Week in Review

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Week in Review

02/24/2024

For the week 2/19-2/23

[Posted 4:30 PM ET, Friday]

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Edition 1,297

Over 25 years ago I came up with the name for this site and this week was a classic example of the import of both stocks and news when it comes to a global review of the past seven days, which is what I sought to do from day one.

I can’t imagine this has ever happened before, but on Thursday, the leading benchmark indexes for equities in the United States, Europe and Japan all hit record highs, as I spell out below, and one company, specialized chip-maker Nvidia, at the forefront of the artificial intelligence (AI) revolution, led the way, which had big tech issues all over the globe rallying in return, spurring the indices to new heights.

The United States also returned to the lunar surface for the first time since 1972 on Thursday, and with a private company performing the heroics for the first time, a truly inspiring moment.

But, also, this week we had new lows in terms of geopolitics, and an inhumane dictator in Russia, as the mother of Russian opposition leader Alexei Navalny wasn’t able to bury her courageous son in the manner she saw fit, instead being given an ultimatum this afternoon.

This comes amidst a U.S. presidential campaign where the current occupant of the White House, while largely having the right intentions when it comes to facing off against America’s enemies, is incapable of true leadership, as in rallying the American people, because he is freaking 81 years old and losing his mental and physical faculties by the day.

President Joe Biden has given one single primetime speech on the need to support Ukraine in its war with Vladimir Putin and his thugocracy, and as a result support in the U.S. for critically needed aid to combat Vlad the Impaler has been dropping, while the man who is leading in the race to oppose Biden in the fall, Donald Trump, a former president who has called America’s fallen soldiers “suckers” and “losers,” is blocking House Republicans from voting for the needed aid for not just Ukraine, but Israel and the Indo-Pacific (read primarily Taiwan).

It's infuriating.

I just have to repeat that the defining moment in my life came in 1973, when at age 15 my parents took me to Eastern Europe to see my relatives in Prague and Budapest, a trip that included stops in Warsaw, Kyiv (then Kiev), Sofia, Leningrad (the name until 1991) and Moscow.  I saw firsthand how my relatives lived under communism; I saw for the first time goose-stepping soldiers; and it forever shaped my politics and world view. 

As I go to post, in Ukraine, they are marking two years since Putin launched his full-scale invasion.  All the brave Ukrainians are asking for is aid.  Their fathers and sons (mothers and daughters) are doing the fighting, and dying, not the West’s.  If they lose, however, we will be doing it.

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Navalny....

Twenty-four hours after Alexei Navalny’s death, at least 400 people had already been arrested by Russian authorities/goons for the egregious crime of laying flowers in remembrance.  In Moscow, the hundreds of flowers and candles laid in his honor were almost immediately taken away in black bags, as reported by Reuters.  One brave soul, Vladimir Nikitin, 36, who was seen laying a carnation, was interviewed in an underpass, citing fear of detention.

“Navalny’s death is terrible: hopes have been smashed,” Nikitin said.  “Navalny was a very serious man, a brave man and now he is no longer with us. He spoke the truth – and that was very dangerous because some people didn’t like the truth.”  [Guy Faulconbridge / Reuters]

Last week I listed some of the immediate foreign reaction to Navalny’s death, including from foreign ministers, presidents and prime ministers across Europe and in the U.S.  Kremlin spokesman Dmitry Peskov said such reaction was “absolutely rabid.”

“We consider it absolutely unacceptable to make such, well, frankly obnoxious statements,” Peskov told reporters. “These statements, of course, cannot cause any damage to our head of state.”

Asked how Putin reacted to news of the death, Peskov said: “I have nothing to add.”

For years I have to admit I wanted to go back to Moscow one last time. Specifically, I wanted to go to the spot on the bridge beside the Kremlin where opposition leader Boris Nemtsov was shot dead, on the order of Putin, on Feb. 27, 2015, years after my last trip to this dark and forbidding place.  I’ve been over this bridge many times.  Flowers were placed at the spot Nemtsov was murdered after word spread about Navalny’s demise and they were immediately removed.

Monday, Yulia Navalnaya said she would continue the fight of her dead husband for a “free Russia” and called on opposition supporters to battle Putin with greater fury than ever.

Navalnaya’s call from abroad for resistance comes less than a month before a presidential election that will hand Putin another six-year term.

In a nine-minute video laced with rage, Navalnaya, 47, said Putin had killed her husband and in doing so had cut away half her heart and robbed their two children of a father.

“I want to live in a free Russia, I want to build a free Russia,” Navalnaya said in the video message entitled “I will continue the work of Alexei Navalny.”

“I urge you to stand next to me,” she said. “I ask you to share the rage with me. Rage, anger, hatred towards those who dared to kill our future.”

It was unclear where she was speaking from but she was not in Russia.  Navalnaya was due to attend a meeting of European Union foreign ministers in Brussels on Monday which was weighing imposing further sanctions on Russia over her husband’s death. [Yulia went to Brussels, and then California to be with her daughter, the two of them meeting with President Biden on Thursday.]

Navalnaya accused Russian authorities of hiding Alexei’s corpse and of waiting for traces of the Novichok nerve agent to disappear from his body.  She said her team would publish details of who killed her husband.

“Vladimir Putin killed my husband,” Navalnaya said. “By killing Alexei, Putin killed half of my heart and half of my soul.”

“But I still have the other half, and it tells me that I have no right to give up.  I will continue the work of Alexei Navalny, continue to fight for our country.”

Navalny’s mother was told on Saturday that her son was struck down by “sudden death syndrome” and that his body would not be handed over to the family until an investigation was completed, his team said.

Alexei’s mother, 69-year-old Lyudmila, braved Arctic temperatures of minus 22 degrees Fahrenheit on Saturday to visit the penal colony where her son perished.  She was given an official death notice stating the time of death as 2:17 p.m. local time on Feb. 16, Navalny’s spokeswoman, Kira Yarmysh, told reporters.

“Sudden death syndrome” is a vague term for various cardiac syndromes that can cause sudden cardiac arrest and death.

The mother was told the body had been taken to Salekhard, the town near the prison complex, but when she arrived at the morgue it was closed.  When contacted by Navalny’s lawyer, the morgue said it did not have Navalny’s body, Yarmysh said.  Later, they were told by officials that the body would not be handed over until the investigation was complete.

Editorial / Wall Street Journal

“Alexei Navalny didn’t have to return to Russia in January 2021. That he did is a testament to his remarkable courage and also an explanation for why Vladimir Putin so feared Navalny....

“In August 2020, Navalny fell ill on a domestic flight. He already had been the victim of one chemical attack in 2017 and thoughts immediately turned to poison given the fate of so many of Mr. Putin’s opponents. Navalny was flown to Germany for medical care, where doctors determined he’d been dosed with a nerve agent of the sort Russian operatives used to try to murder another Putin critic in Salisbury, Britain, in 2018.

“As Navalny’s health improved, he could have remained in relative safety in the West – as many dissidents under oppressive regimes choose to do, letting them continue their work though risking irrelevance.  He chose instead to return to Russia, where he was arrested immediately upon landing. At the time of his death he was serving sentences totaling more than 30 years on various trumped-up charges.

“He kept up his political activism from prison with the help of aides based outside Russia (several of his lawyers who remained in the country are in jail pending trial). This probably explains why the Kremlin moved him to a remote prison last year.  The world is unlikely to know the true circumstances of his death any time soon, and it doesn’t matter whether he was murdered or succumbed to ill health as the Kremlin claims.  If not for Mr. Putin’s political oppression,  Navalny would have been safe and well at home and engaged in a normal legal or political career.

“Navalny’s death may be a sign that Mr. Putin feels secure and therefore can risk provoking protests about Navalny’s fate. Mr. Putin has seen off a potentially serious rebellion by Yevgeny Prigozhin of the mercenary Wagner Group and faces no opponent of Navalny’s stature in ‘elections’ due this year.  A divided West at odds even over the territorial defense of European soil in Ukraine is unlikely to object too vigorously over the murky death of an internal foe.  Navalny’s death wounds Russia’s opposition for the foreseeable future.

“Yet the paradox of dictatorship is that the autocrat who believes he can kill a domestic opponent with impunity also knows that he must to keep power. Navalny’s courage during his life reminds the world that many Russians still want something better for their country.”

Editorial / The Economist

“Alexei Navalny was not afraid of death.  He had almost died before...but after five months [recovering in Germany] he returned home to Moscow – a defiant middle finger to President Vladimir Putin.

“He was swiftly jailed, on ludicrous charges.  As his prison sentence grew longer his face grew gaunter.  In December he disappeared for 21 days as he was taken deeper into Russia’s modern-day gulag, ultimately arriving at a penal colony in Siberia. Then, finally, Mr. Putin got his wish.  On Friday prison authorities said that Mr. Navalny had died, having ‘felt unwell after a walk.’

“Mr. Navalny was an everyman. He was raised in Obninsk, a town southwest of Moscow. His father was an officer in the Soviet missile forces, his mother an accountant... Born in 1976, Mr. Navalny was a generation younger than Mr. Putin, who was a former KGB officer; he associated the Soviet era with decay.  Especially influential was the Chernobyl nuclear disaster of 1986, in Ukraine.  He had spent summers at his grandparents’ house on the edges of the town.

“A lawyer by training, Mr. Navalny said that it was Putin’s rise that brought him into politics.  In 2000 he joined Yabloko, Russia’s oldest liberal party, but found himself an outsider. The party expelled him in 2007, partly because of his nationalist streak. (He made ill-advised xenophobic videos, which he later came to regret.)

“The activist threw his energy into creating a grassroots anti-corruption campaign, using blogs and YouTube videos to expose the graft that underpinned Mr. Putin’s regime of ‘crooks and thieves.’  His online calls for protest drew large numbers on to the streets, especially after Russia’s rigged election of 2011.  He was banned from running for the Russian presidency in 2017, but his videos, watched by millions, continued to make the political weather.

“Mr. Navalny spoke of creating ‘the wonderful Russia of the future’ – free, democratic and unthreatening.  His death underscores how far away that Russia appears.”

Editorial / Washington Post

“When Alexei Navalny returned to Russia in 2021, after treatment abroad for a near-fatal poisoning by Russian government agents, he knew he would likely be imprisoned for his opposition to President Vladimir Putin. And he knew that, in Russia, a prison sentence could become a death sentence.  Despite the risks, he went back to confront Mr. Putin’s deepening repression, and refused to be silent, even when he was sentenced to 19 years on trumped-up charges....

