InvestMacro

By JustForex

The US Stock Indices fell on Monday as investors expected a weak reporting season and negative inflation data for June. Despite a strong labor market, investors are still wary of a recession and waiting to hear from company executives about costs, supply chains, and their views on business conditions over the next few months. “There’s nervousness about earnings season and the CPI report, but I think the market has a sense as to what CPI is going to bring this week,” said Robert Pavlik, senior portfolio manager at Dakota Wealth.

As the stock market closed on Monday, the Dow Jones Index (US30) was down 0.52% and the S&P 500 Index (US500) lost 1.15%. Yesterday the Technology Index NASDAQ (US100) decreased by 2.26%. At the end of the day all three indices were on the plus side.

US consumers see inflation continuing to rise in the coming year but expect a more moderate pace over the long term, indicating that inflation expectations remain reasonably resilient, a New York Fed survey showed on Monday. The Fed is expected to raise rates by 75 basis points at its July 26-27 meeting. Fed futures traders are predicting a prime rate hike to 3.50% by March.

Shares of Twitter Inc fell nearly 10% on Monday as the company prepared to sue Ilon Musk for his attempted rejection of a $44 billion private offering.

Stock markets in Europe mostly fell on Monday. Germany’s DAX (DE30) decreased by 1.40%, France’s CAC 40 (FR 40) lost 0.61%, Spain’s IBEX 35 (ES35) decreased by 0.43%, and only the British FTSE 100 (UK100) closed yesterday in the plus 0.01%.

The euro fell to a 20-year low and came close to parity with the dollar. One of the main problems the ECB is dealing with right now is the so-called “fragmentation” problem. It is when bonding yields of Europe’s northern countries are falling, and yields of peripheral countries are rising. The concern is that tighter monetary policy will increase this difference, leading to an unequal financial position in the general market. This split in views could lead to a stronger market reaction to the ECB’s actions. Most recently, Austrian MPC member Holtzman called for the ECB to raise the rate by 125 points over the next two meetings: 30 points in July and 75 points in September.

The largest pipeline, Nord Stream 1, which transports Russian gas to Germany, began its annual maintenance on Monday, and supplies are expected to be halted for ten days.

On the oil market, the situation remains uncertain. On the one hand, supply shortages on the back of high summer demand are pushing oil prices up. On the other hand, the Fed is aggressively raising interest rates, which leads to an increase in the dollar index. Dollar-denominated goods, including oil, are not usually in demand from foreign buyers when the US currency is rising. As a result, oil prices are very volatile right now.

Yesterday, Asian markets were mostly down. Japan’s Nikkei 225 (JP225) increased by 1.11%, Hong Kong’s Hang Seng (HK50) decreased by 2.77%, and Australia’s S&P/ASX 200 (AU200) ended the day down by 1.14%. Asian stocks are also under pressure on the prospect of further monetary tightening by central banks and the renewed outbreak of COVID-19 in China.

Sri Lanka’s parliament will elect a new president on July 20, its speaker said on Monday. During the meeting of party leaders, it is necessary to ensure the formation of a new all-party government according to the constitution.

S&P 500 (F) (US500) 3,854.47 −44.91 (−1.15%)

Dow Jones (US30) 31,175.52 −162.63 (−0.52%)

DAX (DE40) 12,832.44 −182.79 (−1.40%)

FTSE 100 (UK100) 7,196.59 +0.35 (+0.01%)

USD Index 108.25 +1.24 (+1.16%)

• – Japan Producer Price Index (m/m) at 02:50 (GMT+3);
• – German ZEW Economic Sentiment (m/m) at 12:00 (GMT+3);
• – Eurozone ZEW Economic Sentiment (m/m) at 12:00 (GMT+3);
• – Eurozone EU Economic Forecasts, tentative;
• – UK BoE Gov Bailey Speaks at 20:00 (GMT+3).

By JustForex

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

By ForexTime 

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

By Janet Bednarek, University of Dayton 

Though many Americans may associate airport security with 9/11, it was a wave of hijackings in the late 1960s and early 1970s that laid the foundation for today’s airport security protocols.

During that period, a hijacking occurred, on average, once every five days globally. The U.S. dealt with its own spate of mile-high crimes, convincing reluctant government officials and airport executives to adopt the first important airport security protocols.

The subject of a new Netflix docuseries, hijacker D.B. Cooper emerged as something of a folk hero during this era. While other more violent hijackings might have played a bigger role in prompting early airport security measures, it was the saga of Cooper that captured the imagination of the American public – and helped transform the perception of the overall threat hijackings posed to U.S. air travel and national security.

Incidents become impossible to ignore

The first airplane hijacking happened in 1931 in Peru. Armed revolutionaries approached the grounded plane of pilot Byron Richards and demanded that he fly them over Lima so they could drop propaganda leaflets. Richards refused, and a 10-day standoff ensued before he was eventually released.

That remained a somewhat isolated incident until the late 1940s and 1950s, when several people hijacked airplanes to escape from Eastern Europe to the West. In the context of the Cold War, Western governments granted these hijackers political asylum. Importantly, none of the airplanes hijacked were flown by U.S. carriers.

