Arizona Legislature Passes Bitcoin Reserve Bills, Moving Closer To Stockpiling Crypto

Authored by Turner Wright via CoinTelegraph.com,

Lawmakers in the Arizona House of Representatives passed two bills that could allow the state to adopt a reserve using Bitcoin or other cryptocurrencies.

In a third reading on April 28 of Senate Bill 1025 (SB1025), a proposal to amend Arizona’s statutes to allow for a strategic BTC reserve, 31 members of the Arizona House voted in favor of the bill, with 25 opposed. A similar bill, SB1373, to establish a state-level digital assets reserve, passed with 37 lawmakers in favor and 19 voting nay.

“This bill basically takes the approach that probably 15 other states are considering the same legislation nationwide that allows the treasurer to invest up to 10% into, probably mainly Bitcoin but other things as well,” said State Representative Jeff Weninger on SB1025.

“I think this probably would start as a ‘may’ for the foreseeable future, but as things continue to pivot towards Bitcoin and these things, would have that already in place in the future.”

Voting for SB1025 in the Arizona House of Representatives on April 28. Source: Arizona State Legislature

The approvals bring the bills closer than any other state-level initiative in the US to getting a cryptocurrency or Bitcoin strategic reserve signed into law. Similar legislation proposed in New Hampshire passed the state’s House in April and is expected to head to the Senate for a full floor vote soon.

Arizona Governor Katie Hobbs announced on April 17 that she intended to veto any bill until lawmakers had a “serious, bipartisan funding solution that protects healthcare for Arizonans with disabilities.” However, with the passage of such legislation on April 24, the governor could be more open to signing SB1025 or SB1373 into law.

Federal plans to establish a national crypto reserve

The state-level efforts to create Bitcoin reserves come amid a push from US President Donald Trump and Republican lawmakers to do the same in the federal government. 

Trump signed an executive order in March with a proposal for a “Strategic Bitcoin Reserve” and a “Digital Asset Stockpile.”

Wyoming Senator Cynthia Lummis, a crypto advocate, proposed that Congress pass legislation that could allow the US government to hold more than 1 million BTC, in part through crypto seized through civil or criminal forfeiture. Some lawmakers have suggested Lummis’s bill was an attempt by Congress to codify Trump’s executive order into law.

Tyler Durden Tue, 04/29/2025 - 12:40

Pakistan Shoots Down Indian Spy Drone Over Kashmir As Forces On High Alert

Pakistan's military says it shot down an Indian spy drone in the Kashmir region, soon after the country's defense chief warned that intelligence shows an Indian army incursion is 'imminent'.

The unmanned drone reportedly breached the Line of Control (LOC) in Kashmir, Pakistani state-run media said, and it was subsequently shot down amid the air space incursion. Pakistani defense officials described to The Associated Press that the drone flew hundreds of feet into Pakistani-administered Kashmir.

Illustrative: the type of Indian drone believed downed in Kashmir.

Defense Minister Khawaja Asif the day prior confirmed the nation's military is currently on high alert and he had "reinforced our forces" - after multiple days of sporadic exchanges of gunfire along unspecified border posts.

"In that situation, some strategic decisions have to be taken, so those decisions have been taken," Asif told Reuters, also ominously describing that Islamabad would only consider using its nuclear arsenal in response to "a direct threat to our existence." 

There's as yet been no noticeable incursion, and it remains unclear what evidence for this forecast Pakistan's military and intelligence services might have.

Last Tuesday's deadly militant attack on tourists in Kashmir, which saw 26 Indian tourists get executed after the gunmen sought to identify Hindus among the group, resulted in the Indian government promptly accusing Pakistan of harboring the Islamist terrorists which committed the atrocity, which Islamabad angrily rejected.

The nuclear-armed neighbors have already fought two historic wars over the Kashmir region, and fears are rising that another one may soon be on the horizon - also after both sides have sent military reinforcements to the respective regions they administer. Amid a massive manhunt, India identified two detained suspected militants as Pakistani.

The New York Times described Saturday that "Pakistani solders fired at an Indian position first and India responded in kind, according to local news reports, which said that "the exchange was brief and that there were no casualties." Precise locations of these live fire incidents have not been disclosed.

Missile and nuclear saber-rattling has meanwhile ensued:

India’s navy test-fired missiles on Sunday, showcasing its ability to carry out “long-range, precision offensive” strikes, as tensions with Pakistan rise after last week’s terrorist attack in Indian-administered Kashmir that killed 26 civilians.

“Indian Navy ships undertook successful multiple anti-ship firings to re-validate and demonstrate readiness of platforms, systems, and crew for long-range precision offensive strike,” the navy posted on X, as the prime minister, Narendra Modi, promised a “harsh response” to the attack at a tourist site, the deadliest against civilians in Kashmir in 25 years.

As for the other side, a Pakistani minister, Hanif Abbasi (though he's not in defense or security) days ago warned that Pakistan's nuclear arsenal of more than 130 missiles was "not kept as models" and was aimed “only for India … these ballistic missiles, all of them are targeted at you" - The Guardian noted.

The United Nations has urged restraint, and Pakistan has called for an independent investigation into the Kashmir terror attack, which it says it had nothing to do with. It has also called on Russia and China to mediate and assist with a potential investigation.

If gunfire continues to be exchanged between the two militaries, also amid reports that Pakistani visa holders are being promptly booted from the country amid the diplomatic crisis - clashes could accelerate toward open war. 

India's Chief Minister of Jammu and Kashmir Omar Abdullah has meanwhile said there must be a "decisive fight against terrorism and its origin." Indian officials have continued to heap accusations that ultimately Islamabad either supports these groups or at least turns a blind eye.

Pakistan ACCUSES India of running terror network

Armed Forces spox claims NO EVIDENCE to suggest Pakistan's role in Pahalgam attack pic.twitter.com/xwdPOMpWUo

— RT (@RT_com) April 29, 2025

More observations via Rabobank...

* * *

Pakistan just warned of imminent India military action against it in response to a recent terror attack in Kashmir, to which China stated: “As Pakistan's ironclad friend and all-weather strategic cooperative partner, China fully understands Pakistan's legitimate security concerns and supports Pakistan in safeguarding its sovereignty and security interests,” with rumours it and Turkey are sending Pakistan weapons. 

India will surely be looking for mirroring statements and actions from those who want more trade with it. The UK and the EU aren’t going to provide them; BRICS is a joke given what C just said about I, via P; and that only leaves the US.

Tyler Durden Tue, 04/29/2025 - 12:20

Deep State JOLTED: Government Job Openings Plummet To 5 Year Low As Total Hires, Quits Jump

One month after the BLS reported that in February the labor market reverted to its deteriorating trendline, when the US had 7.568 million job openings (missing estimates of 7.655 million), a drop from the 7.762 million in January (revised from 7.740 million), and down 877,000 from the prior year, moments ago the latest JOLTS report showed that in March the labor market continued to deteriorate, and the number of job openings declined again, this time by 288K, from a downward revised 7.480MM to 7.192MM, the lowest since September 2024.

According to the BLS, the drop in job openings was across most sectors, with an emphasis of construction, transportation, private education and real estate. The lone increase was reported in finance and insurance.

However, the biggest surprise was precisely where we noted last month that something doesn't make sense. 

Recall last month we said that "as always, there is a reason to doubt this particular set of numbers - just as there was reason to doubt every set of numbers from Biden - because according to the February JOLTS report, the number of Federal Government job openings was essentially flat both sequentially and YoY."

Well, not anymore, and in March, the number of government job openings plunged by 36K, from 134K to just 98K, the first sub-100K print since the covid crash, some five years ago!

In  the context of the broader jobs report, in February the number of job openings was 109 more than the number of unemployed workers (which the BLS reported was 7.083 million), down from 428K the previous month, and the lowest differentials since the covid crash.

Still, as noted previously, until this number turns negative, the US labor market is not demand constrained, and a recession has never started in a period when there were more job openings than unemployed workers.

Said otherwise, in January the number of job openings to unemployed rose modestly to 1.1, the highest since last May if on the low end of the pre-covid range in 2018-2019.

While the job openings data was a miss and a drop, what softened the blow is that for the the number of hires unexpectedly rose to 5.411 million from 5.370 million, the highest since last October, and hardly screaming collapse in the labor market. Meanwhile, the number of workers quitting their jobs - a sign of confidence in finding a better paying job elsewhere - rose again, and in March hit 3.332 million, up from 3.250 million and the highest since July 2024.

How to make sense of this continued deterioration in the labor market, and especially in the government sector?

Well, as we explained in "Here's What Trump Needs To Do For Powell To Quickly Cut Rates" to get the Fed to cut rates,
"all Trump has to do is simply maintain the current level of sharp layoffs - i.e., fully unleash Musk's DOGE - in the parasitic government sector which will more than offset gains everywhere and lead to a spike in total unemployment, and Powell will have no choice but to finally capitulate."

And judging by the sudden plunge in government job openings, don't be surprised if Friday's jobs report shows a huge drop in the number of actual government workers which pushes the broader unemployment rate higher and forces Powell out of his stupor.

 

Tyler Durden Tue, 04/29/2025 - 10:59

"Nothing Is Getting Better" - Texas Services Sector Outlook Slumps, Prices Soar

Following yesterday's slump in a survey of Texas Manufacturing firms, the Dallas Fed released their survey of Texas Services sector firms today, and it was just a big a shitshow.

Perceptions of broader business conditions deteriorated further in April. The general business activity index dropped eight points to -19.4. In addition, outlooks worsened as the company outlook index retreated to a 34-month low of -15.5. The outlook uncertainty index jumped 13 points to 40.5 - its highest level since mid-2022. 

Respondents’ expectations regarding future business activity continued to weaken in April.

Under the hood, we saw further stagflationary signals with revenue forecast plunging as prices soar...

Tariffs were top of mind for many, just as with the Texas Manufacturing survey, as respondents broadly speaking reflected: "Nothing is getting better."

• [Our concerns are] tariffs, tariffs, tariffs.

• We have high levels of anxiety as a result of the fast-moving changes in government restructuring and tariff policies. Although we are hoping for the best end results, the overall business environment is very volatile.

• Our major concern is the effect of tariffs.

• [We are concerned about] tariff uncertainty and price increases, mostly related to products from China; plus, we are experiencing longer lead times for orders.

• Potential supply chain impacts of proposed tariffs are being evaluated industrywide.

• All of the uncertainty is slowing private business.

• Tariffs are bringing a high level of uncertainty to our business. It is hard to tell what will happen in one week, let alone six months

• The on-again, off-again psychodrama in Washington with respect to tariffs is upsetting to almost the entirety of the business community. If the unprecedented tariffs continue, the commercial real estate and construction industries will slow to a halt soon.

• The current tariffs in effect will increase our cost of goods due to increased produce prices and certain imported proteins.

• The almost daily shifts on tariffs create havoc.

• People are acting almost in a panic about the economy.

• Tariffs [are a concern].

• We are highly concerned about a downturn in activity from a recession caused by the tariffs.

• [We are] devastated. We are a trucking company specializing in transporting international shipping containers, and there is no other word that captures what we are facing.

• We are becoming increasingly pessimistic.

• We are experiencing an unexpected decline in business activity. I see customers becoming more price sensitive and cutting back on general expenditures.

And finally, 'chaos', 'erratic', and 'turmoil' at The White House summed up many people's perspectives:

• President Donald Trump has a very chaotic style of dealing with the economy.

