Week in Review

---

Week in Review

04/27/2024

For the week 4/22-4/26

[Posted 4:30 PM ET, Friday]

Note: StocksandNews has significant ongoing costs and your support is greatly appreciated.  Please click on the gofundme link or send a check to PO Box 990, New Providence, NJ 07974.

Edition 1,306

Ukraine Aid Finally Passes

We didn’t have to wait until Saturday night.  The U.S. House voted resoundingly to approve $95 billion in foreign aid for Ukraine, Israel, and Taiwan (and the Indo-Pacific) Saturday afternoon.  Speaker Mike Johnson summoned up the courage, albeit months late, to advance the measures, critical in the case of Ukraine, which lost territory and lives in the interim.

Four separate pieces of legislation, including a ban on TikTok.

$60 billion for Ukraine; $26 billion for Israel and humanitarian aid for civilians in conflict zones, including Gaza; and $8 billion for the Indo-Pacific.

There was also a measure to help pave the way to selling off frozen Russian sovereign assets to help fund the Ukrainian war effort, and a new round of sanctions on Iran.

Representative Michael McCaul (R-Tex.), chairman of the Foreign Affairs Committee, said Saturday as the House debated the measures:

“Our adversaries are working together to undermine our Western values and demean our democracy.  We cannot be afraid at this moment. We have to do what’s right.  Evil is on the march.  History is calling and now is the time to act.”

“History will judge us by our actions here today,” he continued.  “As we deliberate on this vote, you have to ask yourself this question: ‘Am I Chamberlain or Churchill?’”

The vote was 311 to 112 in favor of the aid to Ukraine, with a majority of Republicans – 112 – voting against it (101 in the GOP supporting it).

The aid to Israel vote was 366 to 58 (21 GOP and 37 Dems opposing).

And the vote for Taiwan and the Indo-Pacific aid was 385 to 34.

The bill to impose sanctions on Iran and require the sale of TikTok by its Chinese owner or ban the app in the United States passed 360 to 58.  [More below on this particular topic.]

The Senate then passed the $95 aid package by an overwhelming 79-18 vote late Tuesday, and President Biden signed it Wednesday, the U.S. immediately releasing the first $1 billion in aid to Ukraine, with the bulk following in the coming weeks.

Senate Majority Leader Chuck Schumer said in a floor speech Tuesday: “Today the Senate sends a unified message to the entire world: America will always defend democracy in its hour of need.

“Make no mistake, America will deliver on its promise to act like a leader on the world stage, to hold the line against autocratic thugs like Vladimir Putin,” he continued.  “We are showing Putin that betting against America is always, always a grave mistake.”

Minority Leader Mitch McConnell said in an interview before the vote that it “is one of the biggest days in the time that I’ve been here.”

“At least on this episode, I think we turned the tables on the isolationists,” he said.

In the end, 31 Republicans voted for the aid package – nine more than when the Senate passed a similar version in February, and a majority of the Senate GOP conference.

Editorial / Wall Street Journal

“America’s allies and enemies have started to wonder if the U.S. is too consumed with infighting to defend itself and its interests.  So put down a marker: Even a dysfunctional and narrowly divided Congress perceives the world’s dangers and has decided to meet the occasion.

“The House of Representatives on Saturday passed separate bills to support Ukraine, Israel and Taiwan. A fourth bill that cleared the House would seize frozen Russian sovereign assets and force a sale of the Chinese-controlled social media app TikTok, among other priorities.

“All four bills cleared the House with more than 300 votes, albeit with shifting bipartisan coalitions.  Support for partners in the Indo-Pacific attracted the highest tally at 383-34, a testament to the bipartisan consensus on the threat posed by the Chinese Communist Party....

“At the core of these bills is U.S. self-defense.  Some $23 billion of the roughly $60 billion Ukraine bill will replenish U.S. weapons stocks with better equipment than what America has given to Kyiv. Another $11 billion is marked for U.S. troops in Europe for ship and aircraft maintenance and more.

“The Pacific bill includes $3.3 billion to help the U.S. pick up the pace on producing attack submarines.  That is crucial to deterring Xi Jinping and selling hulls to the Australians....

“Credit is due House Speaker Mike Johnson, who in recent days explained the stakes in Ukraine with more clarity than President Biden has mustered... He needed Democratic votes to overcome (his isolationist wing) and bring the bills to the House floor, and Mr. Johnson was right to let the House work its will....

“The House bill also tries to compel the Biden Administration to give the Ukrainians long-range fires known as the Army tactical missile system, which can strike Russian supply and logistics lines.  Mr. Biden denied Ukraine these weapons for more than a year, fretting over Mr. Putin’s reaction, and lately has offered only a token few.  The GOP can connect the dots for voters between Mr. Biden’s weakness and the frozen front lines....

“(Those) who say Mr. Johnson betrayed the GOP are peddling a false history.

“Mr. Johnson from his first days as Speaker revealed himself as a conservative in the mold of Ronald Reagan.  ‘A strong America is good for the entire world,’ Mr. Johnson said in October 2023 after winning the post, and soon after told the press he didn’t want Mr. Putin to prevail in Ukraine.  He worked to pass border security measures both he and the conference wanted, holding out long after it became clear nothing could pass the House.

“ ‘We have to stand for freedom and we have to be the beacon of light,’ Mr. Johnson told reporters last week.  ‘The only thing that has kept terrorists and tyrants at bay is the perception of a strong America – that we would stand strong.  And we will.’  Saturday’s votes are a show of will from the United States that will reverberate around the world.”

Gerard Baker / Wall Street Journal

“The curious taste some Republicans have demonstrated in the last few years for undermining the defense of nations on the front line of a global struggle against states that are sworn to undo America’s power will be one for historians – and perhaps psychologists – to ponder.  For now, we can be grateful that, with an appropriation of taxpayer funds that represents 0.3% of gross domestic product, America has sent an unmistakable reminder to those revisionist powers: We are bigger than you. We are richer than you. And we will do what we need to do to stop you.

“We can all be grateful that enough Republicans still seem to understand the concept of peace through strength – and the need from time to time to put some resources behind demonstrating that strength.

“That is American greatness.

“If you don’t believe that the $95 billion for Ukraine, Israel and Taiwan will have an outsize negative effect on our adversaries’ ability to harm America’s interests, listen to their panicked responses....

“Dark, empty threats. Terrors for children. The weak always make loud noises in the hope of frightening the strong.  But the shriller the cries, the more you can hear the unmistakable sound of fear in the loudmouth’s voice.

“We focus a lot inevitably on our many internal failings, and rightly so.  No one should turn away from the rot that is eating away at our institutions, our national unity, our very identity...

“But we shouldn’t omit either to take a global perspective, to remember how the rest of the world sees America and its power, and to remind ourselves what they well know – how awesome that power is.

“No country on Earth has anywhere near the resources, the capability and now we can say, at least for a while, the self-confidence, to project power – hard, soft and every other sort – around the world at so little cost to itself....

“Conservatives are right to be alarmed about what is happening at home; the hate and extremism on our campuses, the near-dissolution of our border, the accelerating rot of our media, the politicization of our law enforcement, the undermining of our values and our identity.

“But addressing those pathologies doesn’t require us to disown our leading global role.  It needn’t force us to abandon our willingness to use our unrivaled resources to defend ourselves from the rising threats to our global security.  In fact the two are complementary.

“The next Republican president should grasp this opportunity. The other thing Speaker Johnson and his GOP allies have done this week is point the way to a conservatism that can truly make America great – at home and abroad.”

---

Russia-Ukraine

--Ukrainian President Volodymyr Zelensky welcomed the passage of $60 billion in aid for Ukraine by the U.S. House but urged Washington to quickly turn the bill into law and proceed with the actual transfer of weapons, saying long-range arms and air defense systems were top priorities.

“I personally thank Speaker Mike Johnson and all American hearts who believe, as we do in Ukraine, that Russian evil must not be winning,” Zelensky said on social media Saturday.  “The time between political decisions and actual damage to the enemy on the front lines, between the package’s approval and our warriors’ strengthening, must be as short as possible,” he said in a separate video the following day.  “Frontline air defense is just as important as protection for our cities and villages.  Our long-range capabilities, artillery, and ability to expand our area of control are all important,” said Zelensky.

In an interview with NBC’s “Meet the Press,” Zelensky said passage of the aid bill would send a powerful message to Russia that Washington stands by Kyiv and that it would not be “a second Afghanistan.”

“I think this support will really strengthen the armed forces of Ukraine and we will have a chance for victory,” Zelensky said through an interpreter. 

Senate Intelligence Committee Chair Mark Warner (D-Va.) told CBS’ “Face the Nation” that military equipment including longer-range ATACMS should be “in transit by the end of the week.”

“I believe the administration was prepared over the last couple of months to prepare or to provide ATACMS.”

Zelensky said Kyiv had lost the initiative in the fighting in the eastern part of the country, but that once the weapons arrive it will have the chance to stabilize the situation.

--A perspective from the UK: “We would expect a priority to be artillery (ammunition and barrels) as well as air defense systems and missiles to replenish stocks depleted by recent Russian airstrikes,” said Matthew Savill, military sciences director at the London-based Royal United Services Institute.  According to his estimates, “This funding can probably only help stabilize the Ukrainian position for this year and begin preparations for operations in 2025,” Savill said.  “It’s unlikely this will create immediate parity with the Russian volume of fire, but it will help close the gap,” he added.

--Kremlin spokesman Dmitry Peskov said on Saturday that the House’s approval of security aid to Ukraine would lead to more damage and deaths in the conflict there.  The decision “will make the United States of America richer, further ruin Ukraine and result in the deaths of even more Ukrainians, the fault of the Kyiv regime,” Peskov was quoted as saying by Russian news agencies.

Peskov also said that provisions in the legislation allowing the U.S. administration to confiscate seized Russian assets and transfer them to Ukraine to fund reconstruction would tarnish the image of the United States.  Russia, he said, would enact retaliatory measures.

