Oil seen opening up after Iran's attack on Israel, but further gains may depend on response

 Oil prices are expected to rise on Monday after Iran's attack on Israel over the weekend, analysts said on Sunday, but further gains may depend on how Israel and the West choose to retaliate.

Iran launched explosive drones and missiles at Israel late on Saturday in retaliation for a suspected Israeli attack on its consulate in Syria on April 1, a first direct attack on Israeli territory that has stoked fears a wider regional conflict.

Concern of a response from Iran to the strike on its embassy compound in Damascus supported oil last week and helped send global benchmark Brent crude on Friday to $92.18 a barrel, the highest since October.

It settled that day up 71 cents at $90.45, while U.S. West Texas Intermediate crude futures rose 64 cents to $85.66. Trading is closed on Sunday.

"It is only reasonable to expect stronger prices when trading resumes," said Tamas Varga of oil broker PVM. "Having said that, there has been no impact on production so far and Iran has said that 'the matter can be deemed concluded'.

"However fierce and painful the initial market reaction will be, the rally could prove to be short-lived unless supply from the region is materially disrupted."

U.S. President Joe Biden said he would convene a meeting of leaders of the Group of Seven major economies on Sunday to coordinate a diplomatic response to the Iranian attack.

"Oil prices might spike at the opening as this is the first time Iran has struck Israel from its territory," said UBS analyst Giovanni Staunovo.

"How long any bounce will last will... depend on the Israeli response," Staunovo added. "Also today's G7 virtual meeting needs to be monitored, with an eye on if they target or not Iranian crude exports."

Iran has steeply raised oil exports - its main sources of revenue - under the Joe Biden administration. Exports were severely reduced under Biden's predecessor Donald Trump, who will face Biden in a presidential election rematch in November.

The Biden administration has argued it is not encouraging Iran to raise exports and is enforcing sanctions.

Lower Iranian exports would lead to a further rise in oil prices and the cost of gasoline in the U.S., a politically sensitive subject ahead of the elections.

Another factor to watch will be any impact on shipping through the Strait of Hormuz, through which about a fifth of the volume of the world's total oil consumption passes daily.

The commander of Iran's Revolutionary Guard's navy said on Tuesday Tehran could close the strait if deemed necessary, and earlier on Saturday, Iran's state-run IRNA news agency reported a Guards helicopter had boarded and taken into Iranian waters a vessel, the Portuguese-flagged MSC Aries.

"Crude prices already included a risk premium, and the extent to which it will widen further almost exclusively depends on developments near Iran around the Strait of Hormuz," said Ole Hansen at Saxo Bank.

https://www.marketscreener.com/quote/stock/BAKER-HUGHES-COMPANY-40311111/news/Oil-seen-opening-up-after-Iran-s-attack-on-Israel-but-further-gains-may-depend-on-response-46430950/

De-risking, seeking safety as Middle East tensions rise

 A look at the day ahead in Asian markets.

Asian markets are set to open on the defensive on Monday, with heightened tensions in the Middle East spurring strong demand for safe-haven assets like the dollar, gold and U.S. Treasuries at the expense of stocks and local currencies.

Investor sentiment was already veering towards the negative following the U.S. bank earnings-driven equity market slump on Friday - JP Morgan shares had their biggest fall in almost four years and world stocks lost the most in six months.

U.S. stock futures are pointing to another steep decline at the open on Monday, so it's likely Asian bourses will follow suit. Oil prices, which hit a six-month high on Friday, are likely to make further gains on Monday.

In such a febrile environment local Asian economic indicators and events are likely to take a back seat. Monday's calendar is pretty light, with only Indian trade and wholesale price inflation data, and Japanese machinery orders on tap.

China's first-quarter GDP on Tuesday and Japanese consumer price inflation figures on Friday are the two economic indicators from Asia that could most move local markets this week.

But for Monday at least, investors will be focused on reducing risk and playing it safe, and in that regard, there could be some big movement in the Japanese yen.

The yen is traditionally seen as a 'safe-haven' asset that does well in times of heightened risk aversion, boosted by large repatriation flows from Japanese investors and short covering from currency traders using the yen to fund carry trades.