“The Kremlin leader has a taste for the trappings of wealth but has never tolerated true political competition.  After coming to power in 2000, he easily shoved aside wealthy oligarchs, muted the independent media and installed his own cronies as the new elite.  But in later years, he faced in Mr. Navalny a true rival.  Mr. Navalny summoned tens of thousands of people to the streets to protest the ‘party of crooks and thieves,’ as he called Mr. Putin and his cadre of former KGB men.  Mr. Navalny captured the hopes of many Russians to be a normal country – a democratic one.

“Mr. Putin undoubtedly hopes that Mr. Navalny’s death eliminates not only an irrepressible, principled and courageous opponent, but also will squelch the aspirations he embodied for so many others: to live without fear from the state, to choose their leaders, to say and think what they believe, to make free choices in a free market and to travel the world. All of these liberties were denied in the Soviet Union, where Mr. Navalny was born; they were unleashed tentatively under the last Soviet leader, Mikhail Gorbachev, and then fully during the presidency of Boris Yeltsin, when Alexei came of age.

“Yeltsin failed in one crucial respect, to establish the rule of law. Russia was thrust into an era of fierce oligarchic capitalism: wild, violent and corrupt....

“As Mr. Putin pushed Russia deeper into dictatorship, especially after the protests of 2011-2012, Mr. Navalny evolved into more of a champion of democracy and practical political action... Even from his Arctic jail cell, Mr. Navalny just a few weeks ago proposed ways that millions of Russians could protest on the day of Russia’s upcoming presidential election, which Mr. Putin is certain to win without serious competition.

“Through it all, Mr. Putin tried desperately to repress Mr. Navalny and his movement using censorship, subversion, arrests and the attempted poisoning of Mr. Navalny with the nerve agent Novichok....

“For all his personal suffering, Mr. Navalny never succumbed to despair or lost his mordant sense of humor.  Trapped in solitary confinement in prison, he noted on X (formerly Twitter) that he was held in ‘a 2.5 x 3-meter concrete kennel.’  Most of the time, these cells were cold and damp, he said, but ‘I got the beach version – it’s very hot and there’s almost no air.’  He was often denied a pencil and paper but, in November, having been imprisoned for more than 1,000 days, he posted an appeal for Russians to read books about their own recent history.

“Mr. Navalny’s death is a reminder to the United States and its allies that, in Mr. Putin, they are up against a ruthless foe whose primary method is to use force.  Mr. Navalny’s death is an enormous loss to his family and friends, and to the ideal of a free and democratic Russia.  But such ideals cannot be slain.  Mr. Navalny’s legacy will be a never-ending struggle to realize them.”

Jonah Goldberg / Los Angeles Times

“The question of whether the timing of Navalny’s death was deliberate matters geopolitically but not morally.

“If Putin ordered Navalny’s death Friday, it might shed light on his state of mind. Was Putin sending a message in advance of next month’s ‘election’ in Russia?  Does that message reflect confidence or insecurity? Was Putin buoyed by his recent military successes in Ukraine or his related political victories in the U.S. Congress? Perhaps Navalny’s death was a thumb in the eye of the West timed to coincide with the Munich Security Conference?

“Or, was he, as some Russian propagandists have speculated, somehow motivated by the insidiously insipid comments of Tucker Carlson a few days earlier?

“On his way back from interviewing Putin and celebrating Russia’s superiority to America in a series of embarrassing videos about Moscow supermarkets and subways, Carlson appeared at a forum in Dubai. Asked why he hadn’t questioned Putin about the then-still-alive Navalny, Carlson shrugged and said, ‘Every leader kills people.  Some kill more than others.  Leadership requires killing people.’  No doubt Putin agrees.

“At minimum, if Putin didn’t want the world to know about Navalny’s death Friday, the world would not know about it.  The revelation itself is a statement unto itself.

“What Navalny’s death – and his life – say about Putin’s Russia should be obvious to anyone who doesn’t believe ‘leadership requires killing.’

What it says about the moral rot on parts of the American right is another matter.  For numerous right-wing and Republican figures, the real lesson of Navalny’s killing is that ‘Navalny = Trump,’ in the words of Trump-pardoned writer Dinesh D’Souza.  ‘The plan of the Biden regime and the Democrats is to ensure their leading political opponent dies in prison.  There’s no real difference between the two cases.’

“Former House Speaker Newt Gingrich concurred, on X: Navalny’s death ‘is a brutal reminder that jailing your political opponents is inhumane and a violation of every principle of a free society.  Watch the Biden Administration speak out against Putin and his jailing of his leading political opponent while Democrats in four different jurisdictions try to turn President Trump into an American Navalny. The hypocrisy and corruption of the left is astonishing.’

“D’Souza and Gingrich were hardly alone in indulging this grotesque exercise in Soviet-style propaganda.  On Monday, Trump himself invoked the comparison on social media. His first mention of Navalny’s name wasn’t to condemn his death or Putin’s role in it, but to cast himself as an American Navalny....

“Condemning such false moral equivalence was once central to American conservatism.  Ronald Reagan’s United Nations Ambassador Jeane Kirkpatrick and National Review founder William F. Buckley led those denouncing the anti-Americanism inherent in equating undemocratic and democratic regimes.  When someone told Buckley that the U.S. and U.S.S.R. were the same because they both spend a lot on the military, he replied, ‘That’s like saying that the man who pushed old ladies out of the way of an incoming bus is like the man who pushes old ladies into the way of an incoming bus.  Both push old ladies around.’

“Trump is not an innocent anti-corruption crusader brutalized and murdered for championing democracy and the rule of law.  Nor does Moscow’s subway system – built with slave labor – pose some grand indictment of America, as Carlson insinuated.

“There are ample plausible criticisms of the legal cases against Trump, but even if you agree with all of them (I don’t), the notion that Joe Biden is the moral equivalent of Vladimir Putin is a slander, not merely of Biden but of America itself. Indeed, one reason we know it’s not true: Publicly criticizing Putin’s treatment of Navalny can land you in a Russian cell.  Criticizing Biden’s (alleged) treatment of Trump can land you in a Fox News studio.”

Navalny’s death, and Donald Trump’s failure to say anything about it, gave Nikki Haley at least a rhetorical opening.  “Putin did this. The same Putin who Donald Trump praises and defends.”

Speaking on X, Haley added that this is “the same Trump who said: ‘In all fairness to Putin, you’re saying he killed people.  I haven’t seen that.’”

Others pointed to the fact that Navalny’s death came shortly after Trump said he might not support NATO countries if they haven’t contributed enough money to European defense – and even if a NATO member is attacked by Russia.

Trump has also backed efforts by some House Republicans to block aid to Ukraine as it runs desperately short of ammunition.

President Biden last Friday said of Navalny’s death and the stalled Ukraine funding: “This tragedy reminds us of the stakes of this moment.  We have to provide the funding so Ukraine can keep defending itself against Putin’s vicious onslaught and war crimes.”

Trump then broke his silence Monday, as noted above, posting on Truth Social:

“The sudden death of Alexei Navalny has made me more and more aware of what is happening in our Country. It is a slow, steady progression, with CROOKED, Radical Left Politicians, Prosecutors, and Judges leading us down a path to destruction.  Open Borders, Rigged Elections, and Grossly Unfair Courtroom Decisions are DESTROYING AMERICA.  WE ARE A NATION IN DECLINE, A FAILING NATION! MAGA2024”

Nothing on Navalny’s courage, no mention of Putin.

“It’s amazing to me how weak in the knees he is when it comes to Putin,” Nikki Haley told “Fox & Friends” shortly before Trump’s post, “because you look at the fact, he is yet to say anything about Navalny’s death – which, Putin murdered him.”

After Trump broke his silence, Haley quickly posted on X:

“Donald Trump could have condemned Vladimir Putin for being a murderous thug. Trump could have praised Navalny’s courage.  Instead, he stole a page from liberals’ playbook, denouncing America and comparing our country to Russia.”

Gerard Baker / Wall Street Journal...titled “The Moral Blindness of Putin’s Apologists on the Right”...

[Referring to Tucker Carlson’s escapades in Moscow...]

“It’s easy to mock the credulousness of some grown-ups who travel abroad and, like a high-school exchange student, wax lyrical about baroque subway stations and demonstrate a lack of understanding of exchange rates.

“But we have a deeper problem than publicity-hungry provocateurs on ill-timed pilgrimages. A large part of the American right actively embraces the moral equivalence that used to be a defining feature of self-loathing left-wing elites.

“They have taken the illogical leap from legitimate alarm about America’s direction to the idea that America is a moral pariah. In some inexplicable way, they have chosen to see the nation that nurtured them and elevated them, equipped them with opportunities half the world can only dream of, as a moral monster. They use the freedom this country gives them to denounce it, insisting it is no better than a place in which even to harbor those kinds of thoughts could get you eliminated.

“The only response of all decent people to the death of Alexei Navalny, the brave critic of Vladimir Putin’s regime, in a Siberian prison camp is grief, disgust and unqualified condemnation.  It is the sort of event that defines the malevolent nature of Mr. Putin’s Russia.

“But that sort of decency evidently was above the moral reach of some of the more prominent leaders of what used to be the conservative movement.”

[Mr. Baker then uses the same Newt Gingrich example that Jonah Goldberg employed...]

“You can believe, as I do, that Joe Biden is doing significant harm to the U.S.  You can believe, as I do, that he has weakened our national security, exposed us to dangerous levels of mass illegal immigration, and is contributing to the corrosion of our national cohesion with his promotion of progressive ideology.  You can believe, as I do, that he has many more questions to answer about his and his family’s work for foreign entities.  You can believe, as I do, that he and his fellow Democrats have manipulated the levers of justice in pursuit of the man who stands as their principal political opponent.

“He should be held accountable for all these.

“But, need I say this?  Mr. Biden isn’t Vladimir Putin. Mr. Biden doesn’t invade neighbors on a false pretext, killing indiscriminately. He doesn’t make people who have fallen into disfavor fall from the windows of tall buildings. He doesn’t throw a foreign journalist in jail for reporting the truth about what is going on in his country. He doesn’t arrange the murder of his domestic political opponents on the soil of other countries. And he doesn’t imprison, torture and preside over the ‘death by sudden death’ of his principal domestic critic.

“If you can’t see the difference then I say, respectfully, that you have lost – or discarded – your capacity for moral reasoning.  And that is an even bigger problem.”

Donald Trump then did a Fox News town hall on Tuesday and continued to compare his legal problems to the plight of Navalny, while refusing to condemn the death or mention Vladimir Putin.