Former Russian President Dmitry Medvedev, writing on Telegram, said the approval of U.S. aid for Ukraine was expected and grounded in “Russophobia.”

“We will, of course, be victorious regardless of the blood-soaked $61 billion, which will mostly be swallowed up by their insatiable military industrial complex,” wrote Medvedev, a vociferous hawk who is also deputy chairman of the Security Council.

Maria Zakharova, Russian Foreign Ministry spokeswoman, said the approval of aid in the legislation to Ukraine, Israel and Taiwan would “deepen crises throughout the world.”

“Military assistance to the Kyiv regime is direct sponsorship of terrorist activity,” Zakharova wrote on Telegram.  “To Taiwan, it is interference in China’s internal affairs.  To Israel, it is a road straight to escalation and an unprecedented rise in tension in the region.” [Ron Popeski / Reuters]

--Ukraine launched a barrage of drones across Russia overnight, Saturday, the defense ministry in Moscow said, in attacks that appeared to target the country’s energy infrastructure.

Fifty drones were shot down by air defenses over eight Russian regions, including 26 over the country’s western Belgorod region close to the Ukrainian border.  Two people died during the barrage, Belgorod’s governor wrote on social media. A third person was killed in shelling later, he said.

--British Prime Minister Rishi Sunak on Tuesday pledged to increase the UK’s defense spending to 2.5% of GDP by the end of the decade.

Standing alongside NATO Secretary General Jens Stoltenberg in Warsaw, Sunak described the plan as the “biggest strengthening of our national defense for a generation.”

With NATO members facing growing pressure to increase their military spending to 2% of GDP because of growing conflicts around the world, Sunak’s announcement raised the pressure on others to act.

--The United States in recent weeks secretly shipped long-range missiles to Ukraine for use in its battle to fight off Russian invaders, and Ukraine has now used them twice, White House national security adviser Jake Sullivan confirmed with reporters on Wednesday.

The missiles were contained in a $300 million military aid package for Ukraine that President Biden approved on March 12.  Sullivan would not say how many of the missiles were sent but called it a “significant number...and we will send more.”

The missiles were used for the first time on April 17, launched against a Russian airfield in Crimea that was about 103 miles from the Ukrainian front lines.  The official said Ukraine used the weapon a second time against Russian forces in southeastern Ukraine.

The Pentagon initially opposed the long-range missile deployment, fearing the loss of the missiles from the American stockpile would hurt U.S. military readiness.  There were also concerns that Ukraine would use them to attack targets deep inside Russia.

But Russia’s use of North Korean-supplied long-range ballistic missiles against Ukraine in December and January, despite U.S. public and private warnings not to do so, led to a change of  heart.  Also, Russia was warned by the U.S. not to target Ukraine’s infrastructure and Russia only intensified such action.

However, Jake Sullivan said Ukraine has committed to only use the weapons inside Ukraine, not in Russia.

--Russia is considering downgrading the level of its diplomatic relations with the United States if Western governments go ahead with proposals to confiscate its frozen assets, state news agency RIA quoted Deputy Foreign Minister Sergei Ryabkov as saying on Thursday.  Ryabkov said Moscow would retaliate economically and politically if the assets were seized.

--Two U.S. military officials told the Associated Press that Ukraine has sidelined U.S.-provided Abrams M1A1 battle tanks for now, in part because Russian drone warfare has made it too difficult for them to operate without detection or coming under attack.

The U.S. sent 31 Abrams to Ukraine in January 2023, after Ukraine argued they were vital to its ability to breach Russian lines.

But the battlefield has changed since then, notably by the ubiquitous use of Russian surveillance drones and hunter-killer drones.  That’s made it more difficult for Ukraine to protect the tanks.

Five of the 31 have been lost to Russian attacks.

The proliferation of drones on the battlefield means “there isn’t an open ground that you can just drive across without the fear of detection,” a senior defense official told reporters Thursday.

---

--Editorial / Wall Street Journal

“In the new era of great power competition, Africa is one place where the U.S. is losing. Russia is fast making gains in Niger, and the consequences could stretch beyond Africa’s unstable Sahel region.

“A hundred Russian military instructors arrived in the capital of Niamey last week, according to Radio Television du Niger. They came bearing ‘a state-of-the-art air defense system acquired as part of military cooperation with the Russian Federation,’ the broadcaster reported. Russia has been reorganizing the Wagner mercenaries as the Africa Corps under the control of the defense ministry.  ‘WE ARE HERE,’ the outfit posted on Telegram last week.

“Last Saturday hundreds gathered in Niamey to protest the U.S. military presence, some of them reportedly waving Russian flags. France withdrew its troops from Niger last year, and last month the ruling junta that took over in a July coup cancelled the status of forces agreement with Washington.

“Niger has been a vital counterterrorism hub for the Sahel and Northern Africa, where al Qaeda and Islamic State are making gains.  Niger has hosted the second-largest U.S. military presence on the continent after Djibouti.  If the U.S. loses a base in the Sahel, it will ‘degrade our ability to do active watching and warning, including for homeland defense,’ Gen. Michael Langley, the head of U.S. Africa Command, recently warned....

“Niger’s Prime Minister Lamine Zeine has traveled to Russia and Iran this year.  Washington is concerned that Tehran is pursuing a deal that would give it access to Niger’s vast uranium reserves*.

“The U.S. has long neglected Africa, but the world’s rogue regimes aren’t making the same mistake.  They’re filling this vacuum, and trouble for U.S. interests will follow.”

*Niger supplies about 5% of the world’s uranium, including an estimated 20% of the European Union’s needs.

--A court in Moscow rejected an appeal on Tuesday by Wall Street Journal reporter Evan Gershkovich against his detention, more than a year after he became the first American journalist arrested on spying charges in Russia since the Cold War.

The court ruled that Gershkovich, 32, must stay in a high-security prison in Moscow at least until the end of June.  With no trial date set, his detention could easily be extended much further.

In its statement on Tuesday, The Journal said that it “continues to be outrageous that Evan has been wrongfully detained by the Russian government for more than a year.”

--French President Emmanuel Macron called on Thursday for stronger, more integrated European defenses as he outlined his vision for a more assertive European Union on the global stage.

In a 2-hour speech at the Sorbonne University, Macron said the continent must not become a vassal of the United States.  “There is a risk our Europe could die. We are not equipped to face the risks.”

Macron has three years left in his second and final term and he wants to show he’s not a lame duck. He warned that military, economic and other pressures could weaken and fragment the 27-nation EU.  Russia must not be allowed to win in Ukraine, he said, calling for a boost in Europe’s cybersecurity capacity, closer defense ties with post-Brexit Britain, and the creation of a European academy to train high-ranking military personnel.

Europeans should give preference to buying European military equipment, he said.  “We must produce more, we must produce faster, and we must produce as Europeans,” the president said.

---

Israel-Iran

Reacting to Israel’s small, muted retaliatory attack on Iran last Friday night, Iran’s Supreme Leader Ali Khamanei thanked the country’s armed forces for their attack this month on Israel, saying the country had demonstrated its power regardless of how many targets were hit, Iran’s official news agency reported on Sunday.

But most of the over 300 missiles and drones launched on April 13 were shot down by Israel and its allies and the attack caused minimal damage in Israel.

“How many missiles were launched and how many of them hit their target is not the primary question. What really matters is that Iran demonstrated its power during that operation,” Khamenei said.

Khamenei played down last Friday’s Israeli retaliation in Isfahan. “In the recent operation, the armed forces managed to minimize costs and maximize gains,” he said, urging military officials to “ceaselessly pursue military innovation and learn the enemy’s tactics.”

Yet the calm that followed Israel’s strike still led to a deeper unease among U.S. and foreign officials.  There was no assurance that a fresh flareup can be contained if conflict were to flare again between Iran and Israel, but we’ve now gone a week without any incidents directly between the two.

Oil prices eased and markets were relatively unfazed after it became clear that the strike on Iran was far more limited than initially feared.

“If there is a serious escalation – which means a much more wider regional escalation than what we’ve seen so far – then yes, we could have a severe oil shock,” Gita Gopinath, the International Monetary Fund’s first deputy managing director, told Bloomberg.  “But we’re not there yet.”

There was no sign Israel felt compelled to keep striking Iran and its assets elsewhere.

But Iran did make clear it was ready to do something it had never dared do before: to launch hundreds of missiles and drones at Israel from its own territory, and Israel needed help from the U.S., the UK and others to beat back the assault.

As in any future attack/invasion would put Israel in extreme danger if it was trying to repel it alone.

Jared Malsin / Wall Street Journal:

“(The) attacks have raised the risk that one side or the other could miscalculate as they feel their way to the new rules of their conflict. The animosity that has driven the two countries to fight a long-running shadow war hasn’t diminished. But it will now play out in a context in which both sides have demonstrated a willingness to come out of the shadows and escalate to direct bombardment, security analysts said.

“ ‘We’re in a new stage that is much more dangerous and precarious than we used to be in,’ said Brig. Gen. Assaf Orion, who is a senior researcher with Israel’s Institute for National Security Studies, referring to Friday’s attack.  ‘It’s a long game with a lot of moving parts with several frontiers.’”

The New York Times reported that a weapon launched in the strike against Iran on Friday damaged a defense mechanism responsible for detecting and destroying aerial threats near Natanz without detection, citing two Western and two Iranian officials.

The weapon struck an S-300 antiaircraft system at a military base in Isfahan.  Natanz is a central city in Iran and a base for Iran’s nuclear weapons program.

The account from the Western and Iranian officials is supported by satellite images viewed and analyzed by the Times.  It was unclear what type of weapon was used to strike.

Israel launched aerial drones and at least one missile fired from a fighter jet, the Times noted.  A missile was fired from a fighter jet far from Israeli or Iranian airspace and included technology that enabled it to bypass Iran’s radar defenses.