And there is a large short position to cover - the yen is at a 34-year low below 153.00 per dollar and the latest U.S. futures market data show hedge funds' net short yen position is the biggest in 17 years.

To the surprise of many, Japanese authorities have not yet intervened to stop the rot, despite the near-daily warnings from officials that "excessive volatility is undesirable" and that Tokyo stands ready to respond to sharp currency swings.

Perhaps Tokyo has not yet intervened because the yen's slide is fully justified on "fundamental" grounds - U.S. yields and implied rates are rising faster than their Japanese equivalents because U.S. growth and inflation rates are higher than Japan's.

The strong dollar and recent spike up in U.S. bond yields, however, pose potentially significant problems for Asia. They represent a tightening of financial conditions and make servicing dollar-denominated debt more expensive.

A sharp fall in Treasury yields as investors scramble to reduce risk in their portfolios due to intensifying geopolitical tensions is unlikely to offer much comfort.

Here are key developments that could provide more direction to markets on Monday:

- India trade (March)

- India wholesale price inflation (March)

- Japan machinery orders (February)

https://www.marketscreener.com/news/latest/MORNING-BID-ASIA-De-risking-seeking-safety-as-Middle-East-tensions-rise-46431289/

'When Facebook blocks news, studies show the political risks that follow'

 Since Meta blocked links to news in Canada last August to avoid paying fees to media companies, right-wing meme producer Jeff Ballingall says he has seen a surge in clicks for his Canada Proud Facebook page.

"Our numbers are growing and we're reaching more and more people every day," said Ballingall, who publishes up to 10 posts a day and has some 540,000 followers.

"Media is just going to get more tribal and more niche," he added. "This is just igniting it further."

Canada has become ground zero for Facebook's battle with governments that have enacted or are considering laws that force internet giants - primarily the social media platform's owner Meta and Alphabet's Google - to pay media companies for links to news published on their platforms.

Facebook has blocked news sharing in Canada rather than pay, saying news holds no economic value to its business.

It is seen as likely to take a similar step in Australia should Canberra try to enforce its 2021 content licencing law after Facebook said it would not extend the deals it has with news publishers there. Facebook briefly blocked news in Australia ahead of the law.

The blocking of news links has led to profound and disturbing changes in the way Canadian Facebook users engage with information about politics, two unpublished studies shared with Reuters found.

"The news being talked about in political groups is being replaced by memes," said Taylor Owen, founding director of McGill University's Centre for Media, Technology and Democracy, who worked on one of the studies.

"The ambient presence of journalism and true information in our feeds, the signals of reliability that were there, that's gone."

The lack of news on the platform and increased user engagement with opinion and non-verified content has the potential to undermine political discourse, particularly in election years, the studies' researchers say. Both Canada and Australia go to the polls in 2025.

Other jurisdictions including California and Britain are also considering legislation to force internet giants to pay for news content. Indonesia introduced a similar law this year.

BLOCKED

In practice, Meta's decision means that when someone makes a post with a link to a news article, Canadians will see a box with the message: "In response to Canadian government legislation, news content can't be shared."

Where once news posts on Facebook garnered between 5 million and 8 million views from Canadians per day, that has disappeared, according to the Media Ecosystem Observatory, a McGill University and University of Toronto project.

Although engagement with political influencer accounts such as partisan commentators, academics and media professionals was unchanged, reactions to image-based posts in Canadian political Facebook groups tripled to match the previous engagement with news posts, the study also found.

The research analysed some 40,000 posts and compared user activity before and after the blocking of news links on the pages of some 1,000 news publishers, 185 political influencers and 600 political groups.

A Meta spokesperson said the research confirmed the company's view that people still come "to Facebook and Instagram even without news on the platform."

Canadians can still access "authoritative information from a range of sources" on Facebook and the company's fact-checking process was "committed to stopping the spread of misinformation on our services", the spokesperson said.

A separate NewsGuard study conducted for Reuters found that likes, comments and shares of what it categorised as "unreliable" sources climbed to 6.9% in Canada in the 90 days after the ban, compared to 2.2% in the 90 days before.

"This is especially troubling," said Gordon Crovitz, co-chief executive of New York-based NewsGuard, a fact-checking company which scores websites for accuracy.