“Navalny is a very sad situation, and he is very brave, he was a very brave guy because he went back. He could have stayed away,” Trump said.  “And, frankly, he probably would have been a lot better off staying away and talking from outside of the country as opposed to having to go back in, because people thought that could happen and it did happen. And it’s a horrible thing.”

“It’s a form of Navalny,” Trump then said, responding to a question from Laura Ingraham about the $355 million fine against his businesses after a New York civil trial.  “It’s happening in our country too.”

“We are turning into a communist country in many ways,” Trump continued.  “I got indicted four times, I have eight or nine trials.  All because of the fact that I’m in, you know this, all because of the fact that I’m in politics. They indicted me.”

In a Fox News interview on Tuesday, Nikki Haley said: “The only comment [Trump is] going to make about Navalny is not hitting Putin for murdering him, not praising Navalny for fighting the corruption that was happening in Russia, but instead he’s going to compare himself to Navalny and the victim that he is in his court cases?  He is so distracted, he is so focused on himself, and America can’t go through this.”

Thursday, Navalny’s mother, Lyudmila, said she has been shown her son’s body in the town of Salekhard.

Speaking on Navalny’s YouTube channel, she said Russian authorities claimed they knew his cause of death and had “all the medical and legal documents.”

Lyudmila said she was taken to the morgue to see his body on Wednesday and has signed his death certificate.  Navalnaya also claimed in the video that investigators were “threatening” her into agreeing to a secret funeral for her son, or “they will do something with my son’s body.”

“They are blackmailing me, setting me the conditions of where, when and how Alexei should be buried,” she said.

Navalnaya said that the Russian Investigative Committee investigating her son’s death would like to bury his body “secretly without saying goodbye.”

“They want this to be done secretly, with no farewell.  They want to bring me to the edge of a cemetery, to a fresh grave and say: here lies your son. I don’t agree to this.”

Lyudmila said she does not want “special conditions,” but simply wants her son to be treated “according to the law.”

“I demand that my son’s body be returned to me immediately.”

A spokeswoman for Navalny, the aforementioned Kira Yarmysh, then said today, Friday, that Russian authorities had told Lyudmila that her son would be buried in the penal colony where he died unless she agreed within three hours to lay him to rest without a public funeral.

Yarmysh said Lyudmila was refusing to comply and continuing to demand his body be handed to her.

As I go to post, this is where it stands.  The Kremlin is afraid that a public funeral could become a focal point for unrest, weeks before an election.

Lyudmila Navalnaya is yet another profile in courage.  To Vladimir Putin, give the mother her son back!

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This Week in Ukraine....

--News of Alexei Navalny’s death came just hours before Ukraine withdrew from the strategic city of Avdiivka, paving the way for Russia’s biggest victory in the war since Bakhmut in the spring of 2023.

Ukrainian President Volodymyr Zelensky warned allies Saturday at the Munich Security Conference, that an “artificial deficit” of weapons for his country risks giving Russia breathing space, hours after his military chief said he was withdrawing troops from Avdiivka.

“Ukrainians have proven that we can force Russia to retreat,” Zelensky said.  “We can get our land back, and Putin can lose, and this has already happened more than once on the battlefield.”

“Our actions are limited only by the sufficiency and length of range of our strength,” he added.  Ukrainian commander Col. Gen. Oleksandr Syrskyi said early Saturday that he was withdrawing troops from the city, where outnumbered defenders battled a Russian assault for four months, to avoid encirclement and save soldiers’ lives.

Zelensky said the withdrawal was “a correct decision” and emphasized the priority of saving the soldiers.  He suggested that Russia has achieved little, adding that it had been attacking Avdiivka “with all the power that they had” since October and lost thousands of soldiers – “that’s what Russia has achieved. It’s a depletion of their army.”

“We’re just waiting for weapons that we’re short of,” he added, pointing to a lack of long-range weapons. “That’s why our weapon today is our soldiers, our people.”

In a Facebook post, Ukrainian Defense Minister Rustem Umerov said Avdiivka showed modern air defense systems were needed to counter guided bombs and long-range weapons to destroy enemy formations. He said artillery shells were also needed.

--President Putin congratulated military units and their commander on Saturday on the capture of Avdiivka.

“For outstanding military activity, I express my gratitude to all troops under your direction who took part in battles for Avdiivka,” Russian news media reported.

It’s a big morale boost for Russia, days ahead of the two-year anniversary of its full-scale invasion on Feb. 24, 2022.

Apart from Avdiivka, Russia is pushing harder in the northeastern Kharkiv region and in southern Zaporizhzhia, according to the Washington-based Institute for the Study of War.

President Zelensky said Sunday that his country “is doing everything possible and impossible” to defeat Russia.

--Ukrainian authorities said on Sunday they had opened an investigation into alleged shootings by Russian forces of six unarmed Ukrainian soldiers in Avdiivka, and two at a village in the same region, after Russia claimed full control of the city.

Hundreds of Ukrainian troops may also have been captured by Russia, or disappeared, during the chaotic retreat.  Western officials said an internal Ukrainian estimate that 850 to 1,000 soldiers appear to have been captured or are unaccounted for seemed accurate.

There were also reports the Ukrainian forces may have left hundreds of wounded troops behind as they left Avdiivka, following “the largest-ever frontal assault with columns of armored vehicles they’ve seen from Russia thus far,” the Kyiv Independent reported Wednesday.  That’s a killer for morale.

Ukraine wants to mobilize 500,000 more people, but the effort is meeting political resistance and is stalled in Parliament.

Some Ukrainian soldiers and Western officials said the withdrawal from Avdiivka was ill-planned and began too late.

--A prominent Russian soldier and blogger was found dead Wednesday after reporting Russia’s military lost 16,000 troops and 300 tanks and armor since October while trying to invade Avdiivka.  The blogger, Andrey Morozov, who went by “Murz,” was allegedly found to have committed suicide.

--The BBC reported that about 60 Russian troops were reportedly killed Tuesday when Ukrainian artillery struck a formation that had gathered in an open field in occupied Donetsk.

--President Zelensky visited the frontline in Kupiansk on Monday, an area recaptured by Ukraine in 2022, but where Russian forces have been active in recent months.

“There is now an extremely difficult situation in several parts of the frontline, precisely where Russian troops have concentrated maximum reserves,” Zelensky said.

“They are taking advantage of delays in aid to Ukraine and this is a very sensitive matter.  Artillery shortages, the need for frontline air defense and for longer-range weapons.”

--Tuesday, Vladimir Putin said Russian troops would push further into Ukraine to build on their success after the fall of Avdiivka.  Putin said the Ukrainian order to withdraw from the town had been announced after Ukrainian soldiers had already begun to flee in chaos.

Ukrainian Foreign Minister Dmytro Kuleba told CNN that Avdiivka would not have fallen had Kyiv received weapons held up by the Congress’ failure to provide a large aid package.

“We wouldn’t (have lost) Avdiivka if we had all the artillery ammunition that we needed to defend it. Russia does not intend to pause or withdraw...Once Avdiivka is under their control, they undoubtedly will choose another city and begin to storm it,” Kuleba said.  Ukrainian troops, he said, were “making miracles...but the reason they have to sacrifice themselves and die is that someone is still debating a decision. I want everyone to remember that every day of debate in one place means another death in another place.”

--Russia launched 23 drones at Ukraine overnight with its air defenses destroying all of them, the Ukrainian military said on Tuesday.

But separately, another Russian drone attack later Tuesday killed five family members in Ukraine’s north and two people in a car in the northeast region near embattled Kupiansk, local authorities said.

--The Kremlin accused Joe Biden of attempting to appear like a “Hollywood cowboy” after President Biden called Vladimir Putin “a crazy SOB.”

Biden made the comments at a public fundraising event on Wednesday in California, warning about the threat of nuclear conflict.

In response Kremlin spokesman Peskov called it a poor attempt to appear like a “Hollywood cowboy.”  He added that such vocabulary “debases America itself.”

In a brief speech in San Francisco, Biden said: “We have a crazy SOB like that guy Putin, and others, and we always have to worry about nuclear conflict, but the existential threat to humanity is climate.”

Biden has also called Putin a “butcher” and a “war criminal” in the past.

--The U.S. declared Russia too dangerous for any American to remain on Wednesday, urging all Americans to “get out,” after word of the arrest of 33-year-old dual U.S.-Russian citizen Ksenia Karelina.  The Russian security agency said she was charged with treason stemming from a small, $50, donation to a New York-based Ukrainian charity that aids Ukraine’s military.

--Iran provided Russia around 400 short-range ballistic missiles last month, multiple sources told Reuters Wednesday. The missiles can be used on mobile launchers and have a range as far as 435 miles.

According to the Washington-based Institute for the Study of War: “Iran’s arms sales to Russia are part of Iran’s efforts to generate revenue to support its deteriorating economy. Iran’s provision of these missile systems could improve Russia’s ability to penetrate Ukrainian air defenses,” they added.  [Defense One]

--Russian drone and missile attacks on Ukrainian regions in the south and east killed four people Thursday night and damaged residential and commercial buildings.  Ukrainian air defenses shot down 23 out of 31 Russian-launched drones over five regions, the air force said. Six missiles were also launched.

--Hungary said today it had signed a deal to buy four Saab JAS Gripen fighter jets from Sweden, as Budapest finally prepared to approve Stockholm’s bid to join NATO after nearly two years of delays.  Hungary has been the last holdout against Sweden’s historic application to join the transatlantic military alliance.

Hungary’s Prime Minister Viktor Orban met Swedish Prime Minister Ulf Kristersson and Orban said after he had managed to “rebuild trust.”  This is all good.

--Friday the U.S. imposed hundreds of new sanctions against Russia in a package marking the second anniversary of the full-scale invasion of Ukraine. Some of the sanctions will target those responsible for the death of Alexei Navalny, but most will hit “Putin’s war machine” and close gaps in existing sanctions regimes, Under Secretary of State Victoria Nuland said.

Existing sanctions have had little to no effect.

--Dmitry Medvedev, deputy secretary of the Russian Security Council and a former Russia president and prime minister, warned Sunday that Russia will launch Armageddon by nuking cities such as Washington and London if Moscow is forced to give up Ukrainian territory it has taken over.

“Attempts to restore Russia’s 1991 borders will lead only to one thing – a global war with Western countries with the use of our entire strategic (nuclear) arsenal against Kyiv, Berlin, London, and Washington. And against all other beautiful historic places that have long been included in the flight targets of our nuclear triad,” Medvedev wrote on Telegram, according to the Kyiv Independent.

This is far from the first time Medvedev has issued such threats.  Critics say they are a bluff designed to gain concessions from the West.