Beginning in the early 1960s, however, hijackers began targeting U.S. airlines. Most of these individuals were Cubans living in the U.S. who, for one reason or another, wished to return to their native land and were otherwise blocked due to the U.S. embargo against Cuba.

U.S. officials responded by officially and specifically making hijacking a federal crime. Though the new law didn’t stop hijackings altogether, the crime remained relatively rare. When they did occur, they usually didn’t involve much violence.

Officials wanted to downplay hijackings as much as possible, and the best way to do this was to simply give the hijacker what they wanted to avert the loss of life. Above all, airline executives wanted to avoid deterring people from flying, so they resisted the implementation of anxiety-inducing security protocols.

That changed in 1968. On July 23 of that year, members of the Popular Front for the Liberation of Palestine hijacked an El Al flight from Rome to Tel Aviv. Though that 39-day ordeal ended without any loss of life, it ushered in a new era of more violent – often politically motivated – hijackings of international airlines.

From 1968 to 1974, U.S. airlines experienced 130 hijackings. Many fell into this new category of politically motivated hijackings, including what has become known as the Dawson’s Field hijackings. In September 1970, the Popular Front for the Liberation of Palestine hijacked four aircraft, including three belonging to U.S. carriers, and forced them to land at Dawson’s Field in Libya. No hostage lives were lost, but the hijackers used explosives to destroy all four aircraft.

Additionally, and more worrying to U.S. officials, two different groups of hijackers, one in 1971 and another in 1972, threatened to crash planes into nuclear power plants.

Cooper inspires copycats

Amid this dramatic rise in the number of hijackings, on Nov. 24, 1971, a man known to the American public as D.B. Cooper boarded a Northwest Orient 727 flight from Portland, Oregon, to Seattle. Shortly after takeoff, he showed a stewardess the contents of his briefcase, which he said was a bomb. He then instructed the stewardess to take a note to the cockpit. In it, he demanded US$200,000 in $20 bills and four parachutes.

Upon arrival in Seattle, Cooper allowed the other passengers to deplane in exchange for the money and the parachutes. Cooper then ordered the pilot to fly to Mexico but low and slowly – no higher than 10,000 feet (3,048 meters) and under 200 knots (230 mph, 370 kph). Somewhere between Seattle and a fuel stop in Reno, Nevada, Cooper and the loot disappeared out the back of the aircraft via the 727’s aft stairwell. No one knows for sure what happened to him, though some of the money was recovered in 1980.

Cooper wasn’t the first person to hijack an American airliner and demand money. That dubious honor belongs to Arthur Barkley. Frustrated with his inability to get government officials to take seriously his dispute with the IRS, on June 4, 1970, Barkley hijacked a TWA aircraft, demanding $100 million and a hearing before the U.S. Supreme Court. Barkley’s efforts failed, and he ended up confined to a mental institution.

The idea that Cooper might have succeeded, however, clearly inspired several imitators. While it remains uncertain whether Cooper lived to enjoy the fruits of his escapade, none of his imitators did. They included Richard McCoy, Jr., Martin J. McNally and Frederick Hahneman, all of whom successfully parachuted out of the aircraft once they received their ransom payments, only to be eventually caught and punished.

Tightening the screws

In response to the spate of more violent and costly hijackings, the U.S. government established the first anti-hijacking security protocols. Most of them aimed to prevent hijackers from getting on aircraft in the first place. The measures included a hijacker profile, metal detectors and X-ray machines. Specific to Cooper, airlines retrofitted aircraft with a devise known as a Cooper vane that made it impossible to open aft stairwells during flight.

The protocols put in place in the 1970s also laid the foundation for the expansive security measures taken after 9/11. A series of court cases upheld the constitutionality of these early measures. For example, United States v. Lopez, decided in 1971, upheld the use of the hijacker profile.

More importantly, in United States v. Epperson, a federal court ruled in 1972 that the government’s interest in preventing hijackings justified the requirement for passengers to pass through a magnetometer at the airport. And in 1973, the Ninth Circuit Court, in United States v. Davis, declared that the government’s need to protect passengers from hijackings rendered all searches of passengers for weapons and explosives as reasonable and legal.

These rulings upholding early anti-hijacking measures helped create the strong legal grounds for the rapid adoption of the more rigorous security protocols – including detailed identification checks, random pat-downs and full body scans – adopted after 9/11.

The mystery surrounding the fate of Cooper may have afforded him an outsized place in American popular culture, but his crime should also be remembered as one in a consequential wave of hijackings that finally forced the U.S. government, airline executives and airport officials to adopt the first versions of the security measures travelers take for granted today.

About the Author:

Janet Bednarek, Professor of History, University of Dayton

This article is republished from The Conversation under a Creative Commons license. Read the original article.

