>>> Stoxx 600 Pre-Market Indications

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  • Orange (FTE TH) -0.9%
  • Lufthansa (LHA TH) -1%
  • Grifols (OZTA TH) -1%
  • Vestas (VWSB TH) -1%
  • TUI (TUI1 TH) -1.1%
  • Aixtron (AIXA TH) -1.3%
  • Telefonica (TNE5 TH) -1.3%
  • Unibail (1BR1 TH) -1.4%
  • Puma (PUM TH) -1.9%

>>> What to look at today - 30th of December 2022

Asian equities rose while European and US share futures fluctuated on the final trading day of a brutal year in financial markets that has dragged stocks and bonds to their worst annual run in more than a decade. Equity benchmarks in Japan, Australia and China gained ground while contracts for the S&P 500 wavered, taking the shine off the best day this month for the index on Thursday when it jumped 1.7%. The dollar stemmed a decline from the prior session, Treasury yields inched higher and the yen rallied as the Bank of Japan unveiled a third day of unscheduled bond purchases. The uncertain direction sapped hopes for a stellar rally to close out 2022 — a year when inflation reasserted itself to wipe a fifth in value from global stocks, the worst run since the financial crisis. Few regions were spared the pain with Asian stocks falling more than 19% this year, a shade off the decline for global equities. Bonds lost 16% of value, the biggest decline since at least 1990 for one leading measure, as central banks raced to slow rising consumer prices by hiking interest rates around the world. Nasdaq 100 futures also whipsawed after the benchmark jumped 2.5% Thursday. The index has lost a third of value this year as tech stocks emerged as some of the most vulnerable to rising rates. Concerns about the global fallout from rising Covid-19 infections in China were partly eased when Italy said it didn’t find any new strains of the virus in recent Chinese arrivals. Italy and the US this week imposed testing requirements for airline passengers arriving from China as a wave of inflection grips the world’s most populous nation. oil rose after a three-day run of declines on worries about a rise in crude stockpiles and concerns that rising Covid-19 infections in China would slow demand in one of the world’s top oil importers.  US After Hours Another quiet after hours session; ORIC +5.1% higher as Pfizer discloses stake; HSII +1.5% on deal to acquire Atreus.

Nikkei +0.00% Hang Seng +0.54% CSI +0.53% Shanghai +0.53% Shenzen +0.40%

Eur$ 1.0656 CNH 6.9738 CNY 6.9585 JPY 132.69 GBP 1.2044 CHF 0.9235 RUB 73.9690 TRY 18.7087 WTI$ 78.78 +0.30% Gold 1,816 +0.06% BTC 16,540 -0.30% ETH 1,193 -0.10%

S&P -0.42% Nasdaq -0.54% EuroStoxx -0.47% FTSE -0.26% Dax -0.39% SMI -0.52%

Macro :
- Yardeni Says Stock Bulls Have ‘Narrow Path’ to Victory in 2023
- Pele, Brazilian Who Made Soccer the Beautiful Game, Dies at 82

Keep an eye on :
- ASC LN : Asos Is Worst UK Stock in 2022 as Consumer Crisis, Inflation Hit
- BPSO IM : Banca Popolare di Sondrio Sells €242.5 Million of Bad Loans
- BORR NO : Borr Drilling Gets Contracts for Drilling Rigs Worth About $310m
- DKSH SW : DKSH Holding to Sell 25% Stake in Bovet Fleurier to Pascal Raffy
- ENEL IM : Enel Finalized Sale of Electricity Distributor in Brazil
- FXPO LN : Ferrexpo Says Kostyantin Zhevago Prepared to Leave Board
- TIT IM : Telecom Italia Network Deal Negotiations to Extend Into 2023

(ZH) California Lawmaker Introduces Bill To Legalize Magic Mushrooms, Other Psyc

California Lawmaker Introduces Bill To Legalize Magic Mushrooms, Other Psychedelics

