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The Golden Renaissance: A Rational Response To An Irrational Social System


by Tyler Durden
Tue, 11/27/2018 - 17:50

Authored by Keith Weiner via Acting-Man.com,

Battles for Civilization
A major theme of my work — and raison d’etre of Monetary Metals — is fighting to prevent collapse. Civilization is under assault on all fronts.


Battling the barbarians at the gate… [PT]

There is the freedom of speech battle, with the forces of darkness advancing all over. For example, in Pakistan, there are killings of journalists. Saudi Arabia apparently had journalist Khashoggi killed. New Zealand now can force travelers to provide the password to their phones so the government can go through all your data, presumably including your gmail, Onedrive, Evernote, and WhatsApp.

China is now developing a “social credit” system, to centrally plan the economy and control citizen behavior. Canada has made it a crime to call someone by the wrong gender pronoun. Even in the US, whose First Amendment has (mostly) stood as a bulwark against censorship now has a president who threatens antitrust action against Amazon, because its CEO Jeff Bezos owns the Washington Post, which prints things he does not like.

On college campuses, professors are harassed if they say one thing that the professional sensitives are sensitive to. If a controversial speaker is invited, he risks an angry mob coming to disrupt his talk (or worse).


Sacrifices on the road to Utopia. [PT]

Then, there is the nearly-over war against patients’ rights to purchase health care services from the provider of their own choosing, and health care professionals’ right to sell services to patients at a price they prefer. In the US, insurance companies are still forced (as under Obamacare) to provide insurance to anyone who applies, even those who have pre-existing conditions. This would be like forcing home insurance companies to issue policies to people whose houses are currently on fire. It is not insurance, but an unfunded welfare program.

The use of practical energy sources is in the battle for its life. Germany and Japan are de-nuclearizing. Other countries flirt with taxes designed, not to raise revenue, but to reduce the use of fossil fuels. While many may go along with this, thinking it is OK to pay another 50 cents a gallon for gasoline, this will not be nearly enough to force large numbers of people to do without. Gasoline for driving to work and oil for heating homes has a highly inelastic demand.

The price would have to rise enough to force people to change their lifestyles, abandoning their spacious houses in the suburbs to crowd into tiny urban apartments. In Europe this month, I saw petrol around $8 a gallon. And they use so much fossil fuels that more taxes are demanded to reduce carbon dioxide much further.


Saying hello to European gas prices… [PT]

Few Want a Free Market in Money
And don’t even get us started on money. Even otherwise-free-market economists, and even wealthy entrepreneurs and business leaders, are for a properly managed irredeemable currency. One prominent person who is all of the above recently declared that if the Fed adopted GDP targeting (it currently does its central planning based on inflation and unemployment) it would end the business cycle!

He did not want to hear anything about GDP being an invalid measure, about eating the seed corn, declining marginal productivity of debt, etc. If you break a window, it does add to GDP. This is not a recommendation to break windows. It is a damning indictment of GDP as a measure.

Where tyranny, socialism, and central planning (we repeat ourselves) are on the rise, not only liberty and human happiness wither, but so does the ability of people to coordinate their productive activities. A major theme of my dissertation is that government intervention promises improved outcomes, but always reduces coordination.

Others, especially Ayn Rand, have noted that socialism sets man against man. They can no longer cooperate to enrich each other. So they are forced to squabble to loot each other through the apparatus of the state.

This is a formula for misery even in a primitive agricultural economy. Wherever it has been adopted, it has been lethal not just to those who think independently, but even to millions of loyal supporters of the regime. The death toll of the socialist regimes of the 20th century — both international and national, i.e. communist and fascist — was in the hundreds of millions.


Central planning endpoint… [PT]

Trust is Delicate
It is also a formula to destroy trust between people. Trust is a necessary element for people to coordinate their activities, especially over time. There could be no mass produced food, much less computer chips, without both banking and equities markets.

In a world where no one trusts anyone else, everyone hoards their favorite commodity at home. They fear to give it to a fraudulent bank who will steal it. So, instead of financing business, production, inventory, trade and entrepreneurialism, they simply accumulate salt or silver or gold.

This is a picture of a miserably poor society, composed of small farm villages where life is barely above subsistence. And businesses are nothing more than a one- or two-man workshop. Think of Medieval Europe prior to the Italian Renaissance.

What is now called the developing world is significantly better off than this. That’s because developed markets have produced goods that are so cheap that even laborers in India, even farmers squatting in a rice paddy can afford mobile phones (though not plumbing or toilets). Life all over the world will degrade back to the level of poverty that long prevailed — if the lights go out in the West.

Many in the gold community wish for everyone to dump their savings and investments, buy gold and silver metal, and take the metal home to put it under the mattress. It is true that, if even a small percentage of people did this, the prices of gold and silver would skyrocket.

These gold owners focus on this, but not on what we describe above. We have said before that they should be careful what they wish for, so we will not dwell on that point further here. We have a different point to make today.

For the reasons of creeping central planning, socialism, government intervention in all markets, and artificial conflicts of interest between groups, there is a worldwide mega-trend of declining trust. I describe a collapse in trust as one of the eight indicators of financial implosion in my dissertation: “(8) the willingness of people to trust one another falls to zero.

This trend necessarily occurs so long as government interferes with production, and renders people less and less able to coordinate. Much has been written about how the banks privatize gains and socialize losses. Deposit insurance, not to mention central bank lenders-of-last-resort, provide a moral hazard to ignore risk and bet big with Other People’s Money.

More recently, they are starting to enact policies that provide for bail-ins. This is when depositors lose their deposits and instead get (possibly worthless) shares in the bank.


Modern-day bank robbery… [PT]

Rational Response to an Irrational Social System
Something makes our mission, to reverse the trend and save civilization, damnably frustrating. That is, it is an entirely rational response of the individual to withdraw his trust when others demonstrate they are untrustworthy. It is entirely rational to withdraw his capital when counterparties demonstrate they are putting it at undue risk, or paying insufficient or negative real returns.

As an aside, by real return, we do not mean measuring the consumer price index and subtracting from the interest rate. Prices are measured in money. Money cannot be measured in prices. If you empty a bag of gummy bears, and line them up, you can measure the line with a steel meter stick, e.g. 500mm. You cannot invert this and say the meter stick is two bags-of-gummy-bears long.

We measure real returns in money terms — i.e., gold. If you have $1,200 and earn 3% interest on them, then at the end of a year you have $1,236. However, if the gold price goes to $2,472 (we do not predict this, but for sake of easy math), then you have gone from 1oz of gold capital to 0.5oz. You have lost 50%. You would have been (far) better off, to have a gold Krugerrand under the mattress. We won’t even talk about having gold vs. being an involuntary volunteer for a bail-in.

So how do you fix a problem caused by people rationally responding to the perverse incentives imposed by an irrational system? You must offer them different incentives. You must appeal to their rationality, to their self-interest to trust, to invest.

What is the Gold Standard, Really?
The gold standard is more than just sound money. If it is to serve the needs of people and support modern civilization, it must be based on honest credit. It is about honesty and moral rectitude.

We realize this is not sexy material. A headline screaming “gold to go to $5,000” with a subhead about people buying phyzz will grab everyone’s attention. A sermon containing the words “moral rectitude,” not so much.

But, in a way, this summarizes the two alternatives facing us. One is get-rich-quick speculation on Fed-induced asset price volatility, seeking to convert someone’s wealth to another’s income, and destruction of the capital that supports our way of life.

The other is the boring old-school values of honesty, fair dealing, sound credit, and continuing the growth that began in Florence in the 14th century. It may not be sexy, and it is a long and arduous road. Nevertheless, we hope you will join us in working to administer the gold cure to the dollar cancer.

Supply and Demand – Something Is Different
The price of gold moved up two bucks, and the price of silver fell 14 cents. But the precious metals is not where the action occurred, this week. The S&P 500 was down 113 points, or -4.1%. Crude oil was down over five bucks, or -9.1%. Bitcoin was down from around $5,500 to around $4,200 or -24%.

Welcome to deflation—a forcible contraction of credit. The cause may lie elsewhere in the unsustainable debts of the many borrowers who now face rising interest expense when they already were marginal at the recent lower rates. However, remember the word contagion from the last bust/crisis of 2008? Credit stress propagates, because debtors are forced to liquidate and creditors want to contract their balance sheets.
And, interesting (no pun intended) that the price of gold is not much affected too.

We called all of this. We were way early (and this may not be it yet in any case). But we have said many times credit is in danger of deflating. And it will impact stocks severely.

And bitcoin is unsound and has no firm bid. And the prices of the metals may not be so much affected this time as surely no one owns gold or silver with much leverage after all these years of bear markets. And those who love leverage in their portfolios have long ago discarded gold, out of favor.

And now, maybe, here it is. Certainly something has happened. The S&P is just about testing its crash low from the start of the year. Oil hasn’t looked like this since second half of 2014. And — no doubt bitcoin proponents could quibble — bitcoin has never looked like this.

The euro fell a penny (remember this is the second biggest currency in the world). The pound was unchanged, as was the Chinese yuan. The Swiss franc was up slightly. Speaking of the franc, we want to briefly address one argument against collapse.

“The franc will not collapse, because the SNB and the Swiss banks have liabilities in francs and assets in euros. So the more the franc were to drop, the more the liability is falling / asset is rising. Therefore, any decline will be self-correcting, because it adds capital to the Swiss banking system balance sheet.”
We find this argument interesting. Much more interesting than the plain old “everyone loves the franc, worldwide, so that keeps its value up” argument. Clearly, people can stop loving something abruptly. But this argument is our kind of argument: not an appeal to speculators’ apparently permanent preference, but to the balance sheet.

And it’s true. A drop in the franc against other currencies (especially the euro) will add capital. As an aside, we just need to pause here to say two words. How perverse.

In an honest gold standard, there is no way a bank can profit from the decline in its liabilities. If its bond — or worse yet its note! — is being discounted by the market then it is in deep trouble. It cannot get out of trouble by a drop in its liabilities. By that point, it has already lost its equity capital.

And if its notes are impaired, it’s also lost its bondholders’ capital. By contrast, in irredeemable currencies, commercial and central banks have a perverse reason to want their currency to drop a little (sorry, that was more than two words).

Anyways, with that off our chest, we agree it does work. However, if the collapse is self-limiting due to capital gains when the currency falls, this mechanism also has a built-in limit. It only staves off banking system insolvency when the currency goes down.

That is, if SNB assets < liabilities, and people sell off the franc as a result, then liabilities fall and the SNB is solvent again. But only so long as the franc doesn’t rise. This strikes us, not as a guarantee that the currency won’t collapse. But as a mechanism to slow it. With each tick down, the currency is temporarily saved.

There is a more inexorable force that opposes collapse. The negative interest rate, about which we have written so much, is reducing the banking system’s liabilities. While the yield of their asset, euro denominated bonds, is not as negative as the corresponding bond in Switzerland. And the yield of their dollar assets is positive. We plan to revisit the topic in the near future.

Ultimately, all irredeemable currencies fail. They rack up debt at an exponentially accelerating rate. And eventually they reach the point when it all must be defaulted. To hold the currency is to be a creditor, and it’s bad to be a creditor when there is a cascading systemic default of all debtors.

There is no mechanism that can prevent this, though the mechanisms described above provide some color to Adam Smith’s “There is a great deal of ruin in a nation.”

https://www.zerohedge.com/news/2018...ce-rational-response-irrational-social-system
 

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US Futures Jump On Fresh Hopes For China Trade Deal, Dovish Powell Speech


by Tyler Durden
Wed, 11/28/2018 - 07:09


In a generally quiet overnight session, renewed hopes for a thaw in U.S.-China trade relations at the upcoming G20 summit helped global shares rise to a one-week high on Wednesday, though lingering fears of a no-deal outcome weighed on European bourses. U.S. futures rose, extending on Tuesday's rebound and tracking gains in Asia as investors rekindled their risk appetite before a key speech by Fed chair Powell who many hope will reverse yesterday's hawkish rhetoric by Clarida, and come off as dovish, especially after this morning's report that Steve Mnuchin has been pushing for a shift from hiking rates to balance sheet reduction. The dollar and Treasuries were steady.



While President Donald Trump talked tough on the trade tariffs issue ahead of a meeting with Chinese President Xi Jinping on Saturday, markets focused on comments by White House economic adviser Larry Kudlow, who held open the possibility that the two countries would reach a trade deal. Kudlow’s comments helped Wall Street close higher and allowed Chinese and Japanese shares to rally 1% as the MSCI index of Asian shares ex-Japan gained 0.7%.

The mood however fizzled into the European session, with the pan-European index giving up opening gains to trade flat and Germany’s DAX trading unchanged. Technology companies and retailers were the best performers in the Stoxx Europe 600 Index, which struggled to maintain early gains as a Tuesday report that Trump may soon decide about new taxes on imported cars, still weighed on sentiment, keeping Europe’s auto sector shares 0.6 percent in the red.



"An expectation is being priced into markets ahead of the G20 meeting that we will see some deal or at least a framework for a deal between Trump and (Chinese President) Xi Jinping,” said Bernd Berg, global macro strategist at Switzerland-based Woodman Asset Management. “But if they come out with nothing this weekend, it’s going to be very bad."

Traders are also focusing on a speech at 12pm ET by Fed Chair Jerome Powell to see if he offers clues on how many more times the Fed could raise interest rates, following yesterday's modestly hawkish if cautious take from vice chair Clarida.

While Fed Vice Chair Richard Clarida took a less dovish stance on Tuesday than some had expected and backed more rate rises, Powell and his colleagues have in recent weeks alluded to global volatility, leading many to speculate the bank’s three-year-long rate rise campaign could pause in 2019.

Continued uncertainty over global trade as well as Brexit and Italy’s ongoing conflict with the European Union, have supported the U.S. dollar, which rose to a two-week high and approached the highest level hit in 2018.

While the main driver for the greenback is the U.S. interest rate path, Rodrigo Catril, senior strategist at National Australia Bank, said it was also benefiting from the uncertain mood. “Markets seem to be jumping at shadows at the moment and against this backdrop of uncertainty, the dollar remains the preferred option for weathering the storm,” Catril said.

Investors are also monitoring developments in Italy’s row with the EU over its budget spending, with Germany’s Handelsblatt and Italy’s La Stampa quoting EU commissioner Valdis Dombrovskis as saying the draft budget needed “substantial correction”.

The 10-year Treasury yield drifted ahead of Jerome Powell’s speech as European bonds nudged higher and the Euro was range bound. Italian bond yields flatlined after sharp rallies that were triggered by what appeared to be a more conciliatory stance from the government over the issue.

The dollar was mixed versus its Group-of-10 peers, trading in narrow ranges ahead of key events this week and EUR/USD hovered below 1.1300; Treasuries were little changed with the 10-year yield at 3.05%. Sweden’s krona gained even after retail sales and an economic tendency survey missed estimates. The pound trimmed some of the previous session’s losses as U.K. Prime Minister Theresa May appeared to back down in a key Brexit battle with Parliament.