Medvedev also took to X earlier this month to chastise NATO allies for their “dangerous babbling” about a potential wider war with Russia.

“The response will be asymmetrical,” he wrote.  “To defend our country’s territorial integrity, ballistic and cruise missiles carrying special warheads will be put to use. It is based on our military doctrine documents and is well known to all. And this is exactly that very Apocalypse.  The end to everything.”

--U.S. intelligence officials are concerned that Russia is preparing another military satellite launch, like those launched around the time of its invasion of Ukraine in 2022, only the question is whether Russia plans to use the next launch to put a real nuclear weapon into space, the topic last week. 

But as the New York Times reported, American intel officials “are divided on the likelihood that President Vladimir Putin would go so far, but nonetheless the intelligence is an urgent concern to the Biden administration.

“Even if Russia does place a nuclear weapon in orbit, U.S. officials are in agreement in their assessment that the weapon would not be detonated.  Instead, it would lurk as a time bomb in low orbit, a reminder from Mr. Putin that if he was pressed too hard with sanctions, or military opposition to his ambitions in Ukraine or beyond, he could destroy economies without targeting humans on earth.”

Secretary of State Antony Blinken met with his Chinese and Indian counterparts over the weekend on the sidelines of the Munich Security Conference.

“Mr. Blinken’s message was blunt: Any nuclear detonation in space would take out not only American satellites but also those in Beijing and New Delhi.  Global communications systems would fail, making everything from emergency services to cell phones to the regulation of generators and pumps go awry.  Debris from the explosion would scatter throughout low-earth orbit and make navigation difficult if not impossible for everything from Starlink satellites, used for internet communications, to spy satellites.”

Blinken said it was up to the leaders of China and India to talk Putin down from what could be a disaster. [David Sanger and Julian Barnes / New York Times]

Vladimir Putin said on Tuesday that Russia was against the deployment of nuclear weapons in space and his defense minister flatly denied U.S. claims that Russia was developing a nuclear capability in space.

“Our position is clear and transparent: we have always been categorically against and are now against the deployment of nuclear weapons in space,” Putin told Sergei Shoigu, his defense minister.  “We urge not only compliance with all agreements that exist in this area, but also offered to strengthen this joint work many times,” Putin said.  He added that Russia’s activities in space did not differ from those of other countries, including the United States.

Shoigu told Putin: “Firstly, there are no such projects – nuclear weapons in space. Secondly, the United States knows that this does not exist.”

Putin said he had never been against engaging in dialogue about strategic stability, but he said it was impossible to divide what he said was the West’s aim to defeat Russia and talks about strategic security.

Thursday, the Wall Street Journal first reported the U.S. has directly warned Russia against launching a nuclear armed anti-satellite weapon.

--Estonian Prime Minister Kaja Kallas on Sunday dismissed a warrant issued by Russia for her arrest, saying it was just an attempt to intimidate her amid speculation she could get a top European Union post.

Estonia has been a supporter of Ukraine and Kallas has been one of Moscow’s most vocal critics since the invasion two years ago.  Her high profile in pushing the EU to do more to support Kyiv has led to speculation in Brussels that she could take on a senior role after the next EU parliamentary elections in June, possibly as foreign policy chief. 

--A Russian helicopter pilot who took his chopper into Ukraine and defected early in the war, was found killed at his new home on the coast of Spain, his bullet-riddled body clearly a menacing signal from Moscow that those who cross the Kremlin should never consider themselves safe – no matter how far they flee from the war’s front lines.

Maksim Kuzminov was killed in a barrage of gunfire and then run over with his own vehicle by assailants who then used the car to escape, according to Spanish authorities and Ukraine security officials on Thursday.

Where Kuzminov settled was not the smartest decision, the Alicante region that has a prominent Russian ex-pat population and an area long associated with Russian organized-crime syndicates, according to government reports. He also carelessly may have been contacting an old girlfriend in Russia.

--Liz Cheney, appearing on CNN’s “State of the Union,” Sunday, on House Speaker Mike Johnson and his moment, re the Ukraine, Israel, Indo-Pacific aid bill.

“It’s very unusual actually in American history to be in a situation where one man holds that kind of power who’s not the president.  But Mike Johnson could, if he wanted to, today announce that he’s going to call the House of Representatives back into session. He could put the bill that’s already passed the Senate onto the floor of the House for a vote tomorrow.  It could be on Joe Biden’s desk by tomorrow night, and the aid could be flowing to Ukraine. And Mike Johnson ought to search deep in his conscience, understanding exactly what’s happening, the slaughter that’s happening in Ukraine today, the extent to which the Ukrainians are on the front lines in this battle for freedom.

“And history will look back at this moment and ask, what did Mike Johnson do? He has said, and I take him at his word, that he believes that God has told him that he’s called to be Moses.  And I think Mike Johnson ought to look at whether or not this is actually that moment, and he ought to help the Ukrainian people.”

[On the threat from his far right that if he introduces the bill, there could be a motion to remove him from the speakership....]

Cheney: “And what I would say to that is he ought to understand that it is worth it if he has to lose his speakership in order to make sure that freedom survives, in order to make sure that the United States of America continues to play its leadership role in the world.

“He ought to read what’s happening in Ukraine today.  He ought to read about the slaughter that’s going on. And he ought to understand that we are at a turning point in the history not just of this nation, but of the world.

“And, again, he’s going to have to explain to future generations, to his kids, to his grandkids whether or not he did what was right, whether or not he was a force for good and aided the cause of freedom, or whether he continued down this path of cowardice and doing what Donald Trump and Vladimir Putin want him to do.”

--Support for Ukraine among Europeans remains broad, but barely 10 percent now believe it can defeat Russia, according to an EU-wide survey – with some form of “compromise settlement” seen as the most likely end point.

The shift in sentiment from this time last year, when more Europeans than not said Ukraine must regain all its lost territory, will have politicians taking a more “realistic” approach that focuses on defining what an acceptable peace must actually mean, the EU report’s authors argue.

Most Europeans “are desperate to prevent a Russian victory,” co-author Mark Leonard of the European Council on Foreign Relations, which commissioned the polling of 12 EU member states (including France, Germany, Poland, and Italy), writes, meaning that the most convincing argument for an increasingly skeptical public was that continuing aid “could lead to a sustainable, negotiated peace that favors Kyiv – rather than a victory for Putin.”

The survey was carried out before Ukraine’s retreat from Avdiivka.

--The Institute for the Study of War issued an alert on Thursday, warning Russia is planning to escalate its involvement in Moldova, potentially as early as next Wednesday, when Moldova’s pro-Russian breakaway region of Transnistria “may call for or organize a referendum on Transnistria’s annexation to Russia.”

---

Israel and Hamas....

--Israeli forces struck weapons depots near Sidon in southern Lebanon in response to a drone launched into Israel by Hezbollah, the Israel Defense Forces said on Monday.

--Israel’s days-long raid inside Nasser Hospital in southern Gaza has collapsed services and swept up scores of people – including patients and doctors – in mass arrests, the Gaza Health Ministry and a senior UN official said Sunday.

The hospital in the city of Khan Younis in southern Gaza “is not functional anymore,” the head of the World Health Organization, Tedros Adhanom Ghebreyesus, calling for access to the patients.

He said a WHO team sent to deliver fuel and assess medical needs was barred from entering the facility last weekend, “despite reaching the hospital compound.”

Seven patients at Nasser Hospital died after Israeli troops stormed the complex last Friday and a power outage shut off the oxygen, according to Gaza Health Ministry officials.

The IDF overran Nasser Hospital to recover the bodies of hostages it believed were being held there, spokesman Rear Adm. Daniel Hagari said, and to halt militant activity the IDF alleged was taking place on hospital grounds.  As of Sunday night, Israeli forces have not yet found the bodies of any hostages but said they had discovered medicine at the hospital bearing the names of Israelis who were abducted by Hamas.  Israeli Defense Minister Yoav Gallant also said Sunday that “200 terrorists” had surrendered at the hospital, without offering details.  

--Also Sunday, Israeli Prime Minister Benjamin Netanyahu said that he submitted a declaration that the government unanimously approved that says Israel will continue not to recognize a Palestinian state.

Netanyahu said he submitted the decision “in light of remarks that have been heard recently in the international community about an attempt to unilaterally force a Palestinian state on Israel.”

Netanyahu also said further negotiations over a cease-fire to release hostages from Gaza were pointless given what he called Hamas’ “delusional demands,” which includes Israel’s withdrawal from Gaza and the release of Palestinians from Israeli prisons.  “Clearly, we will not agree to them,” he said Saturday.

Israeli lawmakers then voted on Wednesday to back Netanyahu’s rejection of any “unilateral” recognition of a Palestinian state.  The symbolic declaration also received backing from members of the opposition, with 99 of 120 lawmakers voting in support.

The Israeli position says that any permanent accord with the Palestinians must be reached through direct negotiations between the sides and not by international dictates.

--The United States vetoed an Arab-backed UN resolution Tuesday demanding an immediate humanitarian cease-fire in the Gaza Strip.

The vote in the 15-member Security Council was 13-1 with the United Kingdom abstaining, reflecting the wide global support for ending the war after more than four months that has seen more than 29,000 Palestinians killed (both militants and civilians), following Hamas’ heinous Oct. 7 attack that killed 1,200 Israelis and saw 250 others taken hostage.

It was the third U.S. veto of a Security Council resolution demanding a cease-fire in Gaza.

The Biden administration said it would veto the resolution because of concerns it would interfere with efforts to arrange a deal between the warring parties aimed at bringing at least a six-week halt to hostilities and releasing all hostages.

Ahead of the vote, the U.S. had circulated a rival Security Council resolution that would support a temporary cease-fire linked to the release of all hostages and call for the lifting of all restrictions on the delivery of humanitarian aid.

--Benny Gantz, a member of Israel’s war cabinet, warned that his country will launch an offensive in Rafah unless Hamas frees all remaining Israeli hostages by March 10th, which is expected to mark the start of Ramadan.

The European Union on Monday warned Israel against launching an offensive in Rafah that the bloc’s foreign ministers said would create a disaster for the roughly 1.5 million refugees crammed into the city on the southern edge of Gaza.

Israel then intensified its bombardment of Rafah and more than a dozen members of one family were killed in an air strike, residents said, as the Gaza Health Ministry upped the death toll to 29,300.

Benny Gantz did cite “promising early signs of progress” on a new deal to release hostages held by Hamas amid talks conducted by the United States, Egypt and Qatar to secure a pause in the war.