A Democratic lawmaker in California introduced a bill Dec. 19 to decriminalize the personal use of plant-based psychedelic drugs—such as magic mushrooms, mescaline, and psilocybin—outside of school grounds for people 21 and up.
“Criminalizing drug use and possession accomplish absolutely nothing other than to fill up our prisons with people who are addicted,” said Sen. Scott Wiener (D-San Francisco) outside of the state Capitol Dec. 19.
“We need to treat drug use as a health issue instead of a criminal one.”
Wiener, the author of Senate Bill (SB) 58, said that psychedelics—a type of hallucinogenic drug—“have huge promise” when it comes to helping those suffering from mental health issues such as opioid addiction, depression, anxiety, and PTSD.
Sen. Scott Wiener speaks in front of the California State Senate on Aug. 31, 2022. (Screenshot via California State Senate)
SB 58 will also allow the cultivation, transfer, or transportation of fungi or other plant-based materials that can serve as ingredients for these drugs, according to its text.
The bill may be heard on or after Jan. 16, 2023.
These drugs affect how people see, hear, taste, smell, or feel, and can radically affect the user’s mood and thought, sometimes resulting in psychosis, according to existing academic studies.
One veteran, Michael Young, said at the press conference he came home to the United States with severe PTSD after 10 years of counter-terrorism missions in Afghanistan and Pakistan.
“Psychedelics help heal the unseen scars from my years of service in the war on terror,” he said.
“This sacred medicine showed me how to put myself back together again.”
According to the National Institute on Drug Abuse, hallucinogens “can cause users to see images, hear sounds, and feel sensations that seem real but do not exist.” The effects of ingesting psychedelics generally begin within 20 to 90 minutes and can last up to 12 hours in some cases or as short as 15 minutes in others, according to the institute.
Magic Mushrooms sit in a fridge in London, England, on July 18, 2005. (Daniel Berehulak/Getty Images)
SB 58 is a comparably moderate version of a previous bill Wiener proposed but failed to pass in 2021, which would have legalized not only plant-based but synthetic psychedelics, such as MDMAs, LSD, and ketamine.
Although it is rare for someone to die from an LSD overdose, “severe injury and death has occurred as an indirect result of using LSD, in that accidents, self-mutilation, and suicide have occurred … when people are largely unaware of what they are doing,” according to the American Addiction Centers.
The Heroic Hearts Project—a co-sponsor of SB 519 of 2021 and psychedelic advocacy group for veterans struggling with PTSD—said “psychedelic treatment options provided these veterans with a level of relief and healing that many had come to believe was no longer possible.”
Several law enforcement groups opposed the 2021 bill, including the California College and University Police Chiefs Association, California District Attorneys Association, California Narcotic Officers’ Association, California Police Chiefs Association, California State Sheriffs’ Association, California Statewide Law Enforcement Association, and Peace Officers’ Research Association of California, among other organizations.
The Peace Officers’ Research Association of California “believes many of the penalties related to controlled substances work as a deterrent or a reason for individuals to get the treatment they need to turn their lives around,” according to a statement of opposition submitted to the state Assembly Health Committee in July 2021.
“Furthermore, [the association] believes this bill will cause an increase in the selling and personal use of drugs, which will lead to greater crime and arrests in our communities,” the statement read.
Under the CURES Act, signed into law in 2016 to expand medical innovations, many hallucinogenic substances—including LSD, DMT, mescaline, and psilocybin—are classified as Schedule 1 substances, meaning they pose a high risk of abuse and are not accepted for medical use.
In September, the San Francisco Board of Supervisors unanimously passed a motion calling for law enforcement to deprioritize investigations and arrests of adults found in possession of psychedelics. This was a month after an Oakland church using magic mushrooms as its form of communion was raided by police.

FT : Wealth managers grapple with one of their worst years in a century

Wealth managers grapple with one of their worst years in a century
Inflation presents a challenge to preserving wealth in real terms that has not been faced in decades

Wealth managers are grappling with one of their worst years in a century after high inflation and a sell-off in stocks and bonds hammered returns.

