BlackMask Breaking News

BEIJING (AP) — The death toll in the latest COVID-19 surge in China’s capital Beijing has risen incrementally, as feverish clinic patients and an increase in the funeral business point to a widening outbreak after an easing of strict virus containment regulations.

Unofficial reports suggest a widespread wave of new coronavirus cases, and relatives of victims and people who work in the funeral business said deaths tied to COVID-19 were increasing. Those people spoke on condition of not being identified for fear of retribution, official policy and the direction of the latest outbreak remain cloaked in uncertainty and confusion.

The National Health Commission on Tuesday said five newly recorded fatalities, all in Beijing, had taken the country’s total death toll to 5,242 — relatively low by global standards but potentially set to increase substantially following moves by the government to step away from the “zero-COVID” policy of lockdowns, quarantines and compulsory testing that has staggered the economy and prompted rare anti-government protests.  With people testing and recuperating at home, China has said it is no longer possible to keep an accurate count of new case numbers, making it substantially more difficult to gauge the state of the current wave of infection and its direction. Some scientific models have estimated numbers will rise with an eventual death toll in the tens or hundreds of thousands. China is trying to persuade reluctant seniors and others at risk to get vaccinated, apparently with only moderate success. Vaccination centers visited over recent days have been largely empty and there has been no major publicity drive in the entirely state-controlled media. The other major concern is shoring up health resources in smaller cities and the vast rural hinterland ahead of January’s Lunar New Year travel rush, which will see migrant workers returning to their hometowns. Numbers of fever clinics have been expanded in both urban and rural areas and people have been asked to stay home unless seriously ill to preserve resources. Hospitals are also running short on staff, and reports say workers have been asked to return to their posts as long as they aren’t feverish. Chinese health authorities count only those who died directly from COVID-19, excluding deaths blamed on underlying conditions such as diabetes and heart disease that raise risks of serious illness. In many other countries, guidelines stipulate that any death where the coronavirus is a factor or contributor is counted as a COVID-19 related. China had long hailed its restrictive “zero-COVID” approach as keeping case numbers and deaths relatively low, comparing itself favorably to the U.S., where the death toll has topped 1.1 million. Yet the policy of lockdowns, travel restrictions, mandatory testing and quarantines placed China’s society and the national economy under enormous stress, apparently convincing the ruling Communist Party to heed outside advice and alter its strategy.

NN BlackMask Pod Cast:

For Whom the Bell ToLls China Style

SHANGHAI, Dec 19 (Reuters) – COVID-19 is sweeping through trading floors in Beijing and spreading fast in the financial hub of Shanghai, with illness and absence thinning already light trade and forcing regulators to cancel a weekly meeting vetting public share sales. Many banks and asset managers have dusted off plans devised to cope with previous COVID crises, injecting another layer of unpredictability into currency and stock markets, where the outlook is clouded by a rocky exit from strict health curbs. With mass testing halted after abruptly dropped its zero-COVID policy earlier this month, official data no longer reliably capture new case numbers. Internal surveys by several big asset managers and banks suggest more than half of their employees in Beijing, the epicentre of the virus surge, have tested positive. “I would say more than half of colleagues in Beijing are sick, compared with 5%-10% in Shanghai,” said a fund manager at PICC Asset Management, declining to be named as he’s not authorised to speak to the media. NN: I am told this is the most deaths and infections the Chinese have seen to date. They cannot hide the elephant in the room.

China’s COVID surge hits Beijing trading floors, Shanghai finance hub

BEIJING, Dec 19 (Reuters) – China’s business confidence fell to its lowest since January 2013, a survey by World Economics showed on Monday, reflecting the impact of surging COVID-19 cases on economic activity with the abrupt lifting of many pandemic control measures. The index fell to 48.1 in December from 51.8 in November, showed the World Economics’ survey of sales managers at over 2,300 companies conducted Dec. 1-16. The index was the lowest since the survey began in 2013. The survey results were among the first indicators of how business sentiment has taken a hit in the world’s second-biggest economy, after the sharp relaxation of strict COVID containment measures on Dec. 7 triggered a still-growing wave of domestic COVID cases across China. “The survey suggests strongly that the growth rate of the Chinese economy has slowed quite dramatically, and may be heading for recession in 2023,” World Economics said. China’s GDP is expected to grow just 3% this year, its worst performance in nearly half a century. The survey showed business activity fell sharply in December with the sales managers indexes in Manufacturing and Service Sectors both below the 50 level. “The percentage of companies that claim to be currently negatively impacted by COVID has risen to a survey high, with more than half of all respondents now suggesting their operations are being harmed in one way or another,” the London-based data provider said. China has recently dismantled some key parts of the world’s toughest anti-COVID curbs and lockdowns. The measures were championed by President Xi Jinping but impaired the economy and sparked popular protests unprecedented in his decade-long rule. The top leaders and policymakers will focus on stabilising the economy in 2023 and step up policy adjustments to ensure key targets are hit, according to an agenda-setting meeting ended on Friday. “It may take at least another quarter before things turn around,” said Dan Wang, chief economist at Hang Seng Bank China. “Many small businesses have run out of liquidity, especially restaurants, gyms, hotels and other city services.” NN: Markets are not pricing in the coming crash in China. The worst of the COVID crises will hit after golden week in February. And it will not be a quick reversal out of it either…….

• All the dip buying has proved futile during 2022’s bear run
• Recession risk, rising bond yields are headwinds for stocks

For all its twists and turns, the 2022 market has also been a story of patterns repeating. Stocks fall, shorts cover, quants buy, then everyone jumps back in just in time to get torched. It’s happening again. After a month of drawing down positions, investors poured $25 billion in stocks in the week through Wednesday only to see the S&P 500 plummet as the Federal Reserve and other central banks stuck with hawkish stances that threaten to spur a recession. The benchmark index ended the week with its worst three-day drop in two months, shattering chart support and putting it on track for its first down December since 2018, when rate angst was wreaking similar havoc. The latest bout of optimism was crushed after Chair Jerome Powell reiterated that rates will go higher and stay there until inflation falls sharply. Investors playing catchup to a rally that added 14% from October’s lows inopportunely piled back in last week hoping to ride a year-end surge. Instead, they find themselves long a market where valuations remain stretched, earnings are expected to drop and other assets such as Treasuries are proving viable alternatives. “We’ve seen major downside dislocations in equities and risk appetite in general, whenever the market has reinterpreted the Fed outlook, because every time it does that, it gets more and more negative,” Alec Young, chief investment strategist at MAPsignals, said in an interview. “Dip-buyers have been hoping that peaking inflation would lead to more dovish Fed policy, and it hasn’t quite worked out.”

Stocks fell for a second week as economic data on retail sales and manufacturing signaled a slowdown while central banks dialed up their hawkishness. The S&P 500 dropped more than 2%, sliding out of a five-week, 200-point trading range, and undercutting its 100-day average for the first time in more than a month. To chartists, the loss of support is a sign more pain is in store.  The renewed selloff is the latest reckoning for equity bulls who have spent all year buying the dip, to no avail. The S&P 500 has jumped more than 10% from a low two other times this year, in March and from June to August, with both succumbing to fresh selling that took the market to new lows.  This time, the rebound began in mid-October with a massive short-squeeze on the heels of a red-hot inflation print. As asset gains gathered momentum in November, rules-based traders were forced to pile in, with trend-following quants buying $225 billion of stocks and bonds over just two trading sessions, by one estimate. Fear of being left behind was so intense that tens of millions of dollars were spent on call options to play catch-up, adding fuel to the rally.  Fund investors who had pulled money out of stocks for three straight weeks finally jumped back in. According to EPFR Global data compiled by Bank of America Corp., they added $25 billion of fresh money to US stocks in the week through Wednesday and poured a record $14 billion to value funds. While this faith may prove prescient one day, for now, the timing has been painful. Over the past three sessions, 95% of S&P 500 members were down and $1.4 trillion was erased from the index’s value.  “The market had a really strong October and November, so you’ve got a little bit of trend-following by investors, and many perhaps thinking that this is the beginning of a new bull market,” David Donabedian, chief investment officer of CIBC Private Wealth US, said in an interview. “I think there is some more downside here.” Underpinning the latest rout was the growing angst over a looming recession, a threat that the bond market has flagged for months via the inversion of the yield curve and yet was brushed aside by equity investors. Now, with the Fed raising its projection on peak interest rates to 5.1% and cutting the forecast for gross domestic product to flat growth for next year, the reality is starting to sink in.  At 16.7 times forecast earnings, the S&P 500 was valued at a multiple that’s about one point above the 20-year average. And stocks will get more expensive should earnings estimates keep falling. Since June, projected profits for 2023 have fallen 8% to $229 a share, data compiled by Bloomberg Intelligence show.

Moreover, rising interest rates are eroding a decade-long bull case for owning stocks, sometimes labeled “there is no alternative,” or TINA. Part of the competition comes from cash. At the start of the year, when three-month Treasury bills offered almost nothing, about 390 companies in the S&P 500 could be viewed as more attractive with higher dividend yields. After seven Fed hikes that took the payout on short-term government bonds to 4.3%, the pool of stocks with above-cash yields dwindled to no more than 55.    Another threat is fixed income. For illustration, consider an analytical tool known as the Fed model that compares the income stream from stocks to that of bonds. It shows the S&P 500’s earnings yield, the reciprocal of its price-earnings ratio, now sits at 1.9 percentage points above the rate from 10-year Treasuries. An increase in the 10-year yield to 5% from the current 3.5% would need earnings to expand about 28% to hold the current valuation advantage, all else equal.  “We have used the analogy — there’s an equity store and a bond store for your Christmas shopping,” Emily Roland, the co-chief investment strategist of John Hancock Investment Management, told Bloomberg Television’s Surveillance. “The equity store, there’s not very much on sale.”  NN: They are flirting with disaster here. I see one of the biggest stock market rout of all times…. The price movement you see is simply the death throngs of a market about to crash

NEW YORK/SAN FRANCISCO, Dec 16 (Reuters) – Federal Reserve policymakers may need to lift U.S. borrowing costs above the peak 5.1% they penciled in just this week, and keep them there perhaps into 2024 to squeeze high inflation out of the economy, three of them signaled on Friday. The hawkish messages, delivered in separate appearances by New York Fed President John Williams, San Francisco Fed President Mary Daly, and Cleveland Fed President Loretta Mester, underscore the U.S. central bank’s determination to do what it takes to ease price pressures that erode wages and strain household budgets, despite what analysts say could be a million or more jobs lost in the process. They also stand in stark contrast with expectations expressed in financial markets.

New York Fed chief Williams said he’s not expecting a recession, but told Bloomberg TV “we’re going to have to do what’s necessary” to get inflation back to the Fed’s 2% target, adding that the peak rate “could be higher than what we’ve written down.”

The Fed this year has raised rates from near zero in March to a range of 4.25%-4.5% in the steepest round of rate hikes since the 1980s, the last time it battled fast-rising prices. Inflation by the Fed’s preferred measure is currently running at 6%, three times its 2% target Earlier this week as policymakers delivered the latest rate hike they also published projections that signaled nearly all of them see the need to lift rates still further, to at least a 5%-5.25% range, in coming months. On Friday, the broad S&P 500 stock-market index closed down about 2% on the week as the Fed’s more hawkish stance sunk in.

• “I don’t quite know why markets are so optimistic about inflation,” San Francisco Fed’s Daly said, adding that it may be because markets are pricing in an ideal scenario. Central bankers, she said, are positioning policy for what she said were still “upside” risks to the inflation outlook.

• “I think 11 months is a starting point, is a reasonable starting point. But I’m prepared to do more if more is required,” Daly said, adding that exactly how long will depend on the data. She said her own forecast for rates is in line with the 5.1% peak rate expected by the majority of her colleagues..

• The New York Fed said its internal economic model sees a 0.3% decline in overall activity next year and flat growth in 2024, with a return to positive growth the year after.

Central bankers have become increasingly blunt that bringing inflation down will require a labor market slowdown that they will not try to offset with interest-rate cuts until they are confident they have beaten back inflation.

NN: Its a horror show to me. The FED is saying FUCK the masses. We are shutting the economy down not matter what. It would be wise to pay attention to this Juggernaut who has the power to destroy business, real estate, banks and the economy at large, Any market that is credit driven should be scared… Its time to head for the hills and hide in your debt free bomb shelter

The U.S. EIA reported that 4.7 million barrels of crude oil left the Strategic Petroleum Reserves in the week ending December 9, but now the United States has started the process of refilling the nation’s SPR.

While 3 million barrels is a far cry from the 211 million barrels released so far this year, the gesture could be seen by some in the industry as proof that the Biden Administration intends to keep its work to refill when prices fall below $70 per barrel—on a consistent basis, energy security advisor Amos Hochstein said earlier this month.

The Administration said at the beginning of this month that it was looking to halt all sales from the SPR that were mandated by Congress in order to make way for refilling. There are 147 million barrels set to be released, per a Congressional mandate between 2024 and 2027.   “It doesn’t make sense for us to be releasing oil while we’re trying to refill the SPR,” Doug MacIntyre, the Department of Energy’s Deputy Director for the Office of Petroleum Reserves, said in testimony before the Energy and Natural Resources Committee earlier this month. “We can’t fill and release from the same site at the same time.” The purchase of the 3 million barrels will be for a February delivery. While oil isn’t trading at $70 per barrel, WTI has slipped to $74.66 per barrel as of Friday. U.S. oil drilling activity has fallen for two weeks in a row, according to the most recent Baker Hughes data, with 620 oil rigs in operation in the United States. It is about 100 rigs more than what was in operation when Russia invaded Ukraine earlier this year, but more than 220 rigs shy of what was in operation before the pandemic started in 2019. NN: have you ever seen such confusion. The Biden administration hatred of oil is getting them to do crazy shit. They are draining the strategic reserve by hundreds of millions of barrels. While at the same time filling it with a few million barrels. This is simply designed to fool the fools and themselves.

San Francisco Fed President Mary Daly (pictured) said Friday that inflation is not only “toxic,” but the risk of its persistence remains on the “upside.” There is a “long way to go” before the Fed can reach its 2% inflation and full employment targets, which means the Fed will continue until the “job is well and truly done,” Daly added at a virtual event at the American Enterprise Institute. Her assessment of the matter comes days after the Fed raised its key interest rate by 50 bps. The same day United States Federal Reserve Chair Jerome Powell stated that the full effects of the monetary policy tightening are yet to be felt and that there’s “more work to do.” NN: And hope the FED was about to ease off raising rates has been dashed. The Dove becomes a hawk, Daly and the board must have seen some data that scared the shit out of them. I think something is about to break.. As in a financial market shock. I can feel it in my bones.

New York became the latest state to pass a law banning the sale of cats, dogs, and rabbits in pet stores, an effort to curb the use of commercial breeders denounced by critics as “puppy mills,” The Associated Press reports.  Under the new law signed by Gov. Kathy Hochul (D), pet shops will work with animal shelters to find homes for rescued or abandoned animals. The law will also prohibit breeders from selling more than nine animals annually. The ban will not apply to at-home breeders who sell animals raised on their property. The ban is set to take effect in 2024. “This is a very big deal. New York tends to be a big purchaser and profiteer of these mills, and we are trying to cut off the demand at a retail level,” said state Sen. Michael Gianaris (D).  Gianaris accused the puppy mill industry of treating animals “like commodities,”  adding, “there is no pet store not affected.”  Pet shop owners argue that the law unfairly discriminates against pet stores without targeting out-of-state breeders or improving the standard of care at puppy mills. They worry the ban will force dozens of New York pet stores to shut down, per AP. New York is the latest state to pass a ban on pet stores selling commercially bred animals. In 2017 California became the first state to ban such sales, though that law does not regulate sales by private breeders.  Maryland followed suit in 2020, banning the sale of cats and dogs in stores, leading store owners and breeders to challenge the law in court. The following year, Illinois banned the sale of commercially raised puppies and kittens. NN: What can i say…Its NY and the lefties are in control.