After approval from the War Cabinet, Israel today sent negotiators to talks being held in Paris.

--Before the war, Gaza relied on 500 trucks with supplies entering daily, and even during intense fighting in January around 200 aid trucks made it through on most days.  But according to UN data this week and officials, from Feb.9-20 the daily average fell to just 57 trucks.  On seven of those 12 days, 20 or fewer trucks made it through, including just four trucks on Feb. 17.

Deliveries through the Rafah Crossing between Egypt and Gaza have been almost totally halted.

The UN said it is becoming more difficult to distribute aid inside Gaza because of the collapse of security inside the strip.  The UN says the IDF, since it occupies most of Gaza, is responsible for safe passage for aid convoys through areas they control.

---

Wall Street and the Economy

Minutes from the Federal Reserve’s latest meeting, Jan. 30-31, showed that most officials remain more worked up about the risk of cutting rates too quickly than keeping them high for too long.  Officials have consistently said since the minutes indicate that more evidence is needed to prove inflation is firmly on the path to the 2% target before any cuts materialize, with some policymakers raising concerns that this progress might stall, such as in January’s surprise consumer and producer price data.

According to the minutes of the meeting, held before the January data surprise: “Participants highlighted the uncertainty associated with how long a restrictive monetary policy stance would need to be maintained” to get back to the target.  Whereas “most participants noted the risks of moving too quickly to ease the stance of policy,” only “a couple...pointed to downside risks to the economy associated with maintaining an overly restrictive stance for too long.”

We had a lot of Fed speakers this week but I’m only focused on those who have a vote on the Open Market Committee (some votes are permanent, others rotate year-to-year), and one of the voters in 2024, Richmond Fed President Thomas Barkin, said on Wednesday in an interview that the “January data underline(s) the challenge we have had, with a slowdown of inflation dependent on falling goods prices, while shelter and services inflation has remained sticky.”

“You do worry that when the goods price deflation cycle ends you are going to be left with shelter and services higher than you like,” he said.

Barkin did not offer details on how long he feels the current policy rate may need to remain in place. While saying he found the last year of falling inflation and continued low unemployment a “remarkable” outcome, he said he also felt it was too early to say that a “soft landing” in which inflation falls without triggering a painful recession and large job losses was assured.  “We still have a way to go,” he said.

Permanent voting member Fed Vice Chair Philip Jefferson said at a presentation, Thursday: “I think there would have to be a body of evidence about macroeconomic performance that would then weigh in the direction of okay, now is the time (to start cutting rates)...I think we want to see evidence that inflation is sustainably at or going toward our target level.”  Jefferson, like Barkin, didn’t give a target date for when easing might begin.

And a third permanent voting member, Fed Governor Christopher Waller, also said January’s jump in consumer prices warrants caution in deciding when to start cutting rates, though he still expects reductions to begin later this year.

“The strength of the economy and the recent data we have received on inflation mean it is appropriate to be patient, careful, methodical, deliberative – pick your favorite synonym,” Waller said in a speech Thursday in Minneapolis.  “Whatever word you pick, they all translate to one idea: What’s the rush?”

We had little economic data this week, with January existing home sales coming in at a 4 million annualized pace, a little better than expected, and up 3.1% from the prior month, while down 1.7% year-over-year.  The median existing home sales price was $379,100, up 5.1% from a year ago.

But mortgage rates have been heading back up, 6.90% this week on Freddie Mac’s 30-year fixed-rate mortgage, up from 6.64% two weeks ago. 

The Atlanta Fed’s GDPNow barometer for the first quarter is at 2.9%.

Next week is a busy one, with manufacturing and more housing data, and the biggie...the Fed’s preferred inflation barometer, the personal consumption expenditures index (PCE).  It will be market moving, I imagine.

Europe and Asia

We had flash February PMI readings for the euro area, courtesy of S&P Global and Hamburg Commercial Bank, with the composite at 48.9 (50 the dividing line between growth and contraction).  Manufacturing came in at 46.2; services 50.0.

Germany: manufacturing 42.1; services 48.2
France: mfg. 46.3 (11-month high); services 48.0

UK: mfg. 47.3; services 54.3

Norman Liebke, Economist, Hamburg Commercial Bank:

“There is a glimmer of hope as the eurozone inches towards recovery. This is particularly noticeable in the services sector.  The corresponding HCOB PMI is now 50 points and has therefore stopped shrinking for the first time since July last year.  The latest PMI print gives hope for a recovery in the eurozone, which is why we are sticking to our annual HCOB forecast of 0.8% (growth) for 2024. There is also a certain optimism in the latest employment figures, which rose at a faster pace than in the previous month.

“Germany is acting as a brake on eurozone growth. While France is recovering more strongly in both the services and manufacturing sectors.  Germany is lagging behind....

“The manufacturing sector is the drag on the European economy.  That is clearly demonstrated by the sharp decline in production and the drag on new orders.  Accordingly, the companies surveyed have further reduced their workforce and the business outlook for the coming twelve months remains below the long-term average, which tends to reflect pessimism.

“The latest HCOB PMI figures are likely to disappoint the ECB.  Output prices have increased at a faster pace for the fourth month in a row. This is entirely due to the labor-intensive services sector, which continues to struggle with rising wages.  Our forecast remains that the ECB will cut interest rates for the first time in June.”

Speaking of inflation and the European Central Bank, Eurostat reported out January inflation for the EA20, 2.8%, down from 2.9% in December.  A year earlier, the rate was 8.6%.

Ex-food and energy, the inflation rate was 3.8% vs. December’s 4.0%, and 7.1% a year ago, still far from the ECB’s 2% target.

Headline inflation....

Germany 3.1% (ann.), France 3.4%, Italy 0.9%, Spain 3.5%, Netherlands 3.1%, Ireland 2.7%.

Lastly, the Stoxx Europe 600 index (Europe’s S&P 500) ended Thursday at 495.1, surpassing its previous record close from Jan. 5, 2022. As the U.S. market has marched higher, European equity valuations are looking more attractive, ditto another large country’s listed below.

Turning to Asia...China’s stock market reopened after a week off, and the government’s stimulus programs had a positive impact, the Shanghai Composite rising nearly 5% on the week.

The People’s Bank of China said Tuesday that China’s major banks reduced the five-year loan prime rate, a benchmark for home loans, to a new low of 3.95%, from 4.20% previously. It was a  bigger cut than expected.

Meanwhile, tourism revenues in China during the Lunar New Year holidays that ended on Saturday surged by 47.3% year-on-year and surpassed 2019 levels, thanks to a domestic travel boom amid a longer-than-usual break, official data showed on Sunday from the Ministry of Culture and Tourism.

This may offer temporary relief to policymakers as the world’s second-largest economy has been facing deflationary risks amid weak consumer demand, but the sustainability of the tourism boost is uncertain and the tourism revenue per trip remained below the pre-pandemic level.

During the holiday, tourist attractions across the country witnessed massive crowds (boy, that sounds like a nightmare). Domestic tourism spending rose 7.7% compared to the 2019 Lunar New Year holiday before Covid struck, but the holiday in 2024 lasted for eight days, one day more than the Lunar New Year break in 2019.

Japan’s flash February PMI readings were lackluster, with manufacturing 47.2, still contraction, while services came in at 52.5, less than January.

January exports, though, rose by 11.9% year-over-year, better than expected, and the strongest increase in shipments since November 2022, as sales of transport equipment jumped 24.1%, led by motor vehicles (31.6%) and cars (37.1%).

Exports rose to China (29.2%...but this could be an aberration due to the timing of the Lunar New Year holiday), the U.S. (15.6%) and the EU (13.8%), according to the Ministry of Finance.

BUT...the big story in Japan this week was the benchmark Nikkei 225 stock index, which surged Thursday past the record set in 1989 before its financial bubble burst, ushering in an era of faltering growth.

The index closed Thursday at 39068, up 2.2%.  It had been hovering for weeks near 34-year highs.  The previous record was 38915, set on Dec. 29, 1989. [The market was closed Friday.]

Think about it. I’ve told you how I have kept certain market statistics on a spread sheet(s) since the week ended March 23, 1990, and already the Nikkei was down to 30372.  Every Friday I put down figures for this one, London’s FTSE, Germany’s DAX, China’s Shanghai Comp (I started jotting this one down later), as well as bull/bear readings, S&P and Dow P/Es, and even steel production.  All this time I’ve watched the Nikkei do nothing but go down and/or stagnate, until recently.  Good for them. 

Broadly speaking, corporate reforms promised in the early years of former prime minister Shinzo Abe are finally gaining traction, and prices have been rising, which here is good, after decades of deflation, or close to it.

Street Bytes

--Powered by Nvidia answering the call with a sterling earnings report, details below, stocks resumed their rally after last week’s pause, the Dow Jones closing the week at a new all-time high, 39131, up 1.3%, ditto the S&P 500, up 1.7% to 5088.  Nasdaq is still a little shy of its all-time closing high of 16057 set back on Nov. 19, 2021, the tech-heavy barometer up 1.4% to 15996.

--U.S. Treasury Yields

6-mo. 5.34%  2-yr. 4.69%  10-yr. 4.25%  30-yr. 4.37%

Treasuries little changed this week, awaiting next week’s PCE.

--Amazon.com is joining the Dow Jones Industrial Average, replacing Walgreens Boots Alliance Inc. in the 30-stock gauge. The change will go into effect prior to the open of trading this coming Monday, Feb. 26.

The shift was prompted by Walmart’s decision to split its stock 3-to-1, a move that reduces Walmart’s index weight due to the price-weighted construction of the index.

Unlike its counterparts the S&P 500 and Nasdaq 100, the historic Dow index is weighted based on the share price of its holdings rather than their market capitalization.

“Reflecting the evolving nature of the American economy, this change will increase consumer retail exposure as well as other business areas in the DJIA,” the index provider said in a press release.

--Speaking of Walmart, it reported fiscal Q4 adjusted earnings Tuesday of $1.80 per share, up from $1.71 a year earlier and ahead of consensus of $1.65.

Total revenue as reported for the quarter ended Jan. 31 was $173.4 billion, up from $164 billion last year, or 5.7%.  Analysts were at $169.3 billion. Comp store sales growth ex-fuel rose 4%.

For fiscal Q1, Walmart said it estimates adjusted EPS of $1.48 to $1.56 pre-split and $0.49 to $0.52 post-split.  Consensus was at $1.60.  Sales for the quarter are expected to increase by 4% to 5%.  Analysts are at $156.2 billion.