Brent crude handed back earlier gains to trade little changed. Brent (-0.4%) and WTI (-0.1%) are lower heading into the US open after initially trading positive. A larger than expected build in API crude stockpiles of +3.453mln compared to the expected build of +0.8mln had little impact on the price rebound at the time which instead focused on the larger than expected gasoline draw. Additionally, three North Sea forties crude cargoes which were scheduled to load in December have been cancelled due to the temporary closure of the 150,000 BPD capacity Buzzard oilfield. Saudi Energy minister Al Falih stated this morning that Saudi will not and cannot reduce output on their own, and is hopeful that upcoming meetings will result in agreement to stabilise the market.

Gold is slightly lower as the dollar continues to firm, although the yellow metal has rebounded from lows of USD 1211.3/oz in the previous session. Separately, copper is higher following a 3-session decline although, gains for the metal have been restricted by ongoing US-China tensions, with the most recent comments coming from White House Economic Advisor Kudlow saying that US President Trump is prepared to raise tariffs if G20 talks are not constructive.

On other markets, cryptocurrency bitcoin jumped 6 percent to above $4,000, its biggest one day jump since the summer, and extending its rebound from a low of $3,475 touched on Sunday.

Today's expected data include mortgage applications, wholesale inventories, and new home sales. Burlington Stores, Royal Bank of Canada, Tiffany, and Weibo are among companies reporting earnings.

Market Snapshot
  • S&P 500 futures up 0.1% to 2,686.75
  • STOXX Europe 600 up 0.06% to 357.60
  • MXAP up 0.7% to 152.77
  • MXAPJ up 0.7% to 490.34
  • Nikkei up 1% to 22,177.02
  • Topix up 0.6% to 1,653.66
  • Hang Seng Index up 1.3% to 26,682.56
  • Shanghai Composite up 1.1% to 2,601.74
  • Sensex up 0.8% to 35,785.59
  • Australia S&P/ASX 200 down 0.06% to 5,725.08
  • Kospi up 0.4% to 2,108.22
  • German 10Y yield fell 1.3 bps to 0.337%
  • Euro down 0.05% to $1.1283
  • Italian 10Y yield rose 2.0 bps to 2.92%
  • Spanish 10Y yield rose 0.2 bps to 1.556%
  • Brent futures down 0.3% to $60.05/bbl
  • Gold spot down 0.2% to $1,213.28
  • U.S. Dollar Index little changed at 97.38
Top Overnight News from Bloomberg
  • Treasury Secretary Steven Mnuchin privately asked bond dealers and investors in October whether they want the Federal Reserve to tighten monetary policy by raising interest rates or through faster cuts in its securities portfolio, six people familiar with the matter said; Mnuchin’s question could be seen as suggesting a way for the central bank to accomplish its goal of preventing a strong economy from overheating without triggering the ire of President Donald Trump
  • U.K. Prime Minister Theresa May has backed down in a key Brexit battle with Parliament, ditching moves to stop lawmakers trying to re-write her plans, according to an official. Risk of no-deal Brexit choking ports rising, U.K. lawmakers say
  • President Donald Trump and China’s Xi Jinping will meet over dinner Saturday evening in Buenos Aires marking a pivotal moment in the escalating trade war between the world’s two largest economies. Trump-Xi meeting puts emerging markets on pain-or-pleasure watch
  • President Donald Trump renewed his attack on Federal Reserve Chairman Jerome Powell, telling the Washington Post he’s “not even a little bit happy” with his choice to head the central bank
  • Federal Reserve officials on Tuesday sprinkled small doses of concern into otherwise upbeat assessments of the U.S. economy. Federal Reserve Vice Chairman Clarida backs Fed’s gradual hikes with neutral rate uncertain
  • The U.K.’s effort to rejoin a key World Trade Organization agreement that governs public procurement opportunities worth $1.7t a year gained provisional backing on Tuesday
  • Credit Suisse Group AG is set to make Madrid its post-Brexit trading hub in the European Union after initially planning to move only some investment banking positions to the Spanish capital from London, according to people with knowledge of the matter
  • Italian Prime Minister Giuseppe Conte said the budget negotiations with the European Union “won’t be easy,” as the government sticks to its spending plans, according to an interview published by Corriere della Sera
Asian equity markets traded mostly positive following a similar lead from Wall St. but with the session initially mired by lingering uncertainty regarding US-China trade relations. Nikkei 225 (+1.0%) outperformed as the index coat-tailed on the recent advances in USD/JPY, while ASX 200 (-0.1%) was subdued by weakness in miners after the metals complex felt the brunt of the recent USD strength and with financials subdued by AMP Capital amid risk of further mischarging cases and provisions. Elsewhere, Hang Seng (+1.3%) and Shanghai Comp. (+1.0%) were higher but with price action choppy in early trade amid tentativeness heading into the Trump-Xi showdown at this week’s G20 and as participants mulled over various comments from officials including White House Economic Adviser Kudlow who affirmed that Trump could hike tariffs if no constructive talks occur at G20 and that the White House is disappointed in China's response to the trade issue. However, Kudlow also noted that Trump is open to a deal with China and there were recent comments from China’s Vice Premier Liu that China wants a negotiated solution on trade based on mutual respect. Finally, 10yr JGBs weakened amid a lacklustre tone in T-note futures and with the BoJ’s presence in the bond market overshadowed by the outperformance of Japanese stocks. China's US envoy said selling or reducing purchases of US Treasuries would be very dangerous like playing with fire, while the envoy doesn't think anybody in Beijing is seriously thinking about pulling back from US Treasury debt market should tensions worsen. Furthermore, there were reports that China’s Ambassador to the US warned of dire consequences if the trade war leads to economic separation and that China prefers a negotiated solution, while the Ambassador warned that China will retaliate in proportion to any US sanctions regarding Muslim Uighurs in Xinjiang.

Top Asian News
  • Bank of Thailand Minutes Signal an Interest-Rate Hike Is Coming
  • Furor Over Gene-Altered Babies Deepens With China Project Halted
  • Pakistan’s Umar Says No Hurry for IMF Deal as Talks Resume
  • Turkey Sinks to Last on Emerging-Market Scorecard; Malaysia Tops
  • Brookfield Is Said to Be in Talks to Invest in Dubai’s Meraas
In a slightly choppy session thus far, European equities (Eurostoxx 50 +0.3%) have held on to opening gains seen in the wake of the upbeat US and Asia-Pac sessions, despite lingering trade concerns. The most recent interjection came from White House Economic Adviser Kudlow who commented that Trump is open to a deal with China and that the raising of tariffs to 25% is not a "certainty" but will be implemented if no constructive talks occur at the G20. In terms of sector specifics, IT names are the clear outperformers at this stage of the session with Wirecard (+1.3%) and Dialog Semiconductor (+3.1%) notable gainers in the tech-space after trying to recoup recent losses with not much else in the way of key newsflow. Noteworthy individual movers include EDF (+3.1%) with shares buoyed by reports that that a potential increase in the French government’s stake in the Co. would take place next year. To the downside, Tenaris (-8.2%), sit at the foot of the Stoxx 600 after the Co.’s chairman was indicted in a graft case, whilst Continental shares (-5.4%) have been weighed on by negative comments from Redburn who have warned over the group’s EBIT prospects in 2019.

Top European News
  • Continental AG Falls After CFO Sees Margin Pressure Persisting
  • Italy Premier Says Social Stability Takes Priority Over Finances
  • Fevertree 2018 Stock Surge Erased Amid Tonic Maker’s Silence
  • LafargeHolcim Says Cost-Cutting Drive Will Lift 2019 Profit
  • Commerzbank, Helaba Are Said to Drop Out of NordLB Bidding
In FX, the DXY was off bet levels but retaining an underlying bid with supportive month end flows alongside HIA and SOMA redemption (24.9bln comes due on Friday) all impacting, while market participants keep a close eye on Fed Chair Powell’s speech scheduled for later today where he may stop the USD in its tracks or exacerbate the rally. The index has gained more ground above 97.000 to just over 97.500 before losing some momentum but still on the course to challenge the YTD high at 97.693, technically if not fundamentally.

EUR: more choppy trade for the single currency with EUR/USD trading around the middle of a 1.1267-1.1304 range having taken out stops at 1.1275. Italian politics keep weighing on the currency with the European Commission unimpressed as it will begin disciplinary actions on Italy regarding debt before Christmas. EU Commissioner Dombrovskis also added that a cut of 0.2% of the 2019 budget target is not enough. EUR/USD is being drawn towards a large amount of option expiries between 1.1275 – 1.1300 (1.5bln). Looking ahead, markets will be keeping a close eye on the budget discussion between the Italian PM, two Deputy PM and Finance Minister for any hints of a budge towards EC’s direction.

CAD – Another victim of the USD strength and global trade jitters as Trump’s economic advisor Kudlow said the USMCA agreement is to be signed on Friday at the G20 summit, but sticking points remain in regards to dairy. Note, choppy oil prices have hardly helped the Loonie slide to fresh multi-month lows around 1.3330.

JPY - Edging closer to 114.00 vs. the buck with heavy option expiries around 113.50-55 (1.47bln) and 114.00 (1.9bln).

EM – Mostly weaker as the greenback hold firm with RUB as the standout underperformer amid the ongoing escalation between Russia and Ukraine, though Germany and France stated they are against stricter Russian sanctions for now, while there were witness reports of a Russian minesweeper ship heading towards the Sea of Azov share by Russia and Ukraine. On the flip side, the Russian Central Bank governor emerged earlier with a hawkish tilt whilst keeping options open for the next meeting. Note, USD/RUB is at 67.4000.

In commodities, Brent (-0.4%) and WTI (-0.1%) are lower heading into the US open after initially trading positive. A larger than expected build in API crude stockpiles of +3.453mln compared to the expected build of +0.8mln had little impact on the price rebound at the time.

Additionally, three North Sea forties crude cargoes which were scheduled to load in December have been cancelled due to the temporary closure of the 150,000 BPD capacity Buzzard oilfield. Saudi Energy minister Al Falih stated this morning that Saudi will not and cannot reduce output on their own, and is hopeful that upcoming meetings will result in agreement to stabilise the market. Gold is slightly lower as the dollar continues to firm, although the yellow metal has rebounded from lows of USD 1211.3/oz in the previous session. Separately, copper is higher following a 3-session decline although, gains for the metal have been restricted by ongoing US-China tensions, with the most recent comments coming from White House Economic Advisor Kudlow saying that US President Trump is prepared to raise tariffs if G20 talks are not constructive.

Looking at the day ahead, the focus for the market is likely to be squarely with Fed Chair Powell’s speech. Away from that we also have the second revision of Q3 GDP in the US where no change from the +3.5% qoq saar estimate is expected. The October advance goods trade balance reading should also be closely watched with the consensus expecting a widening in the deficit to $77bn from $76bn last month. Also due out in the US will be October new home sales and the Richmond Fed manufacturing index print. It is another busy day for ECB speakers however with Coeure, Guindos and Praet all due to speak. The BoE’s Carney will also speak at the Financial Stability Report press conference this afternoon when we will also get the latest annual bank stress test results.

US Event Calendar
  • 7am: MBA Mortgage Applications, prior -0.1%
  • 8:30am: Wholesale Inventories MoM, est. 0.4%, prior 0.4%, Retail Inventories MoM, est. 0.5%, prior 0.1%
  • 8:30am: Advance Goods Trade Balance, est. $77.0b deficit, prior $76.0b deficit, revised $76.3b deficit
  • 8:30am: GDP Annualized QoQ, est. 3.5%, prior 3.5%; Personal Consumption, est. 3.9%, prior 4.0%
  • 8:30am: Core PCE QoQ, est. 1.6%, prior 1.6%
  • 10am: New Home Sales, est. 575,000, prior 553,000
  • 10am: Richmond Fed Manufact. Index, est. 15, prior 15
  • 12pm: Fed’s Powell Speaks to Economic Club of New York
DB's Jim Reid concludes the overnight wrap
One thing I haven’t heard much about this year is a Santa Claus rally but the US has now had two up days in a row for the first time since mid month so maybe Santa is trying to get some momentum going. In fact given the conviction with which markets have moved in recent weeks, yesterday was a actually a rare calmer day with US equities opening lower but floating upward into their close. The S&P 500 ended +0.33% despite opening down -0.66%, while the DOW gained +0.44% and the NASDAQ closed flat. Attention continues to focus on this weekend’s meeting between Presidents Trump and Xi. The White House’s top economic advisor Larry Kudlow confirmed today that the two leaders will have dinner on Saturday night at the G-20 in Buenos Aires. He said that “there is a good possibility that we can make a deal” and “I don’t want to go overboard, but he [Trump] has indicated some optimism.” So hopes are continuing to build, and emerging market equities, which would benefit from a benign trade outcome, outperformed yesterday gaining +0.70%.

Apple continues to struggle and traded -0.22% lower yesterday as concerns continue regarding the company’s demand outlook and possible tariffs on components for their goods. Notably, Microsoft overtook it to become the world’s largest company by market cap again for the first time since October 2003! The last time Microsoft was larger than Apple was back in May 2010 (though at that time, Exxon Mobile was larger than either of the tech giants). Since Apple peaked in early October, it has shed around $300 billion of market cap, while Microsoft has shed ‘only’ $60 billion, or the equivalent of Pakistan’s GDP to the equivalent of Panama’s respectively. So in 7 weeks Apple has lost the entire annual GDP of a country with 197 million people in terms of market cap.

Europe struggled after an early positive open to close slightly lower across the board with the STOXX 600 ending -0.26%. Part of the reason for the dip in Europe seemed to lie with a story in the German business magazine WirtschaftsWoche (WiWo) which reported that President Trump may, as soon as next week, impose tariffs on cars imported into the US. However the details of the story appeared vague with the source also referencing “EU circles,” while the EU later rebutted the story. That said, autos lagged the wider market in the STOXX 600 yesterday with the sector down -2.52% with EU Trade Commissioner Malmstrom also repeating the warning of the risk of US tariffs on cars.

Making much less of impact on markets yesterday than his speech from two weeks ago were the comments from Fed Vice-Chair Clarida. It’s hard to argue that there was much new information for the market with many of his points a rehash from the October speech. Interestingly, there was no mention of financial conditions, global growth, or recent market volatility which is perhaps a touch hawkish at the margin, as it potentially signals the Fed isn’t hugely concerned about recent developments. Also, Clarida had previously outlined both upside and downside risks to the inflation outlook, but yesterday he dropped his reference to the downside scenario. The flip side however was Clarida’s mention that market- and survey-based measures of inflation expectations had slipped and also that, with an uncertain r-star, the Fed should infer its level from incoming market and economic data. Treasuries appeared fairly nonfussed though with 10-year yields moving as much as +1.8bps higher but quickly snapping back before ending the session close to flat at 3.055%. The USD index gained +0.31%. Later in the session, Chicago Fed President Evans highlighted that inflation is at target and said he favours getting policy back to neutral. The market did not react, but his comments are significant as he will be a voting member of the FOMC in 2019. His most recent vote was a dissent against the rate hike in December 2017.