Officials reported Israel strategically attacked Iran this way to deliver a message to Iran that Israel could bypass and paralyze the Islamic Republic’s defense systems undetected.

And Israel was able to show it could do so while using significantly less firepower than Iran used the previous Saturday in its attack.

Israel sought to send a message with the aim of ending the cycle of attacks and was meant to make Iran reconsider launching a direct attack on Israel in the future, the officials said.

Or, as Mark Dubowitz, CEO of the Foundation for Defense of Democracies, said in an interview in the Wall Street Journal:

“(Israel’s strike on Iran had) an almost poetic symmetry... ‘Our air defenses worked, your expensive S-300 didn’t.  You targeted our air force base, we hit your air force base,’ using much less to do much more damage,” and near a nuclear facility.  Adding insult to injury, the strike came on Khamenei’s 85th birthday.

David Ignatius / Washington Post

“How to explain Israel’s actions over the past week?  What accounts for its restraint, in a situation where hawks in the Israeli government were screaming for an all-out assault?

“Here’s my take: Israel is behaving like the leader of a regional coalition against Iran.  In its measured response, it appeared to be weighing the interests of its allies in this coalition – Saudi Arabia, the United Arab Emirates, Jordan – which all provided quiet help in last weekend’s shoot-down.  It’s playing the long game, in other words.

“This would amount to a paradigm shift for Israel.  Rather than seeing itself as the embattled Jewish state fighting alone for its survival against a phalanx of Arab and Muslim enemies, Israel knows that it has allies.  Top of the list, as always is the United States.  But America is joined by Arab states that oppose Iran and its proxies as much as the Israelis do.

“That’s the new shape of the Middle East.  But for now, at least, this ripening friendship between Israel and its former adversaries in the region must remain unspoken....

“We’re looking at something new, after ‘the guns of April.’  Maybe the worst is yet to come, if Iran decides to ‘sneak out’ toward acquiring nuclear weapons, Hezbollah attacks from the north or Israel opts for devastating preventive war against Hezbollah in Lebanon. But good or bad, this is a new chapter in the story.”

Mark Dubowitz says Iran has enough enriched nuclear material “to break out to one bomb’s worth of weapons-grade uranium in seven days, six bombs’ worth in a month.”  And now we’ve seen a demonstration of Iran’s ballistic-missile capabilities: “ ‘These ones have conventional warheads,’ the Iranians were saying.  ‘The next one may have unconventional warheads.’ ”

---

Israel-Hamas

--Various reports have Israel invading the southern Gaza city of Rafah soon.  The U.S. has urged caution, pointing to the difficulties in the 2016-17 multinational operation to remove ISIS from the city of Mosul.  U.S. intelligence officials publicly predicted last month, “Israel probably will face lingering armed resistance from Hamas for years to come, and the military will struggle to neutralize Hamas’ underground infrastructure, which allows insurgents to hide, regain strength and surprise Israeli forces.”  [Defense One]

Meanwhile, officials in Cairo have said Israel wants the U.S., Egypt, the UAE and others to help evacuate Rafah in the next few weeks – ahead of a ground campaign the Israelis think will take just six weeks, according to the Wall Street Journal.

The Journal separately reported that Israel has responded to pressure from the U.S. and others by scrapping plans for an all-out assault in favor of a more gradual approach that seeks to limit civilian casualties, according to Egyptian and former Israeli officials.

Israel plans to proceed in phases, evacuating neighborhoods in advance before moving on to new areas, these officials said.

“We have not greenlighted a military operation.  I want to be very clear on that point,” Assistant Secretary of State for Near Eastern Affairs Barbara Leaf told reporters on Wednesday.  “In fact we’ve been quite clear publicly and privately that there’s no question of a military operation – major or slightly less than major – being undertaken in circumstances in which you have over a million people crowded into a very small space in the vicinity of Rafah.”

Thursday, Prime Minister Netanyahu’s war cabinet was meeting “to discuss how to destroy the last vestiges, the last quarter of Hamas’ battalions, in Rafah and elsewhere,” a government spokesman said.

--Two Israeli airstrikes overnight Monday killed 24 Palestinians in Rafah, the IDF targeting two houses.  Many of the victims appeared to be children.

--The UN’s human rights chief, Volker Turk, has said he is “horrified” by the destruction of Gaza’s Nasser and Al-Shifa hospitals and the reports of “mass graves” being found at the sites after Israeli raids.

Palestinian officials said they had exhumed 283 bodies at Nasser, some with their hands tied, but it is not clear how they died or when they were buried.

Israel’s military said claims that it buried bodies there were “baseless.”

But it did say that during a two-week operation at the hospital in the city of Khan Younis in February, troops “examined” bodies buried by Palestinians “in places where intelligence indicated the possible presence of hostages.”

Ten hostages who have now been released have said that they were held at Nasser hospital for long periods of their captivity.

Prior to the Israeli operation at Nasser, staff there said they had been forced to bury bodies in the hospital’s courtyard because nearby fighting prevented access to cemeteries.  There were similar reports from al-Shifa.

--The violence in the West Bank continues to escalate.  Last weekend, Israeli forces launched an extended raid near the flashpoint Palestinian city of Tulkarm, with 14 Palestinians killed in exchanges, according to an IDF statement on Sunday, and nine soldiers wounded.  This was just one of many incidents/actions in the territory this week.

--Israel and Lebanon continued to exchange fire across the border, with Israeli strikes killing at least five in various attacks.

Hezbollah then killed an Israeli civilian in an ambush on a convoy in a disputed area along the border Thursday night.

--A top Hamas political official, Khalil al-Hayya, told the Associated Press that the militants are willing to agree to a truce of five years or more with Israel and that it would lay down its weapons and convert into a political party if an independent Palestinian state is established along the pre-1967 border.

But Israel would never even consider such a scenario.  It has vowed to crush Hamas and its current leadership is adamantly opposed to the creation of a Palestinian state on lands Israel captured in the 1967 Mideast war.

--On Thursday, the U.S., along with leaders from 17 countries whose citizens are also held hostage in Gaza, released a joint statement for the first time during the conflict, calling on Hamas to release the remaining hostages.

“We call for the immediate release of all hostages held by Hamas and Gaza now for over 200 days. They include our citizens,” the statement said.  “The fate of the hostages and the civilian population in Gaza who are protected under international law is of international concern.”

Among the other nations signing off on this were Brazil, Canada, France, Germany, Poland, Spain and the UK.

--U.S. troops have begun assembling a floating pier off the coast of northern Gaza, the Pentagon said, as part of an administration effort to open new paths for humanitarian aid ahead of the planned invasion of Rafah.

Hundreds of U.S. troops are involved, with several ships in a mission supported by various nations, including the Israeli military.  But these troops are at risk*.

U.S. officials said the pier will at first enable 90 trucks of humanitarian aid a day to enter Gaza and 150 trucks a day soon after. The mission could last for months.

About 190 trucks on average a day have entered Gaza from two southern crossings so far this month, according to the UN.  Before the war, some 500 trucks entered Gaza daily.

*Israel is dedicating a brigade of troops to protect U.S. forces, which amounts to “thousands of soldiers, plus Israeli Navy ships and the Israeli Air Force,” officials said.  There are also three U.S. Navy destroyers in the region.

--Maj. Gen. Aharon Haliva, head of the Israel Defense Forces’ intelligence department, resigned from his position and retired, he said in a statement Monday, citing Hamas’ Oct. 7 attack as the driving force.

Haliva is the first general of the IDF staff to leave his position because of the failures that led to the attack and the war in Gaza, Israeli media reported.

“The military intelligence directorate under my command did not live up to our mission,” Haliva said in a letter shared by the IDF. “I have been carrying that black day ever since, day and night. I will live with the horrible pain of the war every day.”

Hamas had been planning its assault for more than a year.

---

Wall Street and the Economy

Prior to Friday’s crucial personal consumption expenditures index data, the market rallied early in the week after a rough stretch, particularly in the Nasdaq and its tech components, but the rally ended abruptly on Thursday with the release of the first estimate for GDP in the first quarter.

The headline number, 1.6%, was well below consensus of 2.4%, and that would normally be good.  The Federal Reserve needs the economy to slow and thus relieve inflationary pressures further before it can consider cutting interest rates.

But the price components inside the GDP report rose, the core price index 3.7% when 3.4% was expected, and that was awful in terms of sentiment in the bond pits.  The 2- and 10-year Treasury bonds were trading with yields of 4.93% and 4.63%, respectively, before the GDP announcement, and then they shot up to 5.01%, 4.75%, briefly, after the inflation news.  Equities fell hard but recovered some late in the day.

The stage was thus set for Friday’s PCE and it was largely as expected, which was good.  No negative surprises, though it still helped reinforce the case for no early rate cuts.

Personal income was up a solid 0.5% and consumption (consumer spending) a better than forecast 0.8%.

On the price data, the headline PCE was up 0.3% and 2.7% year-over year, the latter a tick above expectations (and vs. 2.5% prior), while the core figures, ex-food and energy, rose 0.3% and 2.8%, the latter also a tick higher than consensus, but the same as February’s reading.

For the Fed, 2.8% is not good enough and you are seeing how sticky inflation has become over the past few months.

In other economic news this week, March new home sales came in above consensus, 693,000 annualized pace, while March durable goods were stronger than forecast, 2.6%, though 0.2% ex-transportation, a tick below consensus.

Freddie Mac’s 30-year fixed-rate mortgage is at 7.17% this week, up from last week’s 7.10%.

The Atlanta Fed’s first look at second-quarter growth is a whopping 3.9%, though this is meaningless at this very early stage in the data collection process.

The Atlanta Fed’s last look at first-quarter growth was 2.7%, so a big miss off the first estimate, but I expect Q1 GDP to be upgraded over the next two readings.

Next week, aside from the Fed’s Open Market Committee meeting, we have key ISM data on the manufacturing and service sectors, as well as another big jobs report for April.