The threat of stubbornly higher inflation presents a challenge to preserving wealth in real terms that has not been faced in decades, while the pain in markets over the past 12 months has undermined conventional wisdom around balancing portfolios between equities and fixed income.

“This year is one of the most significant years of wealth destruction in nearly 100 years,” said Renaud de Planta, who leads Pictet, the 217-year-old Swiss partnership, which stewards $635bn. 

“Looking at it rather simply, many private investors could have lost more than a quarter of their real inflation-adjusted wealth,” said de Planta, citing the example of a portfolio split evenly between bonds and stocks.

Standard portfolios have suffered as both stock and bonds recorded double-digit drops this year. The two asset classes normally move in opposite directions and provide a counterbalance to each other.

Stéphane Monier, chief investment officer at the $300bn Swiss private bank Lombard Odier, said 2022 was one of only three years since 1926 in which both stocks and bonds had a “significant negative return”. 

The MSCI World Index tracking global stock markets is down 14 per cent since January in US dollar terms, while the Bloomberg Global Aggregate fixed income benchmark is down by a similar amount.


A typical UK wealth management client will have seen their portfolio lose nearly 20 per cent in inflation-adjusted terms in the year to December 15, according to research by Asset Risk Consultants (ARC), which tracks the returns of strategies run by more than 100 large UK wealth managers.

Setting aside inflation, typical wealth management portfolios lost 10 per cent this year, ARC said.

“With falls in almost all asset classes, the notable exceptions being energy and commodities, there have been very few opportunities for investors to avoid losses,” said Graham Harrison, managing director at ARC. “For investors accustomed to low and stable inflation, its impact on the real value of their wealth may not have been immediately apparent.”

Managers have tried to find assets that are not correlated with stocks and bonds.

Monier said hedge funds, particularly using strategies than benefit from volatility, have helped boost returns this year. Other managers say they have turned to commodities exposure and gold.

For Lombard Odier, the parallel falls in stocks and bonds have reinforced a shift away from bucketing clients into a range of boilerplate portfolios based on their tolerance for losses.

Conventional wisdom holds that bond-heavy strategies will lose less during a market downturn. However, many fixed-income dominated portfolios have done worse this year than equity-heavy options. The highest inflation in decades and the prospect of interest rates rising further is a particularly toxic combination for bonds.

Monier said his firm now prefers to design bespoke investment strategies. For example, he said, a tech entrepreneur who had just sold a company for $250mn might look for an annual income of $3mn and want to buy a multimillion dollar property in Florida. The bank could pay the income from a portfolio of government bonds, while putting some cash to work in higher-risk investments to build up to the property purchase.

If investors have a better sense of what they want from their investment strategy, managers think they will be less likely to sell assets during a downturn.

“In a financial crisis, the typical client who is not a financial professional will be disappointed at having lost 8 per cent and take their loss in cash, and miss the rebound,” Monier said.

A spell of rocky performance also requires managers to spend plenty of face time with clients to prevent panicked moves. “There is a lot more engagement with clients and a lot more explanation about what’s happened, why it’s happened and what changes we’ll make when it’s appropriate,” said Peter McLean, director at Stonehage Fleming, the London-based multifamily office, successor firm to the private bank run by the Fleming dynasty, which included James Bond author Ian.

Markets tend to cover their losses over the longer run but the sudden spike in inflation presents a particular challenge, one they have not had to face in earnest in decades. The industry is based on preserving the real buying-power of assets. Inflation running close to 10 per cent means managers start the year far behind, and need to deliver much better performance just to break even.

“There is clearly a higher inflation risk that we have to contend with now compared to the decade before the pandemic,” McLean said. “It is very difficult over the shorter term to keep up.”