Staying with the Fed, today the baton passes to Fed Chair Powell when he speaks at the Economic Club of New York at 5pm GMT on “The Federal Reserve’s framework for monitoring financial stability.” Our US economists previously highlighted that they expect Powell to reiterate the Fed’s plan to get back to neutral. However, since Powell has previously emphasized that neutral is highly uncertain, they are also watching for any hints that Powell sees recent market developments and/or slower activity in rate sensitive sectors like housing and capex as evidence that neutral could be lower than previously thought.

This morning in Asia markets are following Wall Street’s lead with Nikkei (+0.96%), Hang Seng (+0.91%), Shanghai Comp (+0.86%) and Kospi (+0.30%) all up with a rally largely driven by technology shares. Elsewhere, futures on S&P 500 (+0.03%) are pointing towards a flat start.

Moving on. Yesterday’s slew of data in the US was unlikely to move the dial for policy makers much at the Fed. The S&P CoreLogic National Home Price Index rose 0.33% mom and 5.15% yoy on a seasonally adjusted basis, roughly in line with expectations. The FHFA purchase only house price index rose +0.2%, the third weakest month since January 2015. Higher interest rates and tax changes continue to weigh on the housing sector. On the other hand, consumer confidence and the labour market continue to look strong, with the Conference Board Consumer Confidence index printing at 135.7 as expected, down 2.2pts but near its multi-decade high. The labour market subindex rose to 34.4, a new cycle high.

In other news, the daily Italy update consisted of another comment from the League suggesting that the deficit could be lowered to the 2.2% to 2.3% range, this time from Armando Siri. Reuters also reported that EU government delegates are today expected to back the EC’s disciplinary move against Italy, however a formal disciplinary proceeding may not begin until February. Also out yesterday was an MNI article suggesting that the ECB might be willing to consider OMT as an option for Italy should spreads come under further pressure. The story did appear to be rightly ignored by the market however, especially considering that OMT is conditional on an ESM programme. We are not close to being there yet, even if our head of research David Folkerts-Landau believes that the ESM and structural reforms will need to eventually be negotiated together in a grand bargain to deal with the Italian problem (see the op-ed here from David).

After a good run, BTPs were slightly weaker yesterday with two-year yields closing +3.3bps higher and 10-year yields +2.0bps. As we go to print Italian daily Corriere Della Sera reported PM Conte as saying that dealing with the EU over the budget wont be easy while adding that Italy will push ahead with reforms as social stability is more important for Italy. Elsewhere, the EC VP Dombrovskis said in an interview with La Stampa that Italy needs a “significant correction” of its budget. Indeed as we’re pressing the send button HB is reporting that the EU will open deficit procedures before Christmas. So the pressure is still high even if the news flow has improved of late.

Over to Brexit, where Prime Minister May continues to try to sell her Brexit Withdrawal Agreement to the public and to lawmakers. The leader of the DUP, Arlene Foster, said yesterday that “as far as I can see, this [deal] is not going through parliament” and the pound dropped -0.73% versus the dollar, as passage looks less and less likely and a hangover from the Trump comments the previous night on it being a better deal for the EU and that it precludes a UK/US free trade deal percolated. Nevertheless, a reminder that we turned bullish on the pound on Monday due to two key factors: first, the Government will allow amendments during the legislation process, and second, Labour has signaled their willingness to work through the amendment channel rather than try to topple the government. Together, these ingredients should enable the ‘soft Brexit’ majority in Parliament to coalesce around a non-disruptive exit plan. Voting on the motion to accept or reject the Brexit deal will start in the House of Commons at 7 p.m. on December 11 but the “Meaningful Vote” debate will start on December 4. There will be five days of 8hrs debate, each led by a different cabinet minister. So we may get an idea of potential amendments from next week.

As far as the day ahead is concerned, as noted earlier the focus for the market is likely to be squarely with Fed Chair Powell’s speech. Away from that we also have the second revision of Q3 GDP in the US where no change from the +3.5% qoq saar estimate is expected. The October advance goods trade balance reading should also be closely watched with the consensus expecting a widening in the deficit to $77bn from $76bn last month. Also due out in the US will be October new home sales and the Richmond Fed manufacturing index print. This morning in Europe it’s quiet with December consumer confidence in Germany and the October M3 money supply reading for the Euro Area the only data due. It is another busy day for ECB speakers however with Coeure, Guindos and Praet all due to speak. The BoE’s Carney will also speak at the Financial Stability Report press conference this afternoon when we will also get the latest annual bank stress test results.

https://www.zerohedge.com/news/2018...h-hopes-china-trade-deal-dovish-powell-speech
 

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Beware the Confession of Judgment! Lehto's Law Ep. 5.29
Steve Lehto


Published on Nov 28, 2018
Small business owners are often pitched high interest loans - where the borrower is required to sign a Confession of Judgment. I explain what these are and why they are dangerous. Here is the article I reference: https://www.bloomberg.com/graphics/20...

http://www.lehtoslaw.com
 

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Asian Metals Market Update: Nov 28 2018
By: Chintan Karnani, Insignia Consultants
Any news of a deal between the USA and China on the trade war front will result in copper, zinc, lead, nickel and aluminum to rise five percent anytime. The Trump-Xi meeting is on Saturday. Before Saturday, all the speculation will move silver and industrial metals.
 

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Silver and Gold Spike as the Fed Begins to Worry
Silver Fortune


Published on Nov 28, 2018
As predicted by many (including your's truly), the Fed is pivoting to a more dovish stance. The move in metals today was relatively small, but it could be the beginning of a big move up.

Help support the Silver Fortune Channel through my sponsor, SD Bullion - 10 oz. of Silver at Spot! https://sdbullion.com/sf

Support Silver Fortune through Patreon: https://www.patreon.com/silverfortune

Any content within this video or any other video by the Silver Fortune channel is merely one man's opinion, commentary, and analysis, or actual information obtained from elsewhere, and should not be constituted as legal, investment, or financial advice. Make your own financial decisions, or consult a professional if you'd prefer to go that route. The Silver Fortune channel disclaims any liability for legal, financial, or investment decisions made.
 

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Something Big Is About To Happen - 11/28/18
iScrap App


Published on Nov 28, 2018
Check Scrap Prices Today: https://iScrapApp.com/ - With oil continuing to get hammered (it was down 8% Friday alone and 35% for the year from the highs), we have seen gas prices slipping at the pump which has been great to see. How those oil and gas prices are going to affect the metals markets will largely be felt about a week from now- after the meeting between the US and China at the G20 Summit in Argentina. Read more: https://iscrapapp.com/?p=1200896

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If you have video requests for us, comment below or email us at: info@iscrapapp.com. Happy iScrapping!
 

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Putin: Russia not ditching dollar, dollar moving away from Russia
RT


Published on Nov 28, 2018
Vladimir #Putin touched on major topics at this year's 'Russia Calling' investment forum in Moscow. Among them the role the US #dollar plays in the global economy. READ MORE: https://on.rt.com/9jef
 

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General Motors And General Electric Highlight The Ponzi Scheme That Is The US Economy
By: GoldCore
America’s twin economic “generals” are both in very deep trouble. General Electric was founded in 1892, and it was once one of the most powerful corporations on the entire planet. But now it is drowning in so much debt that it may be forced into bankruptcy. General Motors was founded in 1908, and at one time it was the largest automaker that the world had ever seen. But now it is closing a bunch of factories and laying off approximately 14,000 workers as it anticipates disappointing sales and a slowing economy.
 

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Fewer Interest Rates Rises Ahead – Bullish For Markets.
Illuminati Silver


Published on Nov 28, 2018
https://www.illuminatisilver.com

Today is Wednesday 28th November 2018 and we are commenting on the FED Chairman’s remarks today that may lead to fewer interest rate rises ahead.

Wall Street shares have risen sharply after the US central bank indicated there may not be as many future interest rate rises.

Federal Reserve Chair Jerome Powell said today at the Economic Club in New York, that interest rates are "just below" a neutral level that neither hastens nor slows growth whereas last month he said the bank had a "long way" to go before reaching that level.

He certainly appeared to soften his tone about future rate rises while continuing to defend the Fed's plans for gradual increases.

"Interest rates are still low by historical standards, and they remain just below the broad range of estimates of the level that would be neutral for the economy - that is, neither speeding up nor slowing down growth…….. there is no preset policy path. We will be paying very close attention to what incoming economic and financial data are telling us."

There is no doubt that the US has experienced quite healthy GDP figures this year and a continuing decline in unemployment, partly as a result of increased Government spending and the much heralded tax cut. However, many economists expect that pace to slow next year as the effects of the stimulus fade.

President Trump has blamed the Fed's rate rises for recent stock market declines and has described future rate increases as the biggest risk to the US economy and also indicated he was not too happy with his pick for FED Chairman.

We can’t help but think that this may have had a slight impact on Powell’s announcement today, however we still believe that a rate rise in December is still possible and it may be next year that rates may be tempered.

Meanwhile gold jumped almost $10 on the news and silver jumped 20 cents with gold currently standing at $1221 and silver $14.32.
The DOW is up over 600 points, the S&P up 61 points and the dollar index is down .5 but is still standing at 96.8.

We shall see tomorrow how markets digest the news overnight, but what is clear for the moment is that this will be more bullish for stocks as witnessed by the DOW’s rise – however we must not forget that underlying these comments is the thought that perhaps next year, the economy may not be as strong as it has been this year and that point should not be ignored.
 

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*Note: The guy is wrong about the subsidies but it's a good vid not the less.

GM closes factories; opens bullshit floodgates | Auto Expert John Cadogan
AutoExpertTV


Published on Nov 28, 2018
General Motors develops revolutionary new corporate propulsion system: ‘Arsehole Drive'. That’s next. And here in shitsville, GM Holden’s burgeoning Bullshit Division has managed to increase production again. Yesss!

The battle for biggest Retardistani arsehole reached fever pitch this week. Ford, a previous front-runner, has been overtaken by GM and ‘reality president’ (president evil) Donald Chump.

But here in Shitsville: bullshit as usual. We’ll get to that.
GM said, on Monday, in a statement entitled ‘General Motors Accelerates Transformation’, that it would bone 15 per cent of workers and insert a red-hot poker into the anus of five North American assembly plants, including one in Canadastan.

They are very good at betrayal by closing the factory. They did an ace job of it here.

Although, if you buy into GM’s bullshit, they are not closing factories they are just (quote) “unallocating” production to them. Hey, they’re boning people, they’re just:

“...continuing to take proactive steps … to be highly agile, resiliant, and profitable, while giving us the ability to invest in the future”.

GM Chairman and CEO Mary Barra actually said that with a straight face - which I guess is part of the deal, if you want the big bucks.
And by ‘big bucks’, I mean US$22 million, which is what the Detroit Free Press says she earned in 2017. That’s about 300 times the median income of a GM employee.

Mary - I’d suggest you’re fucking people over. Americans, this time. Could we just please call it what it is? For once. Detroit is already on the ropes. You’re killing it. At least man up and be honest about your conduct.

Twitter addict and caricature of an actual banana republic president, Donald Trump, tweeted

“The US saved General Motors, and this is the THANKS we get!”
He then declared to the Twittosphere he was (quote) “very disappointed” in GM’s decision.

He then sternly warned that the White House was (quote) “now looking at cutting all GM subsidies”. And GM stock immediately plummeted 2.6 per cent as a result.

The only problem is:

There aren’t any GM subsidies. (You fuckwit.) It’s a completely empty statement. The US is $11 billion in the red bailing out those mother-lovers, after the GFC, and now you’ve got no leverage.

GM’s operations are increasingly offshore, in China and Mexico, where any new Trump policies - subject to whatever legislation actually getting passed - will have minimal impact.

According to CNN, the only subsidies associated with GM (and not only GM) are the tax credits consumers get for buying electric cars. And its consumers who get them, not carmakers, and they can’t be removed without getting congress onside.

It’s not a captain’s call, you dumb, unpresidential arsehole.

GM is boning the production of its increasingly unpopular shitheaps, like the Cruze, and leveraging its future on electric propulsion and - you guessed it - robot cars.


More here:

Trump's threat to kill GM subsidies prompts skepticism
http://www.autonews.com/article/20181128/OEM01/181129735/gm-trump-subsidy-threat
 

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Chairman Powell Admits Fed Is In the Dark.
maneco64


Published on Nov 29, 2018
 

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Share Talk Bulletin Board Heroes, Wednesday 28th November 2018
Share Talk


Published on Nov 29, 2018
A charting look at some of the most followed stocks on the London market, Zak Mir covers.

Avocet Mining (AVM)
Condor Gld (CNR)
Echo Energy (ECHO)
Hurricane Energ (HUR)
Opg Power (OPG)
Oilex (OEX)
Powerhouse Ener (PHE)
Redx Pharma (REDX)

@ZaksTradersCafe deductive reasoning as to what should happen next in terms of the newsflow regarding the companies listed in this video.

Zakmir.com is a purely journalistic website – Zak Mir is a member of the National Union of Journalists. There is no intention here of providing financial advice. It is recommended you seek an independent professional opinion before deciding whether or not to take any action with regard to anything written here.
 

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S&P Futures Slide, 10Y Yield Hits 3%, Oil Tumbles Under $50


by Tyler Durden
Thu, 11/29/2018 - 07:22


After yesterday's furious Powell-inspired rally, the overnight kneejerk reaction has been muted, with US equity futures giving up some of yesterday's gains while Europe's Stoxx 600 Index faded earlier gains following a mostly upbeat Asia session.



After 10Y Treasuries surprisingly barely moved following yesterday's Powell speech, the benchmark yield finally saw a more pronounced move on Thursday morning, extending its decline after the Fed Chairman fueled speculation the central bank may pause interest rate increases next year...



... while the greenback drifted in a tight range following Wednesday’s drop, it rebounded from session lows and was roughly unchanged.



In the wake of Powell’s “dovish” comments that Fed Funds are “just below” estimates of the neutral rate (vs. “a long way” in October), hinting at a potential slowdown in the hiking cycle, the DXY gave up the 97.000 level and witnessed its steepest one-day percentage decline this month so far, to 96.622 at one stage. However, the USD has pared some losses with month-end and SOMA demand still in play, while some rival currencies also suffer further weakness. Looking ahead, FOMC Minutes are due to be published later today although with the market now pricing in just one rate hike in 2019 (from more than less than two months ago), it is unlikely that any further dovish news is possible.



At the same time, European bonds rose, and even though demand for five-year Italian debt at an auction fell to the lowest since June. Italy’s five-year bond yield dipped 4 bps to 2.36 percent and the closely-watched spread over Germany was at 294 bps. Italian debt has rallied this week as the government said it was ready to compromise with the European Union on its budget deficit target. German bonds extended gains after inflation data from the German state of Saxony and Treasury.

European shares gave up early gains of as much as 0.7%, with the Stoxx 600 Europe Index trading up just 0.2% as of 1:02pm CET, dragged lower by the real estate shares which remains the worst performer sector in the index, while tech shares trim gains of as much as 2%. Deutsche Bank dropped more than 3% after prosecutors said its headquarters were being searched in a money laundering probe.