For the full year, the company projects adjusted EPS of $6.70 to $7.12 on a pre-split and $2.23 to $2.37 post-split.  Consensus is at $7.08. Sales are expected to grow at 3% to 4% during the year.

Separately, Walmart said it has agreed to acquire TV maker Vizio Holding for $2.3 billion, or $11.50 per share, in cash. The acquisition, as I noted last week, is expected to help Walmart “to connect with and serve its customers in new ways including innovative television and in-home entertainment and media experiences,” the company said.

Walmart also hiked its dividend to $2.49 per share on a pre-split basis for fiscal 2024, up from $2.28 in the preceding year.

The stock split takes effect after Friday’s action, shareholders of record at the end of Feb. 22 receiving two additional shares for each share held, the new price reflected Feb. 26.

On the week, the shares rose about $6 to $176.

--Home Depot’s sales continued to fade during the fourth quarter as the country’s largest home improvement retailer feels the impact of high mortgage rates and inflation on its customers.

While quarterly results topped Wall Street expectations, the company’s sales expectations for this year weighed on shares, which slipped on the opening, Tuesday.

Home Depot reported fourth-quarter sales of $34.79 billion, down from $35.83 billion in the prior-year period.  That did beat the Street’s consensus of $34.555 billion.

Sales at stores open at least a year fell 3.5%. In the U.S., same store sales declined 4%.

“After three years of exceptional growth for our business, 2023 was a year of moderation,” CEO Ted Decker said in a prepared statement.

For the three months ended Jan. 28, HD earned $2.8 billion, or $2.82 per share, topping the Street’s forecast for $2.77.  A year ago it earned $3.36 billion, or $3.30 per share.

The company predicts fiscal 2024 sales growth of about 1% (53-week year) to a decline of 1% (52-week year).

HD stock finished the week up $10 to $372.

--So on to Nvidia, which released earnings after the close on Wednesday.  The results were stronger than expected, with its revenue more than tripling from a year earlier.

NVDA’s revenue for the fiscal fourth quarter was $22.1 billion, up from $6.05 billion, and beating estimates of $20.62 billion.  The Santa Clara, California-based company earned $12.29 billion, compared to a profit of $1.41 billion a year ago.  Adjusted earnings per share were $5.16, compared with consensus of $4.64 a share.

But the company also forecasts current quarter revenue of $24.0 billion, plus or minus 2%, with analysts on average expecting revenue of $22.17 billion.

Sales at the data center segment – its largest by revenue share, grew 409% to $18.4 billion in the fiscal fourth quarter, coming in above estimates of $16.8 billion. Data center revenue grew close to 280% in the previous quarter.  The already-hefty demand for the company’s data center chips and graphics processing units (GPUs) continues to grow as firms scramble to expand their AI offerings.

The company’s specialized chips are key components that help power different forms of artificial intelligence, including the latest generative AI chatbots such as ChatGPT and Google’s Gemini.

Nvidia carved out an early lead in the hardware and software needed to tailor its technology to AI applications, partly because founder and CEO Jensen Huang began to nudge the company into what was then seen as a still half-baked technology more than a decade ago.

Huang looked at ways that Nvidia chipsets known as graphics processing units might be tweaked for AI-related applications to expand beyond their early inroads in video gaming.

The company relies heavily on the world’s biggest maker of computer chips, Taiwan Semiconductor Manufacturing Company, to churn out the chips that Nvidia designs.

The outlook extends a streak of Nvidia shattering expectations, thanks to insatiable demand for its AI accelerators – highly prized chips that crunch data for AI models.  The technology has helped power a proliferation of chatbots and other generative AI services, which can create text and graphics based on simple prompts.

“Accelerated computing and generative AI have hit the tipping point,” Jensen Huang said in a statement.  “Demand is surging worldwide across companies, industries and nations.”

In an interview later Wednesday, Huang said much more growth for the company lay ahead.  “We are one year into generative AI My guess is we are literally into the first year of a 10-year cycle of spreading this technology into every single industry.”

After closing Wednesday at $674.72, following an intraday record high of $744 last Friday, NVDA opened at $752 Thursday morning, and finished at $785, a 16% increase, and the biggest single-session increase of market value in history, $277 billion, besting Meta’s historic gain just three weeks ago.

Nvidia’s market capitalization finished Thursday at $1.963 trillion, but while the share price hit $823 earlier Friday, the stock finished at $789, so shy of the $2 trillion mark at $1.97T.

Needless to say, the company’s earnings results and outlook benefited other chipmakers expected to benefit from AI growth.

--Last year, the U.S. produced an estimated 12.9 million barrels of oil a day, which would be a record and more than any other country.  The Permian Basin, which straddles West Texas and Southeast New Mexico, has accounted for nearly all the country’s oil output growth since the pandemic.

But the number of oil rigs operating in the U.S. has dropped nearly 20% since the end of 2022 to about 600, according to oil-field services firm Baker Hughes.

That decline signals a big deceleration in growth down the road, in part because a shale well’s output declines most rapidly early in its life, according to analysts.

You’ve also seen the explosion in mergers in the oil patch, with 39 private exploration and production companies being acquired by public companies in 2023, including four of the big 10 that powered the Permian’s post-pandemic comeback.

Dealmaking mania has depleted the country’s supply of untapped wells. And the Big Boys doing the acquiring often are more interested in returning capital to shareholders than future exploration.

On the week, crude fell back below $77 from the prior week’s $79 on ongoing supply/demand factors.  The International Energy Agency in its monthly report said global oil demand is losing steam due to shifts towards renewable energy, but rising geopolitical tensions in the Middle East can impact supply.  [See the Houthis still playing their game in the Red Sea and Gulf of Aden down below.]

--The head of Boeing’s troubled 737 MAX program, Ed Clark, has left, as reported Wednesday.  Boeing has been scrambling to explain and strengthen its safety procedures after the accident on a brand new Alaska Airlines 737 MAX 9.  Clark oversaw the company’s production facility in Renton, Washington, where the plane involved in the accident was completed.

The change, and others among leadership, come ahead of Boeing CEO Dave Calhoun’s planned meeting with FAA Administrator Mike Whitaker next week, after Whitaker himself toured the Renton plant.

Separately, Boeing announced more orders from two customers for its 787 wide-body, twin-aisle, jet.  But, also, a 757-200 United Airlines jet carrying 165 passengers was diverted Tuesday after one of its wings was damaged.

United said the Boeing aircraft landed in Denver to “address an issue with the slat” on one of the wings.

In terms of fresh orders, Royal Brunei Airlines is buying four Boeing 787 Dreamliner jets.  Thai Airways ordered 45.  Boeing has about 800 unfilled orders for 787 jets and has delivered about 1,100.  That’s a combined 1,900 jets.  Combined orders and deliveries for the similarly sized Airbus A350 total about 1,200.

But in the narrow-body, single-aisle jet market, Boeing has delivered some 1,400 MAX jets and has about 4,400 unfilled orders, while orders and deliveries for the A320neo family of jets total around 10,000 units.

--American Airlines is hiking baggage rates $5-$10, to $40 a bag on domestic flights, or $35 if paid online in advance, up from $30 currently. Checking a second bag will cost $45, up from $40 now.

--TSA checkpoint numbers vs. 2023

2/22...108 percent of 2023 levels
2/21...107
2/20...104
2/19...105
2/18...107
2/17...105
2/16...104
2/15...107

--Shares in Royal Caribbean and the other cruise operators surged Thursday after RCL issued guidance for fiscal 2024 that saw adjusted earnings of $9.90-$10.10, up from $9.50-$9.70 in prior guidance, as the company noted that since its last earnings call, demand and bookings have exceeded expectations.

The cruise industry is indeed on fire.  It’s good value for your travel dollar, if this is your thing.  No doubt, you can spend the same amount of money on a nice resort hotel in just two nights than you might spend for a 7-day cruise.

--Capital One announced on Monday that it would acquire Discover Financial Services in an all-stock transaction valued at $35.3 billion, a deal that would merge two of the largest credit card companies in the U.S.

Capital One, with $479 billion in assets, is one of the nation’s largest banks, and it issues credit cards on networks run by Visa and Mastercard. Acquiring Discover will give it access to a credit card network of 305 million cardholders, adding to its base of more than 100 million customers.  The country’s four major networks are American Express, Mastercard, Visa and Discover, which has far fewer cardholders than its competitors.

As part of the acquisition, Capital One will pay Discover shareholders a 26 percent premium based on the company’s closing stock price on Friday.

But the deal is subject to regulatory approval and these days that’s a big uncertainty.

“Our acquisition of Discover is a singular opportunity to bring together two very successful companies with complementary capabilities and franchises, and to build a payments network that can compete with the largest payments networks and payments companies,” Richard Fairbank, founder, chairman and CEO of Capital One, said in the statement.

Once-giant retailer Sears introduced the Discover card in 1985.  Discover then became a part of Morgan Stanley, which spun it out through an initial public offering in 2007.  When I first saw a headline on this merger, I immediately thought massive layoffs.

--Palo Alto Networks shares cratered 28% on Wednesday after the cybersecurity firm company lowered full-year revenue and billings outlooks, while the firm eyes additional investments to drive its long-term growth.

Revenue is now set to come in between $7.95 billion and $8 billion for fiscal 2024, the company said late Tuesday, down from its prior guidance of $8.15 billion to $8.2 billion.  Consensus on the Street is at $8 billion.

Billings, which consists of revenue plus deferred revenue is pegged at $10.1 billion to $10.2 billion, lower than the prior guidance for $10.7bn to $10.8bn.

“Our guidance is not a consequence of a change in the demand outlook out there,” CEO Nikesh Arora said during a conference call. “Our guidance is a consequence of us driving a shift in our strategy in wanting to accelerate both our platformization and consolidation and activating our (artificial intelligence) leadership.”

Palo Alto did raise its fiscal full-year earnings outlook to $5.45 to $5.55 a share from prior projections of $5.53. The Street is at $5.52.

For the quarter ended Jan. 31, adjusted EPS advanced to $1.46 from $1.05, topping consensus at $1.30. Revenue jumped 19% to $1.98 billion, a tick above the Street.

But the lowered guidance was a killer for the share price.

--Electric vehicle startups Rivian and Lucid forecast 2024 production well below analyst estimates on Wednesday as persistently high borrowing costs keep consumers from buying relatively pricier battery-powered cars.  Rivian also said it is cutting its workforce by 10%.  Shares in both companies plummeted 15% and 8%, respectively, after the announcements – the latest signs of a slowdown in EV demand flagged by automakers including Ford, General Motors and Tesla.

The plateauing demand sparked a price war last year as companies drained margins to woo customers.