Crovitz noted the change has come at a time when "we see a sharp uptick in the number of AI-generated news sites publishing false claims and growing numbers of faked audio, images and videos, including from hostile governments ... intended to influence elections."

Canadian Heritage Minister Pascale St-Onge in an emailed statement to Reuters called Meta's blocking of news an "unfortunate and reckless choice" that had left "disinformation and misinformation to spread on their platform ... during need-to-know situations like wildfires, emergencies, local elections and other critical times".

Asked about the studies, Australian Assistant Treasurer Stephen Jones said via email: "Access to trusted, quality content is important for Australians, and it is in Meta's own interest to support this content on its platforms."

Jones, who will decide whether to hire an arbitrator to set Facebook's media licencing arrangements, said the government had made clear its position to Meta that Australian news media businesses should be "fairly remunerated for news content used on digital platforms."

Meta declined to comment on future business decisions in Australia but said it would continue engaging with the government.

Facebook remains the most popular social media platform for current affairs content, studies show, even though it has been declining as a news source for years amid an exodus of younger users to rivals and Meta's strategy of de-prioritising politics in user feeds.

In Canada, where four-fifths of the population is on Facebook, 51% obtained news on the platform in 2023, the Media Ecosystem Observatory said.

Two-thirds of Australians are on Facebook and 32% used the platform for news last year, the University of Canberra said.

Unlike Facebook, Google has not indicated any changes to its deals with news publishers in Australia and reached a deal with the Canadian government to make payments to a fund that will support media outlets.

https://www.marketscreener.com/quote/stock/META-PLATFORMS-INC-10547141/news/When-Facebook-blocks-news-studies-show-the-political-risks-that-follow-46431265/

Broad Selling After A Broad Advance: What Happens Next?

 On Friday, we saw something unusual.  After the day's steep drop, we finished the day with fewer than 10% of SPX stocks closing above their 3, 5, and 10-day moving averages.  At the same time, by Friday's close, we still saw more than 50% of those shares trading above their 100 and 200-day averages.  Since July of 2006, when I first began collecting these data (over 4400 days), this set of conditions has only occurred 20 times.  In other words, it's been unusual to get a broad short-term decline following a broad longer-term advance. 

While 20 instances is not enough for a robust statistical analysis, I do find it noteworthy that 18 of the occurrences finished higher 20 days later for an average gain of +2.66%, substantially above the average for the entire sample.  

I've found that such historical queries are useful tools for framing market hypotheses.  If I see evidence of buying going forward and then see that we cannot make fresh lows on subsequent selling pressure, the chances are good that I'll participate in the potential bounce.  This is particularly the case if several queries drawing upon different data point to similar conclusions.

The future does not always mirror the past and, in the present situation, it would just take a further escalation of the Middle East conflict to potentially move oil prices higher and stocks lower.  When the present varies greatly from historical patterns, that, too, can be information.

Brett Steenbarger, PhD

https://traderfeed.blogspot.com/2024/04/broad-selling-after-broad-advance-what.html

Whistleblowers To Further Dismantle Jan. 6 National Guard Narrative About Trump

 On Wednesday, whistleblowers from the Washington DC National Guard are expected to tell Congressional investigators that former President Donald Trump wanted them deployed, but an Army Secretary, Ryan McCarthy, delayed relaying this to DC National Guard Commander William Walker by at least two hours.

According to the Daily Mail, at least three whistleblowers will also testify that their stories were ignored by the Democrat-led January 6 committee because it didn't fit their narrative. The hearing will aim to further prove that Acting SecDef Christopher Miller did give advance approval to deploy the National Guard at Trump's command.

Instead of getting to the bottom of the breakdown in communication and focusing on improving Military preparedness for future incidents, the witnesses feel the January 6 panel was solely focused on pinning blame for the events that day on Trump.

The officers, who were with Walker the day of the Capitol riot, will detail how they were on buses in full tactical gear for hours waiting for the go-ahead from the Army.

McCarthy has stated under oath that he did give a timely order for deployment of the D.C. National Guard – but Walker's troops said they found out about mobilization during a press conference, which led to a three-hour-and-19-minute delay of forces arriving at the Capitol. -Daily Mail

Some have suggested that McCarthy was trying to intervene over the optics of the Army, under his command, trying to inhibit or interfere with certification of the 2020 presidential election results - and that he may have been vying for a spot in the incoming Biden administration.