Material names are also seeing support this morning, in-fitting with price action in the metals scope with gains seen in Antofagasta (+4.9%), Glencore (+1.8%), Rio Tinto (+1.1%); upside in mining names and a softer GBP has pushed the FTSE 100 (+0.8%) towards the top of the leaderboard.

Earlier in the session Asian stocks were broadly higher, with MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.6 percent, although the Shanghai Composite Index dropped 1 percent. Gains were tempered by investor jitters before trade talks between U.S. President Donald Trump and Chinese President Xi Jinping on Saturday, during the G20 summit in Argentina.

The euro erased an earlier advance after a raft of weak economic data, while emerging-market equities rose to the highest level since early October and developing-nation currencies strengthened. The dollar held steady even as the U.S. 10-year note yield fell below 3% for the first time in two months. The euro failed to sustain early gains amid mixed regional German inflation prints, while the pound led losses in G-10 as PM Theresa May said the U.K. should be ready for no deal if Dec. 11 Parliament vote rejects her Brexit plan. Fed’s hike path stays in focus with several speeches by policy makers and minutes from latest meeting due Thursday.

With Powell now out of the way, the market is looking for any signals on trade from a meeting between the U.S. and Chinese presidents that will take place at the Group of 20 summit in Buenos Aires this weekend.

“The next catalyst will be the G-20 meeting between Trump and Xi; we believe risk assets will tactically trade in the green following a tariff cease-fire,” said Eleanor Creagh, a strategist at Saxo Capital Markets in Sydney. “A tradable risk bounce on a paper deal at G-20 will be unlikely to reverse sentiment structurally as the underlying U.S.-China relationship is still deteriorating.”

Elsewhere, West Texas oil tumbled below $50 a barrel for the first time in more than a year as Russia signaled little urgency to commit to supply cuts and traders fretted that OPEC won’t act decisively to clear a resurgent surplus in the global crude market while U.S. crude stockpiles continue to grow.

Oil futures tumbled as much as 1.8% in New York to $49.41 a barrel, the lowest since early October 2017. Brent for January settlement, which expires Friday, fell as much as 2.1% to $57.50 a barrel on London’s ICE Futures Europe exchange. The global benchmark traded at an $8.23 premium to WTI. The more-active February contract lost as much as 2.2 percent.



While Putin praised Saudi Crown Prince Mohammed Bin Salman and said Moscow is ready to cooperate further, he said crude around $60 a barrel is “balanced and fair” and well above the level needed to to keep his government’s budget in surplus. “Putin is fine with $60, but this time next week we will be well below that if there is no deal,” said Warren Patterson, commodity strategist at ING. “I think we are going to have to see the Saudis actively reduce flows to the U.S.”

As noted yesterday, US crude stockpiles rose by 3.58 million barrels last week in the longest run of gains since November 2015, according to the Energy information Administration. The build was higher than the 1-million-barrel gain predicted in a Bloomberg survey, overshadowing a surprise draw in gasoline inventories.

“Oil has moved into our bear case scenario,” Norbert Ruecker, head of macro and commodity research at Julius Baer Group told Bloomberg. “Today’s price levels imply that the petro-nations will maintain their output hikes or that the world economy is about to slow down significantly.”

Gold has rebounded from two-week lows, as the dollar fell following comments from Fed Chairman Powell saying that the policy rate is just below the estimated neutral range. China’s steel prices have dropped following a two day gain largely due to ample supply and lean demand in markets, with iron ore now rising following Monday’s sell off. Additionally, spot Palladium has hit a record high of USD 1186.30/oz.

In geopolitical news, US Secretary of State Pompeo said he is very hopeful for a new meeting with North Korean officials to discuss denuclearization, while there were separate reports that US requested that North Korea change its chief negotiator. The US Senate voted 63-37 to advance a bill that would end US participation in Saudi Arabia-backed war in Yemen which paves way for additional vote next week, although White House has previously noted it would veto the bill if passed. Russia are to construct a missile early-warning radar station in Crimea in 2019, according to Interfax.

Expected data include personal income and jobless claims. Dollar Tree, TD Bank, HP Inc., VMware, and Workday are among companies reporting earnings.

Market Snapshot
  • S&P 500 futures down 0.3% to 2,732.00
  • STOXX Europe 600 up 0.7% to 359.89
  • MXAP up 0.7% to 153.87
  • MXAPJ up 0.6% to 493.83
  • Nikkei up 0.4% to 22,262.60
  • Topix up 0.4% to 1,659.47
  • Hang Seng Index down 0.9% to 26,451.03
  • Shanghai Composite down 1.3% to 2,567.44
  • Sensex up 1.3% to 36,186.13
  • Australia S&P/ASX 200 up 0.6% to 5,758.42
  • Kospi up 0.3% to 2,114.10
  • German 10Y yield fell 2.4 bps to 0.325%
  • Euro up 0.07% to $1.1374
  • Italian 10Y yield fell 3.2 bps to 2.888%
  • Spanish 10Y yield fell 2.4 bps to 1.519%
  • Brent futures down 1.3% to $58/bbl
  • Gold spot up 0.4% to $1,226.36
  • U.S. Dollar Index up 0.1% to 96.86
Top Overnight News
  • Deutsche Bank AG’s premises including its headquarters in Frankfurt were being searched by prosecutors on Thursday in a money laundering probe, prosecutors said in a statement. In an emailed statement, Deutsche Bank confirmed that police are investigating at several German locations in relation to Panama Papers, and said it is fully cooperating with authorities.
  • President Vladimir Putin said crude around $60 a barrel is “absolutely fine” just days before talks on oil policy with Saudi Arabia
  • The Swiss economy unexpectedly shrank in the third quarter by 0.2%, blighted by a drop in exports and weak domestic demand.
  • Benchmark Treasury yields fell below 3% for the first time since September and stocks climbed in Europe and Asia after a dovish tone from the Federal Reserve chairman boosted markets ahead of this weekend’s G-20 gathering.
  • U.K. Prime Minister warned the country to prepare for a no-deal Brexit if her deal fails to be approved by the House of Commons on Dec. 11. Sterling fell sharply following the comment, down as much as 0.5% to day’s low of 1.2758.
  • Federal Reserve Chairman Jerome Powell opened the door for a potential pullback in projected interest-rate hikes for 2019 following a widely expected increase in December. In what was seen as a shift in tone from remarks last month, Powell said Wednesday that the Fed’s series of rate increases had brought policy to “just below” the range of estimates of neutral
  • U.K. consumer confidence slumped to the lowest in a year as the country copes with the economic uncertainty of Brexit. The index compiled by YouGov and the Centre for Economics and Business Research fell in November and remains “notably below” where it was before the 2016 referendum to leave the European Union
  • Chinese President Xi Jinping said the global economy is at a turning point as he prepares for a critical meeting with Donald Trump this weekend. Xi said the world has to decide whether to continue working to support the global trading system. Failure to do so will lead to new barriers emerging between nations
  • President Donald Trump raised the prospect of slapping a 25 percent tariff on imported cars and ordered a review of China’s retaliatory auto tariffs against the U.S
Asian stocks traded mostly positive after risk appetite was ignited by Fed Chair Powell’s dovish comments which spurred hopes the Fed may begin to slow down on its hiking cycle and helped US stocks notch their biggest daily gain since March. ASX 200 (+0.6%) and Nikkei 225 (+0.4%) were underpinned from the open but with gains capped amid lingering trade uncertainty and inconclusive capex data for Australia, as well as mixed Japanese retail sales and a decline in USD/JPY. Hang Seng (-0.8%) and Shanghai Comp. (-1.3%) both initially conformed to the positive tone but then stalled amid tariff threats with Chinese President Xi’s offer of an olive branch to the US somewhat falling on deaf ears, as USTR Lighthizer said China has yet to offer meaningful proposals and suggested that the US are seeking to match China’s tariffs on autos. Finally, 10yr JGBs were marginally higher as they nursed the prior day’s losses after having found support around the 151.00 level and although today’s mixed 2yr auction results failed to spur a reaction, prices continued to gain as the strength in the regional stock markets moderated.

Top Asian News
  • China Is Said to Plan Major Purge of $176 Billion Loan Market
  • HNA Is Said to Widen Sales Push, Marketing More Than 90 Assets
  • Singaporean Regulators Widen Noble Group Probe to Auditor EY
  • South Korea-Japan Spat Deepens Over Mitsubishi Forced Labor Case
  • China Bond Defaults Surpass 100 Billion Yuan for 1st Time
European equities (Eurostoxx 50 +0.3%) piggybacked on the optimism seen on Wall St and during the Asia-Pac session as perceived dovish rhetoric by Fed Chair Powell continues to guide markets. Initial reports via WiWo that European Commissioner Oettinger expected US auto tariffs before Christmas resulted in downside to European equities, especially German autos, though DAX (+0.2%) saw a rebound after these comments were denied by the European Commission. Sectors are mixed with IT names the outperformer following gains seen yesterday during US hours which has prompted upside in chip-makers such as Wirecard (+3.3%), STMicrolectronics (+2.5%) and Infineon (+2.2%). Material names are also seeing support this morning, in-fitting with price action in the metals scope with gains seen in Antofagasta (+4.9%), Glencore (+1.8%), Rio Tinto (+1.1%); upside in mining names and a softer GBP has pushed the FTSE 100 (+0.8%) towards the top of the leaderboard. To the downside, energy names lag their peers with WTI and Brent crude unable to halt recent declines. In terms of stock specifics, once again, Deutsche Bank (-3.3%) have found themselves in the centre of further controversy with their offices raided earlier this morning in a money laundering probe involving two members of staff. Elsewhere, Intu Properties’ (-35%) shares have slumped to a record low this morning after reports that a consortium led by their Deputy Chairman has abandoned their plans to buy the Co.

Top European News
  • Euro-Area Economic Confidence Falls, Complicating ECB’s Mission
  • Swiss, Swedish Economies Shrink as Trade Slump Hits Europe
  • Mother and Son Lose $16 Billion in 2018 as Continental Sinks
  • Eurofins Finance Chief Says Company Has No Liquidity Problem
In FX, in the wake of Powell’s “dovish” comments that Fed Funds are “just below” estimates of the neutral rate (vs. “a long way” in October), hinting at a potential slowdown in the hiking cycle, the DXY gave up the 97.000 level and witnessed its steepest one-day percentage decline this month so far, to 96.622 at one stage. However, the USD has pared some losses with month-end and SOMA demand still in play, while some rival currencies also suffer further weakness. Looking aheadd, FOMC Minutes are due to be published later today.

GBP,EUR – Major G10 underperformer with ongoing Brexit bickering and meaningful vote concerns driving Cable below 1.2800 with a low print of 1.2759 (vs. highs of 1.2850, with offers seen between 1.2855-65) , while Sterling also fell victim to cross positioning for month end as EUR/GBP climbed above the key psychological 0.8900 level, before the single currency came under renewed pressure on latest auto tariff headlines as press reported that EU Commissioner Oettinger expects US auto tariffs before Christmas. This pushed EUR/USD to fresh session lows of 1.1350 and bringing into play options around 1.1340-50 (3.2bln) and 1.1360-65 (1.35bln). Note, the EUR did not really react to mixed German state CPIs but did respect a key fib just ahead of 1.1400 (1.1394). Looking ahead German national CPIs are due at 13.00GMT.

AUD – In contrast the AUD has showed some resilience despite lower than expected capital expenditures with the antipodean staying afloat above 0.7300.

JPY – The major beneficiary of the post-Powell Dollar weakness as USD/JPY fell through 114.00, 113.50 and currently rests around 113.40. In terms of technicals, the next level to the downside is at 113.17 (tenkan line), looking ahead, Tokyo CPIs are due to be released later today.

TRY – The clear EM outperformer with the currency breaching 5.1500 (and temporarily rallying through a key fib at 5.1562) vs. the buck as the move was exacerbated by the drop below 5.2000 in the wake of a significan improvement in Turkish economic confidence index and falling oil prices (as Turkey is a large net importer).

In commodities, Brent (-1.3%) and WTI (-1.0%) have moved lower recently, which may have been exacerbated by reports that 7k WTI contracts were dropped at the same time. Overnight oil prices had moved higher, despite a greater than expected build shown in EIA weekly crude stocks of 3.577mln vs. Exp. 0.769mln, with prices boosted by a stronger dollar in addition markets are looking optimistically to this weeks G20 meeting to improve global demand. Gold has rebounded from two-week lows, as the dollar fell following comments from Fed Chairman Powell saying that the policy rate is just below the estimated neutral range. China’s steel prices have dropped following a two day gain largely due to ample supply and lean demand in markets, with iron ore now rising following Monday’s sell off. Additionally, spot Palladium has hit a record high of USD 1186.30/oz.

Looking at the day ahead, much of the focus should be on the various inflation reports. In Germany we’ll get the preliminary November CPI report this afternoon where the consensus expects a small one-tenth decline to +2.3% yoy. Shortly following that we get the October PCE report in the US where the expectation is also for a modest one-tenth decline to +1.9% yoy. Alongside that data we’ll also get October personal income and spending reports in the US, followed later on by the latest weekly initial jobless claims reading, October pending home sales and the November FOMC minutes. Also due out in Europe is Q3 GDP in France, October money and credit aggregates data in the UK and November confidence indicators for the Euro Area. A busy week for central bank speak rolls on with Guindos and Angeloni speaking on behalf of the ECB, while over at the Fed Mester, Evans, Harker, Kashkari, Kaplan and Rosengren are all participating in a Boston Fed Conference on “Collaboration for Inclusive Economic Development”. Also due today is a 5y and 10y BTP auction which will be worth watching in light of recent weak retail BTP demand. Finally, G-20 finance ministers will attend a working dinner in Buenos Aires tonight before the main event kicks off tomorrow

US Event Calendar
  • 8:30am: Powell Greets Students at 15th Annual College Fed Challenge
  • 8:30am: Personal Income, est. 0.4%, prior 0.2%
  • 8:30am: Personal Spending, est. 0.4%, prior 0.4%; Real Personal Spending, est. 0.2%, prior 0.3%
  • 8:30am: PCE Deflator MoM, est. 0.2%, prior 0.1%; PCE Deflator YoY, est. 2.07%, prior 2.0%
  • 8:30am: PCE Core MoM, est. 0.2%, prior 0.2%; PCE Core YoY, est. 1.9%, prior 2.0%
  • 8:30am: Initial Jobless Claims, est. 220,000, prior 224,000; Continuing Claims, est. 1.66m, prior 1.67m
  • 9:45am: Bloomberg Consumer Comfort, prior 61.3
  • 10am: Pending Home Sales MoM, est. 0.5%, prior 0.5%; NSA YoY, est. -2.8%, prior -3.4%
  • 2pm: FOMC Meeting Minutes
  • 2pm: Five Fed Presidents Participate in Conference at Boston Fed
  • 3:05pm: Fed’s Kaplan Speaks at Boston Fed Conference
DB's Jim Reid concludes the overnight wrap
As an analyst the one main currency you have is credibility. If your analysis is found suspect or biased then it’s likely the damage to your reputation will be permanent and career in ruins. I fear that after the deluge of criticism I received after yesterday’s EMR I may have crossed that line. So today I offer an unconditional apology and ask that readers give me a second chance. Maybe I was wrong when I said that “Last Christmas” by Wham is the best ever festive song.