Rivian said it expects to produce 57,000 vehicles in 2024, well below estimates of 81,700, according to eight analysts polled by Visible Alpha.  It produced 57,232 vehicles last year, delivering 50,122, up from 20,332 in 2022.

“There is a host of macro level challenges,” Rivian CEO RJ Scaringe told reporters, adding that high interest rates and geopolitical risks were making consumers more conscious and price sensitive.

Lucid said it expects to make 9,000 units this year, up from 8,428 vehicles in 2023.  But the Street was estimating 22,600 for 2024.

--Toll Brothers shares rose after the company reported earnings that beat analyst expectations. The luxury home builder also cited a “strong start to the spring selling season.”

The company reported earnings of $2.25 a share on revenue of $1.95 billion in the first quarter ending Jan. 31, surpassing analyst estimates of $1.78 a share on about $1.9 billion in revenue.  TOL delivered 1,927 homes in its first quarter and reported 2,042 signed contracts – more than the 1,864 deliveries and 1,964 contract signings consensus had expected.

“Since mid-January, we have seen a marked increase in demand coinciding with the start of the spring selling season,” CEO Douglas C. Yearley, Jr., said in a statement.  “With a healthy job market, improving consumer sentiment, and continued low levels of resales inventory, we are optimistic that demand for new homes will remain strong in 2024.”

Toll Brothers now expects to deliver homes in a range of 10,000 to 10,500 units for the full year, with 2,400 to 2,500 in the second quarter.

As for still high mortgages rates, Toll Brothers’ Yearley said earlier: “Our buyers are more affluent and tend to have significant equity built up in their existing homes, which better insulates them from affordability concerns and makes it easier for them to move.”

Its average price of homes delivered in the quarter was about $1 million, significantly higher than December’s roughly $413,000 price tag on newly built homes more broadly, according to Census data.

--AT&T blamed a large outage that knocked out cellphone service for tens of thousands on Thursday to a glitch in a software update.  It was not a cyberattack as widely feared.

The lack of communication from AT&T during the outage was pathetic.

--The poverty level in Argentina hit 57.4% in January, the highest in at least 20 years, according to a report by the Catholic University of Argentina cited by local media on Sunday.  According to the report, the devaluation of the peso currency carried out by President Javier Milei shortly after his inauguration in early December – and the price hikes caused by it – exacerbated poverty levels, which closed the year at 49.5%.

Milei, a libertarian, took office promising to “dollarize” the economy, tame an annual inflation rate of more than 200%, eliminate the fiscal deficit and end benefits for Argentina’s political dynasties, which Milei calls “the caste.”  Other measures included slashing energy and transportation subsidies and rolling out tax hikes aimed at reaching fiscal balance.

--Hollywood has not had a good start to the year, and after the first three days of Presidents Day weekend, films that have been released widely in theaters had grossed $764.1 million for 2024, down 15% from the same period last year, according to Comscore.

Then we got the 4-day holiday weekend totals, $92 million, domestically, with “Bob Marley” leading the charts with $34.1 million from Fri.-Mon.  That overall total is not only down 45% from the $168.7 million Presidents’ Day weekend total grossed last year, but marks the first time since 1996 – excluding 2021 when most theaters were closed – that overall totals for the February holiday period have failed to eclipse $100 million.

“Bob Marley: One Love,” did take in $52 million for its 6-day domestic launch, ahead of expectations.

The overall domestic February gross through Sunday was just $243 million, down 20% year-over-year.

March could be better with “Dune: Part Two,” “Godzilla x Kong: The New Empire,” “Kung Fu Panda 4” and “Ghostbusters: Frozen Empire.”

Foreign Affairs, Part II

China: On Tuesday, Taiwan drove away a Chinese coast guard boat that entered waters near its sensitive frontline islands, in a rise in tensions, a day after China’s coast guard boarded a Taiwanese tourist boat that a Taiwan minister said had triggered “panic.”

A Chinese coast guard boat entered Taiwan’s waters near Kinmen on Tuesday morning, Taiwan’s coast guard said.

But picture being on the Taiwanese tourist boat, which was carrying 11 crew and 23 passengers, when six Chinese coast guard officers boarded it to check its route plan, certificates and crew licenses, leaving about 30 minutes later, Taiwan’s coast guard said.

Granted, as I noted last week, Kinmen is very close to China’s shores and Fujian province, but the islands are Taiwan’s, claimed after the Republic of China government fled to Taiwan in 1949 after losing the civil war to Mao Zedong’s commies.  Kinmen is home to a large Taiwanese military garrison.

Separately, at the Munich Security Conference last weekend, FBI Director Christopher Wray urged attendees not to lose sight of a threat outside of the Ukrainian and Middle East theaters, that being China.

Wray said Beijing’s efforts to covertly plant offensive malware inside U.S. critical infrastructure networks is now at “a scale greater than we’d seen before,” an issue he has deemed a defining national security threat.  Wray said Beijing-backed actors, namely Volt Typhoon, the name given to the Chinese hacking network, were pre-positioning malware that could be triggered at any moment to disrupt U.S. critical infrastructure.

“It’s the tip of the iceberg...it’s one of many such efforts by the Chinese,” he said.  China is increasingly inserting “offensive weapons within our critical infrastructure poised to attack whenever Beijing decides the time is right.”

Wray didn’t elaborate on what critical infrastructure had been targeted, stressing that the Bureau had “a lot of work underway.”

In keeping with the above, the Biden administration plans to invest billions in the domestic manufacturing of cargo cranes, seeking to counter fears that the use of China-built cranes with advanced software at many U.S. ports poses a potential national security risk.

“We felt there was real strategic risk here,” Anne Neuberger, U.S. deputy national security adviser for cyber and emerging technology, said in an interview. “These cranes, because they are essentially moving the large-scale containers in and out of port, if they were encrypted in a criminal attack, or rented or operated by an adversary, that could have real impact on our economy’s movement of goods and our military’s movement of goods through ports.”

China has previously dismissed U.S. concerns about Beijing-backed cyber threats, including cranes, as “paranoid-driven.”

Last year, a Wall Street Journal investigation revealed U.S. fears that giant cranes made by a Chinese, state-owned company in use at a number of U.S. ports could present an espionage and disruption risk.

“By design these cranes may be controlled, serviced and programmed from remote locations,” said Rear Adm. John Vann, who leads the Coast Guard cyber command, during a press briefing.  And that means “the PRC-manufactured cranes are vulnerable to exploitation,” referring to the People’s Republic of China.

Meanwhile, Chinese Foreign Minister Wang Yi and Secretary of State Blinken met on the sidelines of the Munich conference, Wang raising concerns over Taiwan and China-U.S. trade.

On Taiwan, Wang said Washington should “put into practice its statement of non-support for ‘Taiwan independence.’”

“Taiwan is part of China’s territory, and this is the true status quo of the Taiwan issue,” he said.

“If the U.S. side truly wants stability in the Taiwan Strait, it should abide by the one-China principle and the three joint communiques of China and the United States, and put into practice its statement of non-support for ‘Taiwan independence.’”

Iran: Tehran-backed Houthi militants in Yemen said on Monday they had attacked the Rubymar cargo ship in the Gulf of Aden and the vessel was at risk of sinking – raising the stakes in their campaign to disrupt global shipping in solidarity with Palestinians in the Gaza war.  The crew are safe, a Houthi spokesperson said in a statement.  “The ship was seriously hit which caused it to stop completely.  As a result of the extensive damage the ship suffered, it is now at risk of sinking in the Gulf of Aden.”

The crew were rescued by a “coalition warship along with another merchant vessel” who responded and transported the crew “to a nearby port by the merchant vessel,” according to U.S. Central Command.

The vessel’s maritime security company LSS-SAPU told Reuters, “We know she was taking in water... The owners and managers are considering options for towage.”

No ships attacked have been sunk or any crew killed but there are growing concerns.

In a second incident hours later, a Greece-flagged, U.S. owned bulk carrier was attacked on Monday by missiles, with no injures to the crew and minimal damage.

The Houthis also claimed to have shot down an American MQ-9 Reaper drone, which would be the third such downing since Hamas launched its war against Israel in early October.

Additionally, the Houthis prepared an unmanned submarine to attack ships off Yemen’s coast, U.S. defense officials alleged. The drone was spotted Saturday along with three mobile anti-ship cruise missiles and a drone boat, CENTOM announced Sunday.  U.S. forces destroyed all of the items in airstrikes across Yemen on Saturday.

Tuesday, U.S. and allied forces in the region shot down 10 more probable Houthi drones fired toward ships in both the Red Sea and the Gulf of Aden during a four-hour period.  Minutes after those engagements ended, the U.S. Navy shot down an anti-ship cruise missile that seemed to be targeting sailors and crew onboard the USS Laboon.

Thursday, a suspected missile attack by Houthi rebels set a ship ablaze in the Gulf of Aden as Israel intercepted what appeared to be another Houthi attack near the port city of Eilat, authorities said.

The British military’s United Kingdom Maritime Trade Operations center said the two missiles were fired at an unnamed ship that was ablaze, without elaborating.  [Ship-tracking data analyzed by the Associated press identified the vessel as a Palau-flagged cargo ship, coming from Thailand and bound for Egypt.]

A story in the Washington Post on Sunday said Iran is privately urging Hezbollah and other armed groups to exercise restraint against U.S. forces, according to officials in the region.

By week’s end, it had been nearly 20 days since Iranian-backed militias in Iraq and Syria hadn’t attacked U.S. forces, even holding their fire after a U.S. drone strike in Baghdad killed a senior Kataib Hezbollah official, which was also the last time the U.S. struck Iran-backed assets.

But as noted above, that hasn’t stopped the Houthis.

Meanwhile, Iran continues to enrich uranium well beyond the needs for commercial nuclear use despite UN pressure to stop it, IAEA chief Rafael Grossi said on Monday, adding that he wanted to visit Tehran next month for the first time in a year to end the “drifting apart.”

Addressing EU foreign ministers on the topic, Grossi said that while the pace of uranium enrichment had slowed slightly since the end of last year, Iran was still enriching at an elevated rate of around 7 kg of uranium per month to 60% purity.  Enrichment to 60% brings it close to weapons grade, and is not necessary for commercial use in nuclear power production.

The IAEA warned at the end of 2023 that Tehran already had enough material to make three nuclear bombs if it enriches the material now at 60% to beyond 60%.