• Erratic leadership style in Washington has led to high levels of uncertainty impacting decision making and spending.

• The insane chaos that is running the White House makes it impossible to plan anything.

• Daily instability in D.C. continues to create chaos.

• The randomness of our current president is causing paralysis.

• Uncertainty in the markets is a killer. Erratic behavior of leadership is even worse.

• We are devoting so much time to mitigating the chaos this administration is creating that we have little time left to run our business.

Not a pretty picture... and remember, this is Texans.

However, we did find one silver lining comment:

• I'm not too worried about the new tariffs. I think other countries will soon be negotiating with President Trump, and six months from now the national discussion will have moved on.

Is there hope?

"Consumers are on the fence. This will turn eventually."

Tyler Durden Tue, 04/29/2025 - 10:45

GM Pulls Guidance And Pauses Buybacks Amidst "Tariff Uncertainty"

GM stock dipped slightly Tuesday morning after the company pulled its annual profit forecast, citing significant uncertainty created by President Trump's evolving trade policies, according to Bloomberg, WSJ and multiple other outlets. 

Despite reporting strong first-quarter results, the Detroit automaker warned investors not to rely on previous guidance due to the potentially "significant" impact of automotive tariffs.

"We're telling folks not to rely on the prior guidance, and we'll update when we have more information around tariffs," GM Chief Financial Officer Paul Jacobson said during a media call. "Given the evolving nature of the situation, we believe the future impact of tariffs could be significant."

The company's decision comes as the White House reportedly moves to soften the impact of auto tariffs, preventing them from stacking atop existing duties like those on steel and aluminum. According to The Wall Street Journal, the administration will allow automakers to be reimbursed for overlapping tariffs, a change expected to be retroactive and officially announced before Trump's rally in Michigan Tuesday evening.

Commerce Secretary Howard Lutnick confirmed a deal had been struck, though details remained scarce. The adjustments could offer temporary relief to domestic automakers, including GM, which assemble cars in the U.S. but rely on imported parts.

Nevertheless, GM’s leadership is urging caution. "We're going to look for more clarity before we get into any forward projections of the tariff exposure," Jacobson said.

In January, GM had forecast net income between $11.2 billion and $12.5 billion for 2025, excluding tariff impacts. It also projected adjusted pretax profit between $13.7 billion and $15.7 billion. That forecast is now shelved.

First-quarter results showed cracks forming. GM’s net income fell 6.6% to $2.8 billion, dragged down by weaker sales of highly profitable trucks and SUVs, along with rising warranty and labor costs. Adjusted earnings before interest and taxes (EBIT) slipped 9.8% to $3.49 billion, with EBIT-adjusted margins falling from 9% a year ago to 7.9%.

Revenue, however, rose 2.3% to $44 billion, surpassing analysts’ estimates of $43 billion. Adjusted earnings per share came in at $2.78, also ahead of expectations. GM credited a last-minute surge in car buying in March, as consumers sought to beat potential price hikes from new tariffs that began earlier this month.

While the results slightly exceeded Wall Street's cautious predictions, they revealed growing challenges for a company that has ridden high profits in recent years. Jacobson pointed to an "unusually strong" first quarter in 2024 following the resolution of a United Auto Workers strike, suggesting 2025’s first quarter suffered by comparison.

Earlier this month, GM reported U.S. sales jumped 17% year-over-year to 693,363 units, led by strength in trucks and EVs across its Chevrolet, Cadillac, Buick, and GMC brands. Full-size pickups, particularly the Chevrolet Silverado and GMC Sierra, delivered their best first-quarter sales since 2007.

Nonetheless, GM is bracing for a turbulent year ahead. The company delayed its analysts' call until Thursday, an unusual step reflecting the fast-changing policy environment.

Chair and CEO Mary Barra, in a statement, said, "We appreciate the productive conversations with the President and his Administration and look forward to continuing to work together."

In the meantime, GM announced it would pause new share buybacks beyond the $2 billion plan slated for completion in the second quarter, pending greater economic clarity. It stressed there was no current need to raise additional capital.

Tyler Durden Tue, 04/29/2025 - 10:30

"Never A Consideration" - Amazon Denies Media Claims Of 'Tariff-Tracker'

Update (1155ET): According to CNN (so who knows) - a senior Trump admin official told President Trump about the story, after which Trump called Amazon founder Jeff Bezos following the Punchbowl report that Amazon was considering displaying the cost of US tariffs next to prices on its website. Shortly after the call, an Amazon spokesman released a statement 'clarifying' that the move wasn't considered for the main Amazon site - rather, just 'Amazon Haul.'

"This was never approved and not going to happen," said the spokesperson.

Earlier...

Well that didn't take long...

Amazon has just issued a statement denying PunchBowl's reporting and explaining that showing tariffs costs on the main Amazon site was "never a consideration":

“The team that runs our ultra low cost Amazon Haul store has considered listing import charges on certain products. 

This was never a consideration for the main Amazon site and nothing has been implemented on any Amazon properties.”

Amazon's share price is rebounding on the statement...

Of course, by NOT exposing these numbers (which the leftists and legacy media were cheering so loudly), Jeff Bezos has just shifted the crosshairs once again:

Bezos is once again the second most hated billionaire by the left

— zerohedge (@zerohedge) April 29, 2025

So did PunchBowl just make this up?

Punchbowl story on Amazon, sponsored by Amazon, isn't completely true, per Amazon. pic.twitter.com/5JD7nCk5Pa

— Alex Kantrowitz (@Kantrowitz) April 29, 2025

*  *  *

Shares of Amazon tumbled to premarket lows Tuesday after White House Press Secretary Karoline Leavitt called the company's recent decision to display the effect of tariffs on products a "hostile and political act," adding "why didn't Amazon do this when the Biden administration hiked inflation to the highest level in 40 years?"

"It's not a surprise," Leavitt continued, adding "Amazon has partnered with a Chinese propaganda arm. So this is another reason Americans should buy American."

Watch:

White House calls Amazon's decision to cite Trump tariffs cost on products a "hostile and political act."

"Why didn't Amazon do this when the Biden administration hiked inflation to the highest level in 40 years?" pic.twitter.com/fdof5noJp4

— Josh Caplan (@joshdcaplan) April 29, 2025

AMZN shares are trading over 2% lower in the pre-market following the remarks.

The e-commerce giant will soon display how much of an item's cost is derived from tariffs - 'right next to the product's total listed price,' Punchbowl News reported earlier Tuesday.

Of note, companies like Amazon and Shein Group Ltd. are bracing for a 120% tariff on many of their products due to the US government's decision to end the "de minimis" exemption which allowed goods valued at under $800 to pass into the US without tariffs or customs duties.

Why does Amazon refuse to disclose where its crap products from companies with fake names are manufactured. Amazon won’t disclose country of origin, but it knows the exact country-specific tariff? https://t.co/KU7gr6ILMe

— Sean Davis (@seanmdav) April 29, 2025

According to Treasury Secretary Scott Bessent, who attended the press briefing, Amazon's move to highlight tariffs is unfair given that the costs of policies implemented by other administrations (including regulations) aren't being broken out by Amazon.

"The big tax on consumers that goes unnoticed is deregulation or regulation, and we are deregulating and bringing that down," Bessent said. "So you know, from a household income point of view, we would expect real purchasing increases that we’ve seen over the first 100 days, and we would expect that to accelerate."

Needless to say, this "hostile and political" move by Amazon is catching heat...

Executive order mandating that on-line sales identify country of origin for each product.

— Carnot's Law (@Len54Len) April 29, 2025

Absolutely right. Amazon’s decision is clearly political. They didn't flag inflation impacts under Biden, but now single out tariffs under Trump.

— VJT (@KelvinCold1234) April 29, 2025

 

Tyler Durden Tue, 04/29/2025 - 10:25

Conference Board Consumer Expectations Plunge To 14 Year Lows; Inflation Expectations Soar

Another day, another sentiment measure disappoints...

US consumer confidence fell in April to an almost five-year low on growing pessimism about prospects for the economy and labor market due to tariffs. The Conference Board’s gauge of confidence decreased nearly 8 points to 86, the weakest since May 2020. This was the fifth straight monthly decline, the longest such stretch since 2008. 

Worse still, consumer expectations for the next six months plunged to the lowest level since 2011, while a gauge of present conditions also fell.

“Consumer confidence declined for a fifth consecutive month in April, falling to levels not seen since the onset of the COVID pandemic,” said Stephanie Guichard, Senior Economist, Global Indicators at The Conference Board. 

“The decline was largely driven by consumers’ expectations. The three expectation components—business conditions, employment prospects, and future income—all deteriorated sharply, reflecting pervasive pessimism about the future. 

Notably, the share of consumers expecting fewer jobs in the next six months (32.1%) was nearly as high as in April 2009, in the middle of the Great Recession. In addition, expectations about future income prospects turned clearly negative for the first time in five years, suggesting that concerns about the economy have now spread to consumers worrying about their own personal situations.

However, consumers’ views of the present have held up, containing the overall decline in the Index.”

Labor market conditions weakened, extending their very recent downtrend...

High financial market volatility in April pushed consumers’ views about the stock market deeper into negative territory, with 48.5% expecting stock prices to decline over the next 12 months (the highest share since October 2011). 

Meanwhile, average 12-month inflation expectations reached 7% in April - the highest since November 2022, when the US was experiencing extremely high inflation. 

Notably, the NYFed's measure of inflation expectations (and the market's measure of inflation expectations) are NOT screaming higher like UMICH and CONF BOARD surveys...

Finally, we note that April’s fall in confidence was broad-based across all age groups and most income groups. The decline was sharpest among consumers between 35 and 55 years old, and consumers in households earning more than $125,000 a year.

Guichard added that write-in responses on what topics are affecting views of the economy revealed that tariffs are now on top of consumers’ minds, with mentions of tariffs reaching an all-time high.

Consumers explicitly mentioned concerns about tariffs increasing prices and having negative impacts on the economy. 

Inflation and high prices remained important for consumers’ views about the economy: while the majority complained about the high cost of living, there were also some references to declines in the prices of gas and some food items.

The decline in confidence was shared across all political affiliations.

Tyler Durden Tue, 04/29/2025 - 10:14

​Putin Thanks Kim For 'Heroic' North Korean Troops That Helped Liberate Kursk

For the first time the governments of Russia and North Korea have issued coordinated statements of high-level confirmation that North Korean troops were sent to fight for Russia against Ukraine, having been deployed months ago.

The statements described that the large foreign troop contingency helped liberate Russia's Kursk border region, after a Ukrainian incursion and occupation which stretched all the way back to last August.

Putin said Monday that the population would never forget the 'heroic' feats of North Korea’s special forces. "We will always honor the Korean heroes who gave their lives for Russia, for our common freedom, on par with their Russian brothers in arms."

He further declared they had helped defeat the "neo-Nazi formations" sent by Ukraine and that this was based on "solidarity" and "genuine comradery"

Putin finally confirms North Korean troops have been fighting against Ukraine, pursuant to the mutual defense provision of the June 2024 treaty signed by Russia and North Korea. At the time, it was ambiguous how robust that treaty was to believed to be. Turns out, quite robust pic.twitter.com/PbxjRrkVeL

— Michael Tracey (@mtracey) April 28, 2025

It was only days ago that Putin officially declared the full liberation of Kursk had been accomplished, after the Ukrainians were pushed out of the final border village of Gornal.

