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THE DAILY EDGE: 21 AUGUST 2020

U.S. Jobless Claims Rose to 1.1 Million in Latest Week Data indicate layoffs remain elevated as labor market slowly improves

Weekly initial claims for jobless benefits rose by 135,000 to a seasonally adjusted 1.1 million in the week ended Aug. 15, the Labor Department said Thursday.

The report followed others from the government and private firms showing that job gains slowed in July from June, job postings fell this week for the first time since April and several companies are planning more layoffs.

Still, the data show the job market is improving, though more slowly than in the spring.The number of people collecting unemployment benefits through regular state programs, which cover most workers, fell to about 14.8 million for the week ended Aug. 8. That marked the lowest number on benefit rolls since April. And nationally, new hiring is more than offsetting job cuts. (…)

The number of new claims rising last week shows that fresh layoffs are occurring even as the economy broadly is showing signs of recovering from the deep economic downturn caused by the pandemic and the shutdowns aimed at curbing it. (…)

“Initially businesses were recalling a lot of workers as state restrictions were lifted,” he said. “Now businesses are dealing with the reality that there’s a lot lower demand than there was at the start of the year.” (…)

U.S. employers added nearly 9.3 million jobs in the past three months, separate Labor Department data showed. While that is a strong pace of hiring, it hasn’t yet replaced half of the 22 million jobs lost in March and April. And as hiring slows, it becomes more likely that many Americans will be unemployed for a longer period. The unemployment rate was 10.2% in July. (…)

In addition to regular state claims, Thursday’s report showed the number of people applying for special federal pandemic assistance also rose in the week that ended Aug. 15. That program is open to self-employed and other workers who aren’t eligible for state programs. In early August, more than 11 million people were receiving benefits through that program. (…)

Axios’ Dion Rabouin:

The number of PEUC recipients has been over 1 million for four straight weeks and has increased each week. Worse, it’s likely made up of people who lost their jobs before the wave of business closures that hit the U.S. in mid-March.

“The real tsunami is coming,” Mark Zandi, chief economist at Moody’s Analytics, tells Axios. “My guess is at this point hiring in the industries that have been hit hard is going to abate.”

“That leaves us with very little job creation in the rest of the economy but with still high levels of layoffs.”
“I think the labor market is set to start weakening again here, particularly if Congress and the administration don’t get it together and pass more support.”

ECB fears recovery is at risk from a delayed surge in unemployment Surveys suggest that employment is lagging output, with actual and expected declines in employment and income, amid precautionary household saving, weighing on consumer spending

Ottawa eases EI eligibility as part of $37-billion in new income supports

(…) To qualify for regular EI benefits, which are tapped after a job loss, recipients will now need at least 120 hours of insurable work over the previous year. (Under prepandemic rules, it was at least 420 to 700 hours, depending on a claimant’s local unemployment rate.) There is now a floor of $400 in weekly benefits, and minimum coverage of at least 26 weeks. (…)

“This is just too low a bar and will serve as a disincentive for many part-time workers to return to their pre-COVID employment,” Dan Kelly, president of the Canadian Federation of Independent Business, said in a statement. (…)

David Rosenberg:

Canada’s total debt-to-GDP ratio has soared to a record 364 per cent – up 20 percentage points in the past five years and 70 percentage points higher than it was a decade ago. There is a household credit bubble of historic proportions where aggregate debt in this sector is now 102 per cent of GDP – it was 90 per cent a decade ago. And much of this credit used for Canada’s prized asset – residential real estate, where the ratio of total outstanding value to personal disposable income has soared to an unheard-of 436 per cent. It has shot up 100 percentage points just this past decade in what is arguably the biggest housing bubble of all time.

The corporate sector is in a debt bubble of its own – outstanding liabilities are at 75 per cent relative to GDP compared with 68 per cent five years ago and 56 per cent 10 years back. Instead of this money going into business investment to bolster productivity, the proceeds went to buy back stock and provide the illusion of an earnings cycle (earnings and earnings per share aren’t quite the same thing).