We did also wonder yesterday whether the Santa Claus rally was underway, and in response Fed Chair Powell donned his best Father Christmas outfit and gave the market a mighty “ho, ho, ho.” His speech released at 12 EST / 5pm London time was the game changer as the S&P 500 jumped +0.79% (from only just about up on the day) immediately after he mentioned that rates now were “just below” neutral, and the index ultimately carried on the rally and closed +2.30% the best day since March and the second best this year. This comment was a notable shift from his language on October 3, when he said “we’re a long way from neutral at this point.” Obviously this is very important as the closer that Powell thinks rates are to neutral, the sooner he may be comfortable pausing the hiking cycle. He also noted that the impacts of policy “may take a year or more to be fully realized.” While that’s pretty typical language from a Fed Chair, it is notable in the current context, since it could portend a pause once rates reach neutral. Finally, he also said that “we will be paying very close attention to what incoming economic and financial data are telling us,” committing more forcefully to data dependency than the Fed have for a while. Given recent softness in inflation data and the tightening in financial conditions, this would also argue in favour of a less hawkish rate path.

All markets reacted to Powell’s comments and in rates we immediately priced a more dovish Fed, removing 4bps of hikes from the 2019 rate path. The market continues to expect a hike at this December’s FOMC meeting, but now prices in only 31.5bps of additional hikes over the course of next year, compared to the Fed’s median expectation for 75bps at last count. Two-year Treasury yields fell -2.0bps, and while 10-year yields closed close to flat (+0.4bps), real yields fell -2.7bps (inflation breakevens rose +3.1bps). Elsewhere the dollar depreciated -0.55%, as emerging market currencies gained +0.71% and EM equities advanced +2.39%. Other US equities also rallied, with the DOW, NASDAQ, and NYFANG indexes up +2.50%, +2.95%, and +2.90% respectively. That caps the third session in a row of US equity gains, with the DOW gaining +4.45% over that period, the best such streak since June 2016.

This morning in Asia, markets are largely trading higher with the Nikkei (+0.69%), Shanghai Comp (+0.28%) and Kospi (+0.47%) all up while Hang Seng (-0.04%) is trading flattish. However, most markets are trading off their highs as the overnight rhetoric between the US and China seems to be weighing on sentiment (more on this below). Elsewhere, futures on the S&P 500 (-0.19%) are pointing towards a slightly softer start and Crude oil prices (WTI +1.01% and Brent +0.75%) are up this morning.

Ahead of the meeting between the US President Trump and China’s President Xi Jingping on the sidelines of the G20 summit, the South China Morning Post reported that the Chinese President is likely to offer the US a deal comprising of an offer to provide greater market access to US companies and fewer subsidies to the state enterprises along with better protection for intellectual property. However, the source said that the Chinese offer could be a oneshot deal and that if the US refuses to accept the deal at the meeting then there is a possibility that there will be no deal and “we have to see who can bear the economic pain longer.” In the meantime, President Trump raised the prospect of slapping a 25% tariff on imported cars and ordered a review of China’s retaliatory auto tariffs against the US, likely in response to the General Motors announcement of plant closures in the US. The US Trade Representative Robert Lighthizer also said that China has not offered any meaningful proposals yet ahead of the G20 meeting while adding that China’s policies on auto tariffs are ‘egregious’ and the US will examine tools to equalize tariffs on autos as instructed by President Trump. So the stakes are getting higher ahead of the weekend.

Back to yesterday and prior to Powell, markets in Europe largely limped to the finish following a mostly unspectacular session. The STOXX 600 and the CAC both closed flat, while the DAX fell -0.09%. An index of euro-denominated HY bond spreads widened +1.8bps to match its recent high - the widest level since June 2016. The euro had been trading flat versus the dollar until Powell, after which it rallied +0.70%.

A busy week for the Fed continues with the November FOMC minutes this evening. Some of the interest level has probably been taken out of them given we’ve had Clarida and Powell speak in the last two days however we should still learn a good deal more about the Committee’s discussion of its operating framework and potential for another technical adjustment to the IOER at the December 19 meeting.

Here in the UK, both the BoE and the government yesterday published their various Brexit scenarios with the former also releasing the latest annual bank stress tests – which all banks passed. For the hard Brexit scenarios, look away now if you’re a recent UK homeowner. The BoE warned that at the bearish end with a “disorderly” scenario, GDP would contract -8% within a year, while house prices would fall by -30%, commercial property prices fall -48% and Sterling fall -25% to below parity with the dollar. So we UK homeowners will see our property down over 50% in dollar terms!! Inflation would also accelerate to 6.5% and the base rate to rise to 5.5%. In a scenario in which the UK retains a “Close Economic Partnership” with the EU, including comprehensive arrangements for free trade in goods and some trade in business and financial services, then GDP would be between 1.25% and 3.75% lower over a 5 year forecast relative to where it would have been without the vote. Note a lot of these forecasts assume notable BoE rate hikes to combat higher inflation. Such a hawkish policy response is a bit hard to envision, given the BoE responded to the initial Brexit vote by easing policy aggressively, nevermind the weaker pound and higher inflation outlook. So these forecasts are highly, highly uncertain.

As for the government report, at the most bearish end, assuming no deal and zero EEA migration, UK GDP would be as much as 10.7% lower over 15 years. While there wasn’t an exact modelled representation of the deal agreed with the EU, a halfway point between May’s ideal plan and a regular free-trade arrangement would see GDP as much as 3.9% lower than it would have been assuming no migration and 2.1% lower with migration. When it was all said and done Sterling was trading close to flat on the releases, but it was subsequently caught in the Powell-driven dollar selloff and ultimately rallied +0.64% versus the greenback.

Staying with Europe, there were a few interesting headlines out of the ECB worth noting yesterday. Quoting Euro Area officials, Bloomberg reported that the ECB expects to confirm the end of net asset purchases next month, and also that the central bank sees no need to announce a replacement for TLTRO2 at present. The story also hinted at the possibility of clarifying what the “extended period” means with regards to fully reinvesting maturing bonds after the end of net purchases. So this would suggest that next month’s meeting is likely to be squarely focused on the QE and reinvestment decisions. Our European economists’ baseline view is that it is highly unlikely that the ECB extends QE, the Governing Council reiterates the broad narrative of above-trend growth and confidence in inflation normalisation, and that there is eventually a replacement for TLTRO2 to avoid a disorderly deleveraging. Indeed, the team don’t rule out a hint in that direction from Draghi in next month’s press conference.

Later in the day, the expected new Chief Economist of the ECB, Philip Lane, confirmed that a rate increase will be data dependent in the second half of 2019, and also that the ECB is starting to see more heat in the labour market. These weren’t particularly ground-breaking comments, but Lane’s rhetoric will be important to watch going forward given his expected new position within the ECB. As for markets, after yields bottomed out early in the session, bonds mostly weakened with the improved sentiment. Bunds retraced gains of -1.7bps to close flat.

The BTP curve was a lot more mixed by comparison with the short end selling off (two-year +3.4bps) with the belly stronger (10-year -3.3bps). There wasn’t a great deal of new information to feed off however with headlines remaining fairly contradictory. Finance Minister Tria told the Senate that “we need to clarify to our partners in Europe that the aim of the budget is to tackle concrete problems, and certainly not to organise an affront to Europe or organise an exit from the euro.” Meanwhile, Italian PM Conte was reported as saying that the Government had not decided on a new deficit target for 2019, but also that the Government would do anything necessary to find an agreement with the EU.

In other markets, oil prices were sharply lower once more with WTI and Brent ending the day -2.39% and -2.44% respectively. Despite headlines that both Saudi Arabia and Nigeria were confident about OPEC succeeding in stabilizing prices, Russian President Putin poured cold water on the prospects for a deal.

He said that Brent prices around $60 per barrel are “absolutely fine” for his country, suggesting limited motivation to make an output cap deal at December 6’s OPEC meeting. Later in the session, US crude oil inventories rose more than expected, increasing by 3.6 million barrels. That’s the 10th consecutive weekly inventory build, the longest such streak in three years.

As for the economic data that was out yesterday, there weren’t any great surprises from the releases in the US. There was no change to the second estimate of Q3 GDP in the US at 3.5% qoq saar with downward revisions to consumer spending offset by upward revisions to fixed investment and inventories. Notably, the details showed that corporate profits during the quarter grew at 10.3% yoy which is the strongest pace since Q2 2012 while the core PCE was downgraded by 10bps to 1.49% annualized – enough to move the year over year rate down slightly to 1.96% albeit still close enough to target. Meanwhile the October advance goods trade deficit was confirmed as widening to $77.2bn from $76.3bn, and a bit more than expected. Wholesale inventories rose a greater than expected +0.7% mom (vs. +0.4% expected) during October, new home sales fell unexpectedly (-8.9% mom vs. +4.0% expected) and the Richmond Fed manufacturing index slipped 1pt this month to +14.

Looking at the day ahead, much of the focus should be on the various inflation reports. In Germany we’ll get the preliminary November CPI report this afternoon where the consensus expects a small one-tenth decline to +2.3% yoy. Shortly following that we get the October PCE report in the US where the expectation is also for a modest one-tenth decline to +1.9% yoy. Alongside that data we’ll also get October personal income and spending reports in the US, followed later on by the latest weekly initial jobless claims reading, October pending home sales and the November FOMC minutes. Also due out in Europe is Q3 GDP in France, October money and credit aggregates data in the UK and November confidence indicators for the Euro Area. A busy week for central bank speak rolls on with Guindos and Angeloni speaking on behalf of the ECB, while over at the Fed Mester, Evans, Harker, Kashkari, Kaplan and Rosengren are all participating in a Boston Fed Conference on “Collaboration for Inclusive Economic Development”. Also due today is a 5y and 10y BTP auction which will be worth watching in light of recent weak retail BTP demand. Finally, G-20 finance ministers will attend a working dinner in Buenos Aires tonight before the main event kicks off tomorrow.

https://www.zerohedge.com/news/2018-11-29/sp-futures-slide-10y-yield-hits-3-oil-tumbles-under-50
 

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Asian Metals Market Update: Nov 29 2018
By: Chintan Karnani, Insignia Consultants
Gold and silver have just have formed a short term bottom after comments from the Federal Reserve chairman that interest rates are “just below” neutral range. This implies that the pace of interest rate hikes (after December) will be slower next year. This is just the catalyst needed for gold and silver bulls. The US dollar index should form a long term top over the next two weeks.
 

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Ira Epstein's End of the Day Financial Video 11 29 2018
Ira Epstein


Published on Nov 29, 2018
 

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Ira Epstein's End of the Day Agriculture Video 11 29 2018
Ira Epstein


Published on Nov 29, 2018
 

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Nervous Traders Drag US Futures, World Stocks Lower Ahead Of G-20


by Tyler Durden
Fri, 11/30/2018 - 07:15


US equity futures, European and Asian stocks all dropped as nervous investors looked ahead skeptically to a much anticipated meeting between the American and Chinese presidents that could decide the course of the trade war. US Treasury yields dropped and the dollar gained amid a flutter of risk-off sentiment across the globe.



The G20 Summit kicks off today in Buenos Aires, and while the main event will be the Trump-Xi "dinner of the decade" on Saturday, headline risk is high for the entire event. Market participants have every reason to be nervous: heading into the meeting neither side has expressed a willingness to make concession, making the outcome highly uncertain.

Ahead of his Saturday meeting with Xi, Trump said Thursday he’s very close to “doing something” with China as officials work on the contours of a deal that may delay ramping up tariffs on the Asian country in January. Any sign of a trade truce could take the edge off a rampant greenback and boost risk assets including emerging-market currencies and stocks. Goldman Sachs, however, said an escalation of tensions is the most likely outcome. Citi agrees and notes that even a positive statement will likely be faded promptly by markets because as Citi notes, "any material break in the trade war impasse is difficult to achieve, and so any positive response on Monday may ultimately be short-lived."

US equity futures were down 0.5%, following weakness in Europe where the Stoxx Europe 600 Index dropped to session lows, falling as much as 0.6% and trimming its weekly gains following a raft of disappointing macro data. Revised data showed Italy’s economy contracted 0.1% q/q in 3Q; German Oct. adjusted retail sales dropped -0.3% m/m; missing estimates of +0.4%. Euro-area inflation slipped to 2% in November from a year earlier, matching estimates, while the core reading unexpectedly dropped to 1%.



Germany’s DAX (-0.6%) felt the burden of falling auto names after Daimler (-2.7%) was downgraded to sell at HSBC, in turn moving the likes of Volkswagen (-1.1%) and BMW (-1.8%) lower in sympathy. Sector wise, consumer discretionary (weighed by auto names) lags, closely followed by financials as Morgan Stanley downgraded the EU banking sector, while Deutsche bank (-3.0%) shares hit an all time low as the bank feels the brunt of a double whammy from the aforementioned downgrade alongside a second day of raids amid the money laundering probe. Italian PM Conte and Economy Minister Tria are studying cutting the 2019 deficit/GDP target to around 2% in order to reach a deal with the EU; according to a paper.

In the latest Brexit news, UK PM May said Britain will be a more divided country if Parliament votes against her Brexit deal, while she also urged MPs to think about delivering on Brexit vote and answered that she is focused on December 11th vote when asked if she has a plan B if her deal is not approved by Parliament. The number of Conservative MPs who have spoken out against Theresa May's Brexit deal hit 100 as critics said her two-week charm offensive is failing.

Earlier in the session, Asian stocks traded mixed amid a cautious global risk tone with shares gaining in Tokyo, slipping in Seoul and slumping in Sydney, while rebounding in Shanghai and Hong Kong ahead of the US-China showdown at the G20 and as participants digested disappointing Chinese PMI data. ASX 200 (-1.6%) and Nikkei 225 (+0.4%) initially followed suit to the lacklustre lead from their counterparts stateside with Australia the underperformer on broad weakness in which nearly all sectors declined, while Japanese exporters were hampered by recent flows into the JPY before staging a late recovery. Elsewhere, Hang Seng (+0.2%) and Shanghai Comp. (+0.8%) were initially indecisive due to trade uncertainty amid a ‘hot and cold’ stance by US President Trump who stated he is close to doing something on trade with China but is unsure if he wants to, while reports noted that White House Trade Adviser and ‘China hawk’ Navarro is back on the guest list for the Trump-Xi dinner tomorrow evening. Furthermore, the latest Chinese PMI data left much to be desired as both Official Manufacturing and Non-Manufacturing PMIs missed expectations with the former at its lowest since June 2016. The indices closed higher on the day, however.

  • Chinese Manufacturing PMI (Nov) 50.0 vs. Exp. 50.2 (Prev. 50.2)
  • Chinese Non-Manufacturing PMI (Nov) 53.4 vs. Exp. 53.8 (Prev. 53.9)
  • Chinese Composite PMI (Nov) 52.8 (Prev. 53.1)



Also overnight, Japan reported the latest inflation data, which was slightly weaker on the margin with Tokyo CPI missing expectations;

  • Japanese Tokyo CPI (Nov) Y/Y 0.8% vs. Exp. 1.1% (Prev. 1.5%).
  • Japanese Tokyo CPI Ex. Fresh Food (Nov) Y/Y 1.0% vs. Exp. 1.0% (Prev. 1.0%)

The Bank of Korea hiked the 7 Day Repo Rate by 25bps to 1.75% as expected, while it stated that sluggish employment eased somewhat and that exports will sustain favourable movements, but that it sees investments slowing. BoK Governor Lee said the rate decision was not unanimous as 2 board members voted to maintain rates, while Lee also commented that the policy rate is still not at neutral and that he is not worried much about capital outflows due to further Fed rate hikes.

In FX, the dollar rebounded sharply from yesterday's losses, rising against most G-10 peers in a muted trading session; Treasury yields edged lower while the yen was steady as investors refrained from taking risks ahead of this weekend’s meeting between U.S. President Donald Trump and China’s Xi Jinping. The euro slipped to a day low, holding below the 1.14 handle, after London came into the market. The Norwegian krone crept lower after oil prices resumed their slump, while retail sales contracted in October, missing estimates and unemployment rose in November; DNB finds it likely that Norges Bank will adjust down its rate path in December. The pound remained under pressure, drifting downward as U.K. Prime Minister Theresa May continued efforts to win backers for her Brexit deal. Emerging-market equities and currencies dipped.

Finally, Korea’s won held on to this week’s losses as Friday’s interest rate increase did little to assuage concern surrounding the economy.

WTI crude was dragged back under $51 a barrel, on track for the biggest monthly drop in a decade. The euro weakened after data showed inflation in the common-currency region easing.





Looking at this weekend's key event, Guggenheim's Scott Minerd told Bloomberg TV that “I wouldn’t be surprised at the end of this weekend if the U.S. and China didn’t announce a concord that basically sat down a path to help resolve the trade frictions. I don’t think that out of the meeting there’s going to come much substance, but there will be a sort of set of principles that will be established to start the process of bringing an end to the trade war."

WTI (-1.4%) and Brent (-1.0%) lost the USD 51/bbl and USD 60/bbl handles respectively with sentiment deteriorating as the G20 Summit goes underway, where participants will be looking out for leaks in regard to any potential supply change discussed by key policy makers. Meanwhile, ahead of the Dec 6th OPEC meeting, Russian Energy Ministry stated that OPEC and non-OPEC producers are comfortable with the current oil price, while the country’s Energy Minister Novak said Russia plans to maintain the average oil output level until year-end. Note: yesterday he said Russia proposes an output cut for next year.

In the metals complex, gold (-0.2%) erodes post-Powell gains and remains in the November range of USD 1200-1240/oz as the yellow metal mirrors the rising USD, with traders noting a clean break above the top of the range could result in further bullish action. Copper (-0.3%) trade lower amid the cautious risk tone ahead of the Trump-Xi G20 showdown, with moves to the downside exacerbated by the disappointing Chinese manufacturing PMIs overnight. Elsewhere, Shanghai aluminium prices declined to their lowest level in over two years to print their third consecutive monthly decline amid oversupply fused with downbeat Chinese PMIs Economic data include MNI Chicago Business Barometer.

Market Snapshot
  • S&P 500 futures down 0.4% to 2,734.00
  • STOXX Europe 600 down 0.5% to 356.33
  • MSCI Asia down 0.2% to 153.44
  • MSCI Asia ex Japan down 0.4% to 490.93
  • Nikkei up 0.4% to 22,351.06
  • Topix up 0.5% to 1,667.45
  • Hang Seng Index up 0.2% to 26,506.75
  • Shanghai Composite up 0.8% to 2,588.19
  • Sensex up 0.05% to 36,186.77
  • Australia S&P/ASX 200 down 1.6% to 5,667.16
  • Kospi down 0.8% to 2,096.86
  • German 10Y yield fell 0.9 bps to 0.312%
  • Euro down 0.2% to $1.1374
  • Brent Futures down 1.1% to $58.88/bbl
  • Italian 10Y yield fell 5.1 bps to 2.837%
  • Spanish 10Y yield fell 0.2 bps to 1.506%
  • Brent futures down 1.1% to $58.88/bbl
  • Gold spot down 0.2% to $1,221.86
  • U.S. Dollar Index up 0.2% to 97.00
Top Overnight News
  • Federal Reserve officials have stepped off a predictable path of interest-rate increases and are signaling to investors a hard truth about relying on increasingly contradictory economic data: There are no easy answers anymore.
  • Waning year-end demand for the U.S. currency is leading to a decline in dollar-funding costs for Japanese and European investors
  • Gold may be turning the corner as prices head for the first back-to-back monthly gain since January, holdings in exchange-traded funds expand, and investors reappraise the metal’s prospects in 2019 amid speculation the Federal Reserve will pause its tightening cycle
  • The sequence in which the ECB will take its next policy moves “has pretty much been communicated. It’s more about the timing of the various elements,” Estonian central banker Ardo Hansson says in interview with Financial Times
  • The first official reading of China’s economy in November showed the manufacturing PMI on the brink of contraction. New export orders contracted for a sixth month while the non-manufacturing gauge, reflecting activity in the construction and services sectors, expanded but at a slower pace
Asian stocks traded mixed amid a cautious global risk tone ahead of the US-China showdown at the G20 and as participants digested disappointing Chinese PMI data. ASX 200 (-1.6%) and Nikkei 225 (+0.4%) initially followed suit to the lacklustre lead from their counterparts stateside with Australia the underperformer on broad weakness in which nearly all sectors declined, while Japanese exporters were hampered by recent flows into the JPY before staging a late recovery. Elsewhere, Hang Seng (+0.2%) and Shanghai Comp. (+0.8%) were initially indecisive due to trade uncertainty amid a ‘hot and cold’ stance by US President Trump who stated he is close to doing something on trade with China but is unsure if he wants to, while reports noted that White House Trade Adviser and ‘China hawk’ Navarro is back on the guest list for the Trump-Xi dinner tomorrow evening. Furthermore, the latest Chinese PMI data left much to be desired as both Official Manufacturing and Non-Manufacturing PMIs missed expectations with the former at its lowest since June 2016. The indices closed higher on the day, however. Finally, 10yr JGB traded lacklustre after having failed to benefit from the risk averse tone in Japan and BoJ’s presence in the bond market, as prices marginally pulled back from recent gains which had seen long-term yields hit their lowest levels since the beginning of August.

Top Asian News
  • China’s Worsening Economy Adds Pressure on Xi Heading to G-20
  • BOJ Governor Kuroda’s Latest Pay Raise Falls Short
  • Meitu Sinks on Concern Data Privacy Warning Will Worsen Losses
  • Evergrande Leads China Developer Rally; Rhb Cites Policy Hopes
Major European indices are lower across the board (Eurostoxx 50 -0.3%) after the region gave up opening gains amid trade jitters heading the US-Sino showdown at the G20 Summit. UK’s FTSE 100 (-0.7%) underperforms peers as heavyweight miners are pressured by the price action in the base metals complex, while Germany’s DAX (-0.6%) feels the burden of falling auto names after Daimler (-2.7%) was downgraded to sell at HSBC, in turn moving the likes of Volkswagen (-1.1%) and BMW (-1.8%) lower in sympathy. Sector wise, consumer discretionary (weighed by auto names) lags, closely followed by financials as Morgan Stanley downgraded the EU banking sector, while Deutsche bank (-3.0%) shares hit an all time low as the bank feels the brunt of a double whammy from the aforementioned downgrade alongside a second day of raids amid the money laundering probe. In terms of stock specifics, Altice (+8.0%) rose to the top of the Stoxx 600 (-0.5%) after the company sold its 49.9% stake in SFR GTTH for EUR 1.8bln, while Faurecia (-7.1%) is the worst performer in Europe amid a downgrade.

Top European News
  • Bayer Gains as Analysts Applaud Surprise Measures: Street Wrap
  • The London Housing Market Is Worse Than It Looks. Here’s Why
  • Italian Jobless Rate Jumps With More Reentering Labor Market
  • SocGen Seeks to Tap African Growth and Shrug Off Europe Woes
  • Europe Auto Stocks Drop as China, Trade Prompt PT Cuts at HSBC
In FX, the Greenback remains off pre-Powell highs in wake of the latest FOMC minutes that effectively affirm a shift in the approach towards forward guidance that may start in December after a final rate hike this year, with less pre-set indications and more flexibility to take on board incoming data. However, the Buck is ahead vs all G10 counterparts bar the Kiwi that is benefiting from favourable cross-winds, with the index edging just over 97.000 again.

EUR - The single currency has been more volatile than most ahead of the looming G20 Summit and month end, with more spikes vs the Pound through 0.8900 around fixes due to ongoing/residual RHS interest, but another failure at 1.1400 vs the Usd on round number offers and option expiry flows as circa 1.6 bn roll off between the big figure and 1.1410 at the NY cut. Moreover, some Usd12.6 bn SOMA-related Dollar demand coincides with the final trading day of November, and this usually weighs most heavily on Eur/Usd vs potential bids at 1.1350 where another 1.6bn expiries reside.

AUD/CAD - Also underperforming vs the Greenback, with the Aud bearing the brunt of a weaker than forecast Chinese manufacturing PMI overnight ahead of the Trump-Xi meeting on Saturday, and struggling top keep hold of 0.7300 as the Aud/Nzd cross pivots 1.0650 and the Kiwi remains within striking distance of its 200 DMA (0.6870). Meanwhile, the Loonie is back below 1.3300 as crude prices resume their slide amidst reports from Russia suggesting that OPEC+ are content with current levels, which have also piled more pressure on the Rub for obvious reasons.

In commodities, WTI (-1.4%) and Brent (-1.0%) lost the USD 51/bbl and USD 60/bbl handles respectively with sentiment deteriorating as the G20 Summit goes underway, where participants will be looking out for leaks in regard to any potential supply change discussed by key policy makers. Meanwhile, ahead of the Dec 6th OPEC meeting, Russian Energy Ministry stated that OPEC and non-OPEC producers are comfortable with the current oil price, while the country’s Energy Minister Novak said Russia plans to maintain the average oil output level until year-end.

Note: yesterday he said Russia proposes an output cut for next year. In the metals complex, gold (-0.2%) erodes post-Powell gains and remains in the November range of USD 1200-1240/oz as the yellow metal mirrors the rising USD, with traders noting a clean break above the top of the range could result in further bullish action. Copper (-0.3%) trade lower amid the cautious risk tone ahead of the Trump-Xi G20 showdown, with moves to the downside exacerbated by the disappointing Chinese manufacturing PMIs overnight. Elsewhere, Shanghai aluminium prices declined to their lowest level in over two years to print their third consecutive monthly decline amid oversupply fused with downbeat Chinese PMIs.

US Event Calendar
  • 9am: Fed’s Williams Speaks on Global Economy at G30 in New York
  • 9:45am: Chicago Purchasing Manager, est. 58.5, prior 58.4
DB's Jim Reid concludes the overnight wrap
As I peer into the distance toward s snow-covered mountain tops, the last day of November is now upon us and all of a sudden we’re into the final countdown to year-end, my Xmas ski trip, and thus the likelihood of getting reacquainted with my knee surgeon sometime early next year. We noted at the start of this week that there are still a few big events for markets to get past before we can call it a year and the first of those starts today and continues into the weekend with the G20 meeting in Buenos Aires. The G20 overall is a sideshow to the main event, which is the meeting between US President Trump and Chinese President Xi Jingping. Will the two leaders strike a truce and thus a grand bargain on trade or will talks hit another snag? It would take a brave man to predict the outcome and it does feel like messages have been fairly mixed in recent days despite some optimism from the US side, especially from Trump’s economic advisor Kudlow, that a deal can be made. Yesterday, the Wall Street Journal reported that the two sides are approaching a deal, possibly to include suspension of any new US tariffs through next spring in exchange for discussions and the lifting of restrictions on US agriculture and energy exports. On the other hand, the President told the very same newspaper earlier this week that it is “highly unlikely” that the next tranche of tariffs, set to take effect on Jan 1, will be delayed.

Yesterday’s Reuters headline quoting Trump as saying that he is “close to doing something with China, but he doesn’t know if he wants to do it” perhaps sums up the state of play nicely. Interestingly, the South China Morning Post reported that the White House trade policy adviser, Peter Navarro – who is a known China hawk – is now scheduled to attend the dinner between Trump and Xi having initially been left out. US Trade Representative Lighthizer is still due to attend.

So all to play for and something for everyone in the pre-show headlines. As for timing, the meeting between Trump and Xi is due to take place Saturday evening at some point over dinner, however the exact timing is uncertain. Another potentially interesting meeting on the agenda was that between Trump and Russian President Putin. However, after the Kremlin confirmed yesterday that the meeting was to go ahead tomorrow, President Trump instead said that he had cancelled the meeting, tweeting yesterday that his decision was “based on the fact that the ships and sailors have not been returned to Ukraine from Russia”.

In any case, the tensions between Russia and the Ukraine should also be a focal point along with the trade war, while the presence of the Saudi Crown Prince could also be another talking point. The event has no shortage of AListers however with Japan’s Abe, Germany’s Merkel, France’s Macron, UK’s May, EC’s Juncker, EU’s Tusk, Italy’s Conte, and Turkey’s Erdogan among the leaders attending so there’s the potential for plenty of newsflow this weekend.

As for markets, well the strong three-day winning run for US equities came to an end last night with the S&P 500 (-0.22%), DOW (-0.11%) and NASDAQ (-0.25%) all finishing slightly in the red. As has been the trend recently, tech led the decliners with the NYSE FANG index down -1.13% with Apple (-0.77%) down for the sixth time in the last eight sessions. It was hard to know if the slight riskoff was some pessimism ahead of the G20 or reaction to the news that Trump’s former lawyer Michael Cohen had pleaded guilty to a new federal charge and also agreed to cooperate with Robert Mueller. Prior to this, Europe had opened strongly, benefiting from the dovish Powell halo effect, though ultimately the moves faded. The STOXX 600 pared gains of as much as +0.75% to close +0.20% and the DAX erased gains of +0.93% to close flat.

This morning in Asia markets are off to a mixed start with the Nikkei (+0.33%), Hang Seng (+0.69%) and Shanghai Comp (+0.23%) all up while the Kospi (-0.26%) is down. In terms of overnight data, China’s official November composite PMI continued to soften at 52.8 (vs. 53.1 last month) as both manufacturing (50.0 vs. 50.2 expected) and non-manufacturing PMIs (at 53.4 vs. 53.8 expected) missed expectations. In the details of the manufacturing PMI, new export orders (at 47.0) printed below 50 for the 6th month in a row with new orders also continuing to soften sequentially with the current reading at 50.4 (vs. 50.8 in last month and 53.8 back in May). Japan’s preliminary October industrial production stood at +2.9% mom (vs. +1.2% mom expected) - the highest since January 2015.

Elsewhere, futures on S&P 500 (-0.17%) are pointing towards a slightly softer start. The BoJ is also set to release its monthly bond-buying plan for December at 5:00 pm Tokyo time (8:00 am BST) today which is likely to be closely watched for any possible tweaks as the BoJ tries to boost trading in JGBs. The minutes from the November FOMC meeting were released yesterday evening, but didn’t change the debate much, especially when compared to the market-moving comments from Chair Powell earlier this week. The minutes said that many Committee members may want to change the “further gradual increases” language in the policy statement to something that “places greater emphasis on the evaluation of incoming data.” This confirms the renewed emphasis on data dependency that Powell and Clarida pushed this week. The minutes also signaled that a technical adjustment to the rate setting framework would likely be needed at the December meeting, i.e. raising the IOER rate only 20bps rather than the full 25bps in order to keep the effective federal funds rate near the middle of the target range.

There were several notable landmarks in markets elsewhere yesterday. The first was the 10-year Treasury briefly passing below 3% - touching an intraday low of 2.995% - for first time since September 18th and WTI oil passing below $50 – hitting a low of $49.41 - for the first time since October 9th last year. To be fair both rebounded off the lows. Ten-year Treasuries ended the day at 3.026% (still down -3.3bps on the day) while WTI made a full reversal to finish the session back above $51 (+2.11%), which is roughly where it’s trading this morning. That rebound appeared to be helped by a Reuters report suggesting that both Russia and Saudi Arabia were discussing the details behind a cut in production.

The rally for Treasuries was given an added boost by yesterday’s data in the US. The highlight was the soft core PCE print for October (+0.1024% vs. +0.2% expected) which resulted in the annual rate falling by one-tenth from an already downwardly-revised +1.94% yoy to +1.77% yoy, the lowest since February. On the back of a dovish Powell on Wednesday, that data was perhaps more fuel to the fire for the dovish camp and could drive more talk of a pause in the Fed’s tightening cycle. It’s worth noting that the healthcare component of the data was soft and that there could be some seasonality in this data so that is something to keep in mind.

The other interesting data point in the US yesterday was the weekly initial jobless claims print, which jumped 10k to 234k (vs. 220k expected) and the highest in six months. The four-week moving average is now at 223k and the highest since July. There was some talk that the Thanksgiving Holiday may have had an impact on the data, however a persistent uptick in the jobless claims data would definitely be food for thought looking ahead. So worth setting a calendar reminder for this print over the next two Thursdays after a long period where the number has been no more than a mild distraction to lunch or breakfast depending on where you are in the world.

Over in Italy, the Government and the European Commission continued to trade barbs, with Conte saying that they “are not indifferent to the reaction of financial markets [but] we can’t back away from the core promises we made to Italians.” There still seems to be movement toward a budget deficit of 2.2% of GDP rather than 2.4%, but Commission VP Dombrovskis said that would be an insufficient cut. Italian Deputy Premier Salvini said that the Italian government is not considering lowering the budget deficit below 2.2% while adding that “if there is a saving we won’t leave the money there unspent, we will invest it for other spending.” Still, the Italian press reported that the EU could give Italy more time before instigating the Excessive Deficit Procedure, i.e. delaying the decision till February 2019. This helped BTPs rally -5.2bps despite tepid demand as the Treasury auctioned 4.25 billion euros of debt across the 10- and 5-year tenors.

On Brexit, we didn’t get a lot of new information yesterday but the pound nevertheless traded -0.35% weaker versus the dollar. EU Chief Negotiator Barnier said that discussions are over and that the current Withdrawal Agreement is the only possible Brexit deal. DUP Leader Foster reiterated her opposition to the deal, saying that there exists a better option. It’s hard to square those two views, which explains where there is so much uncertainty ahead of next month’s Parliamentary vote. Interesting it looks like we’ll have a live televised debate with May Vs Corbyn on primetime TV on Sunday 9th December. The problem is that May has agreed to have it on the BBC whereas Corbyn is leaning towards ITV as he didn’t want it to clash with the finale of “I’m a celebrity get me out of here”. It rather sums up the process at the moment. Overnight, on her way to the G-20 summit, UK PM May said that national divisions over Brexit will widen if lawmakers fail to back her plans in the parliamentary vote next month while adding that there are no alternatives to her current deal as she ruled out another referendum and said Britain won’t be in a Customs Union with the EU and dismissed the Norway option. She also reiterated that she won’t resign in the event of her Brexit deal getting rejected by the UK Parliament.

Coming back to inflation, there was also some disappointment in the German HICP reading which came in at a below market +0.1% mom (vs. +0.2% expected) – and so pushing the annual rate down two tenths to +2.2% yoy. A reminder that we get the broader Euro Area reading today in addition to country level reports from France and Italy.

Apart from the inflation and jobless claims prints, the US also released personal income and personal spending data, which both surprised to the upside and supported the narrative of continued labour market strength for now. Income rose +0.5% mom, the fastest pace since January, while spending rose +0.6%, fastest since March. The housing market continued to show signs of slowing, as home sales fell -2.6% mom, their sixth consecutive decline. That’s the longest such streak since 2014.

In terms of the day ahead, as mentioned at the top the G20 Leaders Summit officially gets underway and continues into the weekend, so expect headlines throughout. As for data, shortly after this hits your emails this morning we’ll get November Nationwide house price data in the UK and October German retail sales numbers. Not long after that we get the preliminary November CPI reading for France before the aforementioned Euro Area reading. In the US the only release scheduled is the November Chicago PMI, which is expected to largely hold steady around October’s level. Away from the data we’re finishing the week with two more ECB speakers, with Mersch and Coeure speaking at separate events. Finally the Fed’s Williams will speak this afternoon on the “Global Economy” at an event in New York.

https://www.zerohedge.com/news/2018...drag-us-futures-world-stocks-lower-ahead-g-20
 

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500 Million Affected In Massive Marriott Data Breach; Names, Passport Numbers Stolen By Hackers


by Tyler Durden
Fri, 11/30/2018 - 06:26


This is terrible news for Marriott shareholders (and great news for the VC backers of Airbnb).

Marriott shares have fallen more than 2% in premarket trading after the hotel chain announced news of a massive data breach of its guest registration system at Starwood hotels, the hotel chain that it purchased in September 2016.

According to a press release, Marriott believes the compromised database had information on up to 500 million guests who had made a reservation at a Starwood property. The information compromised includes sensitive details including their passport numbers (for those who booked at foreign hotels) as well as name, date of birth, dates of their reservation, email address and mailing address. The infiltration dates back to at least September 2014 - before Starwood was purchased by Marriott - and continued through September of this year. Payment card numbers and payment card expiration dates belonging to some of those affected were also stolen, but the payment card numbers were encrypted using Advanced Encryption Standard encryption.



To put these numbers in context, going by sheer volume, the Starwood Hotels hack would be the largest since Yahoo announced that information belonging to roughly 3 billion users had been taken by hackers. Marriott was alerted to the breach when a security tool notified the company of an attempted intrusion back in September. After an investigation, the company learned that hackers had been accessing data from its guest registration system and had even attempted to remove and encrypt it.

Just like Equifax and other major data breaches before it, news of the hack is bound to raise a number of questions about what Marriott knew and when, and whether Starwood should have been aware of and disclosed this information before the IPO, as well as exactly what the fallout for those affected might be.

Marriott has informed the UK Information Commissioner's office about the hack of its global reservation system.

"We have received a data breach report from Marriott Hotels, involving its Starwood Hotels and will be making enquiries," the regulator said. It asked any concerned customers impacted by the hack to report any suspicious activity.

Read the full release below:
BETHESDA, Md.--(BUSINESS WIRE)--Marriott has taken measures to investigate and address a data security incident involving the Starwood guest reservation database. On November 19, 2018, the investigation determined that there was unauthorized access to the database, which contained guest information relating to reservations at Starwood properties* on or before September 10, 2018.

On September 8, 2018, Marriott received an alert from an internal security tool regarding an attempt to access the Starwood guest reservation database in the United States. Marriott quickly engaged leading security experts to help determine what occurred. Marriott learned during the investigation that there had been unauthorized access to the Starwood network since 2014. The company recently discovered that an unauthorized party had copied and encrypted information, and took steps towards removing it. On November 19, 2018, Marriott was able to decrypt the information and determined that the contents were from the Starwood guest reservation database.

The company has not finished identifying duplicate information in the database, but believes it contains information on up to approximately 500 million guests who made a reservation at a Starwood property. For approximately 327 million of these guests, the information includes some combination of name, mailing address, phone number, email address, passport number, Starwood Preferred Guest (“SPG”) account information, date of birth, gender, arrival and departure information, reservation date, and communication preferences. For some, the information also includes payment card numbers and payment card expiration dates, but the payment card numbers were encrypted using Advanced Encryption Standard encryption (AES-128). There are two components needed to decrypt the payment card numbers, and at this point, Marriott has not been able to rule out the possibility that both were taken. For the remaining guests, the information was limited to name and sometimes other data such as mailing address, email address, or other information.

Marriott reported this incident to law enforcement and continues to support their investigation. The company has already begun notifying regulatory authorities.

“We deeply regret this incident happened,” said Arne Sorenson, Marriott’s President and Chief Executive Officer. “We fell short of what our guests deserve and what we expect of ourselves. We are doing everything we can to support our guests, and using lessons learned to be better moving forward.”

“Today, Marriott is reaffirming our commitment to our guests around the world. We are working hard to ensure our guests have answers to questions about their personal information, with a dedicated website and call center. We will also continue to support the efforts of law enforcement and to work with leading security experts to improve. Finally, we are devoting the resources necessary to phase out Starwood systems and accelerate the ongoing security enhancements to our network,” Mr. Sorenson continued.

Guest Support
Marriott has taken the following steps to help guests monitor and protect their information:

Dedicated Website and Call Center

We have established a dedicated website (info.starwoodhotels.com) and call center to answer questions you may have about this incident. The frequently-asked questions on info.starwoodhotels.com may be supplemented from time to time. The call center is open seven days a week and is available in multiple languages. Call volume may be high, and we appreciate your patience.

Email Notification

Marriott will begin sending emails on a rolling basis starting today, November 30, 2018, to affected guests whose email addresses are in the Starwood guest reservation database.

Free WebWatcher Enrollment

Marriott is providing guests the opportunity to enroll in WebWatcher free of charge for one year. WebWatcher monitors internet sites where personal information is shared and generates an alert to the consumer if evidence of the consumer’s personal information is found. Due to regulatory and other reasons, WebWatcher or similar products are not available in all countries. Guests from the United States who activate WebWatcher will also be provided fraud consultation services and reimbursement coverage for free. To activate WebWatcher, go to info.starwoodhotels.com and click on your country, if listed, for enrollment.

Marriott is furnishing a Form 8-K with the SEC attaching a copy of this press release and presenting certain other information with respect to the incident.

Starwood brands include: W Hotels, St. Regis, Sheraton Hotels & Resorts, Westin Hotels & Resorts, Element Hotels, Aloft Hotels, The Luxury Collection, Tribute Portfolio, Le Méridien Hotels & Resorts, Four Points by Sheraton and Design Hotels. Starwood branded timeshare properties are also included.

https://www.zerohedge.com/news/2018...ott-data-breach-names-passport-numbers-stolen
 

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COT Gold, Silver and US Dollar Index Report - November 30, 2018
By: GoldSeek.com
COT Gold, Silver and US Dollar Index Report - November 30, 2018

Gold Seeker Weekly Wrap-Up: Gold and Silver End Slightly Lower on the Week 11/30
By: Chris Mullen, Gold Seeker Report
Gold fell $7.20 to $1216.70 by midmorning in New York, but it then rallied back higher for most of the rest of trade and ended with a loss of just 0.18%. Silver slipped to as low as $14.052 before it also rebounded, but it still ended with a loss of 0.91%.
 

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Ira Epstein's End of the Day Financial Video 11 30 2018
Ira Epstein


Published on Nov 30, 2018
 

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Ira Epstein's End of the Day Agriculture Video 11 30 2018
Ira Epstein


Published on Nov 30, 2018
 

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Trump vs the world — G-20 summit stumbles on trade, climate

AP
7 hrs ago

BUENOS AIRES, Argentina — Divisions among the world leading economies emerged from the moment their leaders gathered Friday in Argentina: Donald Trump struck his own deals and angered allies, and the leaders of Russia and Saudi Arabia bonded amid criticism from European powers.

U.S. negotiators blocked progress at the Group of 20 summit on managing migration, slowing climate change, and streamlining how world trade is governed, according to European officials involved in the discussions.

Security concerns also weighed on the two-day talks in Buenos Aires. Argentina's security minister said eight gasoline bombs were discovered in an area of the capital several miles from the summit venue where a protest in the afternoon drew thousands of demonstrators who held up banners with slogans like "Go away G-20" and "Go away Trump."

The whole point of the G-20 — formed in the wake of the global financial crisis a decade ago — is finding ways to solve global problems together, but diplomats in Buenos Aires struggled to find enough things all the leaders agree on.

Trump sought to use the summit to make his own trade deals, and angered the Argentine hosts by misconstruing their position on China's trade practices.

Meanwhile, two men under heavy criticism from the West lately — Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman — appeared to seek refuge in each other, bonding with a tough-guy hand grab as the leaders sat down around a huge round table for talks.

Argentine President Mauricio Macri kicked off the summit by acknowledging divisions within the G-20 while urging world leaders to have a "sense of urgency" and take actions "based on shared interests."

Diplomats from the Group of 20 countries were haggling hard over a final summit statement, with deep divisions over what language to use on the Paris climate accord and the World Trade Organization.

Two European officials involved in the discussions said the U.S. was stymieing progress on both.

So an unorthodox solution emerged: An official in the French president's office said the statement may have language that sets the U.S. apart. For example, a draft says 19 of the participants agree on the importance of upholding the Paris climate accord, but the U.S. doesn't.

Asked about the European concerns, a U.S. official said progress was being made on the joint statement and the White House was "optimistic" about the document as a whole.

Later the Argentine official shepherding the G-20 finance talks, treasury official Laura Jaitman, said Trump was "very active and committed" in the dialogue and said progress was made in Friday's talks on finance and trade.

"There's a very positive message of how trade has been an engine of growth for the next decades and how it will continue in the future providing benefits for all citizens," Jaitman said.

Argentine Foreign Minister Jorge Faurie said trade talks were moving forward and nations were continuing to work on climate change wording.

Despite Trump's dismissal of concerns about global warming, China, France and the United Nations came together Friday to pledge their support for the Paris climate accord. Their declaration was meant to encourage other G-20 members to do the same, and to provide a boost for an upcoming U.N. climate summit.

Overall the G-20 summit is meant to focus on issues such as labor, infrastructure, development, financial stability, climate sustainability and international commerce.

But as the gathering got underway, those themes seemed like afterthoughts, overshadowed by contentious matters from the U.S.-China trade dispute to the Russia-Ukraine conflict.

Russia and Ukraine have traded blame over the weekend seizure of Ukrainian ships and their crew — which Trump cited in canceling a much-awaited meeting with Putin at the G-20. Russia's foreign minister regretted the cancellation, but said "love can't be forced."

Also looming large amid dozens of bilateral meetings in Buenos Aires: The gruesome slaying of dissident Saudi journalist Jamal Khashoggi in Saudi Arabia's Istanbul Consulate and how the Saudi crown prince, who is alleged to have ordered the killing, is received by world leaders.

As soon as he arrived, the crown prince was confronted by French President Emmanuel Macron, who pressed him on the Khashoggi investigation and the Saudi-backed war in Yemen.

Bin Salman told Macron not to worry, but Macron countered, "I am worried."

Saudi Arabia has denied that bin Salman played a role, but some leaders were concerned about seeming to legitimize a man who U.S. intelligence agencies concluded ordered the killing. Trump's administration, however, has made clear it does not want to torpedo the longstanding U.S. relationship with Riyadh.

It is the prince's first significant appearance overseas since the killing. Turkish President Recep Tayyip Erdogan, who has been sharply critical of Saudi Arabia over the incident, is also in attendance.

Leaders of the United States, Canada and Mexico, meanwhile, met in the morning to sign a trade deal replacing the North American Free Trade Agreement that was struck following months of tough negotiations that analysts say left a bitter taste among the partners.

It must still be ratified by lawmakers in all three countries, and passage in the U.S. could face a tough road in the House of Representatives after Democrats won a majority in November midterm elections.

While Trump canceled his meeting with Putin, the U.S. president was still scheduled to meet with Chinese President Xi Jinping, but analysts were not optimistic about prospects for a major breakthrough on the two countries' trade disputes a month before U.S. tariffs on Chinese goods are set to ramp up.

German Chancellor Angela Merkel arrived late after her plane suffered a technical problem.

British Prime Minister Theresa May's attendance at the summit marked the first time a U.K. prime minister has visited Argentina's capital. The only other prime minister to visit the country was Tony Blair, who went to Puerto Iguazu in 2001. The two countries have long been at odds over the South Atlantic islands known as the Falklands in Britain and the Malvinas in Argentina.

Faurie, the Argentine foreign minister, said the recent establishment of more flights to the disputed islands was a positive development.

"We are not withdrawing our historic claim," he added. "The focus of this opportunity is in the reestablishment of trust."

In downtown Buenos Aires, meanwhile, thousands of demonstrators flooded the 9 de Julio Avenue waving flags and holding up banners. Several marched topless with colorful national flags of summit countries painted on their chests."

About 22,000 police officers and other security forces are guarding the leaders during the summit.

Argentina is the first South American country to host the G-20, and officials have the added challenge of ensuring that chaos is better contained than it was at last year's meeting in Hamburg, Germany, where clashes broke out between police and protesters.

Argentine authorities have said they will not tolerate violence or allow the gathering to be disrupted.

___

Associated Press writers Almudena Calatrava and Debora Rey in Buenos Aires and Vladimir Isachenkov in Moscow contributed to this report.

http://www.msn.com/en-us/news/world...umbles-on-trade-climate/ar-BBQhyKP?ocid=ientp
 

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We Went to a Steak Dinner Annuity Pitch. The Salesman Wasn't Pleased.

NYT
By RON LIEBER
11 hrs ago


LOS ANGELES — The pitch arrived in my aunt’s mailbox, just after her 80th birthday and in the wake of a few frightening weeks for retirement investors.

“Tired of the stock market roller coaster ride? Want to protect your principal and lock in interest earnings?” the invitation read.

It offered the opportunity to hear all about it at a “complimentary gourmet meal,” featuring “New York steak.” Even better, it would be at a restaurant in Granada Hills that her mother, Vi, had loved.

The mailer was addressed to another member of the family who no longer lives there, but my aunt had no problem registering when she called the number on the card. It said a guest was welcome, too. I volunteered, and she registered me as well.

And the host? An insurance salesman, Arif M. Halaby, who I quickly discovered had been the subject of a state cease-and-refrain order earlier in the decade because of certain financial products that an administrative law judge determined that he had sold. The state found that Mr. Halaby was offering “unqualified” securities after an ailing older client pulled equity from his home to invest in a real estate development in Costa Rica.

I had long wanted to attend one of these steak dinners, and if you are in or near retirement, or sort the mail of people who are, you might be curious about them as well. Such dinners have been a cause for concern.

Almost a decade ago, in “Protecting Older Investors: 2009 Free Lunch Seminar Report,” AARP said 63 percent of the people it had surveyed had received an invitation like the one my aunt found in her mailbox. Among that group, 57 percent had received five or more within the previous three years. The organization figured that 5.9 million people ages 55 or over had attended at least one seminar.

AARP’s protective instincts were warranted. Two years earlier, the Securities and Exchange Commission, the North American Securities Administrators Association and the Financial Industry Regulatory Authority sent examiners to 110 free-meal seminars. They found that 57 percent of the time, the salespeople used materials that “may have been misleading or exaggerated or included seemingly unwarranted claims.”

I genuinely hoped not to encounter any such thing Tuesday night. But I did.


This is the chart that was among the printed materials that dinner attendees received.

A life-size picture of Mr. Halaby, a former police officer, greeted us on a banner in the foyer of the private dining room. Once we were inside, I saw a large chart on a stand up front. It turned out we were there to learn about equity indexed annuities, a complicated insurance product that I wrote about with a fair bit of skepticism back in 2008.

In short (and short is hard when trying to break down products like these), equity indexed annuities tend to work something like this: You hand over a sum of money to an insurance company for a period of time, and at the end you are guaranteed to get at least that much money back if you don't take some money out along the way. You generally don’t get a monthly check, and you agree not to take large amounts out during that period unless you are willing to pay a penalty. As for that equity index part, the insurance company will generally add money to the amount you initially plunked down, providing a portion of the gains reflected in whatever stock index the insurance company is using.

Mr. Halaby’s staff distributed material before dinner that included a chart that looked like the one at the front of the room. It showed an equity indexed annuity performing 8.29 percent better, after an 18-year period from 1998 to 2016, than the S&P 500 stock market index.

But the pamphlet’s chart has some fine print — so small that my 47-year-old eyes could barely make it out — that disclosed the following: The index it was using was not accounting for the reinvestment of dividends from all those stocks.

A quick email the next morning to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, confirmed the following: When you do reinvest dividends, that basket of stocks does 33.72 percent better than the annuity.

I had hoped to ask our host some questions after the steak, which was cooked medium unwell (no one asked how I wanted it prepared). But by then, Mr. Halaby, who has an active license to sell insurance, including annuities, was gone.

I made an appointment to meet him at his office the next morning, and he did not seem happy to see me once I told him who I was. He disparaged my employer and profession and accused me of attending under false pretenses.


A portion of an invitation sent out for the event.

I explained to him that I wanted to experience the dinner as any invited guest would have. My aunt’s R.S.V.P. used my real name, and Mr. Halaby seems to invite anyone and everyone to attend one of his events via his website, as long as you hand over your name, address, phone number and email.

I tried to ask him a long list of questions, starting with a few about that chart. At first, he said he would talk to me if I gave him five references of other people I had written about. (I sent him several names later that day.) Then, he gave me the name of a person he identified as his lawyer and told me to contact her about the chart. (She eventually declined to answer any of my questions.)

When I turned my line of inquiry to the cease-and-refrain order, he got up from his chair and said, “We’re done.” Then he showed me the door.

He told me over the phone on Thursday night, after I returned to New York, that he did not deliberately send mail to people over 70 years old and resented what he called the “dog whistle” effect of writing about someone older than that, as if I were trying to imply that he was preying on people well into their older years. I said no one had asked my aunt’s age when she R.S.V.P.’d. Another point I made: I know that mailing list rental firms aren’t perfect — the 50-something relative whose invitation arrived at my aunt’s hadn’t lived there for 15 years — but my aunt had also given me an identical invitation that a 76-year-old friend received at his home address.

To learn more about the chart in the pamphlet, I contacted the annuity company that created it, American Equity Investment Life Holding Company.

I asked Steven D. Schwartz, vice president of investor relations for the company, why the chart doesn’t show the returns for the S&P 500 with reinvested dividends. He said it was because the point of the chart is to show the lack of volatility of an equity indexed annuity compared with the S&P 500.

Of course, showing the S&P 500 with reinvested dividends would also do that.

In any event, Mr. Schwartz said, Mr. Halaby should not be using that chart, because the company has discontinued the annuity it depicts.

“It is expected that our independent producers will use current materials,” Mr. Schwartz wrote in an email, using industryspeak for salespeople who don’t work directly for the insurance companies.

When I asked Mr. Halaby about that, he told me that someone who had not been working for him for very long put the old chart in the pamphlet. He added that the chart behind him at the dinner, which to my eyes looked identical to the one in the pamphlet, was in fact different. He would not tell me what company had created it.

American Equity’s updated chart, which it sent me Thursday, shows the S&P 500 — still with no reinvested dividends — doing a bit better than a hypothetical indexed annuity for a period starting in 2006 and ending in 2017. To Mr. Halaby’s credit, he made no outsize promises during the dinner. “The primary thing is not to lose your money,” he told the crowd. “My job is not to make you rich.” It was reasonable, he said, for those in attendance to expect their money to grow 3 to 6 percent annually in an equity indexed annuity. Some people thought it was a compelling pitch; there was a smattering of applause when his presentation ended.

Such annuities may be suitable for some risk-averse retirees who are tired of owning stocks. But as I wrote a decade ago, you can probably get better returns during retirement (and not be penalized for taking too much out too soon) by investing mostly in ultrasafe bonds and adding some stock index fund exposure too.

There are probably plenty of advisers who sell useful products over a steak dinner. But as my experience here demonstrates, you shouldn’t show up for one without doing a couple of things. First, conduct a quick online search about the host, including a check of the central database for stockbrokers’ black marks and the similar ones that state insurance departments maintain. Mr. Halaby’s run-in with the state is right there on the first page of his Google search results.

Then, read any and all fine print, even if it requires a magnifying glass. Ask lots of questions. AARP published a good list several years ago, though I’d add another one: Why aren’t referrals from happy customers alone enough to keep you in business?

If you’re still intrigued by a particular product or pitch, don’t move any money right away. Get a second or third opinion from an independent financial planner, perhaps one who charges by the hour and has no stake in your decision.

While the steak dinner pitch might not be a con game, it is a bit of a psychological dance. You attend, you eat free food and by the time the cheesecake arrives, you may feel you owe a salesperson a one-on-one meeting.

Then you’re on the hook. If these meals didn’t catch lots of people, salespeople wouldn’t keep paying for them.

Ron Lieber is the Your Money columnist and author of “The Opposite of Spoiled.” He previously helped develop the personal finance web site FiLife and wrote for The Wall Street Journal, Fast Company and Fortune.

http://www.msn.com/en-us/money/savi...-salesman-wasnt-pleased/ar-BBQjy9T?ocid=ientp
 

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Baler Talk November 30 2018
Ag Talk In The Raw


Published on Dec 1, 2018
i am here to talk about farming and all that goes with it. i just want to let people know what its about...
 

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WEEK AHEAD COMMODITY REPORT: 3-7, December 2018: Gold & Crude Oil Price Forecast
TheGoldAndSilverClub


Published on Dec 1, 2018
JOIN THE LIVE TRADING ROOM HERE ▶ http://www.jointhelivetradingroom.com/
▶ To Receive LIVE Trade Alerts, Mentorship & Expert Insights For Profitable Commodity Trading.

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The Gold & Silver Club is an international Commodities Trading, Research and Advisory Group specializing in the Metals, Energy and Agriculture markets.
Learn More ▶ https://www.thegoldandsilverclub.com/
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Naked Capitalism Links 12/01
https://www.nakedcapitalism.com/2018/12/links-12-1-18.html

TBP - 10 Weekend Reads 12/01
https://ritholtz.com/2018/12/weekend-reads-347/

SA - Market News Live Feed 12/01
https://seekingalpha.com/market-news

TCS - Book Bits | 1 December 2018
http://www.capitalspectator.com/book-bits-1-december-2018/

AR - Saturday links: more apt to talk 12/01
https://abnormalreturns.com/2018/12/01/saturday-links-more-apt-to-talk/

MtM - Some Technical Considerations or Dollar and Stocks Recover; Oil not so Much 12/01
http://www.marctomarket.com/#!/2018/12/some-technical-considerations-or-dollar.html
 

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Weekly Market Update 12-01-18
boubin2


Published on Dec 1, 2018
A recession is on the horizon. How will that affect resource stocks in particular? I also serve up the usual uranium and oil news. Also discuss the rise of nationalism and how that will bear on resources.
Goehring & Rosencwajg blog on uranium:

http://blog.gorozen.com/blog/uranium-...
 

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Bitcoin, the Stock Market and Bush 41.
maneco64


Published on Dec 2, 2018
 

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"The Nomad Tax": When Living Offshore Costs More
Nomad Capitalist


Published on Dec 2, 2018
Living the Nomad Capitalist lifestyle isn't always about saving money.
 

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China and US Agree Trade Tariff Increase Delay
Illuminati Silver


Published on Dec 2, 2018
https://www.illuminatisilver.com

Today is Sunday 2nd December 2018 and we are briefly covering yesterdays agreement between China and the US at the G20.

US President Donald Trump and his Chinese counterpart Xi Jinping, meeting privately after the G20 Summit in Argentina, have agreed to halt new trade tariffs for 90 days to allow for talks.

Currently the US has imposed on China tariffs of 10% with a proposed increase to 25% on 1st January on $200 bn worth of goods. This agreement to halt such actions and to conduct further talks in the New Year will no doubt dampen the fears of the financial and economic community.

US sources stated that China will buy a "very substantial" amount of agricultural, industrial and energy products while Beijing commented that the two sides agreed to open up their markets.

The White House also commented that
Both sides also pledged to "immediately begin negotiations on structural changes with respect to forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft.

It’s worth noting that up until now, The US has hit $250bn of Chinese goods with tariffs since July, and China has retaliated by imposing duties on $110bn of US products. This agreement for further talks are truly just that – an agreement to discuss these matters further.

Whilst both the US and China have expressed intents and plans, nothing is set in stone, but this does give these two countries and the rest of the world a slight reprieve in what could prove quite a disastrous effect on world trade if such an agreement is not met.

We have little doubt that stock markets will respond positively to this tomorrow, but we must be cautious and not too carried away until some real ink actually touches some real paper.
 

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Federal Reserve Notes - The Truth Hidden in Plain Sight
belangp


Published on Dec 2, 2018
The world's reserve currency is not money, as the Fed will show you in its reports