The hearing on Wednesday, "Three Years Later: D.C. National Guard Whistleblowers Speak Out on January 6 Delay," will explore whether Trump was at fault for the delay in deploying the National Guard.

Last month, Rep. Barry Loudermilk (R-GA), chairman of the Oversight Subcommittee reviewing the J6 investigation into the Capitol riot, released a never-before-seen transcript with Trump's J6 security chief Tony Ornato, during which he testifies that Trump did in fact authorize the National Guard to be mobilized to DC that day - which completely shredded the J6 committee's argument that Trump simply wanted to stoke chaos that day.

Meanwhile, both Capitol Police Chief Steven Sund and DC National Guard leader Maj. Gen. Walker have testified that Army Lt. Gen. Walter Piatt (ret.) delayed or ignored Sund's request for National Guard support - claiming that Piatt said "I don't like the visual of the National Guard standing a police line with the Capitol in the background."

On Wednesday, the whistleblowers will be able to corroborate these claims.

https://www.zerohedge.com/political/whistleblowers-further-dismantle-jan-6-national-guard-narrative-about-trump

UK Universal Credit must change to tackle long-term sickness, report says

 Universal Credit (UC) will need to change to meet the challenges of an older and sicker population, a new report suggests.

The number of benefit claimants who are out of work due to ill health has almost doubled since 2013, says the Resolution Foundation.

The government recently announced changes to UC aimed at encouraging people with ill health to seek work.

The Department for Work and Pensions says UC acts as a "vital" safety net.

Universal Credit is a single benefit payment for working-age people. It was introduced in 2013 to replace a range of different benefits for unemployed and low-paid people and the aim was to make the system simpler.

There were 6.4 million people on Universal Credit in January, according to official government statistics, while nearly 40% of claimants were in work.

The Resolution Foundation suggests that both the benefit system and the country have changed significantly since the Universal Credit system started to be phased in.

The report found that seven in 10 (71%) families who were eligible for either UC or legacy benefits were worse off in real terms on UC in 2024-25 than they would have been under the legacy benefits system in 2013-14.

But this was largely due to cuts in overall levels of working-age support, rather than the design of UC itself, the foundation said.

Alex Clegg, economist at the Resolution Foundation, said: "Whoever wins the next election will be governing a 'Universal Credit Britain', with seven million families eventually receiving the new benefit.

"It is vital that they understand both the system they will inherit and the population that relies on its support."

The unemployment rate has fallen from 8.5% in 2011 to 3.8% in 2023, said the think tank, which focusses on improving the living standards for those on low to middle incomes.

But Mr Clegg said that while the problem of higher unemployment has faded in recent years, "Britain faces new challenges from an older and sicker population".

'Winners and losers'

The Resolution Foundation also looked at who had benefitted the most from the change to the benefits system and found this was working families renting their homes.

A renting single parent who works 30 hours per week on the National Living Wage is nearly £3,800 per year better off in 2024-25 than they would have been under the old benefits system, it said.

Across the 2.7 million families in the private rented accommodation that are eligible for UC, the average gain compared to the old system is £1,200.

However, the report also shows that the streamlining of disability premiums means that out-of-work claimants with disabilities are likely to be the worst off.

For example, a single person with a long-term disability that prevents them from working would now be £2,800 per year worse off, it suggested.

"Compared to the old system, Universal Credit offers greater support for renters and stronger incentives to enter work. But its original design did not anticipate there being over two million claimants with poor health or disabilities," Mr Clegg added.

"Alongside efforts from the NHS, education, and labour market policy to address the drivers of ill health, UC will need to change to tackle Britain's new challenge of long-term sickness."

Concerns have been raised by business leaders and policymakers about worker shortages affecting the economy.

The number of people not employed or actively looking for work has remained at a persistently high level in recent years since it first surged during the pandemic.

Long-term illness has been cited as one of the main reasons for roughly a third of the working-age, inactive population not being in the labour force.

It saw Chancellor Jeremy Hunt announce in November that reforms including stricter fit-to-work tests and jobseeker support would get 200,000 more people into work. Under those plans, the government also wants to scrap the controversial Work Capability Assessment.