(NBF)

FLASH PMIs

Strong expansion in U.S. private sector output in August

U.S. private sector firms signalled a strong upturn in business activity in August, with both manufacturers and service providers registering expansions. Notably, it marked the first rise in service sector activity since the start of the year, while goods manufacturers recorded the fastest increase in production since January 2019.

Adjusted for seasonal factors, the IHS Markit Flash U.S. Composite PMI Output Index posted 54.7 in August, up from 50.3 at the start of the third quarter and signalled a strong increase in output. Moreover, it marked the sharpest upturn in private sector business activity since February 2019.

Driving the overall upturn in output was stronger client demand. Total new business rose for the first time since February and at a solid rate. Manufacturing firms registered a steeper expansion in new order inflows than in July, while service providers signalled a renewed increase in sales. Companies commonly stated that new business growth stemmed from increased marketing efforts and the resumption of client operations. The reopening of economies worldwide also helped to boost new export orders, with foreign sales expanding at the sharpest pace since September 2014.

Meanwhile, increased pressure on capacity and an associated upturn in outstanding business led to a further expansion of workforce numbers across private sector firms in August. The rate of job creation accelerated among service providers, with manufacturers indicating the first rise in staff numbers since February.

On the price front, the rate of input price inflation quickened in August, as firms suggested higher raw material costs had driven the steep increase in operating expenses. Although manufacturers raised their selling prices at a faster pace, the rate of charge inflation among service providers eased amid reports of greater competitive pressures.

Businesses remained optimistic towards the 12-month outlook for output, with the degree of confidence strong overall. That said, positive sentiment dipped slightly from July’s recent high amid concerns surrounding the ongoing COVID-19 pandemic.

The seasonally adjusted IHS Markit Flash U.S. Services PMI™ Business Activity Index registered 54.8 in August, up from 50.0 in July, and signalled the first expansion in service sector business activity since the start of 2020. The rate of growth was the fastest since March 2019.

At the same time, greater client demand and increased marketing activity led to a renewed rise in overall new business. The solid rise in total sales was supported by a sharp upturn in new export orders.

Increased sales and an uptick in backlogs of work reportedly sparked a strong rise in workforce numbers midway through the third quarter. The rate of employment growth was the steepest since February 2019.

Despite a sharp and accelerated increase in cost burdens, competitive pressures led to a softer increase in selling prices.

Firms remained confident of an increase in activity over the coming year, despite the degree of optimism easing slightly from July.

Manufacturers signalled a solid improvement in operating conditions midway through the third quarter, as highlighted by the IHS Markit Flash U.S. Manufacturing Purchasing Managers’ Index™ (PMI™) posting at 53.6 in August, up from 50.9 in July. The overall rate of improvement was the fastest since January 2019.

The upturn was driven by quicker expansions in output and new orders. Many goods producers stated that the resumption of business operations and the reopening of clients had helped to boost sales, with some also noting larger orders being placed by customers. Firms also recorded the first rise in foreign client demand since December 2019.

For the first time since February, manufacturers registered a rise in the level of work-in-hand (but not yet completed) in August. As a result, firms indicated a renewed uptick in employment.

Meanwhile, the rate of input cost inflation accelerated notably in August to the fastest since January 2019. Manufacturers partially passed-on some of their costs to their clients through a solid rise in selling prices.

Finally, business confidence among manufacturing firms picked up in August amid hopes that client demand will continue to increase as economies start to reopen.

Eurozone growth loses momentum in August

August saw a loss of growth momentum across the eurozone private sector, according to provisional PMI® survey data, following a rebound from the coronavirus disease 2019 (COVID-19) related downturn. Both business activity and new orders rose modestly, and at slower rates than in July. The softer overall expansion owed exclusively to weakness in the service sector as growth of manufacturing production quickened. Meanwhile, companies across the single currency bloc continued to scale back workforce numbers.

The flash IHS Markit Eurozone Composite PMI posted 51.6 in August, down from July’s reading of 54.9 and signalling a slowdown in the pace of output growth. July had seen the first expansion of activity in five months amid a rebound following the COVID-19 outbreak and disruption caused by lockdowns across the euro area.