Along with huge amounts of artillery shells and likely even ballistic missiles, North Korea has sent "14,000 troops, mostly members of its special operations units, to Russia, including 3,000 dispatched earlier this year to replace those killed or wounded, according to South Korean officials," the NY Times writes.

All of this was based on a mutual defense treaty inked in Pyongyang last summer. While details have been somewhat scant, it has become clear that the treaty is "quite robust" - as journalist Michael Tracey has pointed out.

As for North Korea's Kim Jong Un, KCNA quoted him Monday as saying, "They who fought for justice are all heroes and representatives of the honor of the motherland."

North Korea "regards it as an honor to have an alliance with such a powerful state as the Russian Federation," he added. Ukraine has claimed to have captured both North Korean and even Chinese troops. 

Via Sputnik

As for Kursk, at the height of the cross-border offensive Ukraine's military had seized just over 530 square miles, but regional reports indicated a week ago that significant figure was down to less than just 20 square miles - and then came the final assault to liberate Gornal.

Prior South Korean intelligence reports have claimed the North Koreans lost over 1,000 casualties in Kursk. But nothing official on this has ever been issued from any side.

Tyler Durden Tue, 04/29/2025 - 09:55

Have You Built Your "Grid" Correctly?

By Michael Every of Rabobank

Delusions of Homo Economicus aside, we each see the world differently via the unconscious cognitive ‘grid’ we all impose on it. Yet in highly unstable times, one needs to check if one’s grid is stable enough to cope.

A week after boasting it had achieved 100% renewables energy power for the first time, Spain’s power grid suffered a crippling blackout, along with Portugal’s. Apparently, this was due to over-reliance on what are always fluctuating power sources vs. the base power that comes from fossil fuels, nuclear, or storage batteries. 

Total chaos and a state of emergency ensued: those without cash couldn’t operate – most businesses didn’t; neither did trains, planes, or traffic lights. A never-before tried renewables-based grid black start had restored 3/4 of power at time of writing. The lessons from this shock are: 1) this is what a cyberattack on the West could look like – and we aren’t ready; and 2) as global energy expert @aberman12 makes clear, we can’t rely on renewables power without back-up batteries. Further massive investment is needed; or a return to fossil fuels or nuclear; or we run the risk of black outs from time to time.

Talking of shocks and massive investments, the US says it’s close to giving up on its peace deal for Ukraine: Europe is worried it’s going to walk away, leaving it to carry the defense can. Note recent rumors the UK is unwilling to send troops to Ukraine on concerns that it could lead to direct UK-Russia clashes. The same obviously applies for Europe. 

Therefore, the EU and UK will tomorrow announce a strategic partnership aimed at “maintaining global economic stability and our mutual commitment to free and open trade,” along with security cooperation – though whether that means either side will risk a Russia clash absent US cover remains to be seen.  Moreover, that’s ahead of a by-election and local elections this week where the Labor government was already going to get hit hard by the anti-EU/pro-US Reform Party – the size of that blow may increase in proportion to the commitment to that new UK-EU deal. Furthermore, how is that new partnership compatible with the UK --who are trying-- and Europe --who reportedly aren’t-- striking a US trade deal? Do they come as a package now, or not at all? 

Equally, the UK is reportedly also close to an FTA with India; yet India is close to a deal with the US that isn’t going to be for “free and open” trade with China. Likewise, Canada’s election --where Trump had called for people to vote for the candidate who would make it the 51st state-- looks like seeing acting PM Carney as the one who will have to accept the “No more China” trade terms that Trump will impose, regardless of what he said pre-election.

Expand, or contract, your mental grid to see that “Free trade first” fluctuations aren’t compatible with baseload “security first” realpolitik.   

As an example, Pakistan just warned of imminent India military action against it in response to a recent terror attack in Kashmir, to which China stated: “As Pakistan's ironclad friend and all-weather strategic cooperative partner, China fully understands Pakistan's legitimate security concerns and supports Pakistan in safeguarding its sovereignty and security interests,” with rumours it and Turkey are sending Pakistan weapons. 

India will surely be looking for mirroring statements and actions from those who want more trade with it. The UK and the EU aren’t going to provide them; BRICS is a joke given what C just said about I, via P; and that only leaves the US.

Indeed, the White House is still expecting to bolt on its first new trade deal soon, as noted, likely with India, which could start a domino effect given the scale and potential of those two economies in tandem. At least that’s the plan.

The US will reportedly soften auto tariffs so they don’t stack with steel and aluminium ones, and those on auto parts will be eased. However, it says it’s up to China to de-escalate for a trade deal - which is by necessity and realpolitik more than a trade deal. That’s a message being sent and received on many levels for those who know how to look for the signs aside from those officially recognised by Bloomberg and the Financial Times.

Yet as reports flood in of US supply chains trying to move out of China, Beijing is allegedly blocking other countries’ attempts to buy China-made intermediate goods, and engineering talent, to ensure production of downstream goods stays at home. “Rules-based order”, right? 

Meanwhile, a Fed Dallas survey saw firms terrified about looming supply-chain shocks and already asking for rate cuts. They won’t help much, much as markets can’t understand that, again, but that’s what they are asking for if they can’t get tariff relief.

US Senator Paul is quoted by CNN as saying he has the votes to block Trump's tariffs in the Senate, but the move could be blocked by Speaker Johnson in the House, speaking to the political pressures building, even as there is no election for over 18 months and the prospect of consumer tax cuts ahead: Trump just floated removing income tax on anyone earning less than $200,000. 

Of course, that will threaten to blow the US deficit sky high, Liz Truss style: buckle-up, buckaroos. Unless supply shocks are deflationary due to a slump in demand and yields fall: buckle-up, buckaroos. 

Again, expand your grid and understand this isn’t just about tariffs, and tariffs aren’t just about trade, and trade isn’t the real game either. 

To cap the morning off, the founder of Binance says he thinks the creator of Bitcoin was an AI from the future. Really. 

Expand your grid immediately - or risk blackouts.

Tyler Durden Tue, 04/29/2025 - 09:35

US Home Prices Hit A New Record High In February... Except In Tampa

US home prices hit a new record high in February, according to the latest data from S&P CoreLogic Case-Shiller, rising 0.4% MoM (as expected). However, the pace of price rises did slow modestly (after accelerating for the past three months) to +4.50% YoY...

But as the average national home price rose to yet another record high, prices in Tampa continued to fall...

But Las Vegas and San Diego are also seeing prices start to decelerate rapidly...

Arguably, (lagged) mortgage rates dipped during that period (positive short-term for the highly smoothed and lagged Case Shiller series), but as is clear, the next couple of months do not bode well...

However, home price appreciation does seem to track very closely with bank reserves at The Fed (6mo lag), which implies prices are going continue to lag for the next couple of months before re-accelerating once again...

So 100bps of rate-cuts prompted a re-acceleration in home prices...Well played Fed!!

Tyler Durden Tue, 04/29/2025 - 09:14

Him & Hers, Novo Nordisk Partner To Sell Heavily Discounted Wegovy

Novo Nordisk is teaming up with major telehealth companies to sell its blockbuster weight-loss drug Wegovy directly to U.S. consumers at a steep discount through its new direct-to-consumer pharmacy platform. For many, the monthly cost of Wegovy will now be more affordable than the average monthly payment for a new vehicle.

Bloomberg reported that NovoCare will begin offering Wegovy through telehealth firms Hims & Hers Health, LifeMD, and Ro. The weight-loss drug will be offered as subscription models on Hims and Ro. Hims will sell Wegovy for $599 monthly, including a membership offering clinical and nutritional support. Ro will charge $499 monthly for Wegovy, plus a $145 membership fee after the first month. Both of these monthly prices are being offered at more than 50% of the drug's retail price in the U.S. market. 

"The strategy comes as rival Eli Lilly & Co. has teamed up with telehealth firms like Ro to distribute lower-cost vials of its own obesity medication, Zepbound. Lilly doesn't have a similar partnership with Hims, which sells Zepbound independently at a premium compared to Lilly's discounted offering," Bloomberg noted. 

We noted in early March that Novo was preparing for a direct-to-consumer launch to take on Lilly's Zepbound.

Andrew Dudum, CEO and founder of Hims, said Novo's new partnership is "delivering the future of healthcare" by offering Americans affordable, breakthrough medicine that improves long-term health outcomes.

"Beyond this initial collaboration, the companies are developing a roadmap that combines Novo Nordisk's innovative medications with Hims' ability to deliver access to quality care at scale, with the goal of improving long-term outcomes for more people living with chronic disease, and doing that more affordably," said Dave Moore, Novo's executive vice president for U.S. operations. 

Last year, elevated demand for Wegovy and Zepbound led telehealth companies — including Hims and Ro — to sell compounded versions of these wonder drugs at steep discounts. 

Moore told Bloomberg that more affordable pricing and increased partnerships are a "change" for Wegovy and that "this is different than where we have been in the last couple of years." 

In markets, shares of Hims in New York surged as much as 30% in premarket trading. On the year, shares are up nearly 18% as of Monday's close. 

The short interest in Hims recently touched 34.33% of the float, or about 61 million shares short. 

 

Tyler Durden Tue, 04/29/2025 - 09:05

Tariff-Frontrunning Sends US Trade Deficit To New Record High In March

The US merchandise-trade deficit unexpectedly widened in March to a record as companies continued importing goods to get ahead of tariffs.

The shortfall in goods trade grew 9.6% from a month earlier to $162 billion, Commerce Department data showed Tuesday.

Imports rose 5% to $342.7 billion, led by consumer goods, while exports increased 1.2% as firms scrambled to get ahead of President Trump's 'Liberation Day' tariffs...

Imports of consumer goods surged 27.5%, while inbound shipments of motor vehicles and capital goods also increased.

Because this is the 'advance' data release, there is no data for individual nation trade balances or how gold imports have shifted. Remember, gold imports had been soaring through February...

...and blowing up economists' models of GDP growth.

What we do know is that gold inventories at COMEX have been falling in March, suggesting a slowdown in imports... which will juice GDP forecasts (further confounding all the PhDs)

Finally, we note that Tuesday’s Commerce Department report also showed stockpiles at wholesalers increased 0.5%. Retail inventories fell 0.1% last month, reflecting a decline at car dealers.

Tyler Durden Tue, 04/29/2025 - 08:56

California Just Became The World's Fourth-Largest Economy In 2024

Authored by Jill McLaughlin via The Epoch Times (emphasis ours),

California Gov. Gavin Newsom announced on April 23 that California had the fourth-largest economy in the world last year, overtaking Japan.

Construction workers on the site of a new development in Long Beach, Calif., on March 5, 2025. Frederic J. Brown/AFP via Getty Images

According to Newsom’s spokeswoman, Tara Gallegos, the governor used preliminary estimates of nominal gross domestic product (GDP) for 2024, issued by the U.S. Bureau of Economic Analysis (BEA).

Nominal GDP measures the value of goods and services for a state or country using current market prices and is not adjusted for inflation. In contrast, real GDP data is adjusted for inflation.

In addition to BEA data, Newsom also cited data released on April 22 by the International Monetary Fund (IMF), ranking each country according to its GDP.

California’s GDP for 2024 was valued at $4.1 trillion by the BEA. According to the IMF, Japan’s GDP was $4.03 trillion in 2024.

In an April 23 statement, Newsom said California’s economy ranked fourth-largest internationally, behind the United States as a whole ($29.2 trillion), China ($18.7 trillion), and Germany ($4.7 trillion).

