Week in Review

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Week in Review

03/07/2020

For the week 3/2-3/6

[Posted 10:30 PM ET, Friday]

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Edition 1,090

President Trump signed an $8.3 billion funding bill today to help state and local governments combat the spreading coronavirus, as public health experts outlined efforts to rapidly accelerate testing for the disease. 

The money to fight Covid-19 includes over $3 billion for research and development of vaccines, test kits and medical treatments.  Another $2.2 billion would aid public health activities on prevention, preparedness and response to outbreaks.  The federal government would dedicate $1.25 billion in coming weeks and months to help international efforts aimed at reining in the virus.

But the paramount issue of the day is, ‘Where are the test kits?’  South Korea has tested over 160,000 for the coronavirus, and as of today, the United States had tested less than 2,000, so no wonder our numbers are low thus far.  It is inexcusable the kits haven’t been distributed sooner.

The White House and the president have been taking credit for shutting down travel from China Jan. 31, but they just got the pharmaceutical CEOs into the White House this week to press them on the test shortage.

So we’re flying blind in this country.  Maybe there isn’t a need for the panic we’ve seen in segments of the market and the economy.  But we don’t know until we gather the evidence and the hard data, and we have little thus far.

In the meantime, covering this topic, and this president’s statements, is overwhelming, but the following gives you a flavor of the latest developments.

As I go to post, there have been over 101,000 confirmed cases worldwide, with over 3,450 dead.  15 deaths have been reported in the United States, 14 of them in the state of Washington.

The cruise ship Grand Princess, denied entry to San Francisco Bay this week after a number of passengers and crew developed flu-like symptoms, finally was able to begin testing passengers and crew today, after the Coast Guard airlifted diagnostic test kits to the ship, and of the first 46 of 3,500 tested, 21 came back positive; 19 crew members, 2 passengers.

All 3,500 are being brought to an unspecified non-commercial port where tests will be conducted and “Those that need to be quarantined, will be quarantined,” Vice President Mike Pence declared today.

Health officials are also seeking to contact some 2,500 passengers who disembarked in San Francisco on Feb. 21 after an earlier cruise to Mexico.

The Grand Princess situation was reminiscent of the Diamond Princess cruise liner that was quarantined off Japan in February, with ultimately 700 infected, and at least six deaths.  Both ships are owned by Princess Cruises, a unit of Carnival Corp., the world’s largest cruise operator. The company’s shares are more than 50% off their highs.

Pence urged elderly people with serious underlying medical conditions “To think carefully about travel.”

--If we are to believe that China is truly seeing a diminishing of the numbers, both cases and deaths, it would be because of the draconian measures it has taken in restricting air travel, closing movie theaters, shuttering factories, and quarantining workers as well as entire towns and cities.

As Dr. Anthony Fauci of the CDC said, China has “taken social distancing to its farthest extreme,” but this has enabled Beijing to slow the virus’ spread.

Tonight, the country’s National Health Commission reported just 99 new confirmed cases, down from 143 a day earlier, bringing the total number to 80,651 in mainland China.  The death toll was 28, bringing China’s total to 3,070.  All of the deaths were in Hubei, the epicenter, with 21 of these in Wuhan, the provincial capital.

--Italy has become Ground Zero in Europe, with deaths at 197 as of tonight, the number of cases exploding to 4,636, an increase of 800 in a single day, and a mortality rate in excess of 4.2%.  The government ordered all schools in the country to shut until March 15, as part of an escalating effort to contain the worst outbreak outside Asia.

Italy’s sporting world is facing unprecedented turmoil, with Alpine skiing World Cup finals in Cortina d’Ampezzo cancelled today.  Top flight Serie A soccer matches are due to be played this weekend, but behind closed doors.

The Vatican, an independent state, registered its first case today.

The average age of those who had died in Italy, it’s important to note, was 81, according to the country’s national health institute.

The Milan stock exchange fell 3.5% on Friday and is now down 17.4% since news of the first case was announced on Feb. 21.  The tourism sector, which accounts for 13% of the nation’s GDP, has been hammered.  Flight bookings to Europe the last week of February, when the Italian outbreak emerged, fell 79% compared with the same period a year earlier, while Italy’s press reports that the Vatican’s museums have experienced a 60% drop in attendance. 

--France has 613 confirmed cases as of today, an increase of 190 compared to a day earlier, with the death toll at nine, 39 in intensive care, according to the public health service.

--South Korea, at last word, has over 6,700 cases with 44 dead, 75% of the cases around the city of Daegu and the surrounding area.  The numbers on those infected appear to be coming down.

--In Japan, citizens have been outraged by the hands-off approach of Prime Minister Shinzo Abe as cases of the virus have continued to climb, over 1,100, even as testing proceeds at a snail’s pace, leaving many fearful a large number of infections are going undetected.

Japan then introduced some of the strictest border controls aimed at preventing the spread, imposing a two-week quarantine on visitors from China and South Korea. South Korea strongly protested the decision of the Japanese government.

So in a tit-for-tat move following decades of hostility between the two nations, South Korea said it would suspend visas and visa waivers for Japan.

The decision effectively bars most travel to Japan from the country’s close neighbors, who typically account for about half of all tourists to Japan.  A planned April visit by Chinese President Xi Jinping was postponed.

--Greece confirmed 14 new cases of Covid-19, bringing the country’s total to 45, with eleven of the 14 among a group recently returning from a pilgrimage to religious sites in Israel and Egypt.

--Ireland has a growing caseload and six of its hospitals have been quarantined, visitors not allowed at last word tonight.  The UK reported its second death today.

--And then there’s Iran, which has reported at least 77 dead, though BBC Persia says the toll is well over 200.  The government admitted at least 23 members of parliament have the coronavirus, with one figure who is a member of a council that advises Ayatollah Khamenei dying of the disease.

Iran shuttered 60,000 mosques for Friday prayers.

--As an example of how quickly the coronavirus can spread, eight of the new cases in New York are in Westchester County, connected to a single New Rochelle lawyer.  The afflicted attorney’s wife, son and daughter have also tested positive, as has a friend, his wife and three of their four kids, Governor Andrew Cuomo said. 

Actually, it’s at least nine, as a neighbor who drove the attorney to the hospital has additionally been confirmed to have it.  Schools and synagogues have been shuttered in the area, the spread occurring in a close-knit Orthodox community, as well as New York City where the attorney worked.

--The World Health Organization’s chief Tedros Adhanom Ghebreyesus said earlier this week that the risk of coronavirus spreading was now very high at a “global level.”

“We are in uncharted territory – we have never seen before a respiratory pathogen that is capable of community transmission but at the same time which can also be contained with the right measures,” he told a news briefing in Geneva.

Thursday, Dr. Tedros said, “This is not a drill.  This is not a time for excuses. This is a time for pulling out all the stops.”

--The impact on the business community, and markets, is being felt in a major way as businesses prohibit travel by their employees and countless major conferences, concerts and expos are canceled.

In a massive economic blow to the city of Austin, Texas, for example, the mammoth South by Southwest yearly media and music celebration was canceled, Texas having reported 17 cases as of today.  Austin Mayor Steve Adler declared a “local disaster,” the event drawing 500,000 annually.

--But here’s the big issue for the United States and other nations around the world.  Antibiotics, blood pressure and diabetes medications, along with common household products such as the pain and fever reducer Ibuprofen, are among the generic drugs that fall within China’s sprawling industrial production of generic drugs and their active ingredients, and China’s disrupted factory output has upset global supply chains.  Many drugs are already in short supply.

The FDA said it has been in contact with 180 manufacturers about their supply levels, and it has identified about 20 drugs that source their ingredients from China.

Adding to the problem, India –a big supplier of generic drugs to the U.S. - this week said it’s restricting exports of 26 drugs and drug ingredients, including pain relievers and antibiotics, because it wants to ensure it has enough medicine for its own citizens, according to reports.

India has at least 30 cases thus far and we all know it could explode from there.

At the same time, as my friend Dr. W. noted, there is also no way today that America’s ICUs could handle a surge in patients.  Right now, there are about 90,000 adult ICU beds in the U.S., Dr. W. writes, with an average occupancy rate of about 70%.  Assuming the AHA data is fairly accurate, that means a coronavirus outbreak that infects about 500,000 people will potentially overwhelm the ICU beds (assuming a 3-5 percent need for one).  As you’ve heard, the U.S. already has a shortage of ventilators.

So you see some of the huge issues we face if Covid-19 spreads like it is in some of the other hot spots.

But many are asking, why are people and the markets freaking out when the flu annually kills tens of thousands?

Well we know what the flu does, and we have vaccines and treatments.  But this is all about the unknown.  We have no idea where this is going, if it will continually mutate, how lethal it ends up being, how quickly it spreads, though, again, just look at the Westchester County, New York, example for evidence of this last point.

--Meanwhile, the Organization for Economic Cooperation and Development projected that global economic growth will slow sharply this year as governments attempt to contain the epidemic, although the scale of the setback is highly uncertain, the OECD said Monday.

In its “best case” scenario, the Paris-based research body said the global economy would grow by 2.4%, weaker than the 2.9% expansion projected before the viral outbreak.  But it said much more severe slowdowns are possible.

However, the research group is forecasting a rebound in growth during 2021, assuming the outbreak is contained over the coming months.

Trump World

--Coronavirus...

The World Health Organization reported this week that the death rate for the coronavirus increased to 3.4% and is more lethal than the flu, which kills tens of thousands of Americans each year.

But President Trump, citing only a “hunch,” called the number “false.”  Asked about the WHO’s findings, Trump told Fox News host Sean Hannity: “Well, I think the 3.4% is really a false number.”

He added, “Now, this is just my hunch...based on a lot of conversations with a lot of people that do this, because a lot of people will have this, and it’s very mild.”  Trump later put the number at less than 1%.

