Israel Won't End War On Hamas As Part Of Hostage Deal, Bibi Tells Blinken

 It seems like once again that the Biden White House has almost zero sway, and that Israel is going to do whatever it is going to do, despite continued Washington pressure to halt and avoid the planned Rafah ground assault, with over a million refugees in harm's way.

A deal is still reportedly on the table, with with no breakthrough being reported amid negotiations mediated by Qatar and Egypt. The deal would reportedly see less than 40 Israeli hostages freed but Hamas wants a permanent, lasting truce that would involve an IDF troop withdrawal from Gaza while Tel Aviv only envisions a temporary pause in fighting.

US Secretary of State Antony Blinken has blamed Hamas for lack of a breakthrough in achieving a deal, saying alongside Israeli President Isaac Herzog in Jerusalem on Wednesday, "No delays, no excuses." He added: "The time is now."

Gaza's terror group is "the only reason that that wouldn’t be achieved," he emphasized. It may not happen "because of Hamas" Blinken stressed. However, Axios' Israel correspondent Barak Ravid has reported that Blinken has conveyed to Israeli PM Benjamin Netanyahu that the US still stands against an IDF operation in Rafah "without a credible plan for protecting civilians."

Axios cited Blinken further as saying the Biden administration "thinks there are a better options to deal with the Hamas battalions in the city other than a full scale military operation," according to a US diplomatic source.

But importantly Netanyahu responded in the Wednesday meeting that he does not intend to accept any deal that includes ending the war. "He said if Hamas doesn't drop this demand there will be no deal and Israel will invade Rafah, per Israeli and U.S. officials," Ravid reports.

This is similar to what Netanyahu said the day prior: "We will enter Rafah and we will eliminate the Hamas battalions there – with or without a deal, in order to achieve the total victory." Blinken is likely trying to get him to backdown from this hardline stance. But even as diplomacy and negotiations intensify, it could yet take several more days to reach a truce or ceasefire deal:

Suhail al-Hindi, a senior Hamas official, has told the AFP by phone that the group will issue a clear response to Israel’s ceasefire proposal “within a very short period”.

Al-Hindi did not provide a specific timeline for Hamas’s response, but another source told the AFP a reply is anticipated within the next day or two.

According to the source, Israel’s proposal includes “real concessions”, yet the question of its complete withdrawal from the Strip remains a likely sticking point.

Complicating things for Israel is the International Criminal Court (ICC) case hanging over Netanyahu and top Israeli officials. 

Herzog addressed the potential for arrest warrants to be issued from the Hague-based court: "Our enemies and other elements are trying to undermine the entire process by using international legal forums that were established in order to have a world order that pursues peace, and pursues the values and norms that we all believe in in the modern world." said the Israeli president. "Especially the efforts done at the International Criminal Court."

"Israel has a very strong legal system, very strong adjudication and law enforcement system, and it has pursued legal steps from the highest authorities in this land [against] any other citizen," said Herzog.

Netanyahu the day prior issued a video address condemning the action. While it would be largely symbolic, as the World Court doesn't have an enforcement arm, it would be a reputational black eye for Israel at a sensitive moment it faces immense criticism on a global stage for the soaring Gaza death toll and reports of famine. 

As for the impending Rafah operation, Netanyahu has been consistent for the past two months that Israel will go into the southern city "no matter what the US says." There's been no wavering on this point, however there does appear to have been a delay.

https://www.zerohedge.com/geopolitical/israel-wont-accept-any-deal-includes-ending-war-netanyahu-tells-blinken

Most migrants paroled under Biden admin flying to Fla.: subpoenaed docs

 The bulk of migrants who qualify for the Biden administration’s mass parole program are flying into Florida, subpoenaed documents released Tuesday by the House Homeland Security Committee show. 

Under President Biden’s controversial border policy, migrants from Cuba, Nicaragua, Haiti and Venezuela who obtain a US sponsor, pass a background check and demonstrate that parole is warranted based on significant public benefit or urgent humanitarian reasons are allowed to fly into US ports of entry, where they will receive work permits and authorization to remain in the country for two years. 

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The House Homeland Security Committee subpoenaed the Department of Homeland Security for the information about the parole program.Jay Janner / USA TODAY NETWORK

The Department of Homeland Security has processed more than 400,000 migrants via the mass parole program. 

The documents from DHS obtained by the House Homeland Security Committee cover some 200,000 migrant arrivals over a period from January to August 2023. 