Newsom said that the state’s 6 percent economic growth in 2024 was a “faster rate than the world’s top three economies.”

The governor touted the strength of the state’s agriculture, high-tech, and manufacturing sectors.

“California isn’t just keeping pace with the world—we’re setting the pace,” Newsom said in a statement. “Our economy is thriving because we invest in people, prioritize sustainability, and believe in the power of innovation.”

California Gov. Gavin Newsom speaks in Los Angeles on Sept. 25, 2024. John Fredricks/The Epoch Times

University of Southern California professor of business management Michael Mische, however, said California’s ranking has more to do with how other economies did last year.

“California’s number four position has more to do with the poorly performing ... economies of Japan and Germany than it does with any in-state specific initiatives,” Mische told The Epoch Times.

California’s economy grew by 13.3 percent from 2019 to 2024, while Japan’s economy saw only a 0.9 percent increase and Germany’s was only 0.3 percent, Mische said.

“So, Japan and Germany grew at less than 1% for the 2019 to 2024 period in real GDP terms,” he said.

Japan has suffered from a prolonged state of decline, while Germany is enduring high labor and energy costs, he added.

Marshall Toplansky, an associate professor and faculty fellow in innovation at Chapman University’s College of Business and Economics, noted that tariffs could slow California’s economy.

“The interesting question here is whether the impact of tariffs will change this,“ Toplansky told The Epoch Times. ”I think we will be feeling a slowdown in trade if the tariffs continue at high levels.”

Shipping containers line the Port of Los Angeles on March 28, 2025. John Fredricks/The Epoch Times

The issue is how high the tariffs will be and how long they will last, he added.

“The ports of Los Angeles and Long Beach will very likely see a drop in volume, and it is not clear to what extent they will hurt overall GDP for the state,” Toplansky said.

Newsom filed a lawsuit on April 16 in federal court challenging President Donald Trump’s tariffs, claiming they will hurt states, consumers, and businesses.

Tyler Durden Tue, 04/29/2025 - 08:45

Futures Flat As Markets Brace For Earnings Tsunami

US equity futures were unchanged, erasing a modest gain and loss earlier, after General Motors pulled earnings guidance for 2025 and put share buybacks on hold until it has more clarity on the impact of US tariffs. As of 8:15am, S&P futures were flat, while Nasdaq futures were down 0.2% as TSLA rose +1.0% pre-mkt, followed by MSFT +0.5% and AMZN +0.5%. GM dropped in premarket trading, reversing an earlier gain, as it said it would suspend $4 billion of share repurchases. Bond yields and USD are higher (2-, 5-, 10-yr yields are 1.6bp, 2.9bp, 2.7bp higher). Commodities are mixed with WTI futures dropping 1.7%, adding to sharp losses seen Monday, Base Metals higher, and Precious Metals mixed. WSJ repeated a report from last week that Trump may ease his auto tariffs today; Elsewhere, Scott Bessent set July 4 as the goal to pass Trump’s tax cut package; he will announce the debt-ceiling X-date this week or next. Today, the key macro focus will be JOLTS Job Openings and Conf. Board Consumer Confidence.

In premarket trading, Magnificent Seven stocks are mixed as futures whipsaw )Amazon +0.2%, Alphabet +0.2%, Microsoft +0.1%, Apple +0.1%, Tesla -0.1%, Meta -0.1%, Nvidia -0.7%). General Motors (GM) shares fall 2.4% premarket after the automaker withdrew 2025 earnings guidance and paused $4 billion in share repurchases until it has more clarity on tariff impacts. Hims & Hers Health Inc. (HIMS) shares soared as much as 46% as it’s among companies Novo Nordisk A/S is partnering with to offer its popular weight-loss drug Wegovy to more US patients at a reduced price. Here are some other notable premarket movers:

• Crown Holdings (CCK) shares rise 3.3% after the beverage can maker reported adjusted earnings per share for the first quarter that beat the average analyst estimate. Analysts note strong volumes in Europe and Brazil
• Honeywell International Inc. (HON) shares gain 4.7% after the company raised its full-year guidance for earnings per share.
• PayPal (PYPL) shares are down 4.1% in premarket trading after the company reported fewer payment transactions in the first quarter than analysts expected.
• Okta (OKTA) shares rise 3.8% after S&P Dow Jones Indices announced that the stock will replace Berry Global in the S&P MidCap 400 before trading opens May 1.
• Regeneron (REGN) shares fall 7.5% after the drugmaker reported profit and sales for the first quarter that fell short of expectations.
• Ultra Clean (UCTT) shares are down 10% after the semiconductor manufacturing company reported first-quarter results that missed expectations and gave an outlook that is below the analyst consensus.
• UPS (UPS) shares are up 2% after the company reported adjusted earnings per share in the first quarter above what analysts expected
• Waste Management (WM) shares fall 1.7% after the firm’s first-quarter update missed revenue expectations and free cash flow dropped, with analysts saying that investors could have been hoping for more in order to support the stock’s year-to-date rally
• Wolfspeed (WOLF) shares are up 10% as the chipmaker is set for its sixth session of straight gains to match February’s winning streak

As Bloomberg notes, after weeks of intense volatility, markets now seem to be in a holding pattern. Gold is consolidating after hitting record highs, the DXY dollar index remains below its key 100 level, and oil is drifting lower. For investors, it’s difficult to find consensus, with risk management, confidence, and the guiding narrative on US exceptionalism upended by tariffs.

“With the uncertainty created by the tariffs we need to start pricing at least a probability of a US recession,” Johanna Kyrklund, chief investment officer at Schroders Plc, told Bloomberg TV. “As we analyze each company stock-by-stock, we’re looking for that risk to growth.”

Tariff sentiment continues to drive price action, with investors weighing plans by the Trump administration to ease the impact of auto tariffs by lifting some levies on foreign parts for cars and trucks made inside the US. However, it doesn’t look like a trade resolution is coming anytime soon. China’s top diplomat warned countries against caving in to US tariff threats, and Trump’s tactics are only serving to make China’s Xi Jinping more popular. At home, Treasury Secretary Bessent set a July 4 goal to pass a multi-trillion dollar tax cut package to appease voters getting fed up of Trump’s handling of the economy.

Still, with just over a third of S&P 500 companies reporting quarterly results, of those, 75% have beat estimates, according to data compiled by Bloomberg. S&P 500-listed companies worth $20 trillion are set to deliver results this week in one of the heaviest for 2025 earnings seasons. But the next few days are key: companies worth $20 trillion are set to deliver results this week in one of the heaviest for 2025 earnings seasons.  

Beyond the plethora of earnings, investors will be tracking data for clues on economic resilience in the face of tariffs. Prospects for Federal Reserve interest-rate cuts will be guided by Friday’s US non-farm payrolls figures. Sentiment earlier was boosted by signs of easing trade tensions after a White House official said imported automobiles would be given a reprieve from separate tariffs on aluminum and steel. 

In Canada, the Liberal Party is projected to win a fourth consecutive election, giving a mandate to former central banker Mark Carney.

European stocks rise 0.4%, with risk sentiment improving after the US said imported autos would be given a reprieve from separate tariffs on aluminum and steel. Miners, travel and banks are the strongest-performing European sectors, while the IBEX lags peers, dropping 0.5%, as Spain deals with the fallout of a massive blackout. In earnings, Deutsche Bank shares rise after its trading unit hit a record. HSBC climbs after announcing a fresh share buyback. BP shares fall after the oil major cut its buyback as profit missed forecasts. Here are some of the biggest movers on Tuesday:

• Rheinmetall shares rise as much as 7.3% after smashing expectations across the board with analysts praising a blowout quarter.
• Deutsche Bank shares gain as much as 4.6% after the lender posted a strong set of results, led by its trading unit hitting a record in the first quarter amid high market volatility.
• Neste shares gain as much as 13% after the Finnish refiner posted an increase in margins within its renewable product unit in the first quarter results.
• HelloFresh shares jump as much as 12% after the meal-kit company reported first-quarter adjusted Ebitda that beat estimates by roughly 30%, a sign that the firm is hastening its pivot to profitability as it cuts fulfillment and marketing expenses.
• Amundi shares slide as much as 2.4% after the investment manager’s first-quarter earnings showed a mixed performance that could weigh on consensus estimates, according to analysts.
• Porsche shares fall as much as 7.6%, their steepest drop since early February, after the luxury carmaker issued another profit warning.
• Deutsche Boerse shares fall as much as 5.7% after the German stock-exchange operator reported earnings for the first quarter that missed the average analyst estimate.
• Lufthansa shares fall as much as 2.9%. Results for the first quarter are largely in line and the carrier expects strong demand during the second quarter, though analysts note that weakening demand on the North Atlantic presents warning signs ahead of the peak summer season.
• Volvo Cars shares fall as much as 11% to a record low after the Swedish automaker posted first-quarter results that missed estimates and withdrew guidance for this year and next due to uncertainty around US tariffs.
• Elekta shares drop as much as 6.2% after an unidentified holder offered up to 15m shares via Goldman Sachs at a discount of 5.5% vs. Monday’s close, according to terms seen by Bloomberg.
• Nordic Semi shares slide as much as 9.4% after the chipmaker forecast 2Q sales below consensus estimates, citing increased risks from trade tensions and tariffs.

Asian equities advanced, rising to the highest level this month, on a rally in some Chinese technology shares and a sentiment boost from further signs of the US dialing down its trade rhetoric. The MSCI Asia Pacific Index gained as much as 0.7% Tuesday. TSMC and Meituan provided the biggest boost to the gauge, while India’s Reliance Industries extended its rally triggered by better-than-expected earnings. Benchmarks advanced in Hong Kong, Taiwan, India and South Korea. Japanese markets were closed for a holiday. Asian markets have largely recovered from the hit sparked by President Donald Trump’s reciprocal tariff announcements on April 2 amid hopes for trade deals. In the latest positive sign, Trump is on track to ease the impact of his auto tariffs, with changes sought by the industry that would lift some levies on foreign parts made inside the US.

• Australia: S&P/ASX 200 +0.92%, extending its winning streak to a 4th straight session as investors brushed off global trade uncertainties. Domestically, expectations are growing that the RBA will deliver another 25-bps cut in May, amid rising economic uncertainty and escalating global trade concerns. Investors are now awaiting Australian inflation data, due Wednesday, for further insight into the RBA’s next move.
• Taiwan: TAIEX +1%, was once again the best performing market in the region as sentiment continues to improve following recent rally in the US. TSMC 2330 TT +0.6% led the way as it closed above TWD900 for the first time since the tariff selloff in the first week of April. Small/mid-caps continued to outperform, as OTC index have rallied for 6th straight days, while beaten down AI ROBOTICS/BBU plays surged today.
• Korea: KOSPI +0.65%, rebounded. led by locals’ inflow. Locals extended their net buying streak for 3 consecutive days, mainly buying Tech (+$69mn) and Financials (+$94mn) today while foreigners remained as net sellers of equities, mainly selling Transport Equipment (-$231mn, comprised heavily of Shipbuilders, Defense, and Autos). Hanwha Ocean 042660 KR -12.1% as the name plunged after Co's shareholder KDB announced to raise up to W1.1trn (c. $735mn) through a block deal. Meanwhile, Korean Autos (KRXAUTO +1.6%) gained as President Trump is expected to soften the impact of this auto tariffs.
• Japan: The market is closed today (Showa Day) and will resume trading on April 30th.
• China: SHSZ300 -0.2%, traded choppy as Sino-US trade uncertainty weighed on sentiment. China reiterated that it is not involved in trade talks with the US. Small cap and TMTs overthrown large cap but neither of them gave a strong conviction. Innovance 300124 CH +4% post earnings beat. Healthcare rebounded, but A is lagging H. Xinqi pharma 300573 +14% post earnings 3x in 1Q. There is also a peer bank report released yesterday calling for China HC re-rating, especially in the domestic pure revenue names like Ping An Good Doctor, and Ali health.
• HK: HSI +0.2%. SB turned net seller of -US$827mm today, continuing general trend of outflows from last week. On the flows front, the desk saw active managers sell into liquidity from passive buying. Wuxi AppTec 2359 HK +4.2% after 1Q25 earnings beat on both top and bottom line. Geely 175 HK also +4.2% after subsidiary Volvo indicated they would reduce costs. In contrast, BYD 1211 HK -2.6% as concerns of waning demand from yesterday persisted.