Differing trends were recorded across the two sectors covered during August. Service providers recorded broadly unchanged levels of business activity from those seen in July. On the other hand, manufacturing production rose sharply, with the rate of growth quickening to the fastest since April 2018.

New orders increased for the second successive month, but as was the case with activity the rate of growth slowed midway through the third quarter. Growth of total new business was undermined by a fall in new export orders, itself driven by a sharp decline in new business from abroad at service providers as travel restrictions were reimposed in some countries following rises in COVID-19 cases.

A marked increase in manufacturing new orders for the second month running helped to bring about a stabilisation of backlogs of work in the sector, thereby ending a 23-month sequence of depletion. Overall, outstanding business continued to fall, however, as service providers posted a sharper reduction than in July.

With underlying demand remaining muted and business confidence towards future activity softening from the previous month, companies in the eurozone continued to reduce their staffing levels. Employment decreased for the sixth successive month, although the rate of job cuts softened further from April’s survey record. Falling workforce numbers were evident across both sectors, with manufacturers in particular continuing to lower employment rapidly.

Input costs increased for the third successive month in August. The rate of inflation was the sharpest since before the COVID-19 crisis hit, but remained relatively muted. The rise in input prices was centred on the service sector, while manufacturing input costs were broadly unchanged following more than a year of falling prices.

Companies continued to lower their own selling prices, extending the current sequence of decline to six months. That said, the latest reduction in charges was only slight and the softest in the current sequence of falling output prices. Charges were down across both monitored sectors amid a general lack of pricing power due to the weak demand environment.

By country, growth in Germany remained solid, seeing only a modest slowdown from July. Ongoing improvements in demand helped to support a rise in business confidence to the strongest in two years. That said, firms continued to lower their staffing levels.

Meanwhile, growth in France suffered a loss of momentum following a strong rebound in the previous month. Modest rises in output and new orders were recorded, while new export business decreased. The rate of job cuts accelerated slightly.

While the two largest eurozone economies remained in growth territory, outside the ‘big-2’ output decreased in August. That said, the contraction was only marginal. New orders also fell slightly, while companies reduced employment at a solid pace that was unchanged from that seen in the previous month.

Japan: Private sector downturn persists in August

Flash Composite Output Index, Aug: 44.9 (Jul Final: 44.9)

Flash Services Business Activity Index, Aug: 45.0 (Jul Final: 45.4)

Flash Manufacturing Output Index, Aug: 44.7 (Jul Final: 43.9)

The headline au Jibun Bank Japan Manufacturing Purchasing Managers’ Index™ (PMI)® rose from 45.2 in July to 46.6. However, by remaining below the neutral 50.0 mark, the latest reading signalled a further sharp deterioration in the health of the manufacturing sector. Production and new orders fell further at steep rates, albeit slower than in July. Job shedding continued in August, but at a softer rate. Business confidence slipped to the weakest for three months.

The au Jibun Bank Flash Japan Services Business Activity Index edged down from 45.4 in July to 45.0, indicating a further sharp decline in output across the service sector. New business inflows contracted again, with the rate of reduction accelerating to a substantial pace. External demand continued to decline. The amount of incomplete work consequently fell again. Service sector employment shrank for a sixth straight month.

Demand continued to be adversely affected by subdued trade flows and social distancing measures. New orders fell sharply in August, accompanied by a substantial drop in export sales. The downturn remains broad-based across the manufacturing and services sectors, with the latter continuing to lead the decline midway through the third quarter.

The prospect of a solid recovery remains highly uncertain as Japanese firms were pessimistic about the business outlook on balance during August. Rising unemployment may also hit domestic household income and spending in the months ahead.

U.S. Listing Prices Up 10.1% Compared to Last Year Buyers should expect hot competition amid inventory shortages, according to realtor.com

In the week ending Aug. 15, the median listing price in the U.S. stood at $349,950, 10.1% higher than it did at same time last year and the first time that the pace of price growth has hit double digits since January 2018, the online real estate portal said. (…)

An increasing number of would-be buyers are entering the market, looking to upgrade their homes to include features such as more space, home offices and backyards, a result of the additional time people now spend at home and working remotely amid coronavirus lockdowns. (…)

Housing stock was down 36% annually last week, and though some sellers are returning to the market, buyers are increasingly outnumbering them, keeping inventory levels down, the report said.