Washington Post: “When Anthony Fauci, clad in a white lab coat, invited an ‘NBC Nightly News’ correspondent into his offices this week and described the coronavirus as an ‘outbreak’ that was reaching ‘likely pandemic proportions,’ the immunologist was acting as he long has during public health crises: delivering a fact-based warning to the public.

“But at the White House, the more politically minded officials overseeing the administration’s response were irritated that Fauci – the veteran director of the National Institute of Allergy and Infectious Diseases – had used the word ‘pandemic’ without giving anyone on Vice President Pence’s staff a heads-up, according to two people familiar with the situation.

“One week after Trump returned home from India to confront an unfolding health crisis and tasked Pence with managing the government-wide response, the effort has been undermined by mixed messages, contradictions and falsehoods – many of them emanating from the president himself, including this week when he repeatedly spread false information about just how soon a coronavirus vaccine would be available.

“The White House is handling the rapidly expanding coronavirus as a public relations problem as much as a public health crisis....

“Trump...has privately griped about what he considers to be hysteria from both the media and his own public health officials, according to people familiar with his complaints... White House aides managing the response have also sought to focus on tamping down what they consider to be alarmist rhetoric.”

Both health officials and drug industry executives have repeatedly told Trump that a vaccine was still a long way off, 12 to 18 months from now, but the president continues to say a vaccine will be available “soon.”

And Trump has made clear he will be the main voice on the crisis.

Trump tweets:

“With approximately 100,000 CoronaVirus cases worldwide, and 3,280 deaths, the United States, because of quick action on closing our borders, has, as of now, only 129 cases (40 Americans brought in) and 11 deaths.  We are working very hard to keep these numbers as low as possible!”

“I NEVER said people that are feeling sick should go to work. This is just more Fake News and disinformation put out by the Democrats, in particular MSDNC.  Comcast covers the CoronaVirus situation horribly, only looking to do harm to the incredible & successful effort being made!”

--President Trump replaced acting chief of staff Mick Mulvaney tonight with Rep. Mark Meadows, tweeting Mulvaney would become the U.S. special envoy for Northern Ireland, just in time for Brexit chaos.

--Senate Minority Leader Chuck Schumer, addressing a rally outside the Supreme Court on Wednesday, while the justices heard oral arguments over a Louisiana abortion law, bellowed:

“I want to tell you, Gorsuch.  I want to tell you, Kavanaugh.  You have released the whirlwind and you will pay the price,” Schumer said.  “You won’t know what hit you if you go forward with these awful decisions.”

Republicans and others immediately criticized Schumer over the comments.

Trump tweet:

“Schumer has brought great danger to the steps of the United States Supreme Court!”

And...

“This is a direct & dangerous threat to the U.S. Supreme Court by Schumer.  If a Republican did this, he or she would be arrested, or impeached.  Serious action MUST be taken NOW!”

[Said the president who has launched frequent attacks on the U.S. judiciary and individual judges.]

“There can be few things worse in a civilized, law abiding nation, than a United States Senator openly, and for all to see and hear, threatening the Supreme Court or its justices.  This is what Chuck Schumer just did.  He must pay a severe price for this!”

Schumer expressed regret on Thursday.

“I’m from Brooklyn.  We speak in strong language.  I shouldn’t have used the words I did.  But in no way was I making a threat.  I never, never would do such a thing,” Schumer said on the Senate floor amid calls from Republicans that he apologize.

“Of course I didn’t intend to suggest anything other than political and public-opinion consequences for the Supreme Court,” he said, “and it is a gross distortion to imply otherwise.”

Senate Majority Leader Mitch McConnell admonished Schumer on the Senate floor.

“There is nothing to call this except a threat. And there is absolutely no question to whom it was directed,” McConnell said.  “He literally directed the statement to the justices, by name.”

Chief Justice John Roberts, who in 2018 spoke out against President Trump’s verbal attacks on federal judges, also criticized Sen. Schumer’s remarks.

“Justices know that criticism comes with the territory, but threatening statements of this sort from the highest levels of government are not only inappropriate, they are dangerous. All Members of the Court will continue to do their job, without fear or favor, from whatever quarter,” the statement said.

Editorial / Washington Post

“After first indignantly defending them, the Senate’s top-ranking Democrat, Charles E. Schumer (N.Y.), on Thursday walked back the offensive comments he made at a rally outside the Supreme Court on Wednesday. He now says he “shouldn’t have used the words I did.”  That is an understatement.

“Speaking to a pro-choice rally as the justices heard oral arguments in a crucial abortion rights case nearby, Mr. Schumer linked Justices Neil M. Gorsuch and Brett M. Kavanaugh to a broader Republican-led move to outlaw abortion, turned to the court building and thundered: ‘You have released the whirlwind, and you will pay the price. You will not know what hit you if you go forward with these awful decisions.’

“The negative reaction was swift and ran the gamut from liberal Harvard law professor Laurence Tribe to Chief Justice John G. Roberts Jr., who immediately, publicly – and justifiably – responded that ‘threatening statements of this sort from the highest levels of government are not only inappropriate, they are dangerous.’

“Mr. Schumer and his fellow Democrats need to learn from this episode.  One lesson is that they were wrong to answer the chief justice, initially, with accusations of selective outrage, ostensibly because he had not condemned President Trump last week for demanding Justices Ruth Bader Ginsburg and Sonia Sotomayor recuse from ‘anything having to do with Trump or Trump-related' due to their alleged bias against him, nor when the president impugned the district judge presiding over his friend Roger Stone’s trial.

“This is unfair to a jurist who has tried to keep the court out of the rapidly polarizing political fray, sometimes at a cost to his standing among fellow conservatives.  Chief Justice Roberts forthrightly rebuked the president in 2018 for characterizing a judge with whom he disagreed as ‘an Obama judge.’  If he responded to every one of Mr. Trump’s out-of-line tweets about the courts, he would have no time to read briefs.

“In any case, Mr. Schumer’s comments were arguably worse than the president’s toward Justice Ginsburg and Sotomayor, improper as those were.  Though not something litigants can seek on a blanket basis, much less via tweet, recusal at least is a legal remedy for which parties may petition, and which judges may refuse. There was no threat attached to Mr. Trump’s statements (this time), whereas Mr. Schumer’s was conspicuously heavy on the ‘or else’ aspect.

“Second, candor counts.  Mr. Schumer compounded his original error by implausibly claiming, through a spokesman, that his outburst targeted not the two Trump-appointed justices but ‘Senate Republicans.’  Even in his subsequent apology, Mr. Schumer denied referring to anything other than ‘political consequences’ for Mr. Trump, Senate Republicans and the Supreme Court, ‘and it is a gross distortion to imply otherwise.’  Even if you buy that, surely Mr. Schumer shares the blame for making himself so easy to misunderstand.

“Mr. Schumer’s behavior seemed especially discordant after Super Tuesday primaries in which his party’s voters signaled their preference for a less polarizing politics by voting massively for former vice president Joe Biden.  American institutions need an alternative to the cynicism about politicians and courts that Mr. Trump encourages and then exploits, which is something Mr. Schumer should remember the next time he’s tempted to fight the president with his own methods.”

--Trump tweets

“Wow! If Elizabeth Warren wasn’t in the race, Bernie Sanders would have EASILY won Massachusetts, Minnesota and Texas, not to mention various other states.  Our modern day Pocahontas won’t go down in history as a winner, but she may very well go down as the all time great SPOILER!”

“Elizabeth ‘Pocahontas’ Warren, who was going nowhere except into Mini Mike’s head, just dropped out of the Democrat Primary...THREE DAYS TOO LATE.  She cost Crazy Bernie, at least, Massachusetts, Minnesota and Texas.  Probably cost him the nomination!  Came in third in Mass.”

“Mini Mike, ‘Three months ago I entered the race for President to defeat Donald Trump, (and I failed miserably!).”

“Mini Mike Bloomberg just ‘quit’ the race for President.  I could have told him long ago that he didn’t have what it takes, and he would have saved himself a billion dollars, the real cost.  Now he will pour money into Sleepy Joe’s campaign, hoping to save face.  It won’t work!”

“Mini Mike Bloomberg can never recover from his incompetent debate performances.  Also, as mayor he was very bad under pressure – a choker!”

[I cover the Democrats and Super Tuesday in full down below.]

“People are disgusted and embarrassed by the Fake News Media, as headed by the @nytimes @washingtonpost @comcast & MSDNC, @ABC @CBSNews and more. They no longer believe what they see and read, and for good reason. Fake News is, indeed, THE ENEMY OF THE PEOPLE!”

“@FoxNews is working hard pushing the Radical Left, Do Nothing Democrats.  They want to be, unlike their competitors, @CNN & MSDNC (Comcast), Fair & Balanced.  When will they ever learn.  The Radical Left never even gave @FoxNews permission to partake in their low rated debates!”

Wall Street

The markets continue to be freaked out by Covid-19, and as noted in the opening, it’s largely warranted given all the legitimate uncertainty.  But in the end, the major indexes only recouped a fraction of their huge losses from the week before in the midst of further massive daily swings.

As Allianz’ chief strategist Mohamed El-Erian said on CNBC this morning, you have three basic issues in the most simplistic explanation for the volatility.

Economic activity has stopped; you have the economics of fear; and the issue, ‘What happens to the trust we’ve had in the Central Bank backstop?’

Speaking of which, the Federal Reserve cut interest rates in an emergency move to shield the U.S. economy from the impact of the coronavirus, 50 basis points on the funds rate to a target range of 1.00% to 1.25%.  The yield on the key 10-year Treasury fell below 1% for the first time in history, finishing the week at 0.77%, after hitting a new all-time low the week before.