By JustForex

The US Labor Department reported Friday that US employers added 372,000 jobs in June, about 100,000 more than economists had expected. Meanwhile, the unemployment rate remained at 3.6 percent for the third month. As the stock market closed Friday, the Dow Jones Index (US30) decreased by 0.15% (+1.95% for the week), and the S&P 500 Index (US500) lost 0.08% (+3.13% for the week). The Technology Index NASDAQ (US100) gained 0.12% on Friday (+5.71% for the week). All three indices ended the week in the black.

Economists believe the Fed has kept rates “too low” for too long, and its attempts to catch up now could derail the recovery from last year’s coronavirus pandemic.

The reporting season for the second quarter starts this week. Banks traditionally open the reporting season with their global view of economic activity. Analysts expect weaker reporting for the second quarter than for the first quarter. Also, strategists say the economic slowdown combined with weak corporate earnings could push the S&P 500 down at least another 10%, compounding the losses that have already sent the Benchmark Index down 18% since the beginning of the year. While the Fed has said it is confident of achieving a so-called “soft landing” by lowering inflation without disrupting the economy, some investors believe that the sharp drop in stocks this year indicates that some economic slowdown is already into asset prices.

Elon Musk filed a Form 13D/A announcing his intention to terminate his agreement to buy Twitter at $54.20 per share. The letter cites “material breach of several provisions” of the merger agreement and the potential for “material adverse effect”. Musk expressed concern that Twitter was underreporting the number of spam or bot accounts on the platform and Twitter’s decision to fire two members of management after the deal was completed.

Stock markets in Europe were mostly up on Friday. German DAX (DE30) gained 1.32% on Friday (+0.86% for the week), French CAC 40 (FR 40) gained 0.44% (+0.82% for the week), Spanish IBEX 35 (ES35) was 0.27% cheaper (-1.53% for the week), British FTSE 100 (UK100) was up by 0.10% (+0.38% for the week).

The weak euro and rising inflation are extremely worrisome before new data on consumer prices in European countries. Inflation in more than six Eurozone countries, including Spain, is already in double digits, and the core CPI is at its highest level in decades. Against high inflation, the region’s economic indicators have started to deteriorate rapidly, so the ECB needs to act more decisively, or else the EUR/USD exchange rate will fall below 1.

Russia continues to wage war with Ukraine with no sign of compromise or negotiation, leaving the possibility of a protracted conflict that could keep inflationary pressures alive. And the resignation of British Prime Minister Boris Johnson opens the door to more uncertainty in the UK as the battle for his replacement begins.

Oil closed last week in the negative, despite recovering on Thursday and Friday. But analysts note that futures have seen a decrease in short positions and an increase in long positions. Crude oil markets are still under pressure right now because of concerns about aggressive rate hikes by the Federal Reserve and the impact it could have on the US economy and its energy demand. But US gasoline prices are holding above $4.50 a gallon, with no sign of a drop in demand.

Asian markets traded higher last week. Japan’s Nikkei 225 (JP225) gained 1.65% over the week, Hong Kong’s Hang Seng (HK50) gained 0.16% over the week, and Australia’s S&P/ASX 200 (AU200) was up by 2.11% over the week.

Sri Lanka’s president fled the country after a crowd of protesters stormed the presidential palace in Colombo. Thousands of protesters stormed the president’s home and office, as well as the official residence of the prime minister, on Saturday, speaking out against their failure to address the devastating economic crisis. COVID-19 caused the first blow to the economy of Sri Lanka: tourism has plummeted, and economic indicators have begun to deteriorate rapidly. Rising national debt and high oil prices led to a ban on chemical fertilizer imports last year, damaging agriculture. Then the fuel crisis began, gasoline and gas became rationed, and people could not cook food, without mentioning of going to work, school, etc. The government asked people to work from home and closed schools to save fuel. Overall inflation in the country of 22 million people reached 54.6% last month, and the central bank warned that it could rise to 70% in the coming months. The parliament speaker said Sri Lanka’s president will formally resign on July 13. The prime minister has also said he will resign to allow an all-party interim government to take power.

The Chinese regulator fined Alibaba and Tencent for violating disclosure rules. Under antitrust law, the maximum possible fine in each case is 500,000 yuan ($74,688).

At the end of the week, futures on palladium (+11.86%), natural gas (+5.88%), wheat (+5.59%), sugar (+5.42%), lumber (+4.82%), and corn (+2.5%) showed the biggest gains on the commodities market. Gasoline futures (-6.47%), Brent oil (-4.01%), orange juice (-3.99%), gold (-3.36%), WTI oil (-3.35%) and copper (-2.33%) showed the biggest drop.

S&P 500 (F) (US500) 3,899.38 −3.24 (−0.08%)

Dow Jones (US30) 31,338.15 −46.40 (−0.15%)

DAX (DE40) 13,015.23 +172.01 (+1.34%)

FTSE 100 (UK100) 7,196.24 +7.16 (+0.10%)

USD Index 106.90 −0.24 (−0.22%)

• – Japan BoJ Gov Kuroda Speaks, tentative;
• – UK BoE Gov Bailey Speaks at 17:15 (GMT+3);
• – US FOMC Member Williams Speaks at 21:00 (GMT+3).

By JustForex

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.