Despite the slower GDP figure, the U.S. economy has been strong, but inflation remains stubbornly high, and as Stuart Paul, an economist with Bloomberg notes, “This is a lose-lose for the president.  He doesn’t get to realize the benefit of the hot growth because it’s coming at the cost of high inflation and interest rates.”

As Bloomberg also notes, this is a perilous time for Biden’s campaign. Research shows American voters begin to make up their minds about the direction of the economy about six months before an election – or right about now.

Europe and Asia

We had the flash PMI data for the month of April in the eurozone, courtesy of S&P Global and Hamburg Commercial Bank, and the composite is at 51.4, an 11-month high (50 the dividing line between growth and contraction), with manufacturing at 47.3, a 12-month high, and services 52.9, 11-mo. high.

Germany: 45.0 mfg., 53.3 services (10-mo. high)
France: 46.8 mfg., 50.5 services

UK: 49.1 mfg., 54.9 services (11-mo. high)

Dr. Cyrus de la Rubia, Chief Economist, HCOB:

“The eurozone got off to a good start in the second quarter. The Composite HCOB Flash PMI took a significant step into expansionary territory.  This was propelled by the services sector, where activity has gathered further steam. Considering various factors including the HCOB PMIs, our GDP forecast suggests a 0.3% expansion in the second quarter, matching the growth rate seen in the first quarter, both measured against the preceding quarter.

“Several factors indicate that the recovery in the private service sector, which dominates the entire economy, is poised to be sustained. Firstly, there has been a positive momentum in new business for the past two months, which translates also into a bolder hiring policy. Secondly, the higher increases in output prices are not only a response to the faster rise in input costs but also reflect the confidence of service providers in setting prices.  Lastly, the recovery is occurring simultaneously in the two most significant economies of the Eurozone, Germany and France. This suggests the presence of common factors such as lower inflation and higher wages, which bolster purchasing power and contribute to the resurgence in the service sector.”

Turning to Asia...there was no big economic data out of China this week.

But Beijing on Friday passed a law leaving its biggest trade partners in no doubt that it can hit back should they put tariffs on China’s exports.

The Tariff Law is the latest addition to Beijing’s arsenal of trade defense instruments.  The law, which takes effect from Dec. 1, outlines a range of legal provisions related to tariffs on Chinese imports.

The U.S. and Europe are increasingly alarmed by Chinese industrial overcapacity flooding the two with cheap products.  The European Union is currently investigating whether to apply tariffs on Chinese electric vehicles, while Beijing is conducting its own anti-dumping probe into EU brandy.

We had flash PMI readings from Japan for April, with manufacturing at 48.1, services 54.6.

Street Bytes

--Stocks rallied despite further evidence the Fed is not cutting rates anytime soon, Nasdaq breaking a four-week losing streak, up 4.2%, Nvidia shares rebounding from $762 last Friday to $877! 

The Dow Jones rose 0.7% to 38239, the S&P 500 2.7%.

Next week, all about Amazon and Apple earnings, plus the jobs report.

--U.S. Treasury Yields

6-mo. 5.38%  2-yr. 5.00%  10-yr. 4.67%  30-yr. 4.78%

The 10-year is at its highest weekly close since Oct. 27.  The 2-year at 5.00% is significant.  Its high last fall was 5.22%.

--As part of the new foreign aid package, Iran’s oil sector was hit with new sanctions that would broaden penalties to include foreign ports, vessels, and refineries that knowingly process or ship Iranian crude in violation of existing U.S. sanctions.  It would also expand so-called secondary sanctions to cover all transactions between Chinese financial institutions and sanctioned Iranian banks used to purchase petroleum and oil-derived products.

About 80% of Iran’s roughly 1.5 million barrels of daily oil exports are shipped to independent refineries in China known as “teapots.”

But we’ve seen how largely ineffective Iranian sanctions have been thus far.

--Exxon Mobil shares slid 4% today after the oil giant reported first-quarter adjusted earnings of $2.06 per share, down from $2.83 a year earlier and a consensus view of $2.18; a net profit of $8.22 billion compared to $11.43bn a year ago.

Revenue came in at $83.08 billion, down from $86.56 billion a year earlier, though this beat the Street’s view of $81.5 billion.

Weaker refining margins and lower natural gas prices offset volume gains. Exxon is also in the process of closing a $60 billion deal for top shale oil producer, Pioneer Natural Resources.

Results were boosted by lower costs and higher volumes from Exxon’s Guyana operations.    Exxon is in a dispute with Chevron and Hess over assets in Guyana, home to the biggest oil finds in the past two decades.  In the face of Chevron’s $53 billion offer for Hess (to gain Hess’ exposure in Guyana), Exxon has claimed preemption rights over Hess’ Guyana assets.

The company’s capital spending in the quarter was the lowest in seven quarters.

--Speaking of Chevron, it reported a first-quarter profit of $5.5 billion.  Adjusted earnings came in at $2.93 per share, surpassing Street expectations, but down from $3.46 a year ago.  Revenue of $48.72 billion was shy of consensus of $49.94 billion.

Chevron, like in the case of Exxon, was hurt by falling nat gas prices.  First quarter oil and gas production overall jumped 12% to 3.34 million barrels of oil equivalent per day.

The company said its merger with Hess “is advancing” and Chevron remains confident “that a preemption right does not apply to this transaction and believes this will be affirmed in arbitration.”

--BHP Group, the world’s largest mining company, has proposed a takeover of its rival Anglo American, in a deal that has the potential to shake up the industry at a time when demand for copper is soaring.

Anglo confirmed it had received an “unsolicited, nonbinding and highly conditional combination proposal from BHP” and that its board was reviewing the offer.

Copper, along with other commodities, has seen rising demand from clean energy technologies like wind turbines, electric vehicle batteries and solar panels.

Anglo American then rejected the takeover proposal, saying it significantly undervalues the company.  So, the ball is in BHP’s court as it will have to improve its offer if it wants to start talks.

A tie-up between the two would give BHP roughly 10% of global copper mine supply.

--Meta Platforms shares plummeted 14% on Thursday (before closing down 10%) after the parent of Facebook and Instagram posted better-than-expected results for the first quarter while aggressively ratcheting up spending plans as it invests in artificial intelligence software and services.

The stock was slammed because of the AI spending and slightly disappointing growth expectations for the June quarter.  Meta shares have soared since late 2022, powered by the company’s “Year of Efficiency” cost-cutting measures and its emergence as a major player in AI.  But AI workloads require expensive infrastructure – and highly paid AI engineers.  And it could be a while before Meta generates any new revenue streams from the work on AI.

“As we scale capex and energy expense for AI, we’ll continue focusing on operating the rest of our company efficiently,” CEO Mark Zuckerberg said on the company’s earnings conference call.  “But realistically, even with shifting many of our existing resources to focus on AI, we will still grow our investment envelope meaningfully before we make much revenue from some of these new products.”

Zuckerberg added: “Historically, investing to build these new scale experiences in our apps has been a very good long-term investment for us and for investors who have stuck with us.”

He also admitted that “building the leading AI” will be a larger undertaking than other experiences that have been added to its apps and will likely take several years before generating significant revenue.

For the March quarter, Meta posted revenue of $36.5 billion, up 27% from the year-ago period, toward the high end of the company’s guidance range of $34.5 billion to $37 billion and ahead of consensus estimates of $36.1 billion.  Profit was $4.71 a share, above the Street’s view of $4.30, and more than double the $2.20 from a year earlier.

But for the June quarter, Meta sees revenue between $36.5 billion and $39 billion, with the midpoint slightly below current consensus.

Meta said it now sees total expenses this year of between $96 billion and $99 billion, with capital spending of between $35 billion and $40 billion, above its previous forecast of $30 billion to $37 billion, on higher AI-related spending.  In 2023, Meta’s capital spending was $28.1 billion, down from $32 billion in 2022.  CFO Susan Lee said on the call that Meta’s capital spending in 2025 will increase again from 2024, without providing a specific figure or range.

“It’s been a good start to the year,” Zuckerberg said in a statement.  “We’re seeing healthy growth across our apps and we continue making steady progress building the metaverse as well.”

“Daily active people” on its applications reached 3.24 billion, up 7% year over year.  Ad impressions were up 20%.  Ad revenue rose nearly 27% to $35.64 billion from $28.1 billion.

Headcount now stands at 69,329, down 10% from a year ago, and up 3% from 67,317 at year-end.

--Microsoft said its profit rose 20% for the first quarter as it tries to position itself as a leader in applying artificial intelligence technology to make workplaces more productive.

The company reported quarterly net income of $21.93 billion, or $2.94 per share, beating Wall Street expectations of $2.82 a share.

The Redmond, Washington-based software maker posted revenue of $61.86 billion for its fiscal third quarter, up 17% from a year ago and above consensus of $60.86.

MSFT doesn’t spell out how much money it makes from AI products, including its flagship Copilot chatbot that can compose documents or generate images.  But it has infused the technology into its main lines of business, such as cloud computing contracts and subscriptions for its email and other online services.

Quarterly revenue from Microsoft’s cloud computing business segment grew to $26.7 billion, up 21% from last year, while revenue from the company’s productivity services, such as its Office line of products, rose 12% to $19.6 billion.

The personal computing business, centered on licensing its Windows operating system, saw revenues of $15.6 billion for the quarter, up 17% from last year.

Microsoft’s generative AI products rely heavily on its multibillion-dollar investments in business partner OpenAI, the maker of ChatGPT.

Meanwhile, the company faces challenges in shoring up its legacy computer services.  A federal cybersecurity safety board issued a scathing report earlier in April saying “a cascade of errors” by the tech giant let state-backed Chinese cyber operators break into email accounts of senior U.S. officials.  The report cited shoddy cybersecurity practices, a lax corporate culture and a lack of sincerity about the company’s knowledge of the targeted breach.

--Google’s corporate parent Alphabet Inc. on Thursday reported Thursday that it is still reaping double-digit revenue gains from its digital advertising empire while talking of the potential for artificial intelligence.