Fed Chair Jerome Powell said in a statement that the coronavirus would weigh on the U.S. economy for some time and he believed the central bank’s action would provide “a meaningful boost to the economy.”

But at least in the hours immediately after the announcement, stocks fell hard, the markets suggesting the Fed’s action was inadequate, as well as a recognition that cutting interest rates or engaging in other types of fiscal stimulus will do little to contain the epidemic.

Chairman Powell himself said as much at his press conference.  “We do recognize that a rate cut cannot reduce the rate of infection, it won’t fix a broken supply chain.  We get that – we don’t think we have all the answers.”

Asked if political pressure fueled the cut, Mr. Powell said that in making decisions, he and his colleagues were “never going to consider any political considerations whatsoever.”

There is one distinct positive from the Fed’s move and that is mortgage refinancing applications are surging, and that extra money in household income can be stimulative.

The Fed formally meets, however, in less than two weeks, March 17-18, and most market participants believe the Fed will cut rates further at that time.

Editorial / Wall Street Journal

“The Federal Reserve has become the default doctor for whatever ails the U.S. economy, and on Tuesday the financial physician applied what it hopes will be monetary balm for the economic damage from the coronavirus.  Financial markets were underwhelmed after the big rally on Monday, which may speak to the limited effect that lower interest rates can have on the supply shock of a pandemic.

“The unanimous decision by the Federal Open Market Committee to cut the fed funds rate by 50 basis points to 1%-1.25% was at least bold.  Perhaps more significant, the Fed also cut the rate it pays on excess reserves that banks park at the central bank by 50 basis points to 1.1%. This gives banks more of an incentive to put reserves to work in the real economy.

“The theory behind the rate cut appears to be that aggressive action is the best way to send a strong message of economic insurance.  Perhaps this will help consumers – whose spending has kept the economy growing despite weak business investment – maintain confidence in the expansion.  Other central banks are also likely to follow the Fed’s lead.

“Will this make much of an economic difference?  Count us skeptical.  Financial conditions weren’t tight even with a flight to the safety of U.S. Treasurys.  The fall in the 10-year note to a historic low of 1% and the recent correction in stocks reflect the expectations of slower growth and thus lower corporate earnings.

“But this relates mainly to the damage to global supply chains and expected limits on travel and commerce as the world tries to mitigate the rates of infection.  Nobody is going to take that flight to Tokyo because the Fed is suddenly paying less on excess reserves.

“The other concern is whether the Fed will have the nerve to raise rates again if the pandemic damage turns out to be less than feared.  That won’t be easy in an election year, and November is still eight months away.  President Trump on Tuesday tweeted a demand that the Fed do more even after its 50-point cut.

“The Fed’s great mistake after 9/11 was that it kept rates at or near 1% for far too long even after the 2003 tax cut had the economy humming.  The seeds of the housing boom and bust were sown.  The housing market has begun to take off again in recent months, and in the near term that will help cushion the economy during the coronavirus panic. The trick will be not letting it get carried away into another national price signal.”

President Trump tweeted following the Fed’s move:

“The Federal Reserve is cutting but must further ease and, most importantly, come into line with other countries/competitors.  We are not playing on a level field.  Not fair to USA. It is finally time for the Federal Reserve to LEAD.  More easing and cutting!”

We had a slew of economic data this week, including PMI readings on manufacturing and the service sector for February; with manufacturing coming in at 50.1 (50 being the dividing line between growth and contraction) and 57.3 on services, the best in a year on this one and well above forecast.

But this is rearview mirror stuff, with the threat from the coronavirus hitting Corporate America and consumers alike in the face just the last 2-3 weeks.

We also had readings on January construction spending, up a strong 1.8%, and factory orders for the month, down 0.5%.

Lastly, we had February’s jobs numbers today, up a whopping 273,000 vs. expectations of 175,000, with December’s number revised upward from 147,000 to 184,000, and January’s revised from 225,000 to 273,000, bringing the three-month average to a strong 243,000, the best since spring 2018.

But the survey has a cutoff date of Feb. 12, so it tells us nothing about today, or 2 or 3 months from now.

Separately, average hourly earnings rose 3.0% year-on-year, still solid but also underwhelming given the expansion.

U6, the broadest measure of unemployment, ticked up to 7.0%.

But owing largely to the strong jobs report, the Atlanta Fed’s GDPNow barometer of first-quarter activity moved up to 3.1%.  Can it hold above 3% after March’s figures roll in?  Not likely.

Europe and Asia

A slew of data in the Eurozone (EA19) this week, including the PMIs for the manufacturing and service sectors for the month of February.

The final Eurozone composite was 51.6 vs. 51.3 in January.

Manufacturing 49.2 vs. 47.9 in January; Services 52.6 vs. 52.5.

Germany 48.0 mfg., 52.5 services
France 49.8 mfg., 52.5 services
Italy 48.7 mfg., 52.1 services
Spain 50.4 mfg., 52.1 services
Ireland 51.2 mfg., 59.9 services
Netherlands 52.9 mfg.
Greece 56.2 mfg.

UK 51.7 mfg., 53.2 services

Chris Williamson, chief economist, IHS Markit

“The eurozone economy showed resilience to disruptions rising from the coronavirus outbreak in February, but dig deeper into the data and there are signs that problems lie ahead.

“The overall rate of expansion picked up slightly, largely on the back of rising domestic demand fueling increased service sector activity, accompanied by signs of the manufacturing downturn easing.   However, exports of both goods and services are now falling at an increased rate due to virus-related downturns in demand, and increasingly widespread delivery delays threaten future production.  In the service sector, growing numbers of companies are reporting lost business due to the virus spread, notably in sectors such as hotels, travel, transport and tourism but also even in areas such as financial services.

“Growth of both output and demand consequently remains weak, and caution in relation to hiring means jobs growth likewise remained among the lowest recorded over the past five years.  Business expectations have also dropped lower, largely in response to the growing virus threat.

“While the PMI data so far for the first quarter are signaling a 0.1%-0.2% increase in GDP, there are clear downside risks and a likely weakening of the economy in March.”

Separately, the EA19 unemployment rate for January, as released by Eurostat, was 7.4%, unchanged from December and down from 7.8% a year earlier.

Germany 3.2%, France 8.2%, Italy 9.8%, Spain 13.7%, Netherlands 3.0%, Ireland 4.8%.

A flash reading on February inflation for the euro area (also per Eurostat) was 1.2% vs. 1.4% in January.  Ex-food and energy, the February reading was 1.4%.

Brexit: The initial formal talks on a trade agreement between Britain and the European Union took place in Brussels this week between two 100-strong teams and afterwards, the EU’s chief negotiator, Michel Barnier, said there were “very serious divergences” between the two negotiating sides.

Barnier has spoken of grave differences between the EU and the UK over their future relationship, warning that British Prime Minister Boris Johnson’s refusal to formally commit to the European convention on human rights would limit cooperation in fighting crime.

The problematic areas were said to range from the maintenance of a level playing field for British and European businesses to the role of the European court of justice and conditions on future access for European fishing fleets to British waters, as I’ve been writing for some time now.

In response, a UK government spokesman said there were “expected, significant differences” but that the final deal had to respect that the country would be outside the orbit of EU law or its courts.

Barnier warned that the British position on the role of European courts threatened “the level of ambition of our cooperation” on joint work to fight crime, terrorism and money laundering.

He said the UK had informed him that “they do not wish formally to commit to continuing to apply the European convention on human rights, nor do they wish to permit the European court of justice to play its full role in interpreting EU law.”

“This is serious,” Barnier said, “I say this is grave, because if the United Kingdom’s position does not move it will have an immediate and concrete effect on the level of ambition of our cooperation.”

The British government does not believe the EU should demand obligations in a treaty beyond that agreed to other independent countries.

Boris Johnson has insisted there should be no role for the European court of justice within any future treaty, while accepting that the court interprets EU law for member states.

On the EU’s demand that any free-trade deal must involve signing up to current European regulations on environment, workers’ rights and state aid for companies, British negotiators have said they intend to maintain high standards but oppose making them a precondition for a trade deal.

“Whilst we agree on preserving high standards, my question is why not commit to them formally?  It is a question of trust,” Barnier said.

On fishing rights, the UK proposal to negotiate the level of catches in British waters on an annual basis, similar to an agreement with Norway, was impractical, Barnier said.  He noted that the EU and Norway negotiated over five species of fish while there were 100 shared stocks in European and British seas.

The EU also wants one over-arching agreement covering everything from trade to transport, fisheries to agricultural standards, underpinned by a common dispute-settlement system.

The UK wants a series of mini-deals that have different arrangements for resolving disputes when needed.

Britain maintains it will walk away from the talks if enough progress hasn’t been reached by June.  Today, that seems likely.

France: French President Emmanuel Macron’s pension reform plan made it through a key phase late on Tuesday when the main law to implement them was deemed passed by the National Assembly in a procedural move.

Hardline trade unions feared workers would have to work longer for lower pensions.

But in the end the law was deemed passed late on Tuesday night after Macron’s centrist government cut debate short by declaring the law a confidence issue, and then two no-confidence motions failed, one from the conservatives and a second from the left.

The draft law, which sets up a single national pension scheme, replaces more than 40 existing occupational schemes.  The proposal had sparked huge protests and lengthy transport strikes in December and January.

Turning to Asia...in China...last week the government’s official PMIs for manufacturing and services in February came in at record lows, 35.7 on the former, 29.6 for the latter.

These figures are for state-owned enterprises.  A few days later we received the Caixin readings for the private sector, small- and medium-sized businesses, and the manufacturing reading for February was 40.3 vs. 51.1 in January, while services came in at a record low 26.5 vs. 51.8 the prior month.

For the service sector, understand this was the first reduction in business activity (below 50) in the 14-year history of the survey.