The number of new listings coming to the market last week was down 11% from last year. The metric had improved the week previously, but has lost some momentum, the report said. (…)

Active Listings of Homes For Sale Keep Declining

RESTAURANT NEWS

Since the week ending June 28 the industry’s recovery remains stagnant. July’s comp sales were -15%, traffic -20%. While there is still a lot of ground for sales to cover before fully recovering, the recent pace of improvement suggests it probably will take a long time to get there. (Black Box Intelligence)

AIRLINE NEWS

According to trade group Airlines for America’s data:

As of mid-August, domestic passenger volumes are still down 70% from a year ago; international travel is down 88%.
The average domestic flight is 47% full, vs. 88% a year earlier.
About 717,000 people passed through TSA checkpoints per day in mid-August, vs. 95,000 in mid-April and more than 2 million per day pre-COVID.
Airlines’ operating revenues plummeted an average of 86.5% in the second quarter.

Bank of America analysts are sounding a note of caution: “We are only a few weeks away from moving out of peak leisure travel season, and into a more business-heavy period.”

“With corporate volumes not moving meaningfully off of trough levels, we believe there could be risk to domestic volumes as we move into September.” (Axios)

Fingers crossed Pfizer (PFE) and BioNTech (BNTX) say their lead coronavirus vaccine candidate triggered a strong immune reaction and they could seek regulatory review as early as October. If approved, they currently plan to supply up to 100 million doses worldwide by the end of 2020, and approximately 1.3 billion doses by the end of 2021. Johnson & Johnson (JNJ) meanwhile, is preparing a 60,000-person late-stage trial of its COVID-19 vaccine. (MarketWatch)

THE DAILY EDGE: 20 AUGUST 2020

Next Steps on Stimulus Package Divide Both Parties Senate GOP leaders are trying to rally support for a new, smaller aid bill, while some House Democrats want to vote this weekend on extending unemployment benefits

(…) Mr. McConnell told lawmakers on a call Tuesday he didn’t plan to hold a vote on the skinny bill next week to avoid any overlap with the GOP convention, which Republicans want to occupy center stage next week. (…) Voting on a new proposal would give the most vulnerable Senate Republicans up for re-election in November an action to highlight to voters, but it appears unlikely to break the gridlock that stymied recent negotiations among congressional Democrats and the White House. (…)

On Tuesday, a group of centrist Democrats were circulating a letter to Mrs. Pelosi and House Majority Leader Steny Hoyer (D., Md.) urging them to hold a vote Saturday on legislation to extend federal jobless benefits. The chamber is already scheduled to convene Saturday to vote on a bill that would prohibit operational changes to the Postal Service until well after the election and give $25 billion in additional funding to the agency.

A senior Democratic aide said there wasn’t currently a consensus among House Democrats around what kind of additional coronavirus aid should be voted on, and leaders hope to keep the focus Saturday on the Postal Service. (…)

If Congress and the White House can’t reach an agreement over a new stimulus package this summer, the negotiations could be combined with discussions over a spending bill that will be needed after the government’s funding runs out at the end of September.

And after many ordinary Americans’ funds will also have run out.

Delinquencies as % of Total Loans

Fed advances policy review on ‘very elevated’ uncertainty Policymakers warn about impact of coronavirus outbreaks and waning fiscal stimulus

Fed Sees Need for Additional Support but Is Vague on Timing Federal Reserve officials said at their meeting last month they expected the economy would require greater support recovering from the coronavirus pandemic but were hazy about when they should deploy their tools

Minutes from the Fed’s July 28-29 meeting released Wednesday showed officials believed more government spending would be needed to prevent a longer or deeper downturn amid difficulties states have faced suppressing the virus.

A number of officials also believed more stimulus from the Fed could be required, the minutes said. With interest rates already cut to near zero, Fed officials could do this by providing more specifics about how long they will keep rates low—including by describing an inflation threshold and various labor market conditions that would warrant withdrawing any stimulus.