In the January-March period, Alphabet’s revenue rose 15% from the same time last year to $80.54 billion, surpassing analysts’ expectations. It was the fourth consecutive quarter of accelerating year-over-year revenue growth for the Mountain View, California, company.

Alphabet earned $23.66 billion, or $1.89 per share, a 57% increase from last year’s comparable quarter, which also surpassed the Street’s view.

“It was a great quarter and there’s more to come,” CEO Sundar Pichai said on earnings call.  The shares surged 10% at the open Friday.

Google’s ad revenue totaled $61.66 billion in the first quarter, up 13% from last year.  But the Department of Justice is taking aim at its search engine in a lawsuit alleging the company has abused its power by negotiating lucrative deals with Apple and other companies to give it an unfair advantage over potential rivals, stifling both innovation and competition.

For now, AI is helping to fuel rapid growth in Google’s cloud computing division, which saw its first-quarter revenue climb 28% from last year to $9.57 billion.  Sundar Pichai also noted, “We are encouraged that we are seeing an increase in search usage among people who are using the AI overviews.”

Alphabet ended March with nearly 181,000 employees, a decrease of nearly 10,000 workers from the previous year.

Lastly, the company announced its first-ever dividend and a $70 billion stock buyback, which cheered investors.  The dividend will be 20 cents per share.  [Three months ago, Meta Platforms announced its own first-ever dividend.]

--Boeing posted an unexpected narrower first-quarter loss on Wednesday, although revenue declined annually as the company slowed production of its 737 models to address quality issues.

The core loss was $1.13 per share, an improvement from $1.27 a year earlier, and consensus of $1.43.  Revenue fell 8% to $16.57bn, trailing the Street’s view for $17.22bn.

Commercial airplane revenue tumbled 31% to $4.65 billion, as lower 737 deliveries and grounding of the 737-9 jetliner dragged down the tally to 83 in the first quarter from 130 last year. Boeing said it reduced output of its 737 program to below 38 planes per month to implement quality management system improvements and ease traveled work within its factory and supply chain.

“Our first quarter results reflect the immediate actions we’ve taken to slow down 737 production to drive improvements in quality,” CEO Dave Calhoun, who is set to step down at the end of the year, said in a statement. “We will take the time necessary to strengthen our quality and safety management systems and this work will position us for a stronger and more stable future.”

--Delta Air Lines said Monday it is providing a 5% pay raise to “eligible employees” across the company.

Following the pay raise, the minimum starting wage of Delta’s “frontline employees” increases to $19 per hour, according to the company statement.

The new raises, which will be effective June 1, apply to flight attendants, ground handlers, mechanics and some office workers, among others. The raises do not apply to pilots, it added, who just received a new contract.

--JetBlue Airways trimmed its annual revenue forecast on Tuesday after reporting so-so first-quarter revenue due to bloated capacity in Latin America, sending its shares down 16%.

Struggling to return to profitability, JetBlue last month outlined plans to cut some of its routes and markets that were unprofitable, including Bogota, Colombia and Lima, Peru, and reallocate resources to better-performing regions.

The Caribbean and Latin American regions represented more than 33% of JetBlue’s overall capacity in 2023.

The airline now expects fiscal 2024 revenue to decline in the low-single-digit percentage range, compared with its prior forecast for revenue to be roughly flat.  The company forecast second-quarter revenue to fall between 6.5% and 10.5%, compared to estimates of a near 4% drop.

For the first quarter, operating revenue was $2.21 billion compared with $2.33 billion a year earlier.  The adjusted Q1 adjusted net loss of $0.43 per share was vs. a loss of $0.34 a year earlier.  Consensus was at a loss of $0.52.

Delta and United recently reported upbeat current-quarter forecasts.

--So, what about American Airlines and Southwest, who reported later in the week?

American said it lost $312 million as labor costs rose 18%, or nearly $600 million.  The airline said it expects to return to profitability in the second quarter, a busier time for travel, and post earnings between $1.15 and $1.45 per share, with analysts currently at $1.15.

AAL’s first-quarter loss amounted to $0.34 cents, adjusted, which was worse than the loss of $0.27 forecast by analysts.  Revenue was $12.57 billion, up 3.1%, and just shy of the Street’s $12.6bn estimate.

“While we aren’t satisfied with our first-quarter financial results, we have a strong foundation in place, and we remain on track to deliver on our full-year financial targets,” CEO Robert Isom said on Thursday.  The carrier continues to expect its full year adjusted profit to be between $2.25 per share and $3.25.

--Southwest reported a loss of $231 million in its first quarter.  Adjusted losses came to 36 cents per share, worse than expected.  The airline posted revenue of $6.33 billion, also falling short of Street forecasts.

Southwest said it will limit hiring, offer voluntary time off to employees and stop flying to four airports: Cozumel, Mexico; Syracuse, New York; Bellingham, Washington; and George Bush Intercontinental Airport in Houston, where the airline’s major operation is at smaller Hobby Airport.

CEO Robert Jordan said the airline was reacting quickly “to address our financial underperformance” and cope with delayed deliveries of new planes from Boeing.

Shares in American fell about 2% and Southwest shares fell 7%, though part of this was due to the overall messy market tone on Thursday.

--TSA checkpoint numbers vs. 2023

4/25...106 percent of 2023 levels
4/24...105
4/23...106
4/22...106
4/21...107
4/20...108
4/19...105
4/18...106

--General Motors saw a small dip in U.S. vehicle sales in the first quarter, though net income rose more than 25% on strong deliveries of pickup trucks and other higher-profit vehicles.

GM said that while its average sales price per vehicle was down slightly from last year at just under $50,000, pickup sales remained strong, and it’s not seeing the price erosion across its lineup that other companies have experienced.

The automaker said Tuesday it made $2.97 billion for Q1, with revenue increasing 7.6% over the same period a year ago to just over $43 billion.

Adjusted earnings came in at $2.62 per share, beating Street estimates of $2.13.

The better-than-forecast prices also allowed GM to raise its full year net income guidance slightly to a range of $10.1 billion to $11.5 billion, up from $9.8 billion to $11.2 billion.  Adjusted 2024 earnings per share guidance rose to a range of $9 to $10 from $8.50 to $9.50.

The shares rose over 4% on the news.

--Ford Motor reported better-than-expected first-quarter earnings, sending its shares about 2% higher. The company’s EV business is still losing billions, but its commercial operation is operating on all cylinders.

Ford reported earnings of 49 cents a share and an operating profit of $2.8 billion from sales of $42.8 billion.  Wall Street was looking for 43 cents on sales of $42.9 billion.  A year ago, Ford reported earnings per share of 63 cents and an operating profit of $3.4 billion from sales of $41.5 billion.

Ford left its operating-profit guidance unchanged, $10 billion to $12 billion for the full year.

As for Ford’s EV business, called Model e, it lost $1.3 billion in the first quarter, down from a $1.6 billion loss in the fourth quarter of 2023.

Wall Street projects a Model e loss of $5.5 billion for 2024.  Ford believes it will be better than that.

--Tesla cut prices on three of its models last weekend after reporting a sales miss earlier in the month.  The company lowered the price of its Model Y, Model X and Model S vehicles by $2,000.

The price of the Model Y on Tesla’s website is $42,990, while the starting price of the Model X and the Model S are $72,990 and $77,990 respectively.

Elon Musk posted on X that the Model Y would cost $29,490 after a federal rebate and gas savings.

These price cuts were for the U.S. and China. But then Telsa cut prices of some models in Germany and elsewhere in Europe as well.

--The war for electric-vehicle sales intensified as China’s Li Auto, responding to Tesla’s moves, announced price reductions in China.

Li Auto cut prices for all models by up to 30,000 yuan, about $4,100, after first-quarter sales of its MEGA vehicles disappointed. 

In China, sales of electric and hybrid vehicles made up 50.4% of all passenger-vehicle sales in the first two weeks of April, surpassing sales of internal-combustion vehicles, the China Passenger Car Association reported.  Battery-electric vehicle sales grew 20% in 2023.

More than 40 Chinese auto makers cut prices or offered discounts this month after BYD trimmed its prices on major models by 10% to 15% in February. 

Auto makers have shifted investments into hybrid vehicles and are seeing rising labor costs. 

Regarding this last bit, workers at a Volkswagen plant in Tennessee voted to join the United Auto Workers, which could help to close a wage gap between nonunion foreign auto makers in the U.S. and Detroit’s Big Three.

Tesla was expected to report sales declined 4.8% in the first quarter, according to the Street’s consensus.

--So how did Tesla then do when it reported after the close on Tuesday?

First-quarter net income plummeted 55%, but its stock price surged in after-hours trading as the company said it would accelerate production of new, more affordable vehicles.  The company said it made $1.13 billion from January through March compared with $2.51 billion in the same period a year ago.

The market was looking for something, some sign that Tesla was taking steps to stem a 42% slide in the share price just this year and CEO Elon Musk did that in a letter to investors, saying that production of smaller, more affordable models will start ahead of previous guidance.

The smaller models, which apparently include the Model 2 small car that is expected to cost around $25,000, will use new generation vehicle underpinnings and some features of current models.  The company said it would be built on the same manufacturing lines as its current products.  [Which hurts expansion plans for Mexico City and India.]

Musk said he expects production to start in the second half of next year, if not late this year.

But Musk gave few specifics on just what the new vehicles will be and whether they would be variants of current models.  “I think we’ve said all we will on that front,” he told an analyst on the earnings call.

He did say that he expects Tesla to sell more vehicles this year than last year’s 1.8 million.

But the company still appears to be counting on a vehicle built to be a fully autonomous robotaxi as the catalyst for future earnings growth.  The robotaxi is slated to be unveiled on Aug. 8.

In 2019, Musk promised a fleet of autonomous robotaxis by 2020.  Ahh, a bit of a miss.

Tesla reported that first-quarter revenue was $21.3 billion, down 9% from last year as worldwide sales dropped nearly 9% due to increased competition and slowing demand for electric vehicles.

