“RP (reporting person) stated there’s a male in the home and that he’s going to wait for his wife. RP stated that he doesn’t know who the male is but he advised that his name is David and that he is a friend.”
pic.twitter.com/O0HeS0s0I5

— Greg Price (@greg_price11) October 28, 2022

In a police response that’s far from typical in America’s cities today, cops arrived at the Pelosi house in just about 2 minutes. They knocked, and someone opened the door, though it’s not clear who.

The police observed the two men, each with one hand on a single hammer, and ordered both of them to drop it. DePape immediately pulled it from Pelosi and started hitting him with it. The cops tackled DePape and took him into custody. 

There’s something of an inconsistency in the LA Times characterization of Pelosi’s 911 call. The Times article, citing police sources, first reports that Pelosi “tricked” DePape and made a surreptitious phone call, but later, the same article says “officials believe Pelosi was intentionally giving coded information because the intruder knew Pelosi was on the phone.”

Perhaps the call started surreptitiously and but then DePape overheard him, or Pelosi was at least wary of it. With that in mind, it’s conceivable Pelosi wasn’t being sincere in calling DePape a “friend,” but rather was trying to soothe the reportedly nutty DePape, who’s been described as a “psychotic, homeless addict estranged from his nudist lover and their children” — and who “talks to angels.”

If Pelosi was being overheard or fearful of it, that may also explain why the dispatcher described Pelosi as sounding “somewhat confused.” At Friday’s press conference, San Francisco Police Chief Bill Scott said dispatcher Heather Grimes had to read between the lines of Pelosi’s call for help: 

“She had to interpret what she was being told. And based on her experience and intuition, she basically figured out that there was something more to this incident than what she was being told. Her actions, in my opinion, resulted in both a higher-priority dispatch and a faster police response.”

Famously, DePape is said to have yelled “Where is Nancy? Where is Nancy?” It’s not exactly clear when. 

There are 3 cameras on one side of Pelosi’s house…. And the cops were there (with body cams) before the assault started.

If anything other than the official narrative is a “wild conspiracy theory,” let’s see the tapes. https://t.co/7s01ba5VYO pic.twitter.com/vRwXfdum85

— John LeFevre (@JohnLeFevre) October 30, 2022

Pelosi underwent surgery to “repair a skull fracture, and serious injuries to his right arm and hands,” according to a statement from Nancy Pelosi’s office. 

All across social media, one can find assertions that DePape was in his underwear when police arrived, with others saying both he and Pelosi were in their underwear. 

Citing “sources,” San Francisco Fox affiliate KTVU on Friday reported that DePape was in his underwear. However, KTVU has retracted that claim and posted a correction at the bottom of the article: “An earlier version of this story misstated what clothing the suspect was wearing when officers found him.”

Zero Hedge hasn’t found another credible source reporting that either DePape or Pelosi were only in underwear (though, at 2 am, it would be understandable if Pelosi was.) 

However, there’s underwear talk all over Twitter and other platforms, along with people misinterpreting an imprecisely worded early SFPD statement to conclude that both Pelosi and DePape were holding hammers. Caught up in the frenzy, Dinesh D’Souza is among those losing credibility points over the weekend — even as he racks up tens of thousands of likes: 

Were Paul Pelosi and his attacker BOTH in their underwear? BOTH holding hammers? And the attacker didn’t strike until AFTER police were on the scene? As a movie-maker, I gotta say this script must be rejected. Nothing about the public account so far makes any sense.

— Dinesh D’Souza (@DineshDSouza) October 29, 2022

Finally, though Democrats and the media are quick to call the attack an act of political violence, police have not asserted a motive. 

Police investigating the Paul Pelosi attack continue to state they *do not know the motive.*

Yet liberal “thought leaders” like @HillaryClinton and @jimmykimmel have decreed that not only is the motive known to them, but only insane or malicious people would question them. pic.twitter.com/g2mmxLG1KF

— Glenn Greenwald (@ggreenwald) October 30, 2022

Having got all that out of the way, we note that none of it stopped Hillary Clinton jumping on the bandwagon that it must have been a MAGA, QAnon conspiracy theorist… to which Elon Musk promptly replied… 

“There is a tiny possibility there might be more to this story than meets the eye…”

Which he has since deleted.

Nevertheless, Glenn Greenwald brings up the elephant in the media’s room…

It’s so crucial to understand the dynamic dominating journalism. Few journalists have career security.

Imagine you’re a young journalist at a big media corporation. You know if you ask these questions, Twitter will explode and it can ruin your career:https://t.co/wzF4FwEDgg

— Glenn Greenwald (@ggreenwald) October 30, 2022

Perhaps, instead, Musk should have retweeted this perspective from Michael Shellenberger…

Neighbors described DePape as a homeless addict with a politics that was, until recently, left-wing, but of secondary importance to his psychotic and paranoid behavior.