The OECD said it now projects that China’s economy will grow 4.9% this year, down from a previous projection of 5.7%.  However, it expects growth to rebound to 6.4% in 2021, having previously forecast an expansion of 5.5%.

In Japan...the manufacturing PMI for February was a poor 47.8 vs. 48.8 in January.  The service sector reading was 46.8 vs. 51.0 in January.

But the full impact of the coronavirus is not reflected in the data as yet, with tourism hurting, and restaurant traffic way down, to name two.

Separately, capital spending in the fourth quarter fell 4.2% over Q3, the first decline in 13 quarters.

And a release today on Japanese household spending showed that fell 3.9% in January from a year earlier, basically in line with expectations.

Elsewhere in Asia...Taiwan’s February manufacturing PMI was 49.9 vs. 51.8 in January, while South Korea’s came in at 44.4 vs. 50.1 the prior month.

Separately, South Korea’s exports in February rose 4.5% year-over-year, the first rise after a 14-month losing streak, though exports to China were down 6.6%.  As in all of the above, including for Europe, the data hasn’t totally caught up to the coronavirus realities, while in the case of China, they were beginning to shutdown in January, the impact of which you can see in February’s numbers.

Street Bytes

--Despite Monday’s record point rally in the Dow Jones, 1,293 points, 5.1%, and another 1,173-point gain on Wednesday, 4.5%; on the week the Dow rose just 1.8% to 25864, still down 9.4% for the year, while the S&P 500 was up 0.6% and Nasdaq 0.1%.  It was another chaotic market with sentiment changing hourly, it seemed.

Earnings season is essentially over but now it’s about corporations issuing statements revealing they basically have no clue as to what the year holds.  ‘Tell me when the uncertainty ends, and I can give you a better idea.’

--U.S. Treasury Yields

6-mo. 0.37%%  2-yr. 0.51%  10-yr. 0.77%  30-yr. 1.29%

In two weeks, the yield on the 10-year has fallen from 1.47% to 0.77%, hitting 0.66% intraday on Friday.  With the Fed cut, the yield on the 6-month T’bill fell from 1.15% to 0.37%.

Overseas, the yield on the German 10-year has fallen from –0.43% to –0.71% the last two weeks.  But the Greek 10-year yield has risen over that time from 0.93% to 1.37%, as investors discriminate between good and bad, Greece with a 177% or so debt-to-GDP ratio.

--OPEC agreed on Thursday to cut output by an extra 1.5 million barrels per day in the second quarter of 2020 to support prices amid the coronavirus outbreak, but made it conditional on Russia joining in.

So then Russia said it would not agree to the steeper cuts and the price of crude plunged all over again, finishing the week at $41.59 on West Texas Intermediate, the worst weekly percentage loss since Dec. 2008, 8% to 9%, depending on your benchmark.

Saudi Arabia had suggested OPEC and its allies, including Russia, cut up to 1.5 million barrels, while keeping existing cuts of 2.1m bpd, which expire this month, in place until the end of 2020.

--Microsoft joined the growing number of U.S. companies asking employees to work from home in order to limit exposure to the spreading coronavirus outbreak, as it responded to cases near its Seattle headquarters and in California.  If possible, the request to work at home is for at least until March 25.

“Taking these measures will ensure your safety and also make the workplace safer for those that need to be onsite,” Executive Vice President Kurt DelBene told employees in a blog post.

Data center and retail employees were asked to continue to go to their work locations and the company would follow government guidelines for disinfecting its sites for essential personnel.

Microsoft then confirmed the first cases of the virus among its employees, two of them.

--Amazon.com said Sunday that two employees in Milan, Italy, have contracted the coronavirus and are under quarantine.  Last Friday, Amazon told employees to stop non-essential travel within the United States and beyond.

--Facebook encouraged its Seattle employees to work from home through the end of March, after a contractor there tested positive for the virus.  Google “strongly recommended” that its Bay Area employees do the same starting on Friday.

--A Lockheed Martin employee in Silicon Valley tested positive for Covid-19, though the company did not specify if it would be instructing its more than 4,000 employees there to work from home.

--At the same time United Airlines’ CEO Oscar Munoz was meeting with President Trump and other airline executives at the White House Wednesday, United announced it would cut domestic and international flying in April in response to the slump in travel demand caused by the spreading coronavirus.

Domestic capacity will be cut by 10% next month from its previous plan and international flying by 20%, with the cuts extending into May.

The carrier is also parking some wide-body jets and offering staff members an unpaid leave of absence.

--Meanwhile, the failure of Europe’s biggest regional airline Flybe could be the start of more casualties, analysts predict, with a global airline industry body, IATA (International Air Transport Association), warning the financial hit from coronavirus could reach $113bn this year.

Flybe’s collapse, which puts 2,000 jobs at risk, “will likely be the first of many in 2020,” said transport analyst James Goodall.

“We expect that the demand destruction caused by Covid-19 accelerated its demise and we believe further airline bankruptcies should be expected in the coming months.”

Today, shares in Norwegian Air Shuttle lost more than a quarter of their value as investors worried about the airline’s ability to cope with the dramatic drop in travel demand as the epidemic spreads around the globe.

On Thursday, Norwegian scrapped its 2020 guidance and cut some transatlantic flights, blaming the outbreak.

Friday, the airline said it has sold over two-thirds of its available seats for March in a bid to stem the panic-selling in the shares.  But these folks could still cancel.

--Southwest Airlines CEO Gary Kelly said on CNBC Thursday, “At the end of last week, we started seeing very sharp declines (in bookings).  It has a 9/11-like feel.”

After the terrorist attacks on Sept. 11, 2001, global air travel plummeted, and it took years for airlines to fully recover.

Though still in its early stages, there are concerns that a prolonged disruption could do lasting economic damage.

One thing prospective passengers are learning is that the airlines don’t appear to be prepared for the onslaught of phone calls, with one advertising executive telling the New York Times she was told there was a three-hour wait to speak to a Delta Air Lines representative as she tried to cancel a flight as the result of a conference that was postponed.

--Cathay Pacific is slated to close its base in Canada, putting 147 jobs at risk.  A memo to the affected Vancouver crew from management in Hong Kong cited the coronavirus epidemic for having accelerated the decision.

Just another example of the chaos in the industry, and the job losses that could be coming rapidly.

--JPMorgan’s Chief Executive Jamie Dimon had emergency heart surgery and is now recovering, senior bank executives said in an internal memo.

The New York Post first obtained the memo which told staffers that the 63-year-old Dimon had “an acute aortic dissection” on Thursday morning – a condition that involves a tear to the aorta, according to the Mayo Clinic’s website.

“He underwent successful emergency heart surgery to repair the dissection.  The good news is that it was caught early and the surgery was successful.  He is awake, alert and recovering well,” the memo said.

Dimon checked himself into the hospital early Thursday after experiencing chest pains, the Wall Street Journal said, citing a person familiar with the matter.

JPMorgan Co-Presidents Daniel Pinto and Gordon Smith, who signed Thursday’s memo, will run the bank while Dimon recuperates, the memo said, citing the bank’s lead director Lee Raymond.

While Raymond expressed “confidence” in the bank’s co-presidents and chief operating officers, the news raises questions anew over Dimon’s succession plans.

Back in 2014, he had to take leave from the bank after being diagnosed with throat cancer.

--Campbell Soup Co. said retailers are stocking up on its namesake product and other canned foods in response to the epidemic, a boost to sales.

The soup giant said Wednesday that retailers are also buying more of its less popular items such as SpaghettiOs and Swanson canned chicken.   [Not a buyer, ever, of either...but ironically I had been stocking up on Campbell Soups for months prior to the coronavirus...anytime I saw a sale.]

Soup and crackers will more than fill you up if you need to stay home for a while.

Campbell’s shares were up 6% Wednesday after the company raised its profit expectations for the fiscal year ending in July, citing stronger earnings momentum in recent months.

Some stores in densely populated cities such as New York and San Francisco have been running out of long-lasting foods such as Jif peanut butter and Kraft macaroni and cheese.  Target Corp. said it is seeing a surge in such buying.

Campbell’s U.S. soup sales increased 1% in its most recent quarter, which will no doubt rise significantly in the current quarter.  Younger households are buying, which has frankly surprised the company.

--The auto industry in China has been absolutely hammered with consumers just staying in their homes, so the dealers are being trained to take their pitch from the showroom to the chat room in a search to do more business online in taking their inventory pile directly to home-bound customers.

Passenger car retail sales in China, the world’s biggest auto market, fell 80% in February, according to the China Passenger Car Association.

--Retail sales in Hong Kong fell for a 12th consecutive month in January, weighed down by the coronavirus outbreak, down a whopping 21.4% from a year earlier, according to the government.

Tourist arrivals in Hong Kong plunged 52.7% year-on-year in January, compared with a 51.5% plunge in December and a 55.9% fall in November, which was the steepest fall since May 2003, during the SARS epidemic.

I’m surprised the January figure wasn’t higher.

--Shares in Apple Inc. have been all over the place amidst the market volatility, including Monday’s rally of 9.3%, the single-best day since 2008, and the company’s heavy reliance on production from China. As the Wall Street Journal reported, some executives on the operational side were urging leadership to relocate assembly of at least one product to Vietnam years ago, which “would allow Apple to begin the multiyear process of training workers and creating a new cluster of component providers outside the world’s most populous nation, people familiar with the discussions said.”

But senior managers rebuffed the idea, and instead Apple stuck with its focus on the second-largest consumer market and the place where it wanted most of its products assembled.

And now you see the results of that strategy.  It’s not the first setback for Apple in China.  I have for years myself warned of the threat to the company from its heavy reliance on China not just for production but for sales growth, though I was focusing on two items; the inevitable playing of the “nationalism card” and the ongoing IP theft that has enabled the likes of Huawei to produce a phone just as good as Apple’s but at a fraction of the cost.