These are the top 15 cities that individuals who qualified for the so-called CHNV program flew into during that eight-month span: 

1) Miami, Fla.: 91,821

2) Ft. Lauderdale, Fla.: 60,461 

3) New York City, NY: 14,827

4) Houston, Texas: 7,923 

5) Orlando, Fla.: 6,043

6) Los Angeles, Calif.: 3,271

7) Tampa, Fla.: 3,237

8) Dallas, Texas: 2,256 

9) San Francisco, Calif.: 2,052

10) Atlanta, Ga.: 1,796 

11) Newark, NJ: 1,498

12) Washington, DC: 1,472

13) Chicago, Ill.: 496 

14) Las Vegas, Nev.: 483 

15) Austin, Texas: 171 

The House panel said the DHS documents also revealed that there were some 1.6 million migrants waiting for approval to fly into the US via the parole program as of October 2023.

“All individuals paroled into the United States are, by definition, inadmissible, including those paroled under the CHNV processes,” DHS noted in one document, according to the committee.  

“These documents expose the egregious lengths Secretary [Alejandro] Mayorkas will go to ensure inadmissible aliens reach every corner of the country, from Orlando and Atlanta to Las Vegas and San Francisco,” House Homeland Security Committee Chairman Mark Green (R-Tenn.) said in a statement. 

“Secretary Mayorkas’ CHNV parole program is an unlawful sleight of hand used to hide the worsening border crisis from the American people,” he added. “Implementing a program that allows otherwise inadmissible aliens to fly directly into the US –– not for significant public benefit or urgent humanitarian reasons as the Immigration and Nationality Act mandates –– has been proven an impeachable offense.”

Green’s committee first requested the information on the CHNV program in April 2023. 

After more than 100 days of delinquency from DHS, the committee issued a subpoena to DHS, at which point the requested documents and information were produced.

Multiple states, including Florida, have sued the Biden administration to block the mass parole program, arguing that it is effectively a new visa program that has no basis in law.

Migrants must make their own travel arrangements under the program guidelines, according to Customs and Border Protection. 

The program is open to 30,000 people from Cuba, Haiti, Nicaragua and Cuba per month.

https://nypost.com/2024/04/30/us-news/most-migrants-paroled-under-biden-administration-are-flying-to-this-state-subpoenaed-docs-show/

UnitedHealth CEO faces Change Healthcare hack scrutiny on Capitol Hill

 Lawmakers question whether healthcare giant is 'too big to fail'

UnitedHealth Group Inc.'s dominance in the U.S. healthcare industry was in the spotlight on Capitol Hill Wednesday, as the healthcare giant's CEO faced two Congressional hearings about the cyberattack that targeted the company's Change Healthcare unit.

The attack on the major healthcare-claims clearinghouse, widely considered the biggest cybersecurity disruption to healthcare in U.S. history, has intensified scrutiny of UnitedHealth's size and influence in the healthcare industry. The company runs a large health insurer and pharmacy-benefits manager, owns outpatient facilities and employs physicians, among other operations.

"This corporation is a healthcare leviathan," Senate Finance Committee chair Sen. Ron Wyden, Democrat from Oregon, said at a hearing with UnitedHealth Chief Executive Andrew Witty Wednesday morning. The hack, he said, is "a dire warning about the consequences of too-big-to-fail mega-corporations gobbling up larger and larger shares of the healthcare system."

The full repercussions of the cyberattack, which disrupted care providers' ability to file claims and get paid for their services and put patients' personal data at risk, still aren't fully understood. UnitedHealth is "working to understand the full scope of impacted patient, provider and payer information," Witty said in testimony prepared for the House Energy and Commerce Committee's Oversight and Investigations subcommittee hearing on the hack, which is scheduled for Wednesday afternoon.

UnitedHealth has said that its ownership of Change Healthcare actually may have helped to limit the fallout from the attack. If UnitedHealth didn't own the insurance-claims processor, "this attack would likely still have happened and it would have left Change Healthcare, I think, extremely challenged to come back," Witty said during the company's April 16 earnings call.

The healthcare giant is providing free credit monitoring and identity theft protection for two years and has advanced more than $6.5 billion in accelerated payments and no-interest loans to affected providers, Witty said in his prepared statement.

The U.S. Department of Justice in 2022 sued to block UnitedHealth from acquiring Change Healthcare, saying the deal would hurt competition and innovation, but a federal judge ruled that the transaction could move forward. At the time, the lawsuit was filed, principal deputy assistant attorney general Doha Mekki said in a statement that the transaction would give UnitedHealth "control of a critical data highway through which about half of all Americans' health insurance claims pass each year."