In FX, the Bloomberg Dollar Spot Index rose 0.2% after falling 0.5% on Monday, when a disappointing manufacturing activity report added to concerns over US economic growth; haven currencies the yen and Swiss franc, were the biggest underperformers versus the dollar, down 0.6% and 0.4% respectively

• CAD/USD was little-changed at 1.3831, outperforming other Group-of-10 currencies which were lower across the board
• EUR/USD fell 0.3% to 1.1388; 10-year bund yield fell 3bps to 2.49%
• GBP/USD also slipped, pulling away from a three-year high; gilts edged up, tracking gains in other European bonds

In rates, treasury futures drift lower into early US session, unwinding a portion of gains seen Monday and underperforming core European bonds. US yields cheaper by 1bp to 3bp across the curve with 2s10s steeper by 1bp on the day; US 10-year yields trade back up 3bps to around 4.24% with bunds and gilts outperforming by 4bp and 5.5bp in the sector.

In commodities, WTI drifts 1.6% lower to trade near $61.03. Spot gold falls roughly $29 to trade near $3,315/oz. Most base metals are in the green. Bitcoin climbs to around $95,000. 

The US economic calendar includes March wholesale inventories, February S&P CoreLogic house prices (9am), March JOLTS job openings, April consumer confidence (10am) and April Dallas Fed services activity (10:30am). From central banks, we’ll hear from the ECB’s Cipollone and Holzmann, and the BoE’s Ramsden. The Fed's talking heads remain mute thanks to the communications blackout ahead of the May 7 FOMC meeting. Finally, earnings releases include Starbucks, Visa, Pfizer and UPS.

Market Snapshot

• S&P 500 mini +0.1%
• Nasdaq 100 mini +0.1%
• Russell 2000 mini +0.1%
• Stoxx Europe 600 +0.2%
• DAX +0.6%, CAC 40 -0.1%
• 10-year Treasury yield +2 basis points at 4.23%
• VIX -0.3 points at 24.86
• Bloomberg Dollar Index +0.2% at 1222.16
• euro -0.2% at $1.1394
• WTI crude -1.4% at $61.17/barrel

Top Overnight News

• Canada’s Liberal Party won a fourth straight election, handing Mark Carney a mandate but with a narrow margin of victory. The loonie was steady. The Liberals led with 168 seats, ahead of the Conservative Party’s 144 but short of the 172 required for a majority. The Bloc Québécois would hold the balance of power in a minority government, raising the likelihood of a looser fiscal policy than Carney wants. Carney vowed to win the trade war with the US and strengthen alliances with other countries. BBG
• President Trump is expected to soften the impact of his automotive tariffs, preventing duties on foreign-made cars from stacking on top of other tariffs he has imposed and easing some levies on foreign parts used to manufacture cars in the U.S. WSJ
• White House said Trump wants tax cuts in this reconciliation package, while it was separately reported that Bessent said he hopes the Trump tax bill can be done by July 4th.
• US Treasury Financing Estimates (Q2): expects to borrow USD 514bln in privately-held net marketable debt, assuming end of June cash balance of 850bln (prev. guided USD 123bln, assuming end of June cash balance USD 850bln).
• China’s copper stockpiles are on track to dwindle to nothing in just a few months, as the market suffers “one of the greatest tightening shocks” in its history on fears of US tariffs. FT
• China said it’s open to working with US companies after halting Boeing jet deliveries. India plans to highlight its large pipeline of Boeing orders and potential for more to secure a favorable trade deal with the US. BBG
• China said the US should stop making threats and pursue dialogue based on mutual respect. Earlier, Foreign Minister Wang Yi warned countries against caving in to tariff threats. BBG
• Eurozone inflation expectations rise, with 12-month climbing 30bp to 2.9% (highest since Apr ’24) and 36-month advancing 10bp to 2.5% (highest since Mar ’24). ECB
• Pakistan’s army said it shot down an Indian spy drone along their disputed border in the Kashmir region, as tensions rise over last week’s militant attacks. BBG
• A union representing West Coast dockworkers has sharply criticized President Trump over his “reckless” tariffs that will hurt American workers. The union noted the tariffs have created tension with allies and are a “direct attack” on the working class. The Hill
• Scott Bessent set a July 4 goal to pass Trump’s multi-trillion dollar tax cut package. He also said the debt-ceiling X date will be announced this week or next. BBG

Tariffs/Trade

• US President Trump is expected to soften the impact of his automotive tariffs by preventing duties on foreign-made cars from stacking on top of other tariffs he imposed and easing some levies on foreign parts used to manufacture cars in the US, according to WSJ citing sources. Furthermore, a White House official said those actions are expected on Tuesday and Commerce Secretary Lutnick said President Trump is building an important partnership with both the domestic automakers and American workers, while Lutnick added this deal rewards companies who manufacture domestically, as well as provides a runway to manufacturers who have expressed commitment to invest in America and expand their domestic manufacturing.
• Chinese Foreign Minister Wang Yi said concession and retreat will only make the bully more aggressive.
• China's MOFCOM said on the report that Boeing flew back three 737 MAX planes to be delivered to Chinese airlines, that China and the US have maintained long-term mutually beneficial cooperation in the field of civil aviation, while it added the US wielded the big stick of tariffs to seriously impact the stability of global industrial and supply chains, and many enterprises were unable to carry out normal trade and investment activities.
• Italian PM Meloni says times are not mature yet for an EU-US summit, according to Corriere Della Sera.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were mostly in the green but with some of the gains capped following the choppy performance stateside and in holiday-thinned conditions with Japanese markets closed for a holiday, while reports that US President Trump is expected to soften the impact of his automotive tariffs saw a muted reaction. ASX 200 gained amid outperformance in the energy, tech and resources sectors, while miners were also lifted as  participants digested output updates. Hang Seng and Shanghai Comp were varied as the mainland lagged owing to uncertainty from the US-China trade war with US Treasury Secretary Bessent recently commenting that it is up to China to de-escalate and that he has an "escalation ladder in his back pocket", while China's Foreign Ministry reiterated its denial regarding a Trump-Xi call and Foreign Minister Wang Yi warned that compromise and backing down would only embolden the bully.

Top Asian News

• Japan and Malaysia are reportedly exploring broader economic ties including AI and automotive.
• Alibaba (9988 HK) introduced Qwen3 to set a new benchmark in open-source AI with hybrid reasoning.
• Earthquake of magnitude 5.0 strikes China's Tibet region, via CENC.
• Agricultural Bank (1288 HK) Q1 (CNH) Revenue 186bln (exp. 185bln), Net Income 72.1bln (exp. 73.95bln), +2.2% Y/Y, NII 140.6bln (exp. 142.7bln), CET1 11.23%.
• Industrial and Commercial Bank of China (1398 HK) Q1 (CNH) NII 156.78bln (exp. 161.29bln), Net Income 84.70bln, -4% Y/Y.
• China Construction Bank (939 HK) Q1 (CNH) NII 141.92bln, NIM 1.41%.
• Bank of China (3988 HK) Q1 (CNY) Net 54.36bln (exp. 57.4bln), NIM 1.29%, Operating Income 165bln (exp. 155bln)

European bourses opened modestly firmer/flat, but some modest pressure crept into the complex as the morning progressed – with indices generally off best levels, to show a mixed picture in Europe. European sectors hold a slight positive bias, albeit with the breadth of the market fairly narrow. Basic Resources takes the top spot, followed closely by Media and Banks. Energy is found at the foot of the pile, dragged down by post-earning losses in BP (-4%); the continued pressure in the crude complex is also not helping. Autos find themselves towards the middle of the bunch. For the sector more generally, US President Trump is expected to soften the impact of his automotive tariffs, by preventing duties on foreign-made cars from stacking on top of other tariffs he imposed and easing some levies on foreign parts used to manufacture cars in the US, via WSJ. For stock specifics, Porsche AG (-5%) dips after it cut FY25 guidance; Volvo Car (-8.3%) reported a significant miss on its EBIT and Revenue figure and launched a SEK 18bln cost and cash action plan.

Top European News

• ECB Consumer Expectations Survey: March: See inflation in next 12 months at 2.9% (prev. 2.6%); 3y ahead sees 2.5% (prev. 2.4%); 12-month is highest since April 2024. Economic growth expectations for the next 12 months were stable in March, standing at -1.2%.
• ECB's Cipollone says that ECB staff estimates suggest that the recently observed increase in financial market volatility might imply lower GDP growth of about 0.2ppts in 2025.

FX

• USD is attempting to claw back some of yesterday's losses that were in part driven by a soft outturn for Dallas Fed Manufacturing data. On the trade front, US President Trump is expected today to announce measures to soften the impact of his automotive tariffs by preventing duties on foreign-made cars from stacking on top of other tariffs, according to WSJ. DXY has risen as high as 99.31 but is yet to venture near Monday's best at 99.83.
• EUR/USD has faded some of its recent gains and failed to sustain the 1.1400 status with recent price action largely driven by moves in the greenback. Spanish CPI metrics which printed hotter-than-expected on a Y/Y, M/M and core basis. EUR/USD is currently contained within Monday's 1.1329-1.1425 range.
• USD/JPY marginally rebounded from support around the 142.00 level after sliding yesterday owing to the early initial risk aversion and lower US yield environment but with the recovery limited in the absence of Japanese participants. USD/JPY has ventured as high as 142.57 but is some way off Monday's opening level at 143.57.
• GBP is a touch softer after Monday's session of outperformance which didn't appear to be driven by any obvious catalyst. BoE's Ramsden is due later; Cable matched its YTD high printed yesterday at 1.3444 before pulling back.
• Antipodeans are both softer vs. the greenback amid a lack of pertinent newsflow out of Australia and New Zealand. That will change tomorrow for AUD with Australian Q1 CPI due on deck.
• CAD in focus after Canada's ruling Liberals, led by Mark Carney, won the national election. However, the outcome was closer than predicted by polls and will require the party to form a minority government. Accordingly, initial support for CAD has faded as markets reprice away from expectations of a majority government. USD/CAD currently sits towards the bottom end of yesterday's 1.3816-92 range.
• Canada's ruling Liberals led by Mark Carney won the national election but will need to form a minority government, according to CTV.
• PBoC set USD/CNY mid-point at 7.2029 vs exp. 7.2781 (Prev. 7.2043).

