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Wednesday, May 1, 2024

'US losing ground to Russia in geopolitical battle over Africa'

 The expected withdrawal of U.S. forces from Niger will endanger U.S. counter-terrorism operations and hand Russia more influence in Africa as American and western ties on the continent fracture. 

Around 1,000 troops in Niger are expected to eventually withdraw from the country after the conclusion of ongoing high-level talks between Niamey and Washington following a military coup in the African country last year, the Pentagon has said

A forced withdrawal from Niger is a major setback for U.S. military as it fights against Islamic extremist groups across the Sahel, a volatile region that stretches from Senegal in western Africa to the Red Sea. 

At risk for the U.S. is not just keeping ISIS, Boko Haram and other insurgent groups in check, but also the growing influence of Russia, Iran and China, all of which are jockeying for power in Africa along with the West.

But Western powers like the U.S. and European Union seem to be losing the battle in the Sahel.

“There’s been this hollowing out of all of the international security cooperation,” said  Joseph Siegle, director of research of the Africa Center for Strategic Studies at the Pentagon-funded National Defense University. “They were all part of a broader regional effort to try to support those countries.” 

Siegle attributes the shift to a series of governments being toppled by military juntas and an anti-western disinformation campaign supported by malicious actors in Russia or other hostile nations. But he said closer ties with Russia will harm those countries in the future, because Moscow is not investing economically into those nations.

“These countries are going to feel huge strains, and they’ll continue to try to put on a good face to [show] this is working, but it’s not something they’re going to be able to sustain,” he added. “Something’s going to have to give here.” 

The immediate risk of a Niger withdrawal is that the Sahel could erupt into more violence as the U.S. and France, along with other western powers, face eroding influence with military juntas that have close ties with Russia and other rival powers. 

Threats from al-Qaeda and ISIS-linked insurgent groups have already spiked in other countries ruled by military governments, including Mali, which booted French forces in 2022 but has since seen terrorist groups double their territorial control.

Jacques Du Preez, analyst at the South African research and intelligence firm In on Africa, warned that a hollower U.S. presence in the Sahel could create conditions for an Islamic extremist resurgence like the rise of ISIS in 2014. 

“It’s the most active frontier in the global conflict against terrorism outside of the Middle East,” he said of the Sahel. “The place that al-Qaeda and ISIS both focused in on was the Sahel.” 

“They understand that this is a very vital region [and] very strategic region that if they could get a foothold,” he explained, “it could allow them to have a very big impact, not just in Africa, but also in surrounding regions like Europe.” 

Du Preez also stressed that other nations in the Sahel region are at risk if instability rises, including Nigeria. 

A near-term risk is Chad, where the U.S. is repositioning some troops after a military coup about three years ago. Talks are ongoing, however, and are expected to pick up after elections beginning May 6. 

Chad’s leader, Mahamat Idriss Déby, has closer ties with the U.S. than he does with Russia. 

Déby will likely prevail in what is expected to be a sham electoral process and would have no reason to push the U.S. out of the country, experts say. Still, Chad faces other political factions inside of the country that are closer with Russia, posing a potential longer term threat. 

“The Russians have thrown a lot in with many of [Déby’s] potential challengers,” said Du Preez. “There’s a clear move to isolate Chad and attempt to install their own regime.” 

While experts see the rise of juntas — and sidelining of western powers — as creating instability that could empower terrorist groups, these same military leaders have cited the inability of governments to suppress extremist threats as justification for their takeovers. 

The Niger government fell in a July military coup that paved the way for Gen. Abdourahamane Tchiani to seize power, promising to more effectively counter terrorist threats.

Instead of turning to the West, Tchiani has fostered relations with Russia’s private military company Wagner Group, which has ties to Moscow and has long exploited the resources of African nations. 

The Wagner Group was previously led by founder Yevgeny Prigozhin, who staged a short-lived mutiny against Russian President Vladimir Putin and was killed in a plane crash last August. 

Putin has since moved to exert more influence over the mercenary group, which gives Moscow a low-profile foothold in Africa. Wagner Group appears to have rebranded into a successor in the newly formed Africa Corps, which sent military trainers to Niger in April. 

Russia also has close relations and security agreements with Mali and Burkina Faso, both of which are controlled by military juntas, and Libya, a country torn between two major rival factions. The Central African Republic is also close to Russia and is reportedly discussing an agreement to host a Russian military base. 

A scaled-back U.S. presence in the Sahel is likely to encourage more Russian influence in the region, particularly if terrorist threats grow.  

Siegle, from the National Defense University, said the “main way that Russia has gained influence is at the expense of the West.” 

“A lot of this is an information war that’s happening,” he said. “But its entry point are these military leaders who are authoritarians that are seeing Russia as their strongest international patron to keep their hold on power.” 

It’s not just Russia: China also has its hands in Africa. 

The Chinese Belt and Road Initiative, a project of large-scale investments primarily for infrastructure in Asia and Africa, has financed loans to African nations that the West has accused of being predatory to give Beijing military, financial and political influence. China, however, only has one base in Africa, in Djibouti.  

Iran is also another regional player, backing a proxy group called the Islamic Movement of Nigeria and the government in Sudan, which is waging a destructive civil war against a rebel group. 

Last year, Iranian President Ebrahim Raisi traveled to Kenya, Uganda and Zimbabwe to shore up ties with all three nations. 

Some experts see a populist, anti-western movement that is organic in nature — even if fueled in part by China and Russia and exploited by military juntas — and centered on long-standing grievances with formerly western colonial powers, but also disenfranchisement with the current state of conditions.

Abigail Kabandula, director of the Africa Center at the University of Denver, said the U.S. is losing its influence in Africa partly because Washington has failed to address terrorism, a threat she added has “mushroomed” in the past decade. 

“The question that a number of [people] propose is why is the West or the French in the region if we still have the same problems and the problems have actually grown?” she said. “It’s a matter of rethinking the whole counterterrorism approach in the region. Whether we have the U.S. or not, it’s about how counterterrorism is being addressed.” 

Kabandula also said the U.S. has relied largely on security arrangements with African nations in the Sahel and failed to focus more cooperation on economic or other needs, creating a “power vacuum around the continent.” 

“The U.S. has not supported a number of countries in the things that they wanted to pursue,” she said. “A number of African countries have really asked for other things like development, development projects, development aid, or infrastructure development. Those have not come forth from the U.S. and so African countries [look] to China for help.” 

Will Walldorf, a professor studying politics and international affairs at Wake Forest University, said he supports the U.S. withdrawal from Niger because it can allow Washington to recalibrate its approach to Africa and counterterrorism. 

Walldorf said the U.S. focus on counterterrorism is “missing the heart of the problem” and that it was “staggering” how terrorism has surged under U.S. watch. 

“The lack of good governance, the lack of meeting the everyday needs of citizens in West Africa, where we know food insecurity is extreme, has been really the core driver of terrorist recruitment in the region,” he said.  

“If you can get to those sort of core issues,” he added, that would be “on a different playing field then what we’re offering now in terms of kind of a force-first approach.” 

https://thehill.com/policy/defense/4634201-us-losing-ground-russia-africa-niger/

Biden’s worst-case economic scenario is unfolding at the worst possible time

 Last Thursday, the Bureau of Economic Analysis released its advance estimate for 2024’s first-quarter real GDP growth. At 1.6 percent, it is the worst quarterly performance since the economy contracted by 0.6 percent almost two years ago in the second quarter of 2022. This was a growth level one-third below economists’ expectations of 2.4 percent. It is also a precipitous drop from 2023’s fourth quarter rate of 3.4 percent and 2023’third quarter rate of 4.9 percent.

This slower growth comes on the heels of higher inflation. The March report on overall prices showed the Consumer Price Index for all Urban Consumers rose 3.5 percent over the last year — 3.8 percent when core inflation (minus food and energy) was considered. That figure was higher than any since September 2023 and marked the third consecutive monthly increase.  

Then on Friday, came more bad inflation news, this time on personal consumer expenditures excluding food and energy. This is the Federal Reserve’s preferred inflation gauge, and in March it rose 2.8 percent compared to a year ago — the same as in February and above expectations. 

This jujitsu juxtaposition of higher inflation and lower growth must not be underestimated. Gone is the charade of someone who has effectively never worked in the private sector telling working Americans how good the economy is. Joe Biden, who loves to harken back to blue-collar Scranton roots, should have known better. Americans now do.

There is but one real measure of the economy for them: Am I putting more on my family’s table? Inflation’s insidious impact is its cumulative effect. Just because inflation’s rate of increase slows (which it isn’t) does not mean its past effect is wiped away (which it’s not). Now the economic growth that the administration hoped would at least outstrip inflation’s increase — and reverse some of that cumulative effect — is not.

The expectation has been for some time that there would be a soft landing from inflation’s lofty heights. The Federal Reserve would begin cutting its interest rates and the slowing economy would pass the baton to lower interest rates that would keep the economy from falling too far. It was the proverbial economic unicorn. And it was going to be seamless.

However, Biden’s high inflation — spurred on by his profligate spending over three-plus years, has given the Fed no opening to begin lowering rates. Expectation has given way to hesitation. Now, rate reductions are not expected for months (if at all this year). 

Biden does not have months to spare. He has six — total — before November. While six may be a lifetime in politics, it is just two quarters in economics. It is the difference between chronological and geological time. Economists can wait; politicians cannot.

Biden’s trajectories leading into these six months are not good. Excessive inflation continues. Could it stay high longer — or even go higher still? The economy is slowing. Quickly. Could it go lower still — perhaps even negative?

The stock market was stoked for months by its rate-cut expectations. When these have not come, it refocused on an unexpectedly strong economy — just recently its evidence appeared to be strong corporate earnings reports. Last Thursday’s GDP report argues the economy is no longer strong. Where do the markets look now for reassurance against money being withdrawn from them?

Biden is already down in the polls. According to Real Clear Politics average of national polling, his overall job approval rating is just 40.1 percent. His approval rating on the economy is lower still: just 39.4 percent.  

Both ratings were compiled while the administration and much of the establishment media said Biden’s economy was good. Now that the data say otherwise, where do those Biden ratings go? Already voters see the recent upswing in prices; soon, they are likely to feel the economy slowing. 

Facing these, Biden has few solid options. He has no prospect of getting more spending through Congress — the crutch he has used throughout his presidency, and which helped spike the still persistent inflation. He can, and undoubtedly will, try to curry favor with more targeted giveaways — sector-specific rules and regulations and student loan forgiveness. 

But these do not have impacts as broad as the economy itself. There is a reason the economy is the most important political variable: it affects everyone. 

Perhaps it is too early to call two reports stagflation. Two data points are a snapshot, not a trend. But their contents — high inflation and low growth — are precisely what stagflation is if they continue.  

Biden has six months to see if they will be. 

J.T. Young was a professional staffer in the House and Senate from 1987-2000, served in the Department of Treasury and Office of Management and Budget from 2001-2004, and was director of government relations for a Fortune 20 company from 2004-2023.

https://thehill.com/opinion/finance/4633147-bidens-worst-case-economic-scenario-is-unfolding-at-the-worst-possible-time/

Feds Probe Block's Square And Cash App for Transactions Funding Terror And Skirted Sanctions

 Federal prosecutors are investigating compliance issues at Block, the fintech firm co-founded by Jack Dorsey, according to a new report from NBC, citing "two people with direct knowledge". 

Questions about the company started swirling back in March 2023 when short seller Hindenburg Research released a report called "Block: How Inflated User Metrics and “Frictionless” Fraud Facilitation Enabled Insiders To Cash Out Over $1 Billion". 

In it, they concluded that "the 'magic' behind Block’s business has not been disruptive innovation, but rather the company’s willingness to facilitate fraud against consumers and the government, avoid regulation, dress up predatory loans and fees as revolutionary technology, and mislead investors with inflated metrics."

Now, a former employee has shared documents revealing insufficient customer information collection, transactions involving sanctioned countries, and cryptocurrency dealings with terrorist groups, the latest report from NBC says.

The employee claims many transactions weren't reported as required, and Block failed to address the breaches despite being notified. The documents detail transactions with entities in sanctioned countries, including Cuba, Iran, Russia, and Venezuela, as recent as last year.

One former told NBC: “From the ground up, everything in the compliance section was flawed. It is led by people who should not be in charge of a regulated compliance program.”

“It’s my understanding from the documents that compliance lapses were known to Block leadership and the board in recent years," Edward Siedle, a former Securities and Exchange Commission lawyer who represents the former employee and participated in the discussions with prosecutors told NBC

Cash App, a mobile payment platform under Block's ownership, faced allegations of compliance failures from two other whistleblowers in mid-February. Introduced in 2013, Cash App enables instant money transfers and stock and Bitcoin purchases. By December, it boasted 56 million active transacting accounts and $248 billion in inflows over the previous four quarters.

Block commented to NBC: “Block has a responsible and extensive compliance program and we regularly adapt our practices to meet emerging threats and an evolving sanctions regulatory environment. Our compliance program includes systems, tools, and processes for sanctions screening, as well as investigating and reporting on sanctions issues in accordance with our regulatory obligations."

They continued: "Continually improving the safety and security of our ecosystem is a top priority for Block. We have been and remain committed to building upon this work, as well as continuing to invest significantly in our compliance program.”

Federal prosecutors are also examining Square, another key component of Block's operations, which serves millions of merchants. According to documents provided to prosecutors and reviewed by NBC News, Square allegedly failed in basic customer due diligence on international merchant sellers and mistakenly reimbursed some merchants' funds frozen for sanctions violations.

The documents also reveal that new customers triggering sanctions alerts were allowed to conduct transactions before resolution, with instances of inadequate screening against sanctions keyword lists, the report adds.

Cash App, due to its design, also apparently heightened compliance risks, NBC wrote. A document highlighted the challenge, stating that stored balances in Cash App are typically depleted by the time of review, limiting the platform's ability to block or reject funds.

The former employee also informed prosecutors of findings from an external consultant hired by Block, which identified nearly 50 deficiencies in monitoring suspicious activities and screening for sanctions violations.

Board members including Lawrence Summers and Sharon Rothstein have also recently departed the company.

https://www.zerohedge.com/markets/feds-scrutinizing-transactions-using-square-and-cash-app-may-have-funded-terrorism-skirted

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. 

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