The hackers first gained entry to the Change Healthcare systems through a portal that was not protected by multi-factor authentication, Witty told the Senate Finance Committee Wednesday morning.

"This hack could have been stopped with cybersecurity 101," Wyden said, referring to multi-factor authentication. All of UnitedHealth's external-facing systems now have multi-factor authentication, Witty said.

Some lawmakers sought to link UnitedHealth's size with the cyberattack's broad impact. "Yes, you have the deep pockets by which to address this, but the very fact that you're so big means it had a wide-ranging ripple effect that was outsized," Sen. Bill Cassidy, a Louisiana Republican, said during the Senate Finance hearing Wednesday. "Is the dominant role of United too dominant, because it's into everything, and messing up United messes up everybody?" Cassidy asked.

Witty told the committee that Change Healthcare's footprint and activity was the same on the day of the attack as it was before it was acquired by UnitedHealth. As for whether UnitedHealth is "too big to fail," Witty said, "I don't believe it is," noting that despite its size the company has no U.S. hospitals or drugmakers.

The company's size also poses other risks for patients and providers, some lawmakers said. "Because UnitedHealth has bought up every link in the healthcare chain, you're now in a position to jack up prices," Sen. Elizabeth Warren, a Massachusetts Democrat, said at the hearing, calling the company "a monopoly on steroids." Warren pointed to a February report by the Wall Street Journal that the Department of Justice has launched an antitrust investigation into UnitedHealth.

"We have a longstanding practice of not commenting on matters such as that," Witty said of the reported investigation Wednesday.

Cybersecurity vulnerabilities could play into the Federal Trade Commission's reviews of prospective deals, chair Lina Khan said last week during a discussion with reporters hosted by health-policy research nonprofit KFF, noting new merger guidelines that the agency published last year. "If we think a merger could substantially lessen competition in ways that could eliminate the incentive to continue investing in data security or otherwise create some of these consolidation risks, that could definitely be part of our analysis," Khan said.

UnitedHealth shares (UNH) gained 0.5% Wednesday morning and have dropped 7.6% in the year to date, while the S&P 500 is up 5.2%.

https://www.morningstar.com/news/marketwatch/20240501344/unitedhealth-ceo-faces-change-healthcare-hack-scrutiny-on-capitol-hill

More Stagflation Signals As Manufacturing Surveys Show Soaring Prices, Orders Tumble

 While 'hard' data has been improving recently (albeit then downwardly revised a month later), it is the 'soft' survey data that has collapsed amid Bidenomics.

Source: Bloomberg

And this morning continued that trend as S&P Global's US Manufacturing PMI (survey) fell from 51.9 in March to 50.0 as the final print for April (49.9 flash). ISM's Manufacturing survey also missed, dropping from 50.3 to 49.2 (contraction).

Source: Bloomberg

Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, said:

“Business conditions stagnated in April, failing to improve for the first time in four months and pointing to a weak start to the second quarter for manufacturers. Order inflows into factories fell for the first time since December, meaning producers had to rely on orders placed in prior months to keep busy.

“However, there are some encouraging signs. The drop in orders appears to have been largely driven by reduced demand for semi-manufactured goods – inputs produced for other firms – as factories adjust their inventories of inputs. In contrast, consumer goods producers reported a further strengthening of demand, hinting that the broader consumer-driven economic upturn remains intact.

“Producers on the whole also seem confident enough in the business outlook to continue adding to payroll numbers at a pace that compares well with the average seen over the past two years, investing further in operating capacity.

But, under the hood it was not pretty - ISM New Orders tumbled, Employment rose modestly, but Prices Paid soared (to their highest since June 2022)...

Source: Bloomberg

Prices charged for goods rose at a slower rate than the 11-month high seen in March. But, as S&P Global notes, the rate of increase nevertheless remains elevated by historical standards – and well above the average seen in the decade prior to the pandemic – as firms continued to pass higher commodity prices on to customers.

However, input costs increased sharply, with the rate of inflation quickening for the second consecutive month. Higher prices for oil and metals were mentioned in particular.

So, stagnating growth and sharply rising input costs... Stagflation signals everywhere.

https://www.zerohedge.com/markets/more-stagflation-signals-manufacturing-surveys-show-soaring-prices-orders-tumble

Apple set for big sales decline as investors await AI in iPhones

 Apple's plan to add generative AI to its iPhones and revive sagging sales in the crucial Chinese market will be in focus on Thursday, when the tech giant is expected to report its biggest quarterly revenue decline in more than a year.