Fixed Income

• A contained start for fixed income given the Japanese holiday (Showa Day) overnight, meaning that there was no cash trade. USTs currently at the lower-end of a very thin 111-22 to 111-30 band and one that is within Monday’s 111-10 to 111-31 confines. Focus ahead is on, US Consumer Confidence, Advance Goods Trade and JOLTS Job Openings.
• Bunds is modestly firmer. On the data front, Spain’s inflation printed hotter-than-expected across the board and sent Bunds to a 131.16 low with Alphabet’s presence in the market perhaps also weighing. Thereafter, Bunds have recovered a touch and are back into the green and just off a 131.46 session high; a high that printed as the European risk tone came under a little bit of pressure after the Russian Kremlin said Ukraine has not responded to its latest ceasefire proposal.
• Gilts are flat given the lack of leads from sparse overnight trade and a European morning that has been devoid of UK-specifics aside from earnings. At the lower end of a 92.96 to 93.25 band, comfortably within Monday’s 92.79 to 93.33 range. BoE's Ramsden is due later.
• UK sells GBP 900mln 1.25% 2054 I/L Gilt: b/c 3.31x (prev. 3.06x) & real yield 2.175% (prev. 2.126%).
• Italy sells EUR 7.5bln vs exp. EUR 6.5-7.5bln 2.95% 2030, 3.60% 2035 BTP & EUR vs exp. EUR 1.5-2.0bln 2033 CCTeu.
• Alphabet (GOOGL) kicks of debut sale of EUR debt 4yr IPTs mid-swaps +85bps area. 8yr IPTs mid-swaps +105bps area. 12yr IPTs mid-swaps +125bps area.

Commodities

• Crude is on the backfoot, extending on the prior day's losses; there has been little by way of fresh oil-specific newsflow, so focus has been on updates out of Russia/Ukraine; most recently, Russia's Kremlin suggested Ukraine had not responded to offers to commence negotiations. Brent July'25 currently trades in a USD 63.62-64.81/bbl range.
• TTF is lower on the day, after finishing Monday’s session modestly higher, surrounding a number of updates including the blackout in Spain and a three-day ceasefire proposal from Russia. With Spain and Portugal’s blackout almost fully resolved today’s attention now shifts to Russia's ceasefire proposal, announced for May 8th-11th. As it stands, Russia says Ukraine is not responding to the proposal.
• Spot gold continues its reversal from recent record highs, with a number of risk events ahead including US consumer confidence and pivotal speakers such as Commerce Secretary Lutnick and Treasury Secretary Bessent who are likely to speak on auto tariffs. Thus far, today’s low has been recorded at USD 3,314/oz, with a high of USD 3,359/oz.
• Copper is a little firmer after a broad base metals bid this morning, lifting it from near session lows of USD 9,368/t, to session highs of USD 9,455/t, currently holding just off best levels.
• Spain's PM said the government will release 3 days worth of strategic oil reserves, while the grid operator later restored nearly all power.
• China's copper supplies are on track to be depleted in just a few months as the market suffers one of the greatest tightening shocks due to fears of US tariffs, according to commodities trading house Mercuria cited by FT.
• Kazakhstan Q1 oil exports +7% Y/Y to 1.63mln BPD, according to Reuters calculations and official data.

Geopolitics: Middle East

• US President Trump intends to extend the two-month deadline allocated for US-Iran negotiations, according to Israel Hayom citing Israeli officials
• Gaza talks in Cairo are said to be witnessing a "significant breakthrough" and parties agreed on a number of issues including consensus on a long-term ceasefire in Gaza, although some sticking points remain including Hamas arms, according to Reuters citing two Egyptian sources.

Geopolitics: Ukraine

• Explosions were heard in Kyiv after the Ukraine air force issued air raid alerts and air defence systems were engaged in repelling a Russian air attack.
• Russian Kremlin says Ukraine has not responded to many offers by President Putin to commence negotiations without any preconditions, according to Tass Direct talks with Ukraine need to commence, adding this is primary and the legitimacy of Zelensky is secondary. 30-day ceasefire is impossible without settling all the nuances.

US Event Calendar

• 8:30 am: Mar P Wholesale Inventories MoM, est. 0.6%, prior 0.3%
• 9:00 am: Feb FHFA House Price Index MoM, est. 0.3%, prior 0.2%
• 9:00 am: Feb S&P CoreLogic CS 20-City YoY NSA, est. 4.7%, prior 4.67%
• 10:00 am: Mar JOLTS Job Openings, est. 7500k, prior 7568k
• 10:00 am: Apr Conf. Board Consumer Confidence, est. 88, prior 92.9

DB's Jim Reid concludes the overnight wrap

It's shorts and sandals weather here in the UK which is lovely unless it forces you to look at the horrible brusing of my broken little toe. Enjoy the sunshine if you're in Europe this week.

After last week’s rally, markets saw a choppy start to a busy week with the S&P 500 recovering from a -1% decline to narrowly post a fifth consecutive gain (+0.06%) last night, even as the Mag-7 (-0.36%) lagged ahead of Meta and Microsoft earnings tomorrow and Apple and Amazon on Thursday. 10yr Treasuries (-2.7bps) also gained for a fifth session in a row, falling to their lowest level in three weeks at 4.21%.

On tariffs, the latest newsflow was actually fairly positive at face value, as US officials continued to sound optimistic about potential trade deals yesterday. For instance, Treasury Secretary Bessent said that they’d had “many countries come forward and present some very good proposals”. He also said “I would guess that India would be one of the first trade deals we would sign”. Separately, White House Press Secretary Karoline Leavitt also said that more details on trade talks would be announced this week. And later on, Bessent tweeted that they were “continuing to make substantive movement on negotiations with many of our trading partners.” So the rhetoric from the administration is still pointing towards negotiations, rather than further escalation. However, there was still little sign of dialogue between the US and China, with Bessent saying “I believe it’s up to China to de-escalate”. Overnight the incremental positive news has continued with the White House confirming an earlier WSJ story that imported autos would not also face additional aluminum and steel tariffs. This has helped lift S&P (+0.19%) and Nasdaq (+0.24%) futures this morning.

This steady flow of mostly more positive trade headlines lifted the S&P 500 from as low as -1.02% mid-way through yesterday's session to ultimately close marginally higher on the day (+0.06%). That left the index still narrowly in technical correction territory, closing -10.02% below its peak in mid-February, but its slightly above that mark again this morning. It was actually a decent day in terms of market breadth, with two-thirds of the S&P 500 constituents moving higher on the day and its equal-weighted version up +0.30%. By contrast, tech stock underperformance saw the Magnificent 7 decline by -0.36%, led by a -2.05% fall for Nvidia as the chipmaker struggled following news that China’s Huawei is set to test a new chip that could end up being a competitor.

Earlier in yesterday’s session, the mood at the lows wasn’t helped by the Dallas Fed’s manufacturing survey, which plunged to its lowest level since May 2020. Specifically, the general business activity index was down to -35.8, and the raw materials prices index also moved up to its highest level since mid-2022, at 48.4. So that added to the stagflationary narrative, although it’s worth noting that this is a survey once again rather than hard data, and so far the surveys have tended to suggest a worse performance relative to the hard data. As a result, markets weren’t too reactive to the print directly, but it added to the more downbeat backdrop going into this week’s other releases.

US Treasuries saw a more consistent performance, with 10yr yields falling -2.7bps to 4.21% and 2yr yields down -5.4bps to 3.70%, their lowest level since April 4th. Yesterday afternoon, the Treasury released its latest quarterly borrowing estimates, with the Q2 issuance estimate revised up to $514bn from $123bn due to a lower starting cash balance and with the Q3 estimate at $554bn. These figures were slightly above our rate strategists expectations but this may be due to the Treasury not yet factoring in increased tariff revenues. The announcement had limited impact on yields, which closed near the session’s lows. In other fiscal news, after the US close Treasury Secretary Bessent said the administration hoped to have Congress pass their tax bill by July 4.

With rates moving lower, one US asset that did lose ground yesterday was the dollar, with the dollar index down -0.54%, as the safe haven currencies of the Swiss franc (+1.02%) and Japanese yen (+1.17%) outperformed.

Back in Europe, there was a stronger risk-on tone, which reinstated the pattern of European outperformance in 2025. In fact, at the intraday peak, the DAX (+0.13% at the close) even managed to entirely erase its losses since Liberation Day, although by the end of the session it was still -0.53% beneath its levels on April 2. Nevertheless, the index was still up for the 8th time in the last 9 sessions, and those gains were echoed across the continent. For instance, the STOXX 600 (+0.53%) advanced for a 5th consecutive day, as did France’s CAC 40 (+0.50%). The smallest yet most notable rise was the FTSE 100 (+0.02%), which posted an 11th consecutive advance for the first time since 2019, and if it manages a 12th consecutive gain today, that would be the first time since 2017.

Consistent with that risk-on tone, European sovereign bond yields also moved higher, with those on 10yr bunds (+5.1bps), OATs (+4.9bps) and BTPs (+5.5bps) all rising. Likewise, credit spreads tightened further, with Euro HY spreads down -4bps to 349bps, edging closer to their Liberation Day level of 322bps.

In political news, Prime Minister Mark Carney's Liberal Party is projected to win the Canadian federal election. However, with projections showing the Liberals leading in only 155 of 343 seats – shy of the 172 needed for a majority – Carney is likely facing a minority government and will need to negotiate with other parties to pass legislation. The Conservatives are currently projected to win 150 seats. So a remarkable comeback for the Liberals relative to their January lows when they were over 25pp down in the polls but seemingly not quite as good as they would have hoped as the polls closed last night.

In Asia the fresh overnight news on auto tariffs we discussed at the top seems to be helping push markets higher. The S&P/ASX 200 (+0.91%) has hit a near 2-month high with the KOSPI (+0.65%) and the Hang Seng (+0.38%) also edging higher while Chinese equities are bucking the positive trend with the CSI (-0.14%) and the Shanghai Composite (-0.05%) seeing minor losses. Elsewhere, Japanese markets are closed for a public holiday. There’s no trading of cash Treasuries in Asia as Japan is closed.

To the day ahead now, and data releases from the US include the JOLTS report for March, the Conference Board’s consumer confidence indicator for April, and the FHFA’s house price index for February. Meanwhile in the Euro Area, we’ll get the M3 money supply for March, and the European Commission’s economic sentiment indicator for April. From central banks, we’ll hear from the ECB’s Cipollone and Holzmann, and the BoE’s Ramsden. Finally, earnings releases include Starbucks, Visa, Pfizer and UPS.

Tyler Durden Tue, 04/29/2025 - 08:29

The Winners And Losers In 21st Century America

Authored by Charles Hugh Smith via OfTwoMinds blog,

Statistical games can be played to mask the realities of our neofeudal economy, but "narrative control" can't obscure the facts or the banquet of consequences that these realities have set.

Not everyone in America gained ground as a result of the rampant hyper-financialization and hyper-globalization of the 21st century. Let's begin our analysis of who gained ground and who lost ground in the year 2001, when China entered the WTO (World Trade Organization) and offshoring / globalization shifted into high gear and when the Federal Reserve began ramping up its financialization / monetary manipulation--oops, sorry, policy interventions.

The top 1% and the top 10% gained ground. The bottom 90% lost ground, especially the bottom 50%. Wage earners lost ground, while corporate insiders, financiers, speculators using leverage and those lucky enough to be born long enough ago to buy assets at pre-bubble valuations gained ground.

If you want to argue with these facts, argue with the Federal Reserve Database. All these charts are drawn from the St. Louis Federal Reserve FRED Database.