The minutes didn’t offer strong signals about the timing of such a move, saying only that a number of officials believe more explicit guidance would be “appropriate at some point.” (…)

Officials are preparing to wrap up a yearlong review by adopting an approach of making up for periods of low inflation by seeking subsequent periods of somewhat higher inflation. The practical effect is it will be a long time before they raise interest rates. (…)

The minutes indicated many officials don’t currently see a need for a new tool by which the central bank would cap yields on short- and medium-term Treasury securities by committing to buy whatever amounts are needed to do so. (…)

U.S. SALES MANAGERS REPORT A FURTHER DECLINE IN PROFITS, SALES AND JOBS IN AUGUST

Panelists responses to the question of sales performance were not positive in August, although the Index moved a full 5 points towards the 50 “no change” level. The Sales index is now way above the all-time low level seen in May of 34.3, recording an index level of 48.8 in August, no longer very far from the 50 level. But it should be remembered that this positive looking improvement (a fall in the rate of decline) relates to sales activity relative to that of the previous month. A bad month followed by a slightly less bad month will produce a positive looking result, but does not suggest an increase in sales levels, or economic activity in general.

The Staffing Index is of considerable significance this month, as (unlike the Sales Growth Index) it compares staffing levels in August this year with levels seen last year. The Staffing Index remains deep in negative territory, with few respondents appearing to have need of more people, and most making do with fewer employees than a year ago.

In general, panelists report an economy slowly re-opening and ready to produce, but still waiting for the consumer demand that makes up a sizeable proportion of overall economic activity in the United States.

UNITED STATES: STAFFING LEVELS INDEX

Cass Transportation Index Report July 2020

The Cass Freight Index showed that sequential volume improvement continued in June but still remains well below year-ago levels and also below where we were in the first quarter of the year. According to carriers on second quarter earnings calls, July was better than expected in the trucking market, both from a rate and demand standpoint. Rail traffic has also continued to march higher off the bottom at a faster pace than the Cass Freight Index (rail is only a small part of this index). Everything in the freight world, although mostly still below year-ago volume levels, seems at least to be moving in the same direction – up.

Cass Freight Index – shipments are sharply below previous years

Note that this doesn’t include a likely much higher number of small businesses that are
permanently closing but not formally going bankrupt. Sometimes creditors are willing to
write off losses when the legal recovery process would cost even more. But those closures
still represent jobs lost and dreams crushed. (Mauldin)

The U.S. recorded 44,000 new COVID-19 cases Wednesday, up from the prior day’s 35,000, but the seven-day average of new cases remains below recent totals.
Germany recorded more than 1,000 new coronavirus cases for a third straight day, with the number of infections near Tuesday’s four-month high. Cases increased by 1,586 in the 24 hours through Thursday morning, compared with a gain of 1,420 a day earlier and 1,693 on Tuesday, according to data from Johns Hopkins University.
In France, new infections totaled 3,776 over the past 24 hours, the government’s health office reported Wednesday, the largest daily jump since May 6. Deaths increased by 17 to 30,468.

New German infections exceeded 1,000 for third day

Just one in seven parents said their children would be returning to school full time this fall, but four in five parents said they would have no in-person help educating and caring for them. (Morning Consult)

(NBF)

China and U.S. to Double Number of Weekly Flights

China and the United States agreed to double the number of scheduled passenger flights operated by each other’s airlines to eight a week in a move to ease a standoff between the world’s two largest economies on travel restrictions amid the pandemic.

The U.S. will allow four Chinese airlines flying to American cities to operate a combined eight weekly round trips, up from the current four, the Transportation Department said Tuesday. China’s civil aviation regulator issued a similar ruling concerning U.S. carriers.

The accord brings the number of scheduled flights between the two countries to 16 a week. Before the pandemic, Chinese and U.S. airlines operated about 300 weekly round-trip scheduled passenger flights between the two countries.