“What I know about the family is that they’re very radical activists,” said one of DePape’s neighbors, a woman who only gave her first name, Trish.

“They seem very left. They are all about the Black Lives Matter movement. Gay pride. But they’re very detached from reality. They have called the cops on several of the neighbors, including us, claiming that we are plotting against them. It’s really weird to see that they are willing to be so aggressive toward somebody else who is also a lefty.”

Fact or conspiracy aside, the fact that a ‘conversation’ can be had without #InstaBan occurring seems like a positive step towards the restoration of freedom of speech… and the enabling of Americans to make their own minds up on matters – not be cajoled into one narrative uber alles.

Musk reportedly has plans to reduce moderation, but such plans may come into conflict with incoming EU laws concerning so-called hate speech.

Among the various challenges Elon Musk faces as the new owner of Twitter, one of his biggest might be the European Union, especially if he moves forward with many of his promised efforts to restore free speech on the platform.

And as John Cody reports for Remix News, after Musk tweeted that “the bird is free!” following his purchase of Twitter, EU Commissioner Thierry Breton warned him, writing, “In Europe, the bird will fly by our [European Union] rules.”

👋 @elonmusk

In Europe, the bird will fly by our 🇪🇺 rules.#DSA https://t.co/95W3qzYsal

— Thierry Breton (@ThierryBreton) October 28, 2022

Breton simply wrote “DSA,” referring to the EU’s Digital Service Act, which is a broad act, but one of the fundamental elements of the act is designed to regulate and restrict speech on the web under the guise of “combating hate speech.” In essence, the DSA gives the EU broad powers to censor political dissidents and political speech it deems a threat to the power of the left-liberal establishment.

“The Digital Services Act and Digital Markets Act aim to create a safer digital space where the fundamental rights of users are protected and to establish a level playing field for businesses,” reads the act’s description on the European Commission website.

The European Council outlines how the DSA will operate in principle, writing: “The DSA follows the principle that what is illegal offline must also be illegal online. It aims to protect the digital space against the spread of illegal content, and to ensure the protection of users’ fundamental rights.”

“The obligations introduced are proportionate to the nature of the services concerned and tailored to the number of users, meaning that very large online platforms (VLOPs) and very large online search engines (VLOSEs) will be subject to more stringent requirements. Services with more than 45 million monthly active users in the European Union will fall into the category of very large online platforms and very large search engines.”

Musk reportedly has plans to reduce moderation, but such plans may come into conflict with the DSA, which demands platforms partake in what is likely to be aggressive content moderation.

The law is not yet in force, but it is expected to radically restrict free speech in Europe.

“The DSA will be directly applicable across the EU and will apply fifteen months or from 1 January 2024, whichever comes later, after entry into force. As regards the obligations for very large online platforms and very large online search engines, the DSA will apply from an earlier date, that is four months after their designation,” reads the site.

It is unclear what will constitute “hate speech” or “disinformation” or who will be the arbiter of these designations, but for example, the vast majority of fact-checkers working for Facebook in Central and Eastern Europe are funded by billionaire oligarch George Soros, whose money has flowed through nearly every major left-liberal NGO and establishment figure in the West, which means those opposed to mass immigration, restrictions on freedom of speech, or supporters for traditional family values, may find themselves designated as purveyors of “hate speech” and subject to fines or censorship under the DSA.

On top of the DSA, Musk undoubtedly features numerous challenges ahead, including a potential flight of advertisers who may boycott his platform, as well as app restrictions from the Google Play and Apple Store unless Musk regulates the platform according to the standards dictated by the rival tech companies. In addition, Musk could also face threats from many different directions, including, for example, hosts cutting off cloud support, such as what happened to Parler shortly after the 2020 elections. Banks could also cut off payment processing and U.S. regulators may also be able to fine and harass his platform.

The reality is that Twitter already features plenty of speech that could fall under the category of “hate speech,” by the EU’s vague definition of the word.

The European Council outlines how the DSA will operate in principle, writing:

“The DSA follows the principle that what is illegal offline must also be illegal online. It aims to protect the digital space against the spread of illegal content, and to ensure the protection of users’ fundamental rights.”

A number of organizations that are backed by billionaire oligarch George Soros and his Open Society Foundation are on the list of “stakeholders” for DSA, including Avaaz and Amnesty International. Thierry Breton is also a stakeholder, along with top tech firms such as Google, IBM, Facebook, and Twitter, along with activist NGOs like HateAid.