Let's start with the varying multiples generated by asset bubbles since 2001.

• NASDAQ up 9.3X

• Corporate profits up 6.2X

• Case-Shiller Housing Index up 3X

Those are some serious bubbles, given that $1 in 2001 is $1.80 in today's currency.

If the NASDAQ index had risen at the same rate as inflation since 2001, it would be 3,340, not 17,166.

Corporate profits would be $1.26 trillion annually, rather than $4.3 trillion. Hmm, $3 trillion a year is a nice chunk of extra change for gutting national security, quality and durability by offshoring essential industries.

The Case-Shiller Housing Index would be up from 110 in 2001 to 200 today, rather than 323.

So how did each household sector do since 2001?

• Net worth of top 1% up 5X

• Net worth of 90-99% up 3.9X

• Net worth 50-90% up 3.2X

• Net worth bottom 50% up 3X

How much of the nation's total household net worth does each sector own now in dollars?

• Total net worth: $160.2 trillion

• top 1%: $49.4 trillion

• 90%-99%: $58.3 trillion

• Top 10%: $107.7 trillion

• Bottom 90%: $52.5 trillion

• Bottom 50%: $4 trillion

Note that the top 1% own roughly the same net worth as the bottom 90%.

How much of the nation's total household net worth does each sector own now as a percentage of total net worth?

• Total net worth: $160.2 trillion

• Top 1%: 31%

• 90%-99%: 36.5%

• TOP 10%: 67.5%

• Bottom 50%: 2.5%

• 50%-90%: 30%

• BOTTOM 90%: 32.5%

Since wealth is concentrated in the top layer of each sector--the top 1% own the lion's share of the top 10%'s net worth, and the top 10% of the 50% to 90% sector own the lion's share of that sector's net worth--we can say with confidence that the top 20% own roughly 80% of the net worth--in line with the Pareto Distribution (the 80/20 rule).

What's lost in this aggregate number is the extreme concentration of income-producing wealth (and thus political power) in the top 0.1% of the citizenry and the mere crumbs left to the bottom 60%. As many of us have pointed out over the past 15 years, the only accurate description for this system is neofeudal, where a New Nobility owns the wealth and political power, the bottom 80% are modern-day debt-serfs and the "middle class" is now the 90% to 99% sector, with those in the 80% to 90% sector having just enough home equity to fancy themselves "middle class" in name if not in ownership of income-producing assets or political influence.

What do we call a system in which the top 1% own roughly the same net worth as the bottom 90%? Neofeudal. Any other description is misdirection / propaganda aimed at protecting the interests of the Nobility at the expense of the serfs.

The NASDAQ stock market index: up 10X at its recent peak.

Corporate profits up 6.2X as surveillance pricing, monopoly price-gouging, crapification, planned obsolescence and extortion have worked marvelously well in stripmining the citizenry to enrich the top 10% who own 90% of all stocks, the "shareholders."

Wage earners' share of the nation's income has been slashed over the past five decades. Unsurprisingly, hyper-financialization and hyper-globalization did nothing to reverse this decline of American labor in favor of global capital.

If housing fell 40% from its current valuation, it would return to the trend line.

Here's a chart of net worth since 1950. Approximately $100 trillion was added above and beyond what inflation dictated.

Some percentage of the bottom 50% benefited from the housing bubble, but even with the bump to $4 trillion in net worth, the bottom 50% owns a grand total of 2.5% of total net worth.

Here's the 50% to 90% sector:

Here's the 90% to 99% sector:

Here's the top 1% sector:

Statistical games can be played to mask the realities of our neofeudal economy and society. But narrative control by the well-paid apologist-punditry class--everyone's doing great because I'm doing great--can't obscure the facts or the banquet of consequences that these realities have set.

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Tyler Durden Tue, 04/29/2025 - 07:45

Apartment Sizes Are Still Shrinking...Except In These Key Cities

As the 2025 rental season kicks off, square footage is becoming the new currency for renters. After a decade of shrinking apartments, new data from RentCafe shows that average unit sizes grew again in 2024, reaching 908 square feet — a reversal driven largely by market demand for more livable space, according to RentCafe.

In 2024, the average U.S. apartment size grew to 908 square feet, reversing a decade-long trend of shrinking floorplans. Studios, one-bedrooms, and two-bedrooms all expanded slightly, gaining between 4 and 13 square feet. Florida cities Tallahassee and Gainesville topped the list for largest average apartment sizes, while Seattle retained its title for the smallest.

Among major markets, San Francisco led the growth with an average unit increase of 59 square feet over the last decade, followed closely by Queens, New York. Marietta, GA, saw the most dramatic jump overall, with new apartments adding 100 square feet compared to those built before 2015, highlighting a broader market shift toward larger, more livable rental spaces.

Studios, one-bedroom, and two-bedroom units all expanded slightly over the past year, adding between 4 and 13 square feet. Developers, responding to consumer preference, heavily favored one-bedroom units, which made up nearly half of all new apartments built.

The RentCafe report says that Florida cities Tallahassee and Gainesville lead the nation for the largest new apartments, with Tallahassee units averaging 1,130 square feet despite a small decline from older stock. Baton Rouge, Knoxville, and Marietta, GA, round out the top five. In fact, Marietta posted the largest growth overall, with new apartments boasting 100 more square feet compared to those built before 2015.

At the same time, big-city hubs like San Francisco and New York’s Queens are seeing apartments expand after years of contraction. San Francisco units grew by 59 square feet over the last decade, while Queens added 39 square feet. Still, Seattle remains the city with the smallest new apartments, averaging just 649 square feet — a steep 57-square-foot drop compared to a decade ago. 

Not every city followed the trend toward larger spaces. Arlington, TX, saw the sharpest decline, with new units shrinking by an average of 215 square feet. Detroit, Memphis, and Birmingham also experienced significant reductions as developers prioritized smaller, more affordable units, the report concludes. 

RentCafe's report, based on Yardi Matrix data, analyzed apartment sizes across the 100 largest U.S. rental markets as of February 2025. The findings reveal a clear shift: where the market allows, renters are demanding — and developers are delivering — more breathing room.

Tyler Durden Tue, 04/29/2025 - 06:55

The Parable Of Goldfinger

Authored by Alexander Zemek-Parkinson via BondVigiliantes.com,

Is there a relationship between the price of gold and bonds? Most vigilantes would agree that there is some correlation based on inflation, with bond yields and the price of gold rising when inflation is on the way up, and vice versa. Most “goldbugs” would probably agree with this assessment. They would say that the metal was a repository of long-term value and was an effective medium for protecting purchasing power. The late Julian Baring was the man with the golden fund1. He presented the relative purchasing power of gold in terms of fixed-price menus at the Savoy, an exercise he frequently undertook with M&G’s former CEO Paddy Lineker. Baring’s results were somewhat mixed, but there can be no doubt of his conclusion that, over time, the gold price not only equalled but outpaced the rate of inflation. It would be easy to conclude, in today’s world of rising bond yields and a historically high gold price, that there is a correlation, and that it is still valid.

But is it? An answer to this can be found in Ian Fleming’s novel, Goldfinger.

Before we turn our attention to Bond, Treasury Bond… Let me enlighten you on the secret life of Ian Fleming. He worked at (but not for) the Bank of England, and in both the film and the novel, he stages a well-crafted scene in one of its palatial offices. He introduces us to a fictional Colonel Smithers, whose job it was to monitor the quantity of gold in the vaults and to stem any bullion ‘leakage’ (smuggling to you and me). Enter the evil Auric Goldfinger, who leads Bond on a merry chase across Europe and the US.

Part of that chase takes Bond to Geneva, where Fleming attended university. Here’s where things get interesting. Goldfinger’s lair where he melts down his gold Rolls-Royce, is on the outskirts of a small village called Coppet4. Fleming gives a detailed description of the village’s ancient chateau, the small forest behind it and the position of a building which houses his foundry. This all exists in real life, except that the foundry is actually the tomb of one of the earliest Bond Vigilantes: the banker Jacques Necker, who was a finance minister under Louis XVI. Necker was popular because he thought debt finance was preferable to placing a heavier tax burden on the public.

Central to Necker’s concept of debt finance was the establishment of a central bank along British principles and a beneficial partnership between sovereign and private investors. System and laws were all-important. He succeeded in raising substantial loans for the beleaguered King as the nation’s political scene deteriorated. His scheme worked for a while, but the debt he created expired worthless. Necker got the sack, the King met the guillotine and a popular government was installed. In its place came the revolutionary interest-free fiat currency called the Assignat. These bills came with a dark warning on their borders5: “Death to counterfeiters, and rewards to denouncers”.

I’ve decided that none of this is a coincidence (or I wouldn’t have an article). What is Fleming actually trying to tell us? The message is clear that there is a link between debt and the value of gold. But does it hold true for inflation?

Below is a graph that is going to come as no surprise to the contemporary Bond Vigilante. It shows an observable correlation between bond yields and CPI. When inflation goes up, bond yields go up. When it comes down, bond yields come down. Nothing exciting.

Source: Bloomberg

Now, let’s look at that again with the same bonds but set against the price of gold instead. We are looking for moments where the yield on the bonds fall and the gold price goes up to seek out some form of correlation between the two asset classes that we are told by textbooks exists.

Source: Bloomberg

Admittedly, a tricky graph there but there are a couple of times where we can see this in action. We see in ’82, ’87 and ’07 clear points where the yields fell and the gold price went up reflecting the ‘flight to safety’ that these trades tend to represent. So we are seeing a negative correlation in action. This sort of thing happens at times of market distress and when things in global markets look dicey.

Of late though, once you dial in on the rolling correlation between the price of gold and the real yield of US Treasuries over the last 20 years, that relationship has begun to break down. In the last 5 years, the correlation has hovered around zero thanks to the recent rise in the gold price. So quite literally there is no correlation between the two assets (and we know there has certainly been market distress recently).

Source: https://www.longtermtrends.net/gold-vs-real-yields/

So what then should we make of gold recently breaking the $3,000 mark? Is this significant for bond markets? Yes.

Things become clearer when we start considering broader macroeconomic movements over the last 50 years. From the 1980s onward, global market dynamics started to change with the introduction of Reaganomics, the Cold War summit and the widespread acceptance of globalisation. The world got smaller and the peace dividend grew, and with it came the development of broad mechanisms for an international system of freer trade. To the astonishment of Julian Baring, bond prices flew as global inflation fell and international cooperation improved. Bond risk premia dwindled.

Then, with the credit crisis of 2007 and the sovereign debt crisis of 2009, gold got moving again and made up for lost time. Why? Fear and uncertainty needled their way back into the bond markets and to gold’s residual value. In both government and commercial bond markets, investors began to demand higher yields8 because the benefits of globalisation seemed to be fast-disappearing9. We now appear to face a more uncertain macroeconomic environment, and quantitative easing, which eventually supported bond prices at artificially high levels, has gone into reverse. Just as the peace dividend now seems to be on the wane, the risk vectors have begun to rise.

Fleming, at the time of Goldfinger, was facing another series of global transformations: the wane of the Bretton Woods system, the possible change of the pound to a fiat currency and their effect upon the fabric of British social and political constructs10.  

Gold has begun to behave like wampum, tulip bulbs and beanie babies11, bubble assets whose unexplained residual value eclipsed their intrinsic value and whose price reflects something other than the commodity it represents. To return to Mr. Baring, the Savoy index would now tell us that a single gold sovereign could buy you roughly 15 meals (a historic high). But where exactly is gold’s additional residual value coming from? I’d return to our friend Colonel Smithers, who supplied the moral to this, our Goldfinger parable.

Whilst bonds are the barometer of trust and faith in a system, Smithers maintains that…

“Gold is the talisman of fear”.

 Cue the Bond theme tune...

Tyler Durden Tue, 04/29/2025 - 06:30

Visualizing AI vs. Human Performance In Technical Tasks

The gap between human and machine reasoning is narrowing...and fast.

Over the past year, AI systems have continued to see rapid advancements, surpassing human performance in technical tasks where they previously fell short, such as advanced math and visual reasoning.

This graphic, via Visual Capitalist's Kayla Zhu, visualizes AI systems’ performance relative to human baselines for eight AI benchmarks measuring tasks including:

1. Image classification

2. Visual reasoning

3. Medium-level reading comprehension

4. English language understanding

5. Multitask language understanding

6. Competition-level mathematics

7. PhD-level science questions

8. Multimodal understanding and reasoning

This visualization is part of Visual Capitalist’s AI Week, sponsored by Terzo. Data comes from the Stanford University 2025 AI Index Report.

An AI benchmark is a standardized test used to evaluate the performance and capabilities of AI systems on specific tasks.

AI Models Are Surpassing Humans in Technical Tasks

Below, we show how AI models have performed relative to the human baseline in various technical tasks in recent years.

Year Perfomance relative to the human baseline (100%) Task 2012 89.15% Image classification 2013 91.42% Image classification 2014 96.94% Image classification 2015 99.47% Image classification 2016 100.74% Image classification 2016 80.09% Visual reasoning 2017 101.37% Image classification 2017 82.35% Medium-level reading comprehension 2017 86.49% Visual reasoning 2018 102.85% Image classification 2018 96.23% Medium-level reading comprehension 2018 86.70% Visual reasoning 2019 103.75% Image classification 2019 36.08% Multitask language understanding 2019 103.27% Medium-level reading comprehension 2019 94.21% English language understanding 2019 90.67% Visual reasoning 2020 104.11% Image classification 2020 60.02% Multitask language understanding 2020 103.92% Medium-level reading comprehension 2020 99.44% English language understanding 2020 91.38% Visual reasoning 2021 104.34% Image classification 2021 7.67% Competition-level mathematics 2021 66.82% Multitask language understanding 2021 104.15% Medium-level reading comprehension 2021 101.56% English language understanding 2021 102.48% Visual reasoning 2022 103.98% Image classification 2022 57.56% Competition-level mathematics 2022 83.74% Multitask language understanding 2022 101.67% English language understanding 2022 104.36% Visual reasoning 2023 47.78% PhD-level science questions 2023 93.67% Competition-level mathematics 2023 96.21% Multitask language understanding 2023 71.91% Multimodal understanding and reasoning 2024 108.00% PhD-level science questions 2024 108.78% Competition-level mathematics 2024 102.78% Multitask language understanding 2024 94.67% Multimodal understanding and reasoning 2024 101.78% English language understanding

From ChatGPT to Gemini, many of the world’s leading AI models are surpassing the human baseline in a range of technical tasks.

The only task where AI systems still haven’t caught up to humans is multimodal understanding and reasoning, which involves processing and reasoning across multiple formats and disciplines, such as images, charts, and diagrams.

However, the gap is closing quickly.

In 2024, OpenAI’s o1 model scored 78.2% on MMMU, a benchmark that evaluates models on multi-discipline tasks demanding college-level subject knowledge.

This was just 4.4 percentage points below the human benchmark of 82.6%. The o1 model also has one of the lowest hallucination rates out of all AI models.

This was major jump from the end of 2023, where Google Gemini scored just 59.4%, highlighting the rapid improvement of AI performance in these technical tasks.

To dive into all the AI Week content, visit our AI content hub, brought to you by Terzo.

To learn more about the global AI industry, check out this graphic that visualizes which countries are winning the AI patent race.

Tyler Durden Tue, 04/29/2025 - 05:45

London Is Losing Its Millionaires

Authored by Guy Birchall via The Epoch Times (emphasis ours),

London is losing its richest residents.

The British capital has seen more than 30,000 millionaires vanish over the past 10 years.

A person sits on a bench next to the River Thames backdropped by the City of London financial district and Tower Bridge in London on Feb. 13, 2025. Henry Nicholls/AFP via Getty Images

It has now dropped out of the top 5 cities for millionaires around the world, with New York, the Bay Area, Tokyo, Singapore, and Los Angeles all ranking higher, according to a report commissioned by Henley and Partners, a United Kingdom-based investment migration consultancy.

The firm found that London had lost 11,300 dollar millionaires in just 12 months, including 18 individuals with a net worth of $100 million or more, and two billionaires.

London, which now has 215,700 millionaires, is one of only two cities in the top 50 — the other being the heavily sanctioned capital of Russia, Moscow—that has fewer rich individuals than a decade ago.

In total, the British capital has lost 12 percent of its wealthiest residents since 2014, while Moscow has lost 25 percent.

Many millionaires fled Moscow in the wake of Western sanctions following the invasion of Ukraine in 2022.

Though the Russian capital has lost more millionaires as a percentage over the past decade, with 10,000 leaving, in terms of sheer numbers, London has lost three times that number in the same time frame.

The majority of departures have been to other European countries such as Italy and Switzerland, as well as the United Arab Emirates (UAE).

Dubai, in particular, has seen a huge growth in the number of millionaires over the past decade, increasing by 102 percent.

So what is driving the super-rich out of what was once one of the premier playgrounds of the rich and famous?

Andrew Amoils, head of research at New World Wealth, who carried out the report for Henley and Partners, told The Epoch Times there were numerous factors for London losing some of its wealthiest residents.

He said that rising concerns about crime and safety were the big factors putting the rich off the British capital.

“Safety is one of the key drivers of long-term wealth growth,” Amolis said. “Women and child safety is especially important—the recent child grooming scandal highlighted this crisis.”

Crime and Safety

A number of billionaires in recent months have made similar statements about crime being an issue.

Devin Narang, an Indian entrepreneur, said in a meeting attended by David Lammy, then shadow foreign secretary, that fear of crime in London was one of India’s elite’s biggest concerns about the city.

“People are being mugged in the heart of London–in Mayfair,” Narang, a member of the executive committee of the Federation of Indian Chambers of Commerce and Industry, said at a meeting in New Delhi in February 2024, the Financial Times reported.

“All CEOs in India have had an experience of physical mugging and the police [in London] not responding.”

Manchester United owner Sir Jim Ratcliffe also said that he had stopped wearing luxury watches in the capital.

“I can’t wear a watch in London, and I just need to be a bit wary, a bit careful,” Ratcliffe told The Sunday Times.

Ratcliffe, one of Britain’s wealthiest people, cited the story of a murder over a Rolex picked up on one of his company Ineos’s CCTV cameras at its headquarters in Knightsbridge.

“He died in a pool of blood because somebody tried to take his Rolex, and he resisted. About a year ago, we had three guys in hoodies, with machetes, right outside the office, opposite Harrods.”

More than 6,800 watches were reported stolen in 2023, the latest year for which figures are available, an increase from more than 6,000 in 2022.

Taxes a Turnoff

High taxes are another one of the prime reasons the rich no longer call London home.

Amoils said: “Capital gains tax and estate duty [inheritance tax] rates in the UK are amongst the highest in the world, which deters wealthy business owners and retirees from living there.

“The recent tax rises from the October 2024 budget have exacerbated this issue as they pulled non-doms, farms, and small businesses into the UK estate duty net.”

Non-dom, short for non-domicile, describes a person who lives in the UK, but whose permanent home for tax purposes is outside the country.

It refers to a person’s tax status and has nothing to do with their nationality, citizenship, or resident status, although it can be affected by these factors.

A non-dom previously only paid UK tax on the money they earn in Britain and did not have to pay tax to the British government on money made elsewhere in the world.

In October, the Labour government confirmed plans to abolish non-dom status from April 2025, and to replace it with a residence-based regime, which will also bring foreign earnings into the UK inheritance tax system.

Dwindling Importance

Another factor spurring the movement of millionaires is the fact that the city itself is becoming less globally significant.

“The London Stock Exchange (LSE) was once the largest stock market in the world by market cap, but it now ranks 11th globally,” Amolis said.

“The past two decades have been particularly poor, with a large number of delistings and relatively few new IPOs.

“The continued ascendance of rival financial hubs such as Dubai, Paris, Geneva, Milan, Lugano, Frankfurt, and Amsterdam has eroded London’s status as Europe’s top financial center.”

He added that growing American and Asian dominance of the global space has also prompted several wealthy tech entrepreneurs in the UK to reconsider their base location, with many moving to tech hubs in North America and Europe.

“A lot of the new wealth that has been created in the last decade has mainly been from the tech sector, so if you miss out on that, you are missing out on a huge amount of wealth,” Amolis said.

Amolis also said that the historic appeal of London and the UK was its use of English, which remains either the first or second language of most millionaires globally.

“However, over time, this has become less relevant as the economies of the other major English-speaking countries like the United States, Australia, and Canada have grown,” he said.

“Furthermore, there are now several other high-income markets globally where one can get by only speaking English, including the likes of Singapore, the UAE, New Zealand, and Malta.”

Another factor is that part of the drop in the number of wealthy people in London is not necessarily that they left the city; they just became less well off due to the drop-off in the stock market and a worsening exchange rate of the pound against the dollar.

“A lot of them have just got less money,” Amolis said. “So, for instance, if someone was worth $1.2 billion and then their investments have gone down and they are now worth $900 million, they are no longer a billionaire.”

Despite this drop in wealthy residents, London remains one of the most expensive cities to live in, with property prices per square meter higher than anywhere else on the planet—other than Hong Kong, New York, and Monaco.

Tyler Durden Tue, 04/29/2025 - 05:00

Bezos-Backed Startup Debuts Pickup Truck Reminiscent Of 1980s Toyota Hilux

A Jeff Bezos-backed startup unveiled on X a cheap electric truck priced at roughly half the cost of the average new American pickup. The catch: it lacks power windows, infotainment screens, and self-driving features.

"The people spoke. We built. Meet the radically simple, radically affordable Slate," Slate Auto wrote in the post on X on Thursday.

The people spoke. We built. Meet the radically simple, radically affordable Slate. Reserve yours at https://t.co/Y5RkOIFCRo pic.twitter.com/uvSZVpdkWv

— Slate Auto (@slateauto) April 25, 2025

"A radically simple electric pickup truck that can change into whatever you need it to be — even an SUV," the Slate Auto website says, adding, "Made in the USA at a price that's actually affordable (no really, for real)."

At 14.5 feet long, the customizable EV is more akin to a Toyota pickup (Hilux) from the mid-1980s.

The range of the EV truck is abysmal, at 150 miles - or 240 miles with a longer-range battery pack - the vehicle in our minds is not a serious truck - instead, similar to mini trucks Americans are importing from Japan to run around town.

Any serious work, whether towing or hauling actual weight, in the EV space will be done by the Tesla Cybertruck or the Rivian truck, or a diesel-powered truck by Dodge, Ford, or Chevy for long-haul towing.

Again, the Slate Auto vehicle isn't a serious pickup truck, but it does look like fun to run around town.

Tyler Durden Tue, 04/29/2025 - 04:15