But in terms of the supply chain, as Burak Kazaz, a Syracuse University supply chain professor and former researcher at IBM, told the Journal, “No executive will admit in a public forum: We should have thought about” the vulnerability to China.  “But from this point on, there are no excuses.”

Meanwhile, CEO Tim Cook continues to play down the need to significantly change Apple’s supply chain.  Cook told Fox Business Network the other day: “The question for us is: Was the resilience there or not?  And do we need to make some changes?  My perspective sitting here today is that if there are changes, you’re talking about adjusting some knobs, not some sort of wholesale fundamental change.’

Well, it’s too late, and you’re wrong, Mr. Cook, on multiple fronts.  And just understand, Tim Cook is the architect, going way back, of Apple’s focus on China.

And this just in...Apple asked employees at its Silicon Valley headquarters to work from home if possible as a “precaution.”  There were 20 confirmed cases of the coronavirus in Santa Clara County, where Apple’s 12,000-person Apple Park campus is located.

--Target unveiled fresh guidance that was basically in line with analysts’ views on Tuesday after posting mixed results for its fiscal fourth quarter, with revenue rising year on year but missing the Street’s estimates, while earnings surpassed projections.

Target generated revenue of $23.4 billion in the three months ending Feb. 1, up 1.8% from the corresponding quarter of the prior year.

Comp sales rose 1.5%, with digital-sales growth of 20%.  Same-day services accounted for more than 80% of its fourth-quarter comparable digital-sales growth.

CEO Brian Cornell said, “With 11 consecutive quarters of positive comparable sales growth, driven by healthy performance in both our stores and digital channels, Targets’ results demonstrate that we’ve built a sustainable business model that drives strong top-line growth and consistent bottom-line performance.”

--Kohl’s posted earnings for the fourth quarter ending Feb. 1 that beat consensus, while revenue at $6.83 billion was a tick higher than last year, and well above estimates, the shares rising in response, initially, before declining on all the coronavirus uncertainty that is/will impact mall traffic.  The company lowered its guidance for fiscal 2020, with same-store sales in a range of –1% to 1%.  Comp sales in the holiday quarter were unchanged.

But Kohl’s struck a deal with Amazon last year to accept Amazon returns in its stores.  The theoretical benefit for Kohl’s is that the program will increase traffic to its stores and that people who visit to drop off an Amazon return will do some shopping while they’re there.

While the dismal holiday sales didn’t do much to instill confidence in the initiative, Kohl’s maintains they have seen a significant pickup in Amazon returns and that sales, post-Christmas, have improved as a result.

--Upscale apparel retailer Nordstrom saw its shares fall sharply after the Seattle-based company fell short of expectations and gave tepid guidance for the current fiscal year.

--Dollar Tree Inc. on Wednesday reported fiscal fourth-quarter net income of $123 million, exceeding expectations, but revenue of $6.32 billion in the period fell short of the Street.  DLTR also guided lower for the current quarter so the shares fell about 4%.

Same-store sales rose 1.4% in Dollar Tree stores, but were down –0.8% at Family Dollar outlets.

--Kroger Co. said it is selling more staple goods as consumers stockpile in preparation for a wider coronavirus outbreak in the U.S.

The biggest U.S. supermarket operator said Thursday it’s too early to calculate the impact of that buying on its business and it has established an internal task force to monitor the situation.  Other supermarkets and retailers have been preparing for higher demand for such items as canned foods, disinfectants and hand sanitizers.

Kroger shares rose 8% on Thursday, with the company saying sales have ticked up in recent days for staples including water, hand sanitizers, hand soap, paper towels and some boxed foods.

Other retailers are seeing a jump in sales of cold medicines and foods such as canned tuna, pasta, and snack bars.

Thursday, I went to my local ACME and as you walked in the door, you were met by a giant bin of disinfectant wipes, so I bought a couple containers.

--Comcast’s NBCUniversal said it sold more than $1.25 billion in national advertising for the Tokyo Olympics, a new record for any broadcaster for the games.  Nearly 90% of its ad invetnory for the Games has been booked, it said.

But now, obviously, coronavirus has cast doubts on whether the Olympics will be delayed.

--Canada added a net 30,300 jobs in February, Statistics Canada said today.  The jobless rate edged up to 5.6%, but it’s more backward-looking data, compared with go-forward concerns about disruptions from the coronavirus in the spring.

--We note the passing of legendary CEO Jack Welch, who turned General Electric into the world’s most valuable company in two decades at the helm.  He was 84.

Under Welch’s leadership, the infrastructure giant’s value multiplied from $12 billion the year he started to $410 billion when he retired, as its revenues spiked nearly fivefold to almost $130 billion in 2000.

But he was known as “Neutron Jack” for his aggressive efforts to slash GE’s workforce, the company reportedly cutting 100,000 over the time he was CEO, 1981-2001.

Welch’s whole philosophy was built around the premise that if one of GE’s business segments wasn’t first or second in its space, it should be sold.  At the same time, he was known for firing the bottom 10% of employees (performers) each year.  During his time he thus streamlined operations while aggressively acquiring new businesses to expand the company’s portfolio, such as GE’s 1986 acquisition of RCA, which gave it control of the NBC television network.  Comcast bought NBC from GE in 2011.

Welch retired from GE just days before 9/11 with a roughly $420 million payout and his handpicked successor, Jeff Immelt, taking his place.  So it was Immelt who then had to deal with the fallout from the terrorist attacks as well as the 2008 financial crisis that roiled the company, particularly its financial-services division, that almost single-handedly sent the share price plunging to previously unthought of lows.

Immelt was forced to dismantle the company Jack had built, which, according to the Wall Street Journal, once led Welch to say that he gave himself an A for his execution of GE’s operations, and an F for his choice of successor.”

Immelt was indeed miserable.

But I have a little Jack Welch story.  In February of 2001, I was a guest of the Jesuit Mission Bureau in Manhattan, and Father Avery Dulles, attending the Consistory in Rome where Dulles was elevated to Cardinal.  When I sat down outside at St. Peter’s Square the day of the celebration, sitting right in front of me was Jack Welch and his second wife (pre-Suzy).  Jack was known for his support of the Catholic church, and his funeral mass was at St. Patrick’s Cathedral on Thursday.

So I had to talk to Mr. Welch, and as chronicled in this space long ago, I knew of his love for Ireland and golf, so rather than be a jerk and start peppering him with business questions (he had just had a key meeting with the European Union on some issue, I recall), I asked him what his favorite course in Ireland was and he surprised me a bit with his answer, Baltray, a course north of Dublin on the east coast.  So we went on to have a pleasant chat about Irish golf.  He could not have been nicer. 

RIP, Mr. Welch.

[I can’t help but add that I have a treasured picture of myself and Cardinal Dulles, after he received his beanie, but the same day, a man I could call a friend, Theodore McCarrick, was elevated.  For years my photo with him was also a treasured memento, and then came the fall.  The Washington Post just this Thursday had another editorial on his days in charge of the diocese in Washington.  You just never know, people.]

--And the founder of Trader Joe’s, Joe Coulombe, died last weekend at the age of 89.  I’m a huge fan of the chain so I’ll be buying some now “3 or 4-buck Chuck” in his memory.

Trader Joe’s started as a quirky local retail success in Southern California in the late 1960s, developing a cult-like following, before expanding nationally in the 1990s after Coulombe left the company.

Coulombe was the owner of a small chain of 18 Pronto Market convenience stores in the mid-1960s when he became concerned about a growing competitive threat: the expansion of Dallas-based Southland Corp.’s 7-Eleven convenience stores into Southern California.

Knowing he had to do something different to survive, he did some research and realized that far more people who were qualified to go to college were doing so, vs. The Depression, for example, and he saw that wide-bodied Boeing 747 jumbo jets would be put into service in a few years, which would significantly reduce the cost of overseas air travel.

So Coulombe decided to target well-educated, well-traveled – but not necessarily affluent – consumers who have more significant tastes in food and drink.

Always enamored with the South Seas, he adopted the relaxed trading post theme for his stores, stocked with a global cross-section of goods.  The Hawaiian-shirt wearing employees added to the trading post concept.

The first Trader Joe’s opened in 1967 in Pasadena (this store remaining in business today).

Coulombe described his target customers as “the overeducated and the underpaid.”  He also attracted and retained the kind of workers he was looking for by paying the average full-time employee the median California family income and offering full benefits.

His son told the Los Angeles Times: “He loved and believed in his employees and he wanted to keep them. And the only way to do that was to pay them well.”

Coulombe and his employees, who owned 45%, sold Trader Joe’s in 1979 to a family trust established by Theo Albrecht, co-founder of the Germany-based discount supermarket chain Aldi. Coulombe served as CEO until 1989.

--Another victim of the coronavirus is the global release of the new James Bond film “No Time to Die,” which producers said will be postponed by seven months until November.

Two James Bond fan sites had written to the studios behind the film to ask for its release to be delayed over worries that cinemas could be closed then.

2015’s “Spectre” raked in $880 million worldwide, while “Skyfall” in 2012 grossed more than $1 billion globally.

--Germany’s harvest of ice wine – a dessert wine produced from grapes that have frozen while still on the vine – has failed for the first time because the winter has been too warm.

None of Germany’s 13 wine-growing regions had the necessary temperatures of –7C (19F.) to produce the wine in 2019.

Foreign Affairs

Syria, Turkey, Russia: Deadly clashes erupted in southern Idlib on Friday, hours into a ceasefire deal that Russian President Vladimir Putin and Turkish President Tayyip Erdogan reached agreement on after six hours of talks in Moscow Thursday.