Ex-items, Tesla made 45 cents per share, falling short of analyst estimates of 49 cents.

Gross profit margin fell again, to 17.4% from 19.3% a year ago, after peaking at 29.1% in the first quarter of 2022.

[Reminder.  Tesla’s original plan was to create a premium product with high margins.]

Meanwhile, Tesla is planning to lay off nearly 2,700 workers at its Austin, Texas factory in June, according to a WARN Act, a U.S. labor law that requires employers with more than 100 or more employees to provide 60 days notification in advance of planned closings or mass layoffs to protect workers and their families.  The layoffs start coming June 14.

This is part of the company’s previously announced notice it was layoff off 10% of employees globally.

--Back to the UAW win at Volkswagen’s Tennessee factory, 73% of workers who cast ballots did so in favor of union representation.

The union called the outcome a historic victory, and said it was the first time a southern auto plant outside the Detroit Three automakers has been organized by the UAW.

This is a big deal.  Next month, about 5,000 workers at a Mercedes-Benz plant near Tuscaloosa, Ala., are expected to vote on whether to let in the UAW.

--Caterpillar shares fell 6% on Thursday after the company said it expects sales to fall in the current quarter as demand for its construction equipment eases from last year’s boom.

CAT had benefited from President Biden’s $1 trillion 2021 infrastructure law to upgrade roads, bridges and other transportation infrastructure that sent sales at the company surging early last year.

However, the boom has eased off, and the company also forecast roughly flat sales for the year.  Still, the company posted a rise in quarterly profit due to higher prices, which helped it offset the impact from lingering supply chain constraints and higher steel prices.

Net income rose to $2.86 billion, or $5.75 per share, in the first quarter, from $1.94 billion, or $3.74 per share a year earlier.

--Apple Inc.’s iPhone sales in China fell 19% during the March quarter, according to data from independent research firm Counterpoint Research estimates and Bloomberg, the worst performance for the iPhone there since Covid struck around 2020.

Apple fell to third in the hotly contested market, roughly on par with Huawei Technologies Co.  The market as a whole expanded about 1.5% as local brands including Honor Device Co. and Xiaomi Corp. led growth.

The iPhone weakness is particularly worrisome because the first quarter has the Lunar New Year holiday where Chinese consumption is normally heightened.  Huawei sales climbed almost 70%, according to Counterpoint.

Counterpoint’s research follows that of IDC, which said global iPhone shipments fell almost 10% in the first three months of 2024.

Beijing banned foreign devices in state-backed firms and government agencies. At the same time, consumers are embracing Huawei’s return to prominence on the heels of a made-in-China chip that U.S. sanctions were meant to prevent.

Apple reports earnings May 2.

--Intel shares fell 7% at the open on Friday after the company forecast second-quarter revenue and profit below market estimates on Thursday, as it faces weak demand for its traditional data center and personal computing chips amid efforts to build its contract manufacturing business.

Intel expects second-quarter revenue in the range of $12.5 billion to $13.5 billion, compared with analysts’ average estimate of $13.57bn.  Intel forecast second-quarter adjusted earnings of 10 cents per share, also below expectations.

Enterprises have prioritized spending on advanced and speedy AI server chips, hurting demand for Intel’s central processing units (CPUs), which have been the mainstay chip powering data centers for decades.

But the demand is for graphics processing units (GPUs) useful for AI applications, and CPUs are Intel’s main product.

The company reported total revenue of $12.72 billion in the first quarter, a slight miss vs. consensus.  Intel insists it will be a player in the AI chip game, and at least the PC market is returning to growth after about two years of declines, which benefits the chipmaker.

--IBM reported first-quarter financial results that were in line with Wall Street estimates, while showing signs that the company’s artificial-intelligence strategy is finding strong reception with customers.

Q1 revenue was $14.47 billion, up 1%, and just below consensus of $14.53 billion.  The company reported software revenue of $5.9 billion, up 5.5%, while consulting revenue was $5.2 billion, down a smidge.  Infrastructure revenue was $3.1bn, off 0.7%.

On the so-so consulting revenue, CEO Arvind Krishna said that a “higher for longer” interest-rate environment is making some IT buyers “a touch more cautious” on discretionary projects.

Adjusted earnings were $1.68 a share, above the Street’s view of $1.60.

IBM repeated its previous forecast that full-year revenue growth on a constant currency basis would be in the mid-single digits.

The shares cratered 8% on the less than exciting outlook and stagnant growth.

IBM also announced it had agreed to buy the cloud-software company HashiCorp for $35 a share in cash, or about $6.4 billion, and investors weren’t pleased with this either.

--Texas Instruments Inc. gave a bullish revenue forecast for the current quarter, indicating that a slump in demand for industrial and automotive components may be easing.

Sales in the period will be as much as $3.95 billion, the company said in a statement after the close on Tuesday.  Analysts were at $3.78bn.  Profit will be $1.05 to $1.25 a share vs. consensus at $1.17.

The shares then rose 6% on Wednesday.

Revenue in the first quarter declined 16% to $3.66 billion, marking the lowest level since 2020. Analysts had estimated $3.6 billion.  Profit was $1.20, down from $1.85 a year earlier, but above consensus of $1.07.

The report suggested that customers have begun to resume ordering chips after working through stockpiles of components – a good sign for the likes of TXN, which has a broad customer base across many industries.  Texas Instruments’ chips are used in household electronics, factory machinery and vehicles.

--United Parcel Service reported first-quarter profit above estimates on Tuesday as cost cuts partly offset subdued demand for small-package delivery, sending the shares up 2%.

The company cut 12,000 jobs in January to save $1 billion in costs in 2024, attempting to counter sagging volumes and higher labor expenses as demand normalized following a boom during the pandemic.

UPS reported a 3.2% decline in average daily volumes in its domestic segment and a 5.8% drop in its international segment but said volumes “showed improvement through the quarter.”

To offset lower volumes, UPS is focusing on more high-margin businesses such as small and medium enterprises and healthcare logistics, where revenue hit $10 billion for the first time in 2023.

A new labor contract with the Teamsters union has also been squeezing the Atlanta-based company’s margins.  UPS reported an adjusted operating margin of 8% for the quarter, down from about 11.1% last year.  It expects margins to improve in the second half.

Adjusted profit of $1.43 per share for Q1 was down 35% from last year but above analysts’ estimates of $1.29.  Revenue of $21.71 billion was below consensus of $21.86bn.

--I live across the street from a large Bristol Myers Squibb R&D facility, so I’m always interested in their earnings.  On Thursday the company reported a first-quarter loss as charges related to various acquisitions offset a 5% increase in revenue.  The company also announced plans to save about $1.5 billion in costs by the end of 2025 through measures such as reducing third-party spending and trimming management layers.  It expects the measures to impact about 2,200 employees this year.

Uh oh...layoffs no doubt coming from across the street, and less revenue for the Dunkin’ Donuts in my building.

The shares fell 8% on the news as BMY also slashed its annual adjusted profit forecast to between 40 cents and 70 cents per share, with current consensus at 66 cents.  Bristol said it continues to expect 2024 revenue growth at a rate in the low single digits.

Revenue growth in the quarter was primarily driven by higher sales of blood thinner Eliquis, which Bristol shares with Pfizer.

--PepsiCo reported better-than-expected revenue in the first quarter on strong international demand for its snacks and beverages.

Revenue rose 2% to $18.3 billion, a little higher than the Street’s consensus at $18 billion.

In North America, Frito-Lay revenue rose 2%, while Pepsi beverage sales increased 1%.  Sales were hurt by a recall early in the quarter of Quaker Oats cereal, bars and snacks because of potential contamination with salmonella.  Quaker Foods sales dropped 24% during the quarter.

But the company saw 11% sales growth in Asia Pacific and 10% sales growth in Europe.

Sales grew in Europe despite fewer products on grocery shelves in some countries. Carrefour, one of Europe’s largest supermarket chains, announced in January it was pulling PepsiCo products from store shelves in France, Belgium, Spain and Italy due to unacceptable price increases.  But the two companies resolved the dispute and Carrefour began restocking PepsiCo products in early April.

PepsiCo has leaned heavily into prices increases over the past two years to combat higher ingredient costs.  But the increases have been coming down, up 5% globally during the quarter, while volumes fell 2%.

Net earnings rose 5.6% to $2 billion in the first quarter.  Adjusted EPS came in at $1.61 vs. the Street’s forecast of $1.52.

The shares fell about 2% on the news.

--Google fired about 20 more workers it said participated in protests denouncing the company’s cloud computing deal with the Israeli government, bringing the total number of workers fired in the past week over the issue to more than 50, according to the activist group representing the workers.

A spokesperson for Google confirmed it had fired more workers after continuing its investigations into the April 16 protests, which included sit-ins at Google’s offices in New York City and Sunnyvale, Calif.

CEO Sundar Pichai told employees in a companywide memo that they should not use the company as a “personal platform” or “fight over disruptive issues or debate politics.”

In his memo, Pichai said the company’s openness was a strength but applied to work topics, not politics.

“We have a culture of vibrant, open discussion that enables us to create amazing products and turn great ideas into action,” he said in the memo, which the company posted online.  “But ultimately we are a workplace, and our policies and expectations are clear: this is a business.”

--As for the TikTok ban, it will not suddenly disappear from your phone. 

For years, there have been attempts to ban the Chinese-owned app, including by former President Trump, but the legislation that was signed gives Beijing-based parent company ByteDance nine months to sell the company, with a possible additional three months if a sale is in progress.  If it doesn’t, TikTok will be banned.

But this could play out for far longer than a year...like 2 or 3, as various lawsuits play out, and the Chinese communists aren’t about to give up the algorithms.

So, if this is how you earn your money, keep using it.  But, of course, you know there is a good chance the Chinese are hoovering up your data, despite what the U.S. representatives of the company say to the contrary.