Trudeau Outlines ‘Expansionist Strategy’ With Freeland On Board

(…) The moves suggest Trudeau isn’t in any rush to reverse the kind of spending that has already driven the nation’s budget gap to 16% of economic output this year — the highest deficit since World War II. While the pandemic has been devastating, it also offers up an “unprecedented” opportunity for a long term recovery plan and to fill “gaps” in public health and social safety nets exposed by the pandemic, Trudeau told reporters.

“This is our moment to change the future for the better,” the prime minister said. “We can’t afford to miss it because this window of opportunity won’t be open for long.”

In Freeland, Trudeau has found an ally on aggressive fiscal policy, but someone with enough political clout in cabinet to maintain discipline on how the money is spent. (…)

Freeland on Tuesday endorsed the idea of an ambitious government plan. “This is a once in a lifetime challenge for our whole country and our commitment as a government is to do whatever it takes to support Canadians as we get through that challenge,” she said at the same press conference. The government wants “to turn this tremendous challenge into a fabulous opportunity for our country.”

Canada is poised to see budget deficits well in excess of C$100 billion for at least one more year. Economists see Canada’s budget gap at about that level in 2021 without new measures. The deficit for the current year is projected at C$343 billion — more than six times the previous all-time record. (…)

Trudeau said he will deliver a so-called Throne Speech in on Sept. 23 to outline the parameters of his new agenda, which is expected to include measures to bolster the country’s social safety net, such as revamping unemployment insurance, and more money for green infrastructure.

Without a majority of seats in parliament, he will need the support of at least one of the three opposition parties to press ahead, with the most likely partner being the left-of-center New Democratic Party.

Inflation in Canada Unexpectedly Falls Back to Near Zero

The consumer price index increased only 0.1% from the same month a year earlier, Statistics Canada reported Wednesday from Ottawa. That’s a reversal from last month when inflation turned positive on higher gas, food and shelter prices. On a monthly basis, prices were flat, and seasonally adjusted actually fell 0.1%.

Core inflation readings — seen as a better measure of underlying price pressure — ticked down to 1.63%, from 1.7% a month earlier. (…)

EQUITIES

The most benchmarked index in the world finally set a new high, ending the shortest bear market in history. It did so with only a single sector following it to a new high, and with odd readings and divergences. Relatively few tech stocks are above their medium-term averages, and even fewer industries, sectors, and countries are in solid uptrends. When the S&P reaches its first new high in months with only 1 or 2 sectors following suit, its future returns were mediocre with only one exception (1995). (…) It’s also odd to see a new high in an index like the S&P 500 with so few of its industries in solid uptrends. Only 57% of industries have a rising 200-day moving average. Even worse, only 55% of sectors have a rising average, and a pathetic 23% of countries do. There have only been three times in 30 years when the S&P hit a high and no more than 60% of industries, sectors, and countries were in solid uptrends. (SentimenTrader)

Yesterday, Lowry’s Research saw weak Breadth and Demand with total NY Volume again well below its 30-DMA, “suggesting a lack of conviction by bulls and bears, alike. Meanwhile, the Percent of NYSE Stocks Above 10-DMA fell to 41.76% as the short-term condition continues to weaken.”

SPY VS SPY EQUAL-WT

NDX VS NDX EQUAL-WT

US share buybacks almost cut in half by pandemic Provisional figures put the quarterly total at $89.7 billion, down 46% year-on-year, on pace for the lowest quarterly total since Q1 2012.

So, who’s doing the buying now?

Does Robinhood’s Design Make Trading Too Easy? The Silicon Valley company has turned the complex process of trading stocks into a simple, free swipe across a screen. But some researchers say the app’s simplicity nudges inexperienced investors to take bigger risks.

Well, at some point, many will discover the swipe does not really come free…

Barstool’s Portnoy Rattles Investors Saying He’s Sick

(…) Portnoy said he hasn’t left his bed in 40 hours. “Do I have Covid? Maybe,” he said in the video, which was posted to social media. “I’m just going to get better, so I can come back and do what I do, which is to entertain you.” (…)

Portnoy posted the video to explain to his followers why he didn’t post his live streamed day trading this morning. During quarantine, millions of Americans stuck at home with little to do have turned to investing and trading for the first time, including Portnoy, whose live stream show reaches millions of his followers. He tweeted last week about his interest in crypto. (…)

PANDEMONIUM

Trump calls for boycott of Goodyear tires after company bans political attire in the workplace

U.S. President Donald Trump on Wednesday called for a boycott of Ohio-based Goodyear Tire & Rubber Co. in response to a company policy that has deemed political attire, including that of the Trump campaign, unacceptable for the workplace.