WSJ : American Spy Plane Has Uncomfortably Close Encounter with Chinese Jet Figh

American Spy Plane Has Uncomfortably Close Encounter with Chinese Jet Fighter
U.S. says Chinese jet flew within 20 feet of American aircraft, forcing ‘evasive maneuvers’

HONG KONG—The U.S. military said a Chinese jet fighter conducted an unsafe maneuver while intercepting an American spy plane in international airspace over the South China Sea last week.

During the Dec. 21 encounter, a J-11 fighter operated by a Chinese navy pilot flew “in front of and within 20 feet of the nose” of a U.S. Air Force RC-135, forcing the reconnaissance plane to “take evasive maneuvers to avoid a collision,” the U.S. Indo-Pacific Command said Thursday.

The RC-135 was “lawfully conducting routine operations over the South China Sea,” the command said, without saying precisely where the intercept took place. Its statement was accompanied by video footage, apparently shot from the RC-135’s cockpit, showing a close encounter with a Chinese fighter carrying what appeared to be air-to-air missiles.

The footage shows the J-11 flying slightly ahead and to the left of the RC-135, with the distance between them narrowing until the American plane seemed to maneuver away.

U.S. forces in the Indo-Pacific will “continue to fly, sail and operate at sea and in international airspace with due regard for the safety of all vessels and aircraft under international law,” the command said.

China’s Defense Ministry didn’t immediately respond to a request for comment.

The U.S. military has reported what it calls “unsafe encounters” with the People’s Liberation Army from time to time, often in the South and East China Seas, where Beijing asserts sovereignty claims that overlap with those of neighboring Asian governments.

“We’ve seen a sharp increase in the number of dangerous PLA intercepts of U.S. and allied forces—including Canadian aircraft—that were operating lawfully in international airspace over the South and East China Seas,” U.S. Defense Secretary Lloyd Austin said in a November speech.

In the South China Sea, whose resource-rich waters are crossed by vital shipping lanes, Chinese claims overlap with those of six governments, including five Southeast Asian countries. Washington, which doesn’t have claims in these waters, has generally called on rival claimants to resolve disputes peacefully and in accordance with international law.

American military forces often operate in the area, gathering intelligence on their Chinese counterparts and conducting what the U.S. calls “freedom of navigation” operations, meant to challenge what it deems excessive sovereignty claims by China.

Beijing says it respects freedom of navigation in the South China Sea, but often raises objections to American military operations in the area, particularly close to China’s southern island province of Hainan and other Chinese-controlled features. The PLA routinely intercepts foreign military aircraft and vessels deemed to stray too near.

Other Western countries have also reported this year what they described as unsafe encounters with Chinese warplanes.

In June, Australia’s Defense Ministry said a Chinese jet fighter had intercepted an Australian military spy plane over the South China Sea in a “dangerous” manner on May 26. Canada has also accused Chinese military planes of harassing its patrol aircraft conducting surveillance to enforce sanctions against North Korea.

FT : UK commercial property values set for new year decline

UK commercial property values set for new year decline
Estate agents predict values will ‘tumble off a cliff’ in the first quarter

UK commercial property values and rents are predicted to “tumble off a cliff edge” in the first quarter of 2023, as estate agents warn offices will fare worst as prices fall.

A survey of more than 400 commercial agents forecast a 2.9 per cent decrease in prices per square foot across the sector in the first three months of the year, with offices falling 3.1 per cent.

The report, compiled by London-based firm Robert Irving Burns, said the “decidedly negative” outlook would mean “values and rents tumble off a cliff edge”, in the sharpest quarterly drop in the past five years of comparable data.

RIB managing director Antony Antoniou said the deterioration was due to a mix of factors including rising interest rates and the fallout of Liz Truss’s ill-fated “mini” Budget, which triggered a pause in transactions and a pullback in lending.

“Where we saw the market stop still, we will see the market finding its level, people working out where things are, where value is,” he said.

That made for a “grim” picture for sellers, he said, but a recovery in transactions, citing open-ended property funds needing to sell stock on the back of investor redemptions.

Listed vehicles have already seen this valuation drop show up in their share prices, with real estate investment trusts such as Land Securities and British Land falling by a fifth or more this year.

Offices are expected to suffer the biggest falls in sale prices, according to the RIB report, with nearly a third of respondents expecting them to come down by more than 5 per cent.

“Work from home is causing tenants to consider reducing space,” said one respondent. Another commented that “occupiers are more inclined to sign on for shorter lease terms”.

Regional and older buildings that do not meet new environmental standards are expected to particularly suffer, while luxury offices should fare better, agents expected. “We are seeing more people wanting their own standalone offices in central London than we have in the past,” said Antoniou.

The survey also predicted a 1.3 per cent fall in rents per square foot over the period, with retail expected to do worst with a 2.1 per cent fall. “In the restaurant and pub market, we expect to see significant business failures after Christmas, and these properties could be very difficult to re-let,” said one estate agent replying to the survey.

Antoniou said there was “significant pressure in retail, particularly in secondary locations”, adding that the sector was surviving the online challenge best in areas that offered experiences other than shops to attract footfall.

FT : GSK on hunt for attractive biotechs ‘hiding in plain sight’

GSK on hunt for attractive biotechs ‘hiding in plain sight’
Chief commercial officer Luke Miels looking at targets worth up to $2.5bn

GSK’s chief commercial officer is looking to acquire or partner with biotechs “hiding in plain sight”, as the UK drugmaker focuses on replenishing its drug pipeline.

Luke Miels said the company was hoping to avoid “getting into a bidding war” by identifying under-appreciated targets worth $1bn-$2.5bn, such as its acquisition of Sierra Oncology earlier this year.

After the worst sell-off in biotech stocks since the early 2000s, analysts have been forecasting a boom in mergers and acquisitions next year. Earlier this month, Amgen bought Horizon Therapeutics for $28bn. 

Miels said he was now spending far more time than usual on business development — half a day, or a day a week — as he hopes to secure drugs that will be approved in the medium term.

He is working closely with the new chief scientific officer Tony Wood, who took over from Hal Barron in August. Barron, who left to join longevity start-up Altos Labs but remains an adviser to GSK, was criticised by some analysts for focusing on earlier-stage projects.

“Hal did a lot of work on the early stage, which we needed to do, fix the discovery machinery. Tony and I are very focused on: what else do we need now? Right now? And let’s bring it in,” said Miels. “But not just . . . any old thing.”

Miels, who joined from AstraZeneca in 2017, has hired many business development, marketing, and clinical trial leaders from his former company. Most recently, Chris Sheldon joined from AstraZeneca, after the companies settled a lawsuit that claimed that his move broke a non-compete clause in his Astra contract.

Miels said these hires boosted GSK’s capability, especially in oncology, where AstraZeneca has far outperformed the company.

“When we go and look at an oncology project, it’s very different from what it was even two years ago, because it’s the same people who built Lynparza and Tagrisso and the immunoncology products in Astra, are now with us. So our judgment and ability to design studies and do deals is materially different,” he said.

GSK is trying to rebuild its capability in oncology, after the previous management team exited the area in a deal that gave their cancer drugs and pipeline to Novartis in 2015.

But analyst concerns that GSK’s efforts so far have been lacklustre were compounded last month when the company had to withdraw its Blenrep drug from the US market after a negative trial result. Miels said there was the potential for GSK to refile for approval for Blenrep based on other studies that had yet to report results.

He said GSK was not trying to beat the biggest players in oncology. Instead, the company was focusing its oncology business on creating drugs for seriously ill patients who do not respond to other treatments, in a “salvage strategy”. 

He pointed to recent positive results that showed that Jemperli, its version of the breakthrough PD-1 drugs, can outperform the megablockbuster in the category, Merck’s Keytruda. He said this showed it could be used by patients who were no longer improving on Keytruda.

“I don’t think our strategy of going head to head and trying to be the next Roche, or trying to be the next Astra . . . is the way forward for us,” he said.