TikTok CEO Shou Zi Chew said in a video posted moments after President Biden signed the bill, “Rest assured – we aren’t going anywhere. The facts and the Constitution are on our side and we expect to prevail again.”

What I worry about is the Chinese government spreading propaganda through the app that influences the 2024 Election. 

[There were reports at week’s end that TikTok owner ByteDance would rather shut down the app than sell it if the company exhausts all legal options to fight a U.S. ban.] 

--Chipotle Mexican Grill posted first-quarter earnings and sales that beat Wall Street expectations and the stock rose 3% at the open on Thursday.

The chain reported $13.01 in earnings and $2.7 billion in sales, up 24% and 14% from the year-ago period, respectively.  The Street’s consensus was for $11.69 in EPS and $2.68 billion in sales.

Chipotle just keeps cranking out the positive results.

“We had another outstanding quarter driven by our improvement in throughput and successful marketing initiatives, including Braised Beef Barbacoa and Chicken Al Pastor, which drove strong sales and transactions,” said CEO Brian Niccol in a statement.

Same-restaurant sales increased 7% from a year ago, driven by both higher transaction volume and larger size of the average check, and the company expects same-store sales to grow by mid-single digits in percentage terms.

Chipotle also continues to expand, opening 47 new restaurants during the first quarter, with plans to open between 285 to 315 new restaurants this year on top of the over 3,400 locations it already runs.

--David Zaslav, the CEO of Warner Bros. Discovery, received $49.7 million in compensation last year, a 26 percent increase from the previous year ($39.3 million), according to a proxy statement filed with the Securities and Exchange Commission.

Warner Bros. Discovery lost $3 billion in 2023, after losses of $7 billion the year before.  Revenue fell 4 percent.

--The film “Civil War” led at the domestic box office for a second week last weekend, for a two-week total of $44.9 million.

Meanwhile, one of the films I want to see but will catch streaming somewhere, “Godzilla x Kong,” is up to a domestic total of $171.6 million through four weekends.

Foreign Affairs, Part II

China: Chinese Foreign Minister Wang Yi cautioned his U.S. counterpart, Secretary of State Antony Blinken, against stepping on China’s “red lines,” as the two met in Beijing, Friday.

Wang opened the meeting with a question which sounded more like a warning: “Should China and the United States keep to the right direction of moving forward with stability or return to a downward spiral?”

Earlier, Wang had warned that both countries could either engage in cooperation or confrontation, and even a “slide into conflict.”

He set out what he called China’s red lines on its sovereignty, security and development and warned the U.S. not to step on them.

“Negative factors in the [U.S.-China] relationship [are] still increasing and building, and the relationship is facing all kinds of disruptions,” Wang said.

“China’s legitimate development rights have been unreasonably suppressed and our core interests are facing challenges,” he said.

While Wang did not specify the challenges, they are clearly the sensitive flashpoints between the two superpowers of the South China Sea, U.S. support for Taiwan, and human rights.

Blinken said Beijing and Washington have a shared responsibility to move ties forward with “active diplomacy,” he said.

But the new aid package just signed by President Biden of course includes military assistance to Taiwan, which China called a “serious violation of the one-China principle.”

The U.S. has also been warning Beijing to stop exporting parts to Russia that helps Moscow make weapons for the war in Ukraine, threatening sanctions.

Blinken then met with President Xi Jinping.  Afterwards, in an interview with CNN, Blinken said the U.S. has seen evidence of Chinese attempts to “influence and arguably interfere” with the upcoming U.S. elections, despite an earlier commitment from Xi not to do so.  Blinken said he told Xi that “any interference by China...is totally unacceptable to us, so I wanted to make sure that they heard that message again.”

Meanwhile, tensions between China and the Philippines continue to increase, with Manila looking to counter Chinese expansionist efforts by bolstering defensive capabilities, both through the purchase of new equipment and strengthened cooperation with allies such as the U.S. and Japan.

Speaking at the opening of the year’s annual joint U.S.-Philippines military exercises on Monday, Philippine armed forces chief General Romeo Brawner Jr. said the drills represent “the essence of unity, collective responsibility and enduring partnership” between the Philippines and the U.S. “and our partners.”

“It is not a partnership of convenience but rather a clear reflection of our shared history, unwavering commitment to democracy and respect for international law in our pursuit of peace and security in the Indo-Pacific region,” he said.

On a totally different matter, China is dealing with massive flooding that has forced over 110,000 to relocate in Guangdong province, state media reported, with numerous deaths (the last figures I saw were for Monday).

Since April 16, sustained torrential rains have pounded the Pearl River Delta, China’s manufacturing heartland and one of the country’s most populated regions, with various weather stations registering record rainfall for April.

The Pearl River basin is subject to annual flooding from April to September, but the region has faced more intense rainstorms and severe floods in recent years as scientists warn that the climate crisis will amplify the extreme weather, as we’ve seen all over the world.

In the provincial capital Guangzhou, a city of 18 million, reservoirs had reached flood limits by Sunday, city officials announced.  In neighboring Guangxi, west of Guangdong, violent hurricane-like winds whipped the region, destroying buildings state media footage showed. 

Local officials called the situation “grim.”

Random Musings

--Presidential approval ratings....

Gallup: New numbers...38% approve of President Biden’s job performance, 58% disapprove; 33% of independents approve (Apr. 1-22). Prior, 40-55, 34.

Rasmussen: 42% approve, 57% disapprove (April 26).

--A new NBC News national poll of registered voters, April 12-16, showed Donald Trump ahead of Joe Biden, 46% to 44%, which was a slight improvement for Biden since a January survey had him trailing 47% to 42%.

Trump’s biggest advantages are among men (53% to 37%), white voters (54% to 37%) and white voters without college degrees (65% to 25%).

Biden’s top advantages are among Black voters (71% to 13%), women (50% to 39%) and Latinos (49% to 39%).

The poll shows the two candidates are essentially tied among independents (Biden 36%, Trump 34%) and voters ages 18-34 (Biden 44%, Trump 43%).

When the ballot is expanded to five named candidates, Biden takes a 2-point lead over Trump: Biden 39%, Trump 37%, independent Robert F. Kennedy Jr. 13%, Jill Stein 3% and Cornel West 2%.

Biden’s overall job approval rating is at 42%, up 5 points since January’s NBC News poll, which showed Biden at the lowest point of his presidency.

Fifty-six percent of voters say they disapprove of the job he has done, which is down 4 points from January.

As for inflation and the cost of living, it tops the list of issues in the poll, with 23% of voters saying they’re the most important issue facing the country.

The other top issue concerning voters is immigration and the situation at the border (22%) – followed by threats to democracy (16%), jobs and the economy (11%), abortion (6%) and health care (6%).

--In a Harvard Youth Poll, a twice-a-year survey that provides one of the most definitive looks at the shifting views of U.S. residents younger than 30, specifically 18-to-29-year-olds, at this point in the 2020 campaign, Biden led Trump among young men by 26 points; but now he leads by 6!

Biden’s lead among young women is 33 points, almost no change from this point in 2020.

In 2020, Biden won by 24 points among voters 18-29, according to the Pew Research Center.  To win reelection, he almost certainly needs to come close to that again this year.

The Harvard poll shows Biden leading Trump 56%-37% among young people likely to vote.  That’s down a bit from the 60%-30% lead the poll found among likely young voters at this point four years ago.

--Voting in the battleground state of Pennsylvania highlighted weaknesses for both Joe Biden and Donald Trump, as Biden struggled with voter turnout and a protest movement and Trump was hit by strong turnout from loyalists to former Republican candidate Nikki Haley.

Biden received 929,798 votes, or 93.1% of the Democratic total, according to official state election data.  Dean Phillips, who dropped out of the race, got 68,523 votes, or 6.9%.  Some 50,000 Democrats wrote in candidates, most of which are expected to be “uncommitted” votes signaling anger at Biden’s support of Israel’s attacks on Gaza.

Trump received 789,155 votes, or 83.4% of the Republican total.  Haley got 156,993, or 16.6%, which is not insignificant.

Democrat turnout in crucial Philadelphia County was also weak.  Biden got 131,298 votes there, compared to 239,492 in the 2020 primaries.  In 2020, Biden received 81.4% of the vote, or 603,790 votes, there.

But Pennsylvania is also going to have an important Senate battle between Democrat incumbent Bob Casey and his Republican challenger, Dave McCormick, both of whom were unopposed in their primaries.

--The Supreme Court’s conservative majority seemed ready to send the criminal case against Donald Trump back to the trial court to draw distinctions between official and private conduct, which could make it virtually impossible for the Jan. 6 case to be tried before the 2024 election.

The high court seems bent on narrowing the scope, while recognizing they should issue a ruling that applies to presidential power generally.

“We’re writing a rule for the ages,” Justice Neil M. Gorsuch said.

Justice Brett M. Kavanaugh also said the court should think about the larger implications of its decision.  “This case has huge implications for the presidency, for the future of the presidency, for the future of the country.”

But then Justice Samuel A. Alito Jr. said that a ruling for Trump could enhance democratic values.

“A stable, democratic society requires that a candidate who loses an election, even a close one, even a hotly contested one, leave office peacefully,” he said, adding that the prospect of criminal prosecution would make that less likely.

“Will that not lead us into a cycle that destabilizes the functioning of our country as a democracy?” he asked.

An infuriating statement, frankly.

Justice Sonia Sotomayor said she had a different understanding.  “A stable democratic society,” she said, “needs the good faith of its public officials.”

--I have little to say about Trump’s hush money criminal trial in Manhattan, except to note that former National Enquirer publisher David Pecker, who was on the stand all week, did make it rather clear that it was “all about the campaign,” and that he used his publication to amplify negative stories about Trump’s GOP rivals, including Ben Carson, Ted Cruz and Marco Rubio.

And then Pecker today admitted he killed stories “to help a presidential candidate.”

I do think this trial can influence the November election at the margins, and it’s at the margins that the election will be decided.