Long considered a must-own stock on Wall Street, Apple shares have underperformed other Big Tech companies in recent months, falling more than 10% year to date as fears mount about its slow roll out of AI services and as a resurgent Huawei takes market share in China.

Analysts on average see iPhone sales, which account for about half of Apple's revenue, falling 10.4% in the first three months of 2024, according to LSEG. That drop would be the steepest in more than three years.

Analysts estimate Apple's total revenue declined 5% in its second quarter, which included January through March. That would be Apple's biggest revenue decline since the December-quarter of 2022, when revenue fell 5.5%.

Apple earlier this year lost the crown of the world's most valuable company to Microsoft and its market value now stands at $2.68 trillion after the decline in its share price in 2024.

Weak revenue and falling shares have put pressure on Apple to spruce up its flagship device after years without major upgrades.

The company is in talks with OpenAI and Alphabet-owned Google to add genAI features for the iPhone that could be unveiled at what is expected to be its biggest-ever annual developer conference in June, Bloomberg News has reported.

Analysts believe such an AI integration could drive demand for the next iPhone series, expected to be announced in the fall.

While executives at Microsoft, Alphabet, Meta Platforms and other major technology firms have talked up their AI strategies on quarterly conference calls in recent months, Apple CEO Tim Cook has discussed his plans for the emerging technology much less.

Adding AI features to iPhones could also help Apple to compete better with Huawei and Samsung Electronics, which reclaimed the title of the world's top smartphone vendor from Apple earlier this year, driven by demand for the AI features in its Galaxy S24 smartphones.

"Replacement cycle tailwinds and incremental generative AI features set up Apple well for a strong iPhone 16 cycle," Bernstein analyst Toni Sacconaghi said this week, upgrading his rating on the company's shares to "outperform" from "market-perform".

"We believe prevailing weakness in China is more cyclical than structural, and note historically Apple's China business has exhibited much higher volatility than Apple overall, given its very feature-sensitive installed base."

Thursday's earnings will also be watched closely for updates on the company's stock buyback plan and the Vision Pro, Apple's first major product in years that hit the shelves in February.

After initial enthusiasm, there have been signs that demand slowed for the $3,500 device, with an analyst saying this month that Apple has pulled back its production estimates for the mixed-reality headset.

The rest of the company's hardware business is also reeling from soft demand, with iPads and Mac sales expected to fall 11.4% and 4.3%, respectively, in the March quarter.

Apple has signaled it is sharpening its focus on the devices, which have also been hobbled by a lack of major upgrades.

The company is hosting an event later this month where a revamped iPad line-up is expected to be unveiled and media reports have said that it plans to update every Mac model with faster, AI-focused M4 processors.

The services business - which includes money earned from App Store and subscription services such as Apple TV - is expected to remain a bright spot with revenue growth of 7.7%.

https://www.marketscreener.com/quote/stock/APPLE-INC-4849/news/Apple-set-for-big-sales-decline-as-investors-await-AI-in-iPhones-46591103/

Cannabis stocks pull back on pot reclass as 'moderate to low potential' for dependence

 Canopy Growth drops 20%, Tilray drops 15% and Curaleaf falls 5% after sharp gains on the DEA's plan to make pot a Schedule III controlled substance

Canopy Growth Corp., Tilray Brands Inc. and Curaleaf Holdings Inc. moved into the red along with other cannabis stocks on Wednesday.

The sector cooled off after a huge rally in the previous session on plans by the Biden administration to reclassify pot as less dangerous under federal law.

Canopy Growth (CGC) moved lower by 21%, Tilray Brands Inc. (TLRY) dropped 14% and Curaleaf (CURLF) fell 5% and Trulieve Cannabis Corp. (TCNNF) shed 10.6%. TerrAscend Corp. (TSNDF) dropped 13.3% and Cresco Labs Inc. (CRLBF) declined by 4%.

The AdvisorShares Pure U.S. Cannabis ETF MSOS declined by 6.8% and the Amplify Alternative Harvest ETF MJ lost about 8.8% of its value.

In the previous session, Canopy Growth notched its second-largest one-day gain in the stock's history with a whopping 79% gain, on the heels of a report by the Associated Press that the Drug Enforcement Administration planned to lower the classification of pot to Schedule III from Schedule I.

Schedule III substances include ketamine and testosterone and are typically available through a doctor's prescription.

Since 1970, pot has been classified as Schedule I, with no health benefits, in the same bucket as heroin and LSD.

After the AP report, the U.S. Department of Justice issued a statement that Attorney General Merrick Garland circulated a proposal to reclassify marijuana to Schedule III.

"Once published by the Federal Register, it will initiate a formal rulemaking process as prescribed by Congress in the Controlled Substances Act," the statement said.

John Hartmann, chief executive of cannabis company Ascend Wellness Holdings (AAWH), told MarketWatch he expects the change in federal law to "have a dramatic affect on taxation and capital availability" to the industry.

"It's been anticipated for many years - it's a very positive step," he said. "We've been told by institutions and lenders they'd enter the sector."

While the process may take until 2025 to complete, the move by Garland marks a major step in the right direction, he said.

Meanwhile, Senate Majority Leader Chuck Schumer (D-NY), Senate Finance Committee Chairman Ron Wyden (D-OR), and Senator Cory Booker (D-NJ) said in a statement that they plan to reintroduce legislation to remove cannabis from the Controlled Substances Act.

Michael Harlow, managing partner of CohnReznik, who works on tax matters with cannabis companies, said the Schedule III designation raises questions around the 280E tax requirement that prevents dispensaries and other plant-touching businesses from taking standard tax deductions.

While the Schedule III status of pot would eliminate 280E, it's unknown whether companies will be able to reflect the change for the 2024 tax year or even past tax years for filings with the Internal Revenue Service, he said.

"I'd be shocked if the IRS has regulations ready to go to address this," he said. "The details still have to be worked out."

He said cannabis companies may be more aggressive in asking for 280E rebates or exemptions now that the federal government plans to remove cannabis from Schedule I.

https://www.morningstar.com/news/marketwatch/20240501327/cannabis-stocks-pull-back-after-rally-on-plans-to-reclassify-pot-as-having-moderate-to-low-potential-for-dependence

J&J eyes paying $6.5B to settle talc ovarian cancer lawsuits in US

 Johnson & Johnson on Wednesday proposed a plan to pay nearly $6.5 billion to resolve tens of thousands of lawsuits claiming that its cosmetic talc-based powder causes cancer. 

Through a bankruptcy filing of its subsidiary company, LTL Management, J&J will be able to resolve about 99.75% of the pending talc lawsuits against the company and its affiliates in the U.S. Courts have rebuffed J&J's two previous efforts to resolve the lawsuits through the bankruptcy of the subsidiary created to absorb the company's talc liability.

The $6.47 billion would be paid out over 25 years, which J&J claims would be a "far better recovery than the claimants stand to recover at trial."

As of July 2023, the company was facing more than 34,000 lawsuits linking its baby powder to ovarian cancer, asbestos poisoning and other illnesses, FOX Business previously reported. Asbestos is a known cause of mesothelioma, a cancer that forms in the tissue that lines internal organs. 

The company has maintained that its baby powder and other talc products don't cause cancer or contain asbestos, 

"The company reiterates that none of the talc-related claims against it have merit. The claims are premised on the allegations that have been rejected by independent experts, as well as governmental and regulatory bodies, for decades," J&J said Wednesday. 

However, lead lawyers for plaintiffs Leigh O'Dell and Michelle Parfitt, told Reuters in March that evidence showing the company's products caused cancer is "stronger than ever."

Bottles of Johnson & Johnson baby powder line a drugstore shelf in New York on Oct. 15, 2015. (REUTERS/Lucas Jackson / Reuters Photos)

The truth of J&J’s deceptive conduct to hide the presence of carcinogens in talcum powder and mislead the medical and scientific communities has only become clearer over time," the lawyers said in a statement.

In 2019, the Food and Drug Administration (FDA) alerted consumers that Johnson’s baby powder was under a voluntary recall after FDA testing found that a sample from one lot of the product contained chrysotile fibers, a type of asbestos.

Ticker	Security	Last	Change	Change %
JNJ	JOHNSON & JOHNSON	149.88	+5.27	+3.64%

Nearly all the suits the company is facing are related to ovarian cancer. The remaining pending personal injury lawsuits relate to mesothelioma, according to J&J.

Those suits are being addressed separately, though the company said it has resolved 95% of them to date. 

https://www.foxbusiness.com/lifestyle/johnson-johnson-proposes-pay-6-5-billion-settle-talc-ovarian-cancer-lawsuits-us