“Don’t buy GOODYEAR TIRES – They announced a BAN ON MAGA HATS,” the Republican President tweeted, referring to his slogan, “Make America great again,” that often features on baseball caps worn by his supporters.

White House Press Secretary Kayleigh McEnany said Mr. Trump was concerned that the company allowed attire supporting the Black Lives Matter movement and other issues related to equality, but not the Blue Lives Matter group backing police officers, or MAGA. (…)

Goodyear said, it asks employees to avoid “workplace expressions in support of political campaigning for any candidate or political party as well as similar forms of advocacy that fall outside the scope of racial justice and equality issues.” (…)

Trump’s call for a Goodyear boycott might mean new tires for the presidential limo

FYI, Goodyear had about 15% of the U.S. tire market in 2019, in third place after Japan’s Bridgstone (27%), France’s Michelin (27%) and ahead of Germany’s Continental (13%) according to Statista. “MAGA!”

White House press secretary leaves open door to Trump rejecting results of election

“The only way we can lose, in my opinion,” he [Trump] said, intently, “ … is if cheating goes on.” (…)

In focusing so insistently on allegations of fraud, he has convinced many of his supporters that it occurs at significant scale and poses a persistent threat to our electoral system. According to his press secretary, Kayleigh McEnany, Trump himself actually believes his dishonest claims.

“The president said this week the only way we lose this election is if the election is rigged,” a reporter asked McEnany at a briefing Wednesday. “It begs the question: Does the president believe there’s any circumstance under which he can lose the election fairly?”

“The president believes he’s done a great job for the American people, and he believes that will show in November,” McEnany responded. “He believes that voter fraud is real, in line with what we see all across the country, particularly with mail-in ballots which are prone to fraud.”

“Is the president saying if he doesn’t win this election, that he will not accept the results unless he wins?” another reporter asked later.

“The president has always said he’ll see what happens and make a determination in the aftermath. It’s the same thing he said last November,” McEnany said, presumably referring to his assertions about November 2016. (…)

Trump Says QAnon Followers Are People Who ‘Love Our Country’ When asked, the president did not question the truth behind the claims of the QAnon conspiracy movement. Instead, he offered his help.

President Trump on Wednesday offered encouragement to proponents of QAnon, a viral conspiracy theory that has gained a widespread following among people who believe the president is secretly battling a criminal band of sex traffickers, and suggested that its proponents were patriots upset with unrest in Democratic cities.

“I’ve heard these are people that love our country,” Mr. Trump said during a White House news conference ostensibly about the coronavirus. “So I don’t know really anything about it other than they do supposedly like me.” (…)

FBI document warns conspiracy theories are a new domestic terrorism threat

The FBI intelligence bulletin from the bureau’s Phoenix field office, dated May 30, 2019, describes “conspiracy theory-driven domestic extremists,” as a growing threat, and notes that it is the first such report to do so. It lists a number of arrests, including some that haven’t been publicized, related to violent incidents motivated by fringe beliefs.

The document specifically mentions QAnon, a shadowy network that believes in a deep state conspiracy against President Trump, and Pizzagate, the theory that a pedophile ring including Clinton associates was being run out of the basement of a Washington, D.C., pizza restaurant (which didn’t actually have a basement).

“The FBI assesses these conspiracy theories very likely will emerge, spread, and evolve in the modern information marketplace, occasionally driving both groups and individual extremists to carry out criminal or violent acts,” the document states. It also goes on to say the FBI believes conspiracy theory-driven extremists are likely to increase during the 2020 presidential election cycle.

Alexei Navalny in a coma after suspected poisoning Russian dissident’s spokeswoman says the toxin was put in his tea on a flight to Moscow.