According to the Syrian Observatory for Human Rights, 15 soldiers from both sides were killed, the clashes underlining the fragility of Thursday’s deal.  The ceasefire aims to contain a conflict that has displaced nearly a million people in three months in the northwest part of the country.

Erdogan had vowed to reverse recent advances by Assad’s forces in Idlib.  However, Thursday’s deal froze the conflict along existing front lines, cementing significant gains made by Syrian government forces.

A senior Turkish official said today, “There may be criticism but our priority was for a ceasefire and we achieved it.  Some goals were not reached but that goes for both sides.”

But several similar ceasefires since 2018 have blown up. And this new deal evidently does not address the humanitarian crisis or air protection.  All experts agree that no ceasefire arrangement in Idlib will work without a no-fly dimension.

Earlier, before the ceasefire deal on Thursday, Turkey killed 21 members of the Syrian government armed forces after two Turkish soldiers were killed in an attack.

Syrian-backed forces, reportedly Russian warplanes, on Thursday hit a poultry farm where several displaced families had taken shelter, killing at least 15 including children.

Just sickening.

As for the humanitarian/refugee crisis, Russia has repeatedly played down any talk of a crisis and accused Turkey of violating international law by pouring troops and equipment into Idlib since early last month.  About 60 Turkish soldiers have been killed in that time.

Erdogan said both sides would work together to supply aid to Syrians in need, but that Turkey retained the right to “respond to all (Syrian) regime attacks in the field.”

On the migrant issue following Turkey’s decision to open its border with Greece, ignoring its 2016 migration deal with the European Union, the EU said this simply isn’t acceptable and any such political pressure will be rejected, EU foreign ministers said today.

“The EU reiterates its serious concern over the situation at the Greek-Turkish border and strongly rejects Turkey’s use of migratory pressure for political purposes,” the ministers said in a statement after a meeting in Zagreb.  “This situation at the EU external border is not acceptable,” they said, also telling Ankara: “Migrants should not be encouraged to attempt illegal crossings by land or sea.”

So as for the border, as expected, after Turkey opened the doors, tens of thousands of migrants immediately attempted to cross from Turkey into the European Union.  Greece stepped up its forces on the border and has been trying to hold them back, with attempts to disperse the migrants met by tear gas from Turkish forces on the other side.  Turkey said it’s responding to tear gas fired from the Greek side.

Greece, at week’s end, says it has repulsed around 35,000 migrants trying to cross its border in the past week.  Turkey has deployed 1,000 special police to the area to halt the push-back of migrants onto its territory.

Ankara accused Greek forces of killing four migrants, a charge rejected by Athens.

About a quarter of the migrants at the border are Syrian and most of the rest are Afghans, Pakistanis, Iranians and Africans, according to Turkish estimates.

Iran: The UN watchdog policing Iran’s nuclear deal admonished Tehran Tuesday for failing to provide access to two undeclared locations or fully answer its questions about past activities there.

Reuters first reported Monday that the International Atomic Energy Agency planned to issue a second report in addition to its regular quarterly update on Iran’s nuclear activities, rebuking Iran for less than full cooperation in general and for failing to grant UN inspectors access to one or more sites of interest.

“Iran has not provided access to the agency to two locations...and not engaged in substantive discussions to clarify agency questions related to possible undeclared nuclear material and nuclear-related activities,” the IAEA’s report said.

“The director general calls on Iran to immediately cooperative fully with the agency, including by providing prompt access to the locations specified,” said the confidential report seen by Reuters.

Needless to say this is worrisome, and getting lost in the other news of the day.

Israel: Following last Monday’s election, the third in less than a year, in which the strength of Prime Minister Benjamin Netanyahu’s religious-nationalist coalition fell three seats fewer than the 61 required for a governing majority, the prime minister suffered a big blow on Thursday when Yisrael Beytenu leader Avigdor Liberman endorsed rival Blue and White leader Benny Gantz’s efforts to pass a law that would prevent an indicted MK (member of the Knesset) from forming a government.

Netanyahu’s corruption trial begins March 17.

Liberman’s endorsement gave the bill a majority, with the support of all 62 MKs who are not in Netanyahu’s right-wing bloc.  Liberman also said he would back term limits for prime ministers.

Speaking at a meeting of his bloc yesterday, the prime minister said the effort to pass the bill would undermine democracy.

Netanyahu later said that Gantz was worse than Iranian Ayatollah Khamenei.

“In Iran, they disqualify candidates before their elections, but here Gantz is doing it after an election despite the results,” the PM said.

With 100% of the ballots counted, Netanyahu’s Likud party had 36 seats, compared to 33 for Bantz’ Blue and White party, which at first was viewed as a devastating setback for the 60-year-old retired general, who had campaigned hard on a platform of Netanyahu’s unfitness to serve.

But then the tally for the prime minister’s coalition slipped to 58 in the 120-seat Knesset.

The Knesset reconvenes on Monday, March 16, the day before the trial.

President Reuven Rivlin will eventually give a mandate to Netanyahu or Gantz to form a government, but he could throw the matter directly to parliament, initiating a 21-day period in which a consensus candidate could emerge.

Avigdor Liberman’s party holds seven seats, and the former ally of Netanyahu has reiterated a pledge not to team up with him.

A block of Arab citizens of Israel, who make up about a fifth of the electorate, known as the Arab List, won 15 seats, making it the third-largest party.

It’s possible that Netanyahu could remain the head of a caretaker government and election-weary Israelis could head back to the polls within months for a fourth election.

Meanwhile, Israel is dealing with the coronavirus crisis.

Iraq: A power vacuum has deepened here after plans for a new prime minister, PM-designate Mohammed Allawi, withdrew his candidacy for the post on Sunday, accusing political parties of obstructing him.

This couldn’t happen at a worse time, with mass unrest, a reawakening ISIS and a spreading coronavirus infection.

Protesters who say the elite is corrupt and subservient to neighboring Iran had rejected even Allawi, and vowed on Monday to oppose any replacement lined up by the parties.

Afghanistan: Friday, gunmen attacked a ceremony in Kabul, killing at least 30 people in the first major attack on the Afghan capital since the U.S. reached an agreement with the Taliban to withdraw U.S. troops.  The Taliban said it was not involved in the attack.  A top Afghan official, Abdullah Abdullah, was present at the event but escaped unharmed.

The gathering marked the anniversary of the death of Abdul Ali Mazari, an ethnic Hazara leader who was killed in 1995 after being taken prisoner by the Taliban.  Several were killed in a similar attack on the same commemoration last year, which Islamic State said was carried out by its militants.

Abdullah was runner-up in the last three Afghan elections, each of which he disputed, including the last election in September, in which President Ashraf Ghani was again declared the winner by the Electoral Commision last month.

As for the peace agreement, initially, violence decreased during a seven-day hold-down agreement with the Taliban leading up to last Saturday’s deal, though then the Taliban resumed attacks on Afghan forces.

Sunday, Afghan President Ashraf Ghani rejected a Taliban demand for the release of 5,000 prisoners as a condition for talks with the Afghan government and civilians, included in a deal between the United States and the Islamist militants.

“The government of Afghanistan has made no commitment to free 5,000 Taliban prisoners,” Ghani told reporters in Kabul, a day after the deal was signed in Qatar.

Thursday, Secretary of State Mike Pompeo said the upsurge in violence in recent days was unacceptable and it must cease immediately for the peace process to move forward.  Pompeo said all sides should stop posturing and prepare for the intra-Afghan negotiations, including practical discussion on prisoner releases.

Since the signing of the deal last Saturday, the Taliban decided on Monday to resume normal operations against Afghan forces, though supposedly hold back on attacks on foreign forces.  That said, the Taliban carried out at least 76 attacks across 24 Afghan provinces since Saturday.

The U.S., in response, carried out an air strike on Taliban fighters that were actively attacking an Afghan checkpoint, just hours after President Trump said he had had a “very good talk” with a leader of the group.

China: It is simply unclear just how much things are returning to normal in much of the country.  You have anecdotal evidence such as in Chibi, a small city just south of Wuhan, the epicenter, saying it is removing road blocks and restoring normal traffic by Friday, one of the first cities in Hubei province to loosen traffic curbs, but traffic between Chibi and other counties and provinces remains forbidden.

China’s state assets oversight agency said the other day that over 90 percent of Chinese state-owned enterprises have resumed production.

The 48,000 subsidiaries under the 96 central government-owned firms supervised by the oversight agency have reported a 91.7 percent work resumption rate, following the quarantine and work-from-home policies announced across the country in the past five weeks to contain the coronavirus.

But this doesn’t say anything about the percentages of workers who are returning, the largely migrant workforce from all over the country.

Chinese authorities have turned their attention to stopping the virus being brought in from new hot spots abroad, such as Italy.

The cities of Shanghai and Guangdong have ordered people who have been in countries with severe outbreaks within the previous two weeks to stay in quarantine for 14 days.

Meanwhile, Chinese scientists who compared the genetic sequences of 103 viral samples from patients infected with Covid-19 said their evidence suggests that the virulent version of the coronavirus – which they tagged the “l-type” version – was the dominant strain in the earliest phase of the outbreak that began in Wuhan late last year.  That strain, they said, appeared to recede as the epidemic progressed.

But among samples collected later, as Covid-19 spread across China and into other countries, a variant of the virus they dubbed the “S-type” was more common, the scientists reported.  They suggested that the genetic makeup of the S version more closely resembles coronaviruses circulating in bats and pangolins, the animals that are thought to have incubated the virus before it jumped to humans.  And they surmised that it is a less virulent version.

Chinese scientists reported their analysis Thursday in the journal National Science Review.  [Melissa Healy / Los Angeles Times]

Officials at the World Health Organization warned that “it’s important we don’t overinterpret” the scientists’ findings.  Other scientists want the paper to be retracted.  Just another case of not knowing what we are dealing with.