--Joe Biden, in an apparently off the cuff response to a question from Howard Stern during an interview today said he would debate Trump... “I am, somewhere, I don’t know when, but I am happy to debate him.”

--Texas Republican Rep. Tony Gonzales was on CNN’s “State of the Union” Sunday, following the big votes on Saturday, and he called some of his fellow lawmakers “scumbags.”

Gonzales was asked whether Speaker Johnson will survive an effort to remove him from his leadership post.  He had sharp words for some of his colleagues: most notably, Rep. Matt Gaetz, R-Fla.

“It’s my absolute honor to be in Congress, but I serve with some real scumbags,” Gonzales said, alleging that Gaetz sexually assaulted minors “at drug parties.”

The Department of Justice had opened an investigation into Gaetz over various allegations but in 2023 dropped charges against him after prosecutors said there were credibility issues with two key witnesses.  He is still under investigation by the House Ethics Committee.

Gaetz accused Gonzales of lying and called on voters to support his GOP opponent.

Gonzales also criticized Rep. Bob Good, R-Va., for supporting his Republican opponent, Brandon Herrera, a gun rights activist. Gonzales alleged that Herrera is a “known neo-Nazi” and referred to the Ku Klux Klan.

The Republican Party of Texas voted to censure Gonzales last year over his positions on a range of issues, including supporting some gun safety laws following the Uvalde school shooting.

Gonzales on Sunday said more centrist members of Congress are “tired” and “exhausted.”

“For some reason, these fringe people think as if they have the high ground. They do not, I assure you,” he said, adding, “The way you take care of a bully is you bloody their nose.”

Gonzales is a war veteran.  He’s in my Hall of Fame after Sunday’s performance.

--So, speaking of this “fringe” element of the GOP....

Editorial / Wall Street Journal

“The U.S. – and the Republican Party – dodged a geopolitical disaster on Saturday with the House passage of military aid to allies in Europe, the Middle East and the Pacific. But the moment shouldn’t pass without noting the Members who voted against U.S. help for any allies, anywhere, and against replenishing American weapons stocks.

“Fourteen Republicans voted against all four bills on the House floor, including the one that would force a sale of TikTok from Chinese ownership.  Here’s the dishonor roll in alphabetical order: Andy Biggs (Arix.), Lauren Boebert (Colo.), Andrew Clyde (Ga.), Elijah Crane (Ariz.), Matt Gaetz (Fla.), Bob Good (Va.), Paul Gosar (Arizo), Marjorie Taylor Greene (Ga.), Andy Harris (Md.), Thomas Massie (Ky.), Troy Nehls (Texas), Ralph Norman (S.C.), Matt Rosendale (Mont.), Chip Roy (Texas).

“These Members are in heavily Republican districts, so they would be difficult for Democrats to defeat.  But Ms. Boebert and Mr. Good face competitive primaries that could end their destructive Congressional careers.

“The unavoidable meaning of the votes is that these Members don’t believe the U.S. should support allies threatened by authoritarians on the march. Like Republicans in the 1930s who slept while Hitler and Tojo advanced, these Republicans apparently think America can sit out these fights in splendid isolation.  But history suggests that if they prevail, American sons and daughters would eventually have to fight.  Better to help allies who want to help themselves.

“The isolationist caucus lost this round, but this GOP tendency is dangerous. Another 17 Members voted for arms for Israel but not for Taiwan and Ukraine.  Do they want to encourage a Chinese invasion?  Perhaps if Florida is attacked, they’ll awaken to the reality of the world’s growing dangers.”

--An Arizona grand jury on Wednesday indicted seven attorneys or aides affiliated with Donald Trump’s 2020 presidential campaign as well as 11 Arizona Republicans on felony charges related to their alleged efforts to subvert Joe Biden’s victory in the state, according to an announcement by the state attorney general.

Those indicted include former Trump White House chief of staff Mark Meadows, attorneys Rudy Giuliani, Jenna Ellis, John Eastman and Christina Bobb, and top campaign adviser Boris Epshteyn.

Trump was not charged, but he is described in the indictment as an unindicted co-conspirator.

The indictment spells out various ways that Trump and his allies sought to pressure state and local officials to “encourage them to change” the election results.

Steven Cheung, a spokesman for Trump, called the charges against the former president’s allies “another example of Democrats’ weaponization of the legal system.”

--House Speaker Johnson and some of his Republican colleagues ventured to Columbia University on Wednesday to weigh in on the protest movement against Israel’s war against Hamas.  They were met with boos, laughs and pro-Palestinian chants.

Johnson and the lawmakers demanded that Columbia’s president, Nemat “Minouche” Shafik, resign for failing to quickly dismantle the encampments and, in their view, for not doing enough to ensure that Jewish people on campus feel safe.

“As speaker of the House, I’m committed today that the Congress will not be silent as Jewish students are expected to run for their lives and stay home from their classes hiding in fear.”

While Johnson was booed, the students chanted in support of Palestine, including “Free Palestine,” “Stop the genocide” and “From the river to the sea,” a phrase many say constitutes antisemitic speech.

New England Patriots owner Robert Kraft, a Columbia graduate, penned an op-ed for the New York Post on the current environment across many campuses, not just his alma mater’s.

“When I enrolled in Columbia, it was on a full academic scholarship.

“It helped make me who I am today – it allowed me to grow, learn and be successful as I set out into the world.

“Without the opportunity I was given, I would not have been able to attend college and learn from professors that encouraged students to cultivate independent thought and the ability to engage critically with diverse viewpoints.

“Today, the attention and visuals surrounding the hateful protests taking place on Columbia’s campus have been focused on the students, but the students have been taught and empowered by faculty more focused on politics than they are on education.

“These are not the professors I had who exemplified the fundamental principles underpinning the mission of higher education in the United States.

“Those principles were what set our academic institutions apart from the rest of the world and gave America a distinct competitive advantage.

“This is no longer the case.  I do not recognize my alma mater.

“Signs at Columbia University read ‘Go Back to Poland,’ calling for the Jewish community to return to the horrific death camps of the Holocaust.

“They chant ‘Kill all the Jews’ and ‘October 7th 10,000 more times.’

“This hateful rhetoric calling for the death and destruction of an entire population has no place at Columbia and no place anywhere.  Period.

“Students now celebrate and promulgate hatred and divisiveness against a whole people.  And worse, their professors are not only encouraging them, but joining them and partaking in the actions....

“Jewish students have had to endure a level of fear and intimidation that I am not sure any other group in modern times this century has had to face on a college campus spread by people that are meant to protect them, not hate them.

“Addressing this virulent hatred of Jews is not a political issue, but rather a human issue....

“Unchecked faculties have allowed this hate to grow and fester by using their classrooms for espousing personal views instead of educating.

“Their job should not be that of journalists and politicians.  Their job is not to teach students what to think, their job is to teach students how to think.

“To that end, the job of administrators is to manage the faculty, not to stand idly by as their campuses are taken over by a minority of students or to compromise with or negotiate with those violating the rules.”

Hamas and Iran’s Supreme Leader Ayatollah Ali Khamenei publicly applauded the growing number of anti-Gaza war protests and encampments.  A Hamas spokesman said on Wednesday that the Biden administration is violating the rights of students and faculty members and arresting them, “because of their rejection of the genocide that our Palestinian people are being subjected to in the Gaza Strip at the hands of the neo-Nazi Zionists.”

The statement claimed: “Today’s students are the leaders of the future.”

Oh brother.

Khamenei posted on X: “The people of the world are supporting the Resistance Front because they are resisting & because they are against oppression.”

During a CNBC interview on Tuesday, billionaire investor Leon Cooperman, a Columbia University donor, was asked about the demonstrations on campus, and he responded: “many of the college kids have shit for brains,” adding the students were “ignorant.”

--U.S. births declined in 2023 to their lowest level in more than 40 years, continuing a two-decade trend of Americans having fewer children.

Total births for the year fell 2% to 3.59 million, according to preliminary data released Thursday from the U.S. National Center for Health Statistics, a level not seen since 1979, when about 3.4 million U.S. babies were born.

--Federal regulators have discovered fragments of bird flu virus in roughly 20 percent of retail milk samples tested in a nationally representative study, the Food and Drug Administration said in an online update on Thursday.

But regulators say that there is no evidence that this milk poses a danger to consumers or that live virus is present in the milk on store shelves.

It is a bit disturbing, however, at how extensive the bird flu outbreak in dairy cows is.

--People in parts of the American Midwest and South are bracing for the arrival of Brood XIX and Brood XIII, a rare double emergence of periodical cicadas.  We’re talking trillions of out of tune baby carrot-size insects singing their hearts out from Wisconsin to Louisiana, Maryland to Georgia, and many places in between.

The last time these broods co-emerged, the year was 1803, with Thomas Jefferson president.

It really is remarkable that these bugs only crawl out of the ground in roughly 13- and 17-year intervals. We need to teach them how to sing Sinatra and Nat King Cole.  Maybe AI can effort this.

If I had to choose...just one day
To live my whole life through
It would surely be...that Sunday
The day that I met you....

[Nat King Cole... "That Sunday, That Summer"]

---

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 $2350
Oil $83.66

Bitcoin: $63,900 [4:00 PM ET, Fri.]

Regular Gas: $3.66; Diesel: $4.01 [$3.64 / $4.16 yr. ago]

Returns for the week 4/22-4/26

Dow Jones  +0.7%  [38239]
S&P 500  +2.7%  [5099]
S&P MidCap  +2.1%
Russell 2000  +2.8%
Nasdaq  +4.2%  [15927]

Returns for the period 1/1/24-4/26/24

Dow Jones  +1.5%
S&P 500  +6.9%
S&P MidCap  +4.1%
Russell 2000  -1.2%
Nasdaq  +6.1%

Bulls 46.2
Bears 21.5...huge move from 56.5 / 14.5 a week ago...reminder, a contrarian indicator.  [Investors Intelligence]

Hang in there.

Brian Trumbore

---