Authored by Cautlin Johnstone via Medium.com,

The official narrative promoted by the entire western political/media class is that Vladimir Putin invaded Ukraine in February of this year solely because he is evil and hates freedom. He wants to conquer as much of Europe as possible because he cannot stand free democracies, because he is another Adolf Hitler.

The official narrative is that while Russia is in Ukraine solely because its leader is an evil monster like Hitler, the US is in Ukraine solely because its leaders are righteous. The United States is providing arms, military intelligence, and assistance on the ground from special ops forces and CIA officers to Ukraine, as well as implementing an unprecedented regime of economic warfare against Russia, solely because the US loves its good friends the Ukrainians and wants to protect their freedom and democracy.

If you dispute any part of the official Ukraine narrative, you are an evil monster, and a disinformation agent. Because Vladimir Putin is the same as Adolf Hitler, you are also the same as Neville Chamberlain, and are guilty of the cardinal sin of supporting appeasement.

Because you are an evil disinformation agent Neville Chamberlain appeasement monster, it is legitimate to censor you. It is legitimate to accuse you of being secretly paid by the Russian government. It is legitimate to swarm you with coordinated astroturf trolls working to shout you down and overwhelm you. It is legitimate to publish propagandistic smear pieces about you. All normal expectations of public discourse go out the window, because you are a monster, not a person.

If you are tempted to ask questions which put a wobble on the official narrative, you must resist this urge at all cost. Don’t ask why western officials, scholars and strategists have spent years warning that the actions of western governments would lead to this war. Don’t ask what people are talking about when they say the US provoked this war, or when they say the US is using this war to advance strategic agendas it has had in place for years, or when they suggest that these things might have something to do with why the US is obstructing diplomatic solutions at every turn. If you ask questions like these, you are the worst person in the world.

Per the official narrative, if you confront powerful lawmakers on their support for US interventionism in Ukraine, you are “parroting pro-Putin talking points” and spreading “Russian disinformation”.

Questioning officials of the most powerful government in the world about the most consequential decisions being made in the world is violence, and is not allowed.

I am sorry, you all aren’t “anti war protesters”, you are dangerous propagandists who are literally making a mockery of the anti war movement.

I have never had the pleasure of responding to 🇷🇺 ridiculous internet disinformation in person before. Thank you for the opportunity ✌🏽 https://t.co/xzTLQCymgO

— Ilhan Omar (@IlhanMN) October 28, 2022

If you claim you are objecting to the US using proxy warfare in Ukraine on anti-war grounds, you are lying; you are not anti-war. You are only anti-war if you support the same positions on Ukraine as noted anti-war activists John Bolton, Bill Kristol, Tom Cotton, and Mike Pompeo. Anyone advocating diplomacy, de-escalation and detente is an evil warmonger, like Hitler. If you want to learn about the true anti-war position, consult reliable anti-war publications like The New York Times and The Washington Post.

The official narrative on Ukraine is that the US empire and its media never lie or circulate propaganda about wars that the US is involved in. If you dispute this, you are lying and circulating propaganda. That’s why it’s necessary to have so much censorship and organized trolling and mass media reports reminding you how good and righteous this war is: it’s to protect you from lies and propaganda.

If any part of the official narrative on Ukraine sounds suspicious to you, this means you have been infected by Russian disinformation.

Do not breathe a word of the thoughts you’ve been thinking to anyone, or else you will be guilty of spreading Russian disinformation and will become the enemy of the free world.

Remember, good citizen: we must oppose Russian propaganda at all costs to protect our western values of free expression, free thought, free press, and free democracy.

So do not question any part of the official Ukraine narrative. Or else.

*  *  *

My work is entirely reader-supported, so if you enjoyed this piece please consider sharing it around, following me on Facebook, Twitter, Soundcloud or YouTube, buying an issue of my monthly zine, or throwing some money into my tip jar on Ko-fi, Patreon or Paypal. If you want to read more you can buy my books. The best way to make sure you see the stuff I publish is to subscribe to the mailing list for at my website or on Substack, which will get you an email notification for everything I publish. Everyone, racist platforms excluded, has my permission to republish, use or translate any part of this work (or anything else I’ve written) in any way they like free of charge. For more info on who I am, where I stand, and what I’m trying to do with this platform, click here. All works co-authored with my American husband Tim Foley.

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Authored by Daniel Greenfield via the Gatestone Institute,

The Virginia Military Institute is celebrating the 25th anniversary of the presence of women at the nation’s oldest state military college with an appearance by Kimberly Dark: a fat rights activist and author of lesbian fanfic who wants to “reimagine masculinity”.

“Why couldn’t we see that America has been racist forever, sexist forever?” Dark ranted in a post titled, “For those who do not want a Trump presidency — this is what we will do now.”

Under Superintendent Cedric Wins, this is what the Virginia Military Institute has become.

By Mark Glennon of Wirepoints.

If approved by Illinois voters in November, Amendment 1 will give government teachers’ unions an unfettered constitutional right to demand not just anything in their interests, but in what they see as the interests of every Illinoisan. The amendment is not limited to employee matters at the workplace.

Don’t take my word for that. Look at the first sentence of the argument in favor of it as written in the official summary as published by the Illinois Secretary of State: “This amendment will protect workers’ and others’ safety.” [Emphasis added.]

That particular sentence is just about safety, but it shows the broad interpretation of the amendment beyond the workplace that government unions will assert. The language of the amendment itself supports that broad interpretation, and will extend to anybody’s “economic welfare,” which is pretty much everything. **

What will government unions, especially radical teachers’ unions, demand with that new constitutional right?

The Chicago Teachers Union has long been quite open about its purpose. It sees itself as the vanguard of a national movement, led by unions like itself, that is textbook Marxism.

That purpose is well documented. It goes beyond the radical curriculum they teach in schools and encompasses an entire rearrangement of how America works.

Among the first things we wrote about on this site, ten years ago, was the role of the CTU and other teachers’ unions at a Marxism conference held that year:

The event was teeming with teachers who spoke about the new found bond” between Socialism and teachers’ unions according to reports, and Chicago teachers were on the stage. Chicago Teachers Union [then] VP Jesse Sharkey spoke at one breakout session. Becca Barnes, a Chicago Teachers Union teacher and organizer with Chicago Socialists, proclaimed at the beginning of the conference that “the struggle here in the United States has entered a new phase. Nowhere have we pointed the way forward more clearly than here in Chicago with the teachers union strike….”

Since then, militant radicalism has become still more firmly embedded in the CTU. That history is well documented – quite proudly by radicals themselves. The International Socialist Review, for example, lays out a good history of the CTU, saying the CTU “transcended a simple labor dispute and was transformed into a social movement, with the teachers fusing their struggle with that of the community they serve…joining in the Occupy Chicago movement that pointed out the root of societal problems—social and economic inequality.”

A Chicago Magazine column this year also described the “radical transformation” of the CTU beyond schools, citing a recent book on the subject:

 “From milquetoast to militant” is how Jane F. McAlevey described the union’s evolution in her 2016 book, No Shortcuts: Organizing for Power in the New Gilded Age. “If the labor movement’s instinct has been to reduce demands in order to sound reasonable, the new CTU took the opposite approach,” McAlevey wrote. “They led every meeting with school-based discussions of billionaires, banks and racism.” 

It cites current CTU president Stacy Davis Gates saying, “There was a movement afoot to say our union has to be more than a place that bargains a contract for a finite amount of time…. Our union couldn’t be silent on what was happening to the children in the city, the families in the city.”

And there was the solidarity mission of a delegation of CTU members to Nicolás Maduro’s communist Venezuela two years ago.

Today, the majority faction in the CTU is CORE, the Caucus of Rank and File Educators. It’s “engaged in direct action such as protests and shouting down speakers at hearings, and developed a critique of education reform that connected school closings to other issues in Chicago, like the underdevelopment of Black and brown neighborhoods, gentrification, and financialization, as described here.

The CTU is not alone. It’s the Chicago affiliate of the American Federation of Teachers, which is equally radical and militant. It recently pledged $1 million to support the election to Chicago Mayor of Brandon Johnson, a CTU organizer who is already a member of the Cook County Board of Commissioners.

Though the CTU today is technically limited to bargaining for workplace demands, it has already advocated for things like universal basic income, rent control and housing assistance.

If amendment 1 passes, however, all those matters and more will be constitutionally guaranteed as legitimate demands in contract negotiations. Rest assured that the CTU and other teachers unions will be making those demands.

Among those demands will be an end to parental control over schools. Parents across the nation have risen up against political indoctrination and sexually explicit “gender affirmation “in schools. Teachers unions aren’t happy with that and want control over curriculum to the exclusion of parents. Amendment 1 will give them a constitutional right to restrict or eliminate parental control.

Another absurdity of Amendment 1 is that teachers anywhere in Illinois who share the CTU’s vision could choose to have the CTU represent then in the bargaining process. That’s because workers anywhere, under the amendment, would have the right to bargain through representatives of their own choosing. In other words, the more radical teachers could opt out of having a different union represent them and choose the CTU or any other representative.

Militant radicals are chomping at the bit for the constitutional right Amendment 1 will give them: the right to include their vision of a national, Marxist workers’ revolution in their contract demands.