Today, Secretary of State Mike Pompeo said imperfect data from China on the coronavirus has hindered the U.S. response to the outbreak, faulting Beijing.  “The information that we got at the front end of this thing wasn’t perfect and has led us now to a place where much of the challenge we face today has put us behind the curve,” Pompeo said in an interview with CNBC.

Separately, we have the issue of China and Hong Kong.

Editorial / Washington Post

“The pro-democracy demonstrations that rocked Hong Kong last year have lulled, in part because the city is under partial lockdown to prevent the spread of the coronavirus.  You’d think Chinese Communist authorities and their hugely unpopular representatives in the city would breathe a sigh of relief and focus on keeping the population healthy.  Instead, they chose last week to escalate the repression of opposition leaders.

“On Friday, police arrested Jimmy Lai, the founder of the pro-opposition newspaper Apple Daily, along with two well-known politicians, Lee Cheuk-yan and Yeung Sum.  They were charged with participating in an unauthorized march more than six months ago, on Aug. 31, a day hundreds of thousands took to the streets, prompting bloody assaults by police. Mr. Lai was also charged with criminal intimidation for a 2017 incident in which he exchanged words with a pro-regime journalist.

“Why now?  It may be that Beijing sees an opportunity to dispose of key opponents in Hong Kong while the country and the world are preoccupied with the epidemic.  A hardline ally of President Xi Jinping was recently installed as head of the office overseeing the region. Days before the arrests, authorities announced that the head of a Hong Kong publishing house that produced uncensored books about Chinese leaders, Gui Minhai, had been sentenced to 10 years in prison.

“Or maybe the regime was offended by the latest op-ed by Mr. Lai, a self-made millionaire who regularly assails Mr. Xi in the pages of the Wall Street Journal, among other publications.  In a Feb. 19 op-ed, Mr. Lai bluntly declared that ‘the spread of the coronavirus has revealed a truth that poses a much greater risk to Mr. Xi: There is no cure for Chinese communism except the collapse of the party.’  His point was that the suppression of information that helped the virus spread has only reinforced the corrosive distrust with which the regime is regarded by both the world and its own people....

“Hong Kong’s legal system, which was supposed to remain independent via the ‘one country, two systems’ formula under which the former British colony was returned to Chinese sovereignty, no longer can be counted on to uphold the rule of law.  A high-profile prosecution of the publisher of the city’s most outspoken newspaper would underline that shift for the foreign investors on whom Hong Kong’s prosperity depends.  But as the recent history of tumult in the city has repeatedly shown, Mr. Xi is nothing if not shortsighted.”

Lastly, China continues to pressure Taiwan with “provocative” air force maneuvers near the island while spreading fakes news to sow discord during the Covid-19 outbreak, according to Taiwanese officials.

As far as I know, there also still hasn’t been a resolution to the issue of about 1,000 Taiwanese stranded in Wuhan, and China has made no obvious moves to respond to offers of help to fight the virus from Taiwan President Tsai Ing-wen.

North Korea: Chinese authorities have told people to stay away from the border with North Korea, which has banned people from China to keep out the coronavirus, or risk being shot by North Korean guards, residents of the area said, as reported by Reuters.

China and North Korea share an 880-mile frontier that is especially porous in winter, when rivers separating the countries freeze, allowing people to cross.  Residents of the Chinese cities of Jian and Baishan were warned that people who get too close to the border might be shot.

Meanwhile, North Korea’s recent military drills, including two missile launches, were not meant to threaten anyone, according to a statement by state news agency KCNA on Tuesday.  In the statement, Kim Jong Un’s sister and senior government official Kim Yo Jong, described South Korean criticism of the missile launches as disingenuous.  Interesting the sister was put forward in this way.

Russia: President Putin said Russia has been targeted from abroad by foes spreading fake news about the coronavirus to sow panic.  Putin’s remarks came as Russia’s communications regulator said it had shut down access to some social media posts containing falsehoods about the virus outbreak.

In a beyond laughable statement, Putin said on Wednesday, in televised remarks at a government meeting, “The Federal Security Service reports that they (the fakes) are mainly being organized from abroad.  But unfortunately this always happens to us... The purpose of such fakes is clear: to sow panic among the population.”

Tuesday, Kremlin opposition leader Alexei Navalny accused Russian authorities of emptying and blocking his bank accounts and those of his close family, a move he said was aimed at strangling him and his supporters financially.

Navalny said his own bank accounts had been frozen as had the bank cards of his wife, son, daughter and elderly parents.

Back to Vlad the Impaler, Putin said Russia has developed unique offensive weapons without the intention of starting a war with anyone but to maintain “strategic balance” and “strategic stability” in the world.

“We are not going to fight against anyone.  We are going to create conditions so that nobody wants to fight against us,” Putin said in an interview with the state-ruin Tass news agency.

Russia has created “offensive strike systems the world has never seen,” and which are forcing the U.S. to try to catch up, Putin told Tass.

As an example, Putin mentioned new “hypersonic offensive systems” - a weapon that can fly 27 times the speed of sound that became operational late last year.

Random Musings

--Presidential tracking polls....

Gallup: 47% approve of President Trump’s job performance, 51% disapprove; 92% of Republicans approve, 42% of independents (Feb. 17-28).  Slight downticks on all four metrics from Feb. 2-16 survey.
Rasmussen: 47% approve, 51% disapprove (Mar. 6).

--Joe Biden was dead after Nevada, finished, though his supporters claimed he had a firewall in South Carolina, with blacks, who make up 60% of the Democratic primary vote in the state coming out to support him.  Democratic House leader James Clyburn, a giant of a figure in the state, announced he was endorsing his longtime friend.

And Biden then blew away the expectations in last Saturday’s vote.

Biden 48.4%
Sanders 19.9%
Steyer 11.3%
Buttigieg 8.2%
Warren 7.1%
Klobuchar 3.1%

Biden won 61% of the black vote.

Tom Steyer immediately dropped out, and then Amy Klobuchar and Mayor Pete did as well, Monday, both endorsing Joe Biden dramatically, setting the stage for Super Tuesday.

In a further shock, Biden then took ten of the 14 states: Alabama, Arkansas, Maine, Massachusetts, Minnesota, North Carolina, Oklahoma, Tennessee, Texas and Virginia.

Sanders took: California, Colorado, Utah and Vermont.  The young voters who turned out for rallies to cheer Bernie’s anti-establishment message didn’t show up at the voting booth in the numbers he needed, as is their historic wont.

--Delegate count after Super Tuesday, 1991 needed for the nomination.  [Associated Press]

Biden 642
Sanders 565
Warren 64
Bloomberg 61

After his poor Super Tuesday showing, Mayor Bloomberg then dropped out Wednesday, endorsing Biden.

Bloomberg said in an initial statement: “After yesterday’s results, the delegate math has become virtually impossible – and a viable path to the nomination no longer exists. But I remain clear-eyed about my overriding objective: victory in November. Not for me, but for our country.  And so while I will not be the nominee, I will not walk away from the most important political fight of my life.”

He then told a group of supporters: “Joe has fought for working people his whole life.  I am glad to endorse him – and I will work to make him the next President of the United States.”

Bloomberg will form an independent group (Super PAC) to help elect the Democratic presidential nominee in November, employing some of the enormous staff he built during his campaign, with the group having offices in six battleground states – Arizona, Florida, Michigan, North Carolina, Pennsylvania and Wisconsin.  The group, whose name and budget are still being determined, will be able to spend unlimited sums as long as it does not coordinate directly with any campaign. The goal is to support down-ballot Democrats as well as whoever wins the nomination.

Bloomberg never recovered from his Vegas debate performance.   As I wrote at the time, it was beyond pathetic that he hit the stage that night totally unprepared for all the obvious questions that had been circulating in days prior, and hardly pointed out his many successes as mayor, and as the founder of a major American corporation.

He did better in the Charleston debate six days later but the damage was done.  His opportunity to scoop up the moderates who ended up voting for Joe Biden was lost.

[For the record, Bloomberg did hit the 15% threshold in four states on Super Tuesday, and was at 13% or 14% in three others.]

Biden’s strong showing among African Americans, suburbanites and moderate white voters on Super Tuesday certainly gives Democrats some confidence he can build the coalition necessary to defeat Donald Trump.

During his victory speech Tuesday night in Los Angeles, Biden said: “Our campaign reflects the diversity of this party and this nation, and that’s how it should be,” he told supporters.  “Because we need to bring everybody along, everybody.  We want a nominee who will beat Donald Trump, but also keep Nancy Pelosi the speaker of the House, and win back the United States Senate.”

For good reason, President Trump has to be concerned.  Bernie Sanders was an easy mark and after Nevada, the Trump team was ecstatic.  Then came Clyburn’s endorsement and South Carolina rallied around Sleepy Joe, err, the former vice president.

Biden has taken to calling himself an “Obama-Biden” Democrat, pledging to rebuild the diverse electorate that helped Obama secure two terms.

As for Bernie Sanders, he can point to solid support among young people and Hispanic voters, including more than 70 percent of Latino voters under the age of 30, and about half of Latino voters over all, according to exit polls in California.

More broadly, within the Democratic Party, it’s liberals who want government to play a much larger role versus moderates who make up the party establishment.

Wednesday, following Super Tuesday’s results, Sanders said he and Biden “have a very different vision for the future of this country,” Bernie making it all-too-clear he was going to go after Biden’s votes on backing the Iraq war and on trade, among other policy issues.

So this coming Tuesday we have six more states voting, the most important being Michigan.  Both Sanders and Biden claim they can recapture the state in November (ditto Wisconsin and Pennsylvania).  The result in Michigan is thus huge.  Sanders won it in 2016, but a Biden win and he becomes nearly unbeatable.

Biden is lucky, however, that he doesn’t have to debate Sanders, now one-on-one, until after Michigan and the other five states (including Missouri, Mississippi and Washington).

But he will on March 15 in Phoenix, prior to the March 17 lineup of primaries, some biggies: Florida, Illinois, Ohio and Arizona, followed a week later by Georgia.

Editorial / Wall Street Journal

“The former Vice President ran away with the vote among late deciders, which means he benefited from the rush of endorsements that followed South Carolina.  The party is almost literally lifting the old war horse on its back despite his many gaffes and stumbles.  The prospect of an avowed socialist at the top of the ticket has scared millions of Democrats into Mr. Biden’s arms no matter his liabilities.

“His strong performance will keep him close to Mr. Sanders in the delegate count... but his victories may be most important for restoring credibility to Mr. Biden’s argument that he is the Democrat who is best able to defeat Mr. Trump.  His coalition so far is the closest to Barack Obama’s, and the turnout in Virginia was especially impressive at nearly double what it was in 2016.  Trump campaign, take note.

“Mr. Sanders can point to victories in his home state of Vermont, Colorado, Utah and California  But the biggest night of the primaries carried warnings for the two-time candidate.   He lost ground from his 2016 vote share in several states, including Vermont.  This suggests he isn’t building his coalition with a surge of new voters as he has promised Democrats.

“Mr. Sanders also benefited from early voting but did much more poorly among late deciders.  He can talk about millennials all he wants, but Mr. Biden overwhelmed him among voters over age 45 who were 65% of the electorate in Virginia, 62% in Massachusetts, 64% in North Carolina, 66% in Maine, and 67% in Oklahoma, according to exit polls.  Older Americans vote more than do young socialists.”

The pressure is on Biden to raise his performance.  “He has a retooled stump speech that stresses a practical progressivism against Mr. Sander’s revolution, and healing and compromise against Mr. Trump’s divisiveness.  But the former Vice President will be back in the relentless media spotlight, and his vigor and acuity will be tested anew.”

--After her disastrous Super Tuesday performance, including a distant third place finish in her home state of Massachusetts, Elizabeth Warren dropped out Thursday, though said she needed time before endorsing a candidate.

“Not today,” she said when asked about an endorsement.  “I need some space around this and a little time to think a little more.”

When asked by reporters if sexism played a role in her leaving the race, Warren said it was a “trap question” for any woman to answer.

“If you say, ‘Yeah, there was sexism in this race,’ everyone says, ‘Whiner.’  And if you say, ‘No, there was no sexism,’ about a bazillion women think, ‘What planet do you live on?’  I promise you this: I’ll have a lot more to say on that subject later on.”

--In a Fox News townhall in Scranton, Pa., Joe Biden’s home town, Thursday night, President Trump said Biden would ultimately emerge as his Democratic opponent in November.

“I was all set for Bernie,” Trump said.  “I think it’s going to be very hard for him to come back.”  Trump said Biden’s frequent gaffes and the controversy over his son’s appointment to the boards of foreign entities would make him an easy target.

“It looks like he’s going to be a candidate,” Trump said.  “How did that happen?”

Asked how he could bring the country together, Trump responded, “Ultimately what’s uniting the country is success.”

--No secret I liked Sen. Klobuchar, and she seems to me like a layup to be Biden’s running mate.  She is more than qualified, has the same moderate credentials, would help lock up the suburban vote, Biden clearly not needing help with the black vote (so Cory Booker or Kamala Harris don’t need to be on the ticket), and Klobuchar would more than hold her own against Mike Pence in their Veep debate next fall.  Left unsaid, voters would also see that should anything happen to Biden in his first years, highly possible, there is someone ready and able to step right in.

And kudos to Pete Buttigieg for fighting the good fight.

--I was watching Biden’s victory speech Tuesday night when the two protesters, one after the other, rushed the stage, shocking Biden’s sister, Valerie, as well as Jill Biden, who were standing behind Joe, and for that split second, it was a truly scary moment.

It also brought out the fact that neither Biden nor Bernie Sanders have Secret Service protection, which the House then got to work on.  They both must have it.

I didn’t realize that as a former vice president, Biden was entitled to Secret Service protection for up to six months after he left office, which I totally understand, but it should have been reinstated at some point in the campaign.

Under the law, “major” presidential and vice presidential candidates automatically receive protection within 120 days of the general election, so starting in July.  The decision to initiate it earlier is up to the Department of Homeland Security, not the Secret Service.

--Another ‘for the record’ tidbit.  Republican challenger, on some ballots, former Massachusetts Gov. Bill Weld, captured 9% of the vote in New Hampshire and Massachusetts, and 10% in Vermont.

--Former U.S. Attorney General Jeff Sessions will face ex-college football coach Tommy Tuberville in a Republican runoff March 31 as the former Alabama senator seeks to regain the longtime seat he held.

Sessions and Tuberville (a 21-year head coach at four schools, most famously Auburn) won the most votes in a crowded primary field on Tuesday to advance, the runoff winner facing Democratic incumbent Doug Jones in November.

President Trump forced Sessions from his Cabinet after harshly criticizing him for withdrawing from the federal investigation of Russia’s involvement in the 2016 U.S. election.  But in his Senate campaign, Sessions still positioned himself as a strong supporter of the Trump agenda, Tuberville also closely aligning himself with the president, who is extremely popular in the state.

Wednesday morning Trump tweeted:

“This is what happens to someone who loyally gets appointed Attorney General of the United States & then doesn’t have the wisdom or courage to stare down & end the phony Russia Witch Hunt.  Recuses himself on FIRST DAY in office, and the Mueller Scam begins!”

As for Doug Jones, who defeated a scandal-plagued Roy Moore in Dec. 2017 to become Alabama’s first Democratic senator in a quarter-century, he is the only Democrat in a statewide office in the GOP-controlled state.

--Longtime MSNBC anchor Chris Matthews abruptly resigned following an allegation that he “inappropriately flirted” with a female guest.  The story, along with others over the years, had been out a while, but it still shocked his audience when at the start of “Hardball” Monday night, he announced on-air, “I want to start with my headline tonight: I’m retiring.”

“This is the last ‘Hardball’ on MSNBC and obviously this isn’t for a lack of interest in politics,” he added.

Matthews said he’s leaving his post to make way for “younger generations” who are “improving the workplace.”

“A lot of it has to do with how we talk to each other, compliments on a woman’s appearance, that some men, including me, might have once incorrectly thought were OK, were never OK,” Matthews said in explaining why he was leaving.

“Not then, and certainly not today.  And for making such comments in the past, I’m sorry.”

--Don’t forget to turn your clocks ahead early Sunday morning to daylight-saving time.  I do enjoy more daylight in the evening, for spring and summer, and also don’t mind turning it back in the fall.

But as Sumathi Reddy writes in the Wall Street Journal, there is a growing body of evidence that shows the annual time shift is bad for our health, disrupting our sleep patterns and leading to a higher immediate risk of heart attacks, strokes, and other outcomes, including car accidents.

A 2019 survey by the Associated Press and NORC Center for Public Affairs Research found that 28% of people polled are happy with the status quo, 31% would like to be on daylight-saving time year-round, while 40% would prefer sticking solely with standard time.

But health experts have called for an end to daylight-saving time, with studies showing an association between DST and certain health condition, though there’s no definitive data.

Clock changes affect our internal circadian clocks, which are located in every cell in our body and influence our biological workings.

Till Roenneberg, professor emeritus at the University of Munich in Germany, notes: “Daylight-saving time means that we virtually live in another time zone without changing the day-light cycle. The problem is the misalignment. The circadian clock is trying to optimize our physiology.  Now suddenly we have to do things which are not at the biologically appropriate time....It’s a general stress of the physiology.”

Well, just chill out the first few days. 

--Central Park, New York, had a whopping 4.8 inches of snow this meteorological winter (Dec., Jan., Feb.) with literally not even a trace in February, according to the National Weather Service, for the first time on record.

There have been records kept in Central Park since 1886 and this season was the second-least snowy for Gotham.

But the decade also witnessed the second-snowiest winter, Dec. 2010 to Feb. 2011, 61.9 inches.

--Southern California is slated to receive some desperately needed substantial rain this coming Tuesday after one of the driest Februaries in recorded history, which has elevated fears the state is once again headed towards a major drought, and perhaps an early fire season.

February is a key month for building up the snowpack and that didn’t happen this year, though due to an unusually wet winter last season, many of California’s reservoirs are still in good shape.  But rain is needed now.  Sacramento had zero rain in February, making it the driest February on record there in 153 years of record-keeping. 

San Francisco hasn’t had measurable rain since late January.  It’s only slated to receive a few showers in the coming days.

And this is incredible.  The northern part of the Sierra Nevada mountains had no precipitation in February for the first time since records started there 100 years ago.

--Finally, our hearts go out to the people of Tennessee and Nashville after this week’s devastating tornadoes that claimed 24 lives.  I can’t help but acknowledge Taylor Swift’s $1 million contribution for the recovery efforts. 

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Pray for the men and women of our armed forces...and all the fallen.

God bless America.

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Gold $1674...huge swings last few weeks, $1646 to $1586 to $1674
Oil $45.32

Returns for the week 3/2-3/6

Dow Jones  +1.8%  [25864]
S&P 500  +0.6%  [2972]
S&P MidCap  -0.9%
Russell 2000  -1.8%
Nasdaq   +0.1%  [8575]

Returns for the period 1/1/20-3/6/20

Dow Jones  -9.4%
S&P 500  -8.0%
S&P MidCap  -12.9%
Russell 2000  -13.1%
Nasdaq  -4.4%

Bulls 41.7
Bears 20.4...split was 54.7 / 18.9 two weeks ago.

Have a great week.  Wash your hands.

Brian Trumbore

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