Pakistan: The country’s two major parties met Monday to try and bridge differences over forming a minority coalition government after an inconclusive election.  Former Prime Minister Shehbaz Sharif was named by his Pakistan Muslim League-Nawaz (PML-N) party to lead the country again, with the Pakistan Peoples Party (PPP) of former foreign minister Bilawal Bhutto Zardari announced conditional support for the PML-N, with Zardari’s father, Asif Ali Zardari, as president.

But independents supporting jailed former Prime Minister Imran Khan’s party members said they will join the minority Sunni Ittehad Political Party to form a government.  The independents have to join another party so that the party could have access to the 70 reserved seats allocated for women and minorities, as I noted last time.  The independents aligned with Khan form the largest group in the legislature.

What the election showed more than anything is the diminished power of the Pakistani military, which was long the power broker and this time had launched a crackdown on Khan’s party.

Young people refuse to be intimidated by the military, and social media outpaced censorship, the BBC reported.

Random Musings

--Presidential approval ratings....

Gallup: 41% approve of President Biden’s job performance, 54% disapprove; 35% of independents approve (Jan. 2-22). Update next week.

Rasmussen: 40% approve, 58% disapprove (Feb. 23). It was 43-55 last week.

--With the South Carolina Republican primary tomorrow, Saturday, the latest Suffolk University-USA Today poll of likely Republican primary voters had Donald Trump leading Nikki Haley 63-35 percent. Haley vowed to soldier on regardless of the outcome.

--A new Quinnipiac University national poll of registered voters had Joe Biden leading Trump 49 to 45 percent.  A Jan. 31 Quinnipiac survey had Biden leading Trump 50-44.

Today, independents are divided, 44 percent for Biden, 42 percent for Trump.

When the hypothetical matchup is expanded to include independent and Green Party candidates, Biden receives 38 percent, Trump 37 percent, Robert F. Kennedy, Jr. 15 percent.  Cornel West and Jill Stein receive 3 percent each.

Voters by 67-31 percent think Joe Biden is too old to effectively serve another 4-year term, while by a 57-41 percent margin, voters think Donald Trump is not too old to effectively serve another 4-year term.

In a hypothetical pitting Nikki Haley vs. Biden, Haley receives 46 percent and Biden 43 percent.

Voters give Biden an overall approval rating of 40 percent, 57 percent disapprove of his job performance.

Separately, a vast majority of voters (83 percent) think that U.S. membership in NATO is either very important (57 percent) or somewhat important (26 percent) for the security of the United States, while 16 percent think it is not so important (9 percent) or not important at all (7 percent).

--The aforementioned former Rep. Liz Cheney on CNN’s “State of the Union,” on the Republican frontrunner for the nomination for president:

“When you think about Donald Trump...pledging retribution, what Vladimir Putin did to Navalny is what retribution looks like in a country where the leader is not subject to the rule of law. And I think that we have to take Donald Trump very seriously.  We have to take seriously the extent to which you have now got a Putin wing of the Republican Party.

“I believe the issue this election cycle is making sure the Putin wing of the Republican Party does not take over the West Wing of the White House.”

--Lawyers for Trump asked a federal judge to throw out the indictment charging him with retaining classified documents at Mar-a-Lago club on grounds of presidential immunity, claiming they were his to keep because he designated them personal records while he was president.

Classified information is material owned by the United States and cannot, by definition, be personal.

--The former FBI informant charged with lying about the Bidens’ dealings in Ukraine told investigators after his arrest that Russian intelligence officials were involved in passing information to him about Hunter Biden, prosecutors said Tuesday in a new court filing, noting that the information was false.

Prosecutors also said Alexander Smirnov has been “actively peddling new lies that could impact U.S. elections” after meeting with Russia spies late last year and that the fallout from his previous false bribery accusations about the Bidens’ “continues to be felt to this day.”

The revelations about Smirnov’s alleged foreign contacts were disclosed as part of prosecutor’s arguments to keep him jailed ahead of trial – though a federal judge later granted Smirnov’s release with several conditions, including GPS monitoring and the surrender of his two passports. 

Thursday, Smirnov was rearrested.

House Republicans vowed to continue their impeachment inquiry into the president.

--For the record, I forgot to note last week that West Virginia Sen. Joe Manchin said Friday he won’t run for president.

“I will not be seeking a third-party run, I will not be involved in a presidential run...I just don’t think it’s the right time,” the 76-year-old centrist Democrat said.

In a speech at West Virginia University announcing his decision, he complained that the democratic institutions in the country were breaking down and extreme partisanship and the parties were no longer able to work together to solve the country’s problems.

--Washington Post / Tim Craig and Sabrina Malhi: “Alabama doctors are puzzled whether they will have to make changes to in vitro fertilization procedures.  Couples are cramming into online support groups wondering if they should transfer frozen embryos out of state.  And attorneys are warning that divorce settlements that call for frozen embryos to be destroyed may now be void.

“Throughout Alabama, there is widespread shock, anger and confusion over how to proceed after the state Supreme Court ruled (last) Friday that frozen embryos are people, a potentially far-reaching decision that could upend women’s reproductive health care in a state that already has one of the nation’s strictest abortion laws....

“The state Supreme Court decision signals a new chapter in America’s fight over reproductive rights and marks another blow to women’s rights groups who expect similar challenges in other conservative states.  The ruling is limited to Alabama, but legal experts say it could embolden the ‘personhood movement,’ which assert that unborn children should be granted legal rights beginning at conception.”

I feel for those couples in such a predicament. It’s a tragic mess.

But Alabama lawmakers are considering legislation that would protect in vitro fertilization. And just now, Donald Trump posted on Truth Social that he supports IVF, so no doubt Alabama will rectify the situation in short order.

--According to new Customs and Border Protection data, the number of Chinese nationals crossing the southern border near San Diego has now eclipsed the number of Mexicans crossing.

Border agents have encountered 21,000 Chinese nationals illegally entering the U.S. in the San Diego sector since October, compared to 18,700 Mexican nationals, according to information obtained by Fox News.

The number of Chinese nationals crossing into San Diego was only second to the number of Colombians.

Over the 2023 fiscal year, which ended in September, CBP officials apprehended 24,000 Chinese migrants at the U.S.-Mexico border – a record high, and an increase from 1,970 arrests recorded in F2022.

Yes, this is a major concern. No doubt, a large number of these folks are spies and agents.  I’ve had them in my building over the years. [The wives are always friendly.  The men’s eyes burn a hole through your brain.]

--There was a record jet stream over the Washington-Baltimore region late Saturday at about 35,000 feet, with winds at speeds of 265 mph, the National Weather Service said.  It was the second-highest measured speed since records began in the 1950s, the only higher wind speed recorded at a comparable altitude was 267 mph on Dec. 6, 2002.

A huge bonus for those flying eastbound, as in a huge tailwind (and of course the converse for those flying to the U.S. from Europe).

Virgin Atlantic Flight 22, from Washington Dulles International Airport to London landed ahead of schedule by 45 minutes.

Boosted by the extreme tailwind, the Virgin Atlantic jet reached a peak speed of 802 mph, data from Flight Aware indicated.  It attained that velocity over the Atlantic Ocean just east of Long Island as it was gaining altitude and entering the jet stream’s fast flow.

United Airlines Flight 64 from Newark to Lisbon, which departed Saturday evening, reached a ground speed of 835 mph off the East Coast.  The flight reached Lisbon 20 minutes early. American Airlines Flight 120 from Philadelphia to Doha, Qatar, topped out near 840 mph, which would rank among the highest on record.

The windspeed’s were detected by a weather balloon launched from the NWS’s office in Sterling, Va.  The office releases weather balloons every 12 hours, the data feeding computer models that aid prediction. 

Jason Samenow / Washington Post answers your question if you were wondering about the flights’ breaking the sound barrier, and it’s an interesting factoid for your next cocktail party, if you want to be an overbearing know-it-all.

“While the [Virgin Atlantic jet’s] peak speed of 802 mph was higher than the speed of sound (767 mph), the aircraft did not break the sound barrier. Although its ground speed – a measure that combines the plane’s actual speed and the additional push from the wind – was greater than the speed of sound, it was still moving through the surrounding air at its ordinary cruise speed. It just so happened that the surrounding air was moving unusually fast.”

And now you know...the rest of the story....

--First Dog Commander was jettisoned from the White House following revelations of more brutal attacks on Secret Service employees – including a case in which White House tours were suspended to mop up blood from the floor of the East Wing and another attack where an agent suffered a “severe deep open wound” at Biden’s Delaware vacation home.

Prior top dog Major, another German shepherd, was also re-homed after terrorizing protective agency staff and others.

I’d send Commander as a goodwill gesture to Vladimir Putin.  “He responds best, Vlad, if you mention your former service in the KGB.”  [heh heh]

--As of Tuesday afternoon, downtown Los Angeles had received about 17.5 inches of rain since the water year began on Oct. 1 and around 12 inches just during February. That’s more than the area’s average for a full year, and 8 inches more than it typically gets by this point in the water year.

The snowpack across the Sierra Nevada mountain range now measures 86% of normal for the date, according to state data, up from 28% of normal at the start of the year, while California’s major reservoirs, filled spectacularly by last year’s historic wet winter, are still at 118% of their average levels.

--Finally, congratulations to Houston-based Intuitive Machines for becoming the first private company to put a spacecraft on the Moon, landing its Odysseus robot near the lunar south pole, where it is suspected there is water, key for building a base there one year, China wishing to do the same. It was fun watching it all unfold yesterday.

Intuitive Machines thus broke the United States’ half-century absence from the Lunar surface.  You have to go back to the last Apollo mission in 1972 for an occasion when American hardware nestled down there.

The uncrewed IM-1 mission was sent on its way to the moon on Wednesday atop a Falcon 9 rocket launched by Elon Musk’s SpaceX from NASA’s Kennedy Space Center in Cape Canaveral, Florida.

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

Pray for Ukraine and the innocent in Gaza.

God bless America.

---

Gold $2046
Oil $76.63

Bitcoin: $51,100 [4:00 PM ET, Friday]

Regular Gas: $3.26; Diesel: $4.09 [$3.39 / $4.46 yr. ago]

Returns for the week 2/19-2/23

Dow Jones  +1.3%  [39131]
S&P 500  +1.7%  [5088]
S&P MidCap  +1.1%
Russell 2000  -0.8%
Nasdaq  +1.4%  [15996]

Returns for the period 1/1/24-2/23/24

Dow Jones  +3.8%
S&P 500  +6.7%
S&P MidCap  +2.8%
Russell 2000  -0.5%
Nasdaq  +6.6%

Bulls 57.3
Bears 16.2

Hang in there.

Brian Trumbore

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