The Resolution Foundation projects that by 2028, entitlements to UC would work out as about £86bn a year, although this is £14bn less than if the government had kept the former system in place.

A Department for Work and Pensions spokesperson said: "Universal Credit has proven itself as a modern benefits system fit for the future, providing a vital safety net to millions while helping people move into work faster."

It also pointed to the fact that the UC standard allowance - the basic amount before additional payments or reductions for things like savings are taken into account - went up earlier this month.

"Work is the best path to long-term financial security and through Universal Credit, our £2.5bn Back to Work Plan will help over a million people - including those with long-term health conditions - find, stay and succeed in work," they added.

https://www.bbc.com/news/explainers-68814023

Hochul administration is flooding Harlem with drug treatment clinics, Dem congressman complains

 Gov. Kathy Hochul’s administration is oversaturating Harlem with drug treatment facilities — and it’s got to stop, fed up Congressman Adriano Espaillat (D-13) said.

“It’s too much for the community. It’s totally out of control,” Espaillat told The Post.

There are currently 13 such clinics — many running along or near the spine of 125th Street — with 75% to 80% of patients coming from outside of Harlem, the congressman said.

3

Thirteen drug addiction treatment centers have opened in Harlem, many along or near the spine of 125th Street, which is drawing drug dealers to the area like a magnet.Google Maps

The high concentration of treatment clinics serving addicts is also attracting more drug dealers to the neighborhood, claimed Espaillat.

For the mess he blames the state Office of Addiction Services and Supports, which licenses and approves drug treatment programs. Hochul oversees the agency.

“It’s bad planning,” Espaillat said. “OASAS has been horrible.”

He said he’s personally discussed the problem with the governor, but that the status quo is untenable.

Espaillat said merchant groups like the 125th Business Improvement District are furious and described the abundance of drug treatment clinics in a single corridor a form of “redlining.” The merchants, feeling under siege, even objected to opening a legal pot store across from the Apollo Theater.

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Congressman Adriano Espaillat (D-13) told The Post he’s “deeply troubled” by the influx of drug treatment centers in his district, and is calling on Gov. Hochul to intervene.CQ-Roll Call, Inc via Getty Images

According to a list provided by the congressman’s office, the locations of just some of the addiction centers include:

• 119 W. 124th Street
• 103 East 125th Street
• 132 W. 125th Street
• 2406 Amsterdam Avenue
• 2191 Third Avenue
• 2367-69 Second Avenue

“I have long expressed my concerns and am deeply troubled by the number of OASAS clinics and their placement in my district,” said Espaillat. “There is an undeniably disproportionate amount of methadone treatment clinics in communities in my district compared to the residents who need it.

“This disparity results in nearly an 80% increase of treatment-seekers from outside of our communities to commute to Harlem and East Harlem for these services, a pattern which has subsequently created an increase in the drug dealers in the surrounding area as well as an increase in drug use and overdoses in our communities,” he continued.  

He said he has urged OASAS to relocate some of the drug treatment clinics so they are distributed more equitably across the city “as opposed to the current oversaturation in predominantly African American and Latino neighborhoods,” he said. 

Espaillat noted that northern Manhattan is shouldering more than its share of responsibility in helping addicts get their lives back on track.

His district includes two controversial “safe” drug injection sites — where addicts can bring their own drugs and are provided with clean needles to shoot up under the watch of medical professionals. A report by The Post revealed that drug dealers sold narcotics to patients at the injection sites.

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Espaillat says said he’s personally discussed the problem with Gov. Hochul, but that the status quo is untenable.Mike Groll/Office of Governor Kathy Hochul

The fentanyl crisis has only worsened the situation, the congressman said.

“I’ve seen people shooting up drugs between cars,” he said.

The Post previously reported about a legion of drug-addicted zombies roaming East Harlem and transforming parts of the neighborhood into lawless, open-air shooting galleries.

The congressman knows the damage that open drug use can cause a community, having battled the crack epidemic that infected Washington Heights in the 1980s and early 1990s.

OASAS and Hochul’s office had no immediate comment.

https://nypost.com/2024/04/14/us-news/junkieland-hochul-administration-is-flooding-harlem-with-drug-treatment-clinics/