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Barron's : Five Ways to Profit from the Boom in Life Science

Five Ways to Profit from the Boom in Life Science

Monika Orfanakos was diagnosed with breast cancer in 2015. A medical aesthetician in Downingtown, Pