Macro Links Mar 1st – “Take the Guns First”

Macro Links Mar 1st – “Take the Guns First”

You are viewing the Macro Links delayed archive. The real time Macro Links, posted each trading day, are available via the Mercenary Research Suite. To see how it works, click here.

MACRO LINKS TABLE OF CONTENTS (Click or Scroll Down)

TOP

BITCOIN, CRYPTOCURRENCY, INITIAL COIN OFFERINGS

Las Vegas Strippers Accept Bitcoin via QR Tattoos – Bitcoin News

A Las Vegas news show has featured a segment on an adult entertainment venue in the city which enables its dancers to get payments from clients directly via bitcoin transfers. The use of the cryptocurrency was primarily showcased as a privacy enhancing measure (preventing your wife from seeing the payments on the credit card bills) as well as an attraction for affluent bitcoin investors.

Telegram Triples Price in Largest Initial Coin Offering – Bloomberg

Telegram Group Inc., an encrypted-messaging service that just raised $850 million from selling rights to virtual coins, is tripling the price in its next funding round, according to people familiar with the matter.

Swiss Stock Exchange Chairman Advocates National Cryptocurrency – Bitcoin News

The chairman of Switzerland’s stock exchange, Romeo Lacher, has spoken in favor of developing a Swiss national cryptocurrency. Mr. Lacher suggested that the proposed “e-franc” would provide a boost to the Swiss economy, in addition to comprising a payment system offering benefits over traditional systems.

US City Plans to Sell Tokenized Bonds in ‘Initial Community Offering’ – CoinDesk

Confronted with substantial federal funding reductions, Berkeley, California, is turning to crypto tokens as a way to fund services like affordable housing. Mayor Jesse Arreguin and councilman Ben Bartlett have teamed up with San-Francisco-based investment startup Neighborly to advance an initiative that would divide municipal bonds into micro-bonds and then sell them as tokens in what they call an “initial community offering.”

Fundstrat’s Tom Lee Stays Bullish On BTC Price, Sees Major Firms Joining Crypto Sphere | Cointelegraph

Co-founder and Fundstrat strategist Tom Lee has repeated his prediction that Bitcoin (BTC) will reach $20,000 by mid-year and $25,000 by the end of the year. He also expects at least three publicly traded corporations to issue their own cryptocurrencies in 2018, writes CNBC, citing Lee’s Feb. 28 Fundstrat report.

Malaysian Central Bank: ID Now Needed For Any Crypto Exchange Transaction | Cointelegraph

A copy of the legislation and official press release from the Bank Negara Malaysia (BNM) states that any exchanges offering crypto-to-fiat, fiat-to-crypto and even crypto-to-crypto trading must “identify the customer and verify that customer’s identity.”

Meet the ‘Sovereign’: Marshall Islands Government to Issue Crypto Token – CoinDesk

“The purpose of this Act is to declare and issue a digital decentralized currency based on blockchain technology as legal tender of the Republic of Marshall Islands,” reads the bill, posted in the Sovereign’s official Telegram channel. The bill goes on to say that the currency will be issued by the nation’s Ministry of Finance and introduced via an initial coin offering (ICO).

Square: Murky Crypto Accounting Rules Pose Risk – CoinDesk

Square Inc. has identified another business risk for publicly traded companies that deal in cryptocurrencies: unclear accounting rules. “The accounting can be complex and subject to challenge or scrutiny. The final conclusions on the accounting treatment for our cryptocurrency transactions could affect the presentation of our results of operations.”

Jack Dorsey: Square Will Go Further With Bitcoin Than Buy/Sell Option | Cointelegraph

Dorsey, who is also the CEO of Twitter, specifically discussed the company’s Cash App, which now allows all users to buy and sell Bitcoin, telling Market Watch: “Bitcoin, for us, is not stopping at buying and selling. We do believe that this is a transformational technology for our industry, and we want to learn as quickly as possible.”

Bill Gates Says Crypto Has Caused Deaths in a Fairly Direct Way – Bitcoin News

“Right now crypto currencies are used for buying fentanyl and other drugs,” Gates wrote in a Reddit AMA, “so it is a rare technology that has caused deaths in a fairly direct way.”

Bitcoin ATMs Thriving in Michigan’s Most Populous City – Bitcoin News

Low-income areas in the city of Detroit are seeing a bunch of cryptocurrency-based automated teller machines (ATM). According to local reports, ATMs are popping up in great number in liquor stores, gas stations, and cash-checking locations. Cryptocurrency proponents in the area believe the Detroit crypto-ATMs help the underbanked within the region. Although, some law-enforcement officials believe some of the action may be helping facilitate illegal activities and money laundering.

Bitcoin-Futures Regulator Clears Employees to Trade Crypto Coins – Bloomberg

Under the Commodity Futures Trading Commission’s ethics guidance, workers can trade digital tokens as long as they don’t buy them on margin or have inside information gleaned from their jobs. Investing in the Bitcoin futures that the CFTC polices, however, is barred.

Chinese Entrepreneur Warns Against Mining and ICO Crackdowns

Angel investor and Founder of Chinese app Meitu, Cai Wensheng, has published criticisms of the central government’s expanding regulatory crackdown on cryptocurrencies via Wechat. Mr. Wensheng warns that heavy-handed regulatory policies may squander the opportunity for China to maintain a significant presence in the burgeoning global cryptocurrency sector, in addition to arguing that many of the challenges faced cryptocurrencies have are indicative of the typical “development process” experienced by emerging monetary forms.

Class Actions Mount as Coincheck Lingers Over Crypto Heist Refunds – CoinDesk

According to Japanese media outlet Sankei, an additional 132 investors have joined a class action suit filed with the Tokyo District Court on Feb. 27 that seeks a refund of about 228 million yen (around $2.1 million) in cryptocurrency. The new case again puts Coincheck in the spotlight once more, as the exchange has yet to disclose details of how it plans to compensate victims who saw some $530 million-worth of NEM tokens stolen from the exchange on Jan. 26.

JPMorgan Joins BofA in Quiet Warning: Crypto Could Disrupt Banks – Bloomberg

JPMorgan Chase & Co. just weighed in again on virtual currencies — very discreetly. Bank of America Corp. made a similar observation in a filing late last week. The warnings add to signs that traditional financial companies are taking Bitcoin’s innovations more seriously.

TOP

BLOCKCHAIN, FINTECH, DIGITAL PAYMENTS

Dubai To Release Blockchain-Based System To Track Vehicle Lifecycles | Cointelegraph

Dubai’s Roads and Transport Authority (RTA) has announced plans to launch a Blockchain-based vehicle lifecycle management system in 2020 that would provide customers which a history of their vehicle from “the manufacturer all the way to the scrap yard,” local news outlet Arabian Business reported yesterday, Feb. 27. The Blockchain project, formed in connection with the Dubai 10x initiative, would show a transparent record of where each vehicle is at any moment of its life cycle. The initiative plans to begin by covering all cars in Dubai before expanding to all cars in the United Arab Emirates (UAE).

UK Bank HSBC Might Soon Pilot Live Blockchain Payments – CoinDesk

International banking giant HSBC is reportedly close to testing blockchain in live transactions. Global Trade Review reports that the bank could launch several pilot programs based on existing proof-of-concept (PoC) projects in an effort to begin transitioning to live blockchain transactions. The move was announced during a private media call earlier this week.

TOP

FOREX, CARRY TRADES, EXCHANGE RATES

India’s Currency Falters—and So Does Investors’ Enthusiasm – MoneyBeat – WSJ

The rupee this month dropped 2.2% against the dollar, making it one of Asia’s worst-performing currencies so far in 2018. It had advanced 6.4% against the dollar last year, as investors chasing juicy returns poured money into the country’s financial markets. A broad-based rebound in the dollar hasn’t helped, with the U.S. currency on track to notch its first monthly advance since October. But several domestic factors have collided recently, prompting foreign investors to sell holdings of Indian stocks and bonds and dragging the rupee lower.

TOP

TRADE, PROTECTIONISM, REGULATION, OVERSIGHT

Exclusive: Public wants Big Tech regulated – Axios

A majority of Americans are now concerned that the government won’t do enough to regulate how U.S. technology companies operate, according to an Axios-SurveyMonkey poll. Across the board, concern about government inaction is up significantly — 15 percentage points — in the past three months.

Mnuchin Says Trump ‘Willing’ to Negotiate U.S. Return to TPP – Bloomberg

U.S. Treasury Secretary Steven Mnuchin said Tuesday he had “begun to have very high-level conversations” on the Trans-Pacific Partnership, and rejoining the regional trade pact is an option for President Donald Trump.

Trump Says U.S. Will Use All Tools to Pressure China on Trade – Bloomberg

President Donald Trump is warning the U.S. will use “all available tools” to prevent China’s state-driven economic model from undermining global competition, the latest warning to Beijing as America readies a host of trade actions.

White House expects ‘frank exchange’ on trade with Chinese official: source

Top aides to President Donald Trump look to push a tough line on trade in talks on Thursday with an envoy of Chinese President Xi Jinping, with a White House official saying a frank exchange of views was expected.

TOP

GUN CONTROL, MARIJUANA BOOM, PUBLIC POLICY

Trump: ‘Take the guns first, go through due process second’ | TheHill

President Trump on Wednesday voiced support for confiscating guns from certain individuals deemed to be dangerous, even if it violates due process rights.

Trump Stuns Lawmakers With Seeming Embrace of Gun Control – The New York Times

In a remarkable meeting, the president veered wildly from the N.R.A. playbook in front of giddy Democrats and stone-faced Republicans. He called for comprehensive gun control legislation that would expand background checks to weapons purchased at gun shows and on the internet, keep guns from mentally ill people, secure schools and restrict guns for some young adults. He even suggested a conversation on an assault weapons ban.

Trump says ‘bump stocks’ are gone, may use executive order to ban device – The Washington Post

Sitting with a group of Democrats and Republicans, including some who are backed by the NRA, Trump made what sounded like an extraordinary break with the powerful gun-rights organization. He accused lawmakers of being so “petrified” by the NRA that they have not been willing to take even small steps on gun control.

Wal-Mart raises age to buy guns and ammunition to age 21 – The New York Times

Walmart, the largest retailer in the United States, said Wednesday evening that it would stop selling guns and ammunition to anyone under 21 years of age and remove from its stores all toys and airsoft rifles that resemble assault-style weapons.

Dick’s Sporting Goods to stop selling assault-style rifles – FT

Edward Stack, the group’s chairman and chief executive, called on politicians “to enact common sense gun reform” and pass regulations banning assault-style weapons, raise the minimum age to purchase firearms to 21, ban high-capacity magazines and bump stocks and require universal background checks.

Georgia Teacher in Custody After Report of Shots At School – Bloomberg

A social studies teacher barricaded himself inside a classroom at a Georgia high school on Wednesday and fired a handgun in what may have been a warning shot, authorities said. It wasn’t immediately clear why the teacher, 53-year-old Jesse Randal Davidson, had the gun. Under questioning by detectives, he refused to discuss what led to the shooting.

TOP

TAXATION, WEALTH HAVENS, INEQUALITY

Treasury Unveils Tax Cut Calculator to Verify Withholding – Bloomberg

The U.S. Treasury Department unveiled an online calculator Wednesday to help Americans determine whether the amount of federal taxes being withheld from their pay is accurate under a new tax law. Democrats have asked for more information about the withholding tables and how the calculations are made.

TOP

RUSSIA MEDDLING, RUSSIA PROBE, TRUMP WORLD

Manafort Joined Trump as Ukraine Work Slowed, Cash Woes Rose – Bloomberg

Among the enduring curiosities of Donald Trump’s presidential run was his announcement that campaign chairman Paul Manafort was an unpaid volunteer. The special counsel, who is investigating whether the Trump campaign colluded with Russia in the 2016 election, may seek to determine whether Manafort sought to benefit in some way from his unpaid work.

Trump lashes out at Jeff Sessions over alleged surveillance abuses – The Washington Post

In a Twitter message that took some liberties with the facts, Trump wrote, “Why is A.G. Jeff Sessions asking the Inspector General to investigate potentially massive FISA abuse. Will take forever, has no prosecutorial power and already late with reports on Comey etc. Isn’t the I.G. an Obama guy? Why not use Justice Department lawyers? DISGRACEFUL!”

Sessions Defends Integrity After Trump Attack Over FISA Probe – Bloomberg

Trump accused the attorney general Wednesday of fumbling the investigation by leaving it to an independent inspector general. Sessions, who has been the subject of periodic attacks by Trump and repeated rumors that he’s on the verge of dismissal, responded with a statement defending himself and the Justice Department.

Hope Hicks Will Resign as White House Communications Director – Bloomberg

Hope Hicks, one of President Donald Trump’s longest serving advisers and closest aides, will resign, the White House said a day after she testified to congressional investigators probing Russia’s meddling in the 2016 election.

Jared Kushner’s Security Clearance Downgraded – The New York Times

The president’s adviser and son-in-law lost his top-secret clearance, a White House official and another person familiar with Mr. Kushner’s situation said.

Kushner’s Business Got Loans From Companies After White House Meetings – The New York Times

It was one of the largest loans Kushner Companies received last year. There is little precedent for a top White House official meeting with executives of companies as they contemplate sizable loans to his business, say government ethics experts.

Jared Kushner’s Ties to Banks Under Scrutiny – WSJ

The New York State of Department of Financial Services asked several banks for information about their relationships with Jared Kushner and his finances, people familiar with the information requests said.

More Than 30 White House Aides Lose Top Secret Clearance, Sources Say – Bloomberg

More than 30 aides to President Donald Trump have been stripped of access to top secret intelligence, two people familiar with the move said. The officials have been notified that they will be downgraded to lower-level “secret” interim security clearances, said the two people. None of the officials has been asked to leave the administration and their portfolios on top secret matters will be distributed to other staff members, they said.

TOP

INFLATION, RATES, DEBT AND CREDIT, BALANCE SHEETS

Why International Investors Aren’t Buying U.S. Debt – WSJ

Last year, buying Treasurys and swapping the proceeds back into euros provided European investors with a higher return than buying German sovereign bonds. Now, hedging costs have increased so much that this trade is no longer profitable. That could sap an important source of demand for U.S. Treasurys. It’s also making it more expensive for foreign investors to buy U.S. corporate debt.

Overdue US credit card debt hits 7-year high at $11.9bn – FT

Overdue US credit card debt has reached a seven-year high, underlining the difficulties faced by many consumers in spite of the strong performance of the economy. Banking sector data show consumers were at least three months behind repayments or considered otherwise distressed on $11.9bn of credit card debt at the turn of the year, a rise of 11.5 per cent during the fourth quarter. More Americans are also falling behind on their mortgages, for which problematic debt levels rose 5.2 per cent over the same period to $56.7bn.

Higher hedging costs take shine off US corporate debt – FT

Some of the biggest international buyers of US corporate debt are showing signs of stepping back from this $8.8tn market, reflecting expectations of a bigger shift under way: the retreat of central banks from the era of easy money. International investors were net sellers of US corporate paper in December, only the second time this has occurred in the past three years as the rising cost of insulating their portfolios against swings in the dollar erodes the attraction of high US bond yields.

18H01 - INTL INVESTORS BONDS

Collapse in Asia’s Favored Bond Market Drives Biggest Bank Away – Bloomberg

India’s 10-year bonds dropped for a seventh month in February, the longest-losing streak in data compiled by Bloomberg starting in November 1998. Government-run lenders such as State Bank of India, Punjab National Bank and Bank of Baroda, are the biggest holders of the securities and have been net sellers as a group this year.

Era of the Holdout Is Pushing Up the Cost of Sovereign Default – Bloomberg

In defaults of yesteryear, countries could bank on immunity as they reneged their obligations in peace. These days they’re ending up in costly legal quagmire like never before, according to a working paper published by the European Central Bank on Wednesday. The trend is strengthening the power of creditors, especially hedge funds, and significantly raising the cost of default for debtors, the paper found.

Summers Warns Next U.S. Recession Could Outlast Previous One – Bloomberg

The next U.S. recession could drag on longer than the last one that stretched 18 months. That’s the assessment of former Treasury Secretary Larry Summers. “…in the next few years a recession will come and we will in a sense have already shot the monetary and fiscal policy cannons, and that suggests the next recession might be more protracted,” he said during a panel with Bloomberg Television’s Erik Schatzker on Wednesday.

TOP

MACRO OP-EDS, INSIGHT, EVENTS AND TRENDS

Xi Sets China on a Collision Course With History – The New York Times

China kept a half-century of global democratic growth at bay by at least nodding to the importance of institutions and rules. Now what? China’s Communist Party has been vigorous in suppressing dissent and crushing potential challenges. When the Communist Party announced this week that it would end presidential term limits, allowing Xi Jinping to hold office indefinitely, it shattered past norms. It may also have accelerated what many scholars believe is China’s collision course with the forces of history it has so long managed to evade.

As Xi Tightens His Grip on China, U.S. Sees Conflict Ahead – The New York Times

Gone is a widespread agreement among diplomats, scholars and businesspeople that China is gradually converging with the United States and, therefore, that Americans should work to manage any flare-ups between the two countries. With China now unabashedly charting its own course — one that diverges rather than converges with the liberal democracies and market economies of the West — conflict, many say, is inevitable.

All the Ways Regulators Plan to Tame Bitcoin – Bloomberg

It took one of the wildest investment manias in history to jolt them into action, but governments around the world are finally starting to regulate cryptocurrencies. Their approaches have run the gamut, from a massive crackdown in China to an exchange-licensing regime in Japan and a largely hands-off system in Switzerland. Some countries, most notably the U.S., have yet to formulate a comprehensive strategy. But on the whole, oversight is increasing. How the rules evolve will help determine whether last year’s cryptocurrency boom was a flash in the pan, or the start of something bigger.

Dealmakers Cast Cautious Optimism While Eyeing Buyout Boom – Bloomberg

Private equity investors are weighing a tricky mix: high asset valuations, record levels of idle cash and an equity bull run some consider overdue for a downturn. While top dealmakers gathered in Berlin this week had plenty of words of caution, they show few signs of slowing down. Should dealmaking pick up in 2018, it could be years before the industry sees the outcome of those decisions. Whether business growth and operating improvements can overcome the expensive purchase prices is a key question for dealmakers and their investors.

Corporate America Is Suppressing Wages for Many Workers – The New York Times

The culprit is “monopsony power.” This term is used by economists to refer to the ability of an employer to suppress wages below the efficient or perfectly competitive level of compensation. It turns out that many corporations possess bargaining power over their workers, not just over their consumers. Their workers accept low wages and substandard working conditions because few alternative job opportunities exist for them or because switching jobs is costly.

Chinese workers build railway station in just nine hours | The Independent

A train station was built in just nine hours by 1,500 workers in China. Organised with military precision, the project which reportedly took place over the weekend, was completed in the southern Fujian Province. Seven trains and 23 diggers were used in the huge construction project at the Nanlong Railway Station in the south China city of Longyan, the Xianhua News Agency reported.

Why Italian Elections Matter: A New Type of Populism Is Rising – WSJ

Populist groups in Europe in recent years have thrived on rising anger about immigration and the European Union. 5 Star represents a uniquely Italian strain, being overwhelmingly a revolt against Italy’s entrenched political class. The rest of its program is eclectic, borrowing from left, right and technological utopianism. It has centrist views on immigration, and while it was once in favor of Italy’s exit from the eurozone, its leaders say it is no longer time to leave the common currency.

The Alt-right is recruiting depressed people | The Outline

Type “depression” or “depressed” into YouTube and it won’t be long until you stumble upon a suit-clad white supremacist giving a lecture on self-empowerment. They’re everywhere. For years, members of the alt-right have taken advantage of the internet’s most vulnerable, turning their fear and self-loathing into vitriolic extremism, and thanks to the movement’s recent galvanization, they’re only growing stronger.

People in Sweden Now at Risk of Losing Access to Notes – Bloomberg

People living in the world’s most cashless society may soon lose their access to notes and coins. To avoid that extreme scenario, Swedish cash-handling provider Loomis AB wants authorities to force banks and retailers to continue accepting cash. The warning follows similar calls from the Swedish central bank, which is worried that the rapid disappearance of cash will ultimately lead to the disintegration of the infrastructure needed to use notes and coins and undermine its task to promote a safe and efficient payment system.

Flying Taxis May Be Years Away, but the Groundwork Is Accelerating – The New York Times

Whatever you imagine a flying car to be — stop. What these companies envision is something like a helicopter but much quieter and more affordable. Think of a hobbyist’s drone, but big enough to fit people. It would, in theory, be welcome in urban environments and affordable to more than well-heeled businesspeople. At least, that’s the dream. Before there can be too much enthusiasm for these flying taxi services, it’s worth noting that self-driving cars have yet to turn into a notable business for anyone, despite about a decade of research at tech giants like Google and billions in investment from Silicon Valley and the auto industry.

Paul Allen Wants to Teach Machines Common Sense – The New York Times

Digital assistants like Amazon’s Alexa do a pretty good job of recognizing human speech, but stumble over anything more than basic commands and questions. A.I. “recognizes objects, but can’t explain what it sees. It can’t read a textbook and understand the questions in the back of the book,” said Oren Etzioni, a former University of Washington professor who oversees the Allen Institute for Artificial Intelligence. “It is devoid of common sense.” Success may require years or even decades of work — if it comes at all. Others have tried to digitize common sense, and the task has always proved too large.

Permian’s Mammoth Cubes Herald Supersized Future for Shale – Bloomberg

Encana Corp.’s RAB Davidson well pad is so mammoth, the explorer speaks of it in military terms, describing its efforts here as an occupation. More than 1 million pounds of drilling rigs, bulldozers, tanker trucks and other equipment spread out over a dusty 16-acre expanse. As of November, the 19 wells here collectively pumped almost 20,000 barrels of crude per day, according to company reports. Encana calls this “cube development,” and it may be the supersized future of U.S. fracking, says Gabriel Daoud, a JPMorgan Chase & Co. analyst who visited Davidson last year. The technique is designed to tap the multiple layers of petroleum-soaked rock here in Texas’ Permian shale basin all at once, rather than the one-or-two-well, one-layer-at-a-time approach of the past.

TOP

CENTRAL BANKS & MONETARY POLICY

“Avoiding An Overheated Economy” | Tim Duy’s Fed Watch

Federal Reserve Chairman Jerome Powell delivered the Fed’s Semiannual Monetary Policy Report Tuesday morning. Powell smoothly and confidently responded to – or deflected – questions as if he were already seasoned in the role of Chair. As to the content of his remarks, they were hawkish. More hawkish than I anticipated and arguably signaled a significant change of focus for the Fed.

Here’s What We Learned From Powell’s First Fed Chair Testimony – Bloomberg

Federal Reserve Chairman Jerome Powell appeared Tuesday before the House Financial Services Committee, his first testimony since he took charge earlier this month. He moved markets with his upbeat economic assessment, and also dropped some hints about how his views and style might differ from his predecessor, Janet Yellen.

Jay Powell jolts markets with reminder he is no academic – FT

Having a Fed chairman who understands the market, as many have put it, could be a double-edged sword. Mr Powell may be inclined, unlike an academic economist, to put an end to market nonsense earlier, and not be cowed by predictions of doom from the banks. On this view, worries about inflation may miss the point. The Powell Fed may wish to avoid becoming boxed in like the Greenspan Fed did when it prompted serious ructions in the fixed-interest market in 1994 (having arguably allowed speculation to go on too long) or when it felt obliged to bail out LTCM and the markets in 1998.

How Low Can Unemployment Really Go? Economists Have No Idea – The New York Times

“It’s not a terribly useful tool right now,” said Alan Blinder, a Princeton economist and former vice chairman of the Federal Reserve. “For it to be useful you have to have at least a little confidence you know the number. You don’t need to know it to two decimal places, but within a reasonable range. If your range is 2.5 to 7, that doesn’t tell you anything.”

18H01 - NAIRU VS EMP

TOP

USA ECONOMY DATA, CITIES AND STATES

U.S. Consumer Confidence Reaches Highest Level Since 2000 – WSJ

U.S. consumer confidence rose to its highest level since 2000 in February, showing Americans shrugged off financial market gyrations earlier in the month. ”Despite the recent stock market volatility, consumers expressed greater optimism about short-term prospects for business and labor market conditions, as well as their financial prospects.” said Lynn Franco, director of economic indicators at the Conference Board.

18H01 - CONSUMER CONF 2

U.S. Pending Home Sales Gauge Falls to Lowest Since 2014 – Bloomberg

A gauge of contracts to purchase previously-owned U.S. homes unexpectedly declined in January to a more than three-year low, reflecting a shortage of inventories and rising mortgage rates, according to data released Wednesday from the National Association of Realtors in Washington.

Pending home sales drop 4.7 percent to lowest point in nearly 4 years – CNBC

Pending home sales, which measure signed contracts, not closings, fell 4.7 percent in January compared with December, according to the National Association of Realtors. It is the lowest point in nearly four years. The weakness was nationwide, and December’s reading was also revised lower. Pending sales, which are an indicator of future closings, were 3.8 percent lower than January 2017.

TOP

GLOBAL ECONOMY, INTERNATIONAL

China manufacturing gauge suffers sharpest fall in 6 years – FT

China’s official gauge of manufacturing activity suffered its largest fall since 2011 in February, an unexpectedly sharp slowdown that left it near the zero-growth level. The manufacturing purchasing managers’ index published by China’s National Bureau of Statistics on Wednesday dropped to 50.3, down a point from January and the largest fall in more than six years. The fall marked the gauge’s nearest brush with the 50-point mark that separates growth from contraction since August 2016. The figure was stark enough to unnerve European-listed mining stocks, which depend upon China for a significant part of their revenues.

India’s Quarterly GDP Increases 7.2% – WSJ

India’s economy grew at its fastest pace in more than a year last quarter, regaining the top spot from China of the world’s fastest-growing major economies. Asia’s third-largest economy grew 7.2% in the three months through December compared with a year earlier, government data show. The figure raised hope that the disruptions from dramatic policy moves by Prime Minister Narendra Modi last year may have faded.

India regains title of world’s fastest-growing major economy – FT

The new figures came on the same day Beijing announced that last month its official gauge of manufacturing activity suffered its largest fall in seven years, a reflection of an economy that analyst believe is set to slow this year as the government focuses on mitigating financial risks. Although China’s economic growth accelerated to 6.9 per cent last year, several signs of slowing momentum have started to emerge, led by a fall in property sales and prices in many large cities in January. The manufacturing index showed small and medium-sized enterprises particularly hard hit.

Energy Slump Is Still Holding Back Canada’s Investment Plans – Bloomberg

Business investment has been one of the weak spots in a broad Canadian economic expansion, with growth being led more by government and consumer spending. Bank of Canada policy makers have said a shift to an expansion led by business is important to create a durable recovery. “Forget about Canadian businesses opening their wallets this year,” Avery Shenfeld, chief economist at Canadian Imperial Bank of Commerce in Toronto, wrote in a research note.

TOP

POSITIONING, INFLECTION, MARKET CALLS

S&P 500 Hits Tech-Heavy Milestone Last Seen With Dot-Com Bubble – Bloomberg

“It’s the first time the sector has made up at least a quarter of the S&P since a one-year period that ran from Thanksgiving 1999 through Thanksgiving 2000,” according to analysts at Bespoke Investment Group. “Notably, the weighting only got above 25 percent for the final four months of the dot-com bubble when share prices were going insane.”

Stocks Sink Into Worst Monthly Decline Since 2016: Markets Wrap – Bloomberg

The S&P 500 Index dropped more than 1 percent, ending February with a decline of 3.9 percent in one of the wildest months in years. After a torrid January, the stock market sank into a recession a week later, only to claw back half of the rout just as quickly. Trading was heavier than normal Wednesday, with shares swinging between gains and losses for much of the day.

Big Short’s Eisman Says U.S. Bank Outlook Is Best Since 1990s – Bloomberg

“I have not been this positive on banks since the 1990s,” Eisman said in an interview with Bloomberg Television, citing higher interest rates and deregulation. U.S. banks “were forced to clean their balance sheets rapidly and bring leverage down rapidly,” he said. “The Europeans are taking a much slower — I think wrong — attitude, and are still constrained by leverage and will be for years.”

Short Interest in High-Yield ETFs Hits Record – Bloomberg

Short interest as a percentage of shares outstanding on the $15 billion iShares iBoxx $ High Yield Corporate Bond ETF, ticker HYG, hit an all-time high of 29 percent Monday, Markit data show. Add elevated shorts on the SPDR Bloomberg Barclays High Yield Bond ETF, ticker JNK, in concert with a European counterpart, and bearish sentiment has piled up even as junk-bond spreads recover from the selloff earlier this month.

TOP

COLOR, EARNINGS, SENTIMENT, VALUATIONS

Lowe’s Reports Big Miss in Fourth Quarter – Bloomberg

Lowe’s Cos., the second-largest U.S. home-improvement chain, reported fourth-quarter earnings that missed analysts’ estimates by 15 percent. That’s the biggest miss the company has ever recorded, according to data compiled by Bloomberg. Shares fell after the release and are down about 3 percent on the year.

Netflix Climbs 50% in Two Months and Now Outruns Price Targets – Bloomberg

There’s Netflix Inc., and then there’s everyone else in 2018. The stock is up more than 50 percent through the first two months of the year after shattering subscription-growth expectations. That jump easily makes it the best performer among the so-called FAANG’s this year. Amazon Inc. is in the rear-view mirror with a mere 30 percent return.

William Ackman’s Pershing Square Buys Stake in United Technologies – WSJ

Analysts and investors have long speculated whether an activist was involved with United Technologies, a company that could be a prime target because of its distinct brands under a common corporate umbrella. The Farmington, Conn.-based company owns one of the world’s biggest jet-engine makers, Pratt & Whitney, along with Otis elevators and Carrier air conditioners.

Gassner Becomes Silicon Valley’s Latest Billionaire on Veeva Pop – Bloomberg

Peter Gassner has become Silicon Valley’s latest billionaire as shares of his Veeva Systems Inc. hit a record Wednesday after the cloud-software provider posted profit and sales that topped Wall Street estimates.

TOP

CREDIT, YIELD, BUYBACKS, CORPORATES

Teva Selling $3.5 Billion of Junk Bonds to Refinance Debt – Bloomberg

The drugmaker will have to bear higher interest costs to push out maturities as a massive debt load and weakening sales of a top product have cost it its investment-grade ratings. Teva is selling 1 billion euros ($1.22 billion) and $2.25 billion of debt, it said in a statement Wednesday. The European offering will include maturities of four and seven years, according to people with knowledge of the matter.

TOP

DEALS, MERGERS, IPOs, LBOs, RESTRUCTURINGS

Geely Used $9 Billion-Collar Trade on Daimler Purchase – Bloomberg

Chinese billionaire Li Shufu’s Geely Group structured the purchase of its 7.3 billion-euro ($9 billion) stake in Daimler AG through complex derivative transactions that allowed the buyer to build a large equity holding while limiting the risks, people with knowledge of the matter said.

Is Chinese state behind Geely’s Daimler swoop? – FT

The rapid pace of Geely’s acquisitions comes as other Chinese industrial groups have been told to unwind exposure to sectors such as real estate, entertainment and sports. Yet Geely has faced no such constraints from the Chinese government, spending more than $10bn in foreign M&A deals in the past three months alone. The sheer number of deals — and the company’s vagueness about its funding for the deal — has raised questions about whether it is acting entirely on its own. “The most plausible explanation is a China Inc deal,” says a research note from Bernstein in Hong Kong.

Spotify Kicks Off Its Unusual IPO – WSJ

The filing showed that the company’s revenue is growing sharply but its losses are ballooning. It posted €4.1 billion ($5.02 billion) of revenue in 2017, up nearly 39% from the prior year. The company, which has yet to turn a profit, posted a loss of €1.24 billion in 2017, wider than losses of €539 million in the prior year and €230 million in 2015.

TOP

HEDGE FUNDS, PRIVATE EQUITY, MONEY MGMT

Investors Are Paying $1,300 Per Hour for ‘Expert’ Chats – Bloomberg

They may be cutting research budgets, but European investors are more willing than ever to dole out up to $1,300 an hour to talk to someone who can give them an edge. Now that banks have stopped giving equity research for free under a new European Union law, some money managers are opting instead to spend their cash speaking with experts in fields as trendy as artificial intelligence or as niche as sausage packaging.

Bill Ackman Gives Up Herbalife Fight, Ending Five-Year Saga – Bloomberg

One of the longest and most colorful battles in Wall Street history is over, and Bill Ackman lost. Ackman has almost entirely exited his position in Herbalife Ltd., ending a short-selling campaign that lasted more than five years, according to a person familiar with the matter. The move follows a steady rise in the shares of a company that he repeatedly called an illegal pyramid scheme and vowed to destroy.

TOP

ENERGY CRUDE OIL, OIL SANDS, SHALE

Shale Surge Sent U.S. Oil Production to Record High in November – Bloomberg

Once the world’s largest importer of crude, the U.S. is passing Saudi Arabia and closing in on Russia to become the world’s largest producer. Oil prices above $60 a barrel have lured companies to ramp up production. Oil and gas exploration last year was a money-maker for the first time in more than a decade, according to Wood Mackenzie Ltd. As a result, drillers in the U.S. are using the most oil rigs since 2015.

18H01 - US SHALE PROD

TOP

COMMODITIES AGRICULTURE & SOFTS

The Worst Drought in 30 Years Adds to Argentina’s Economic Woes – Bloomberg

Argentine President Mauricio Macri was banking on a near-record soybean crop to drive economic growth of 3.5 percent this year and extend the nation’s recovery. Instead, this year’s drought, on course to be the worst in 30 years, has farmers bracing for the poorest harvest since 2009. It’s an unwanted surprise for a government with a daunting list of tasks that already includes taming inflation, closing the fiscal gap and boosting exports.

TOP

BREXIT, SCOXIT, LONDON, UK ECONOMY

Theresa May attacks Brussels Brexit draft as threat to UK integrity – FT

Theresa May said that no UK prime minister could “ever” accept new EU proposals that could keep Northern Ireland under the bloc’s rules, as she hit out at Brussels’ first draft of a Brexit treaty. Mrs May’s comments underline the scale of her dilemma, as her government seeks to reach a final agreement on the divorce terms, negotiate a transition deal with the EU and set out proposals for future ties — while taking account of Brussels’ demands, opposition from Eurosceptic Conservative MPs and the lack of a parliamentary majority.

Brexit withdrawal text: What it says and what it means – POLITICO

The 118-page document includes 168 articles. Text highlighted in gray reflects points that the EU says it has already agreed with the U.K. during Phase 1 of the talks, while the plain text reflects the EU’s preferred outcomes. None of it should come as any surprise to London, the bloc’s chief negotiator, Michel Barnier, said.

TOP

GEOPOLITICS, CRIME, TERRORISM

Amid Turkish Assault, Kurdish Forces Are Drawn Away From U.S. Fight With ISIS – The New York Times

The United States-led campaign to hunt down the last pockets of Islamic State militants in Syria has lost its most effective battleground partner in what American military officials fear will stall a critical phase of the offensive and leave open the door for hundreds of foreign fighters to escape. Thousands of Kurdish fighters and commanders who make up the backbone of the Syrian Democratic Forces in recent weeks have diverted to defend Afrin, in Syria’s northwest, where other Kurdish militia are facing sharp attacks from Turkish troops.

TOP

PROPAGANDA, CORRUPTION, AUTHORITARIANISM

China Stifles Critics of Plan to Extend Xi Jinping’s Reign – WSJ

China has launched a broad effort to silence critics of a proposal that would allow President Xi Jinping to extend his reign indefinitely, as Beijing seeks to break decades of political precedent with minimal domestic uproar. Beijing has mobilized multiple arms of the government to suppress criticism of the Communist Party proposal to remove presidential term limits—expected to be approved at an annual parliamentary session that kicks off Monday—with lawyers threatened with disbarment, police visits to critics and online censorship.

Turkey’s Erdogan wants to make adultery a crime – The Washington Post

Erdogan’s Justice and Development Party, or AKP, had tried to make adultery illegal in 2004 (it had been officially criminalized from 1926 to 1996), but the proposal was scrapped after it sparked a battle with the European Union and threatened talks about Turkey’s bid to join the union. Those talks have all but collapsed since a 2016 coup attempt against Erdogan and his subsequent crackdowns and purges of perceived enemies.

TOP

AUTOS, ELECTRIC, SELF-DRIVING

Waymo Says Its Autonomous Vehicles Logged Five Million Test Miles – Bloomberg

Waymo’s autonomous vehicles have now logged 5 million test miles, and it wants more of the world to experience that progress — at least virtually. Alphabet Inc.’s car unit disclosed the new milestone on Wednesday, along with a promotional push to educate the general public on the nascent technology. Waymo created a 360-degree video of a self-driving ride, culled from footage of its test fleet in Phoenix.

TOP

The Mercenary Trader Macro Links were created by Justice “Jack” Litle, aka Justice Litle / Jack Litle — the founder of Mercenary Trader — to provide a compact summary of daily information flows. They are accessed via the Mercenary Research Suite, the flagship offering of Mercenary Trader, which combines trading education and trading research. To see how it works, click here.



MEMBER UPDATES HOME
Recent updates and the latest member content.
>> CLICK HERE to access <<

SIR ARCHIVE
The Strategic Intelligence Report, containing the Intermarket View, Macro View, Tactical View and portfolio.
>> CLICK HERE to access <<

MACRO LINKS ARCHIVE
A daily curated, clickable summary of news, data, insights and opinion across the market spectrum.
>> CLICK HERE to access <<

ANALYSIS ARCHIVE
Analysis write-ups, concise and chart-driven, with updates on new setups and position adjustments.
>> CLICK HERE to access <<

METHODOLOGY ARCHIVE
Ongoing tutorials and explanatory materials in respect to pyramiding, position sizing, portfolio management, and more.
>> CLICK HERE to access <<

PSYCHOLOGY ARCHIVE
Ongoing research and insights into personal psychology, crowd psychology, sentiment, behavioral analysis and more.
>> CLICK HERE to access <<

PRODUCTIVITY ARCHIVE
Ideas, insights and research into more efficient use of time, energy and mental focus for enhanced personal performance.
>> CLICK HERE to access <<

METAPROCESS ARCHIVE
Our proprietary toolset for cultivating superhuman performance via behavior adjustments and mental modeling.
>> CLICK HERE to access <<

THEORY + MODELS ARCHIVE
Ideas, concepts and areas of exploration to better understand markets, probability, human behavior, finance and more.
>> CLICK HERE to access <<

SPECIAL REPORTS ARCHIVE
An evolving look into specific market areas — e.g. a country, currency, commodity, industry, company, technology or trend.
>> CLICK HERE to access <<

PREMIUM REPORTS ARCHIVE
Unique and one-off collections of trading resources, interviews with top traders, deep dive topical investigations, and more.
>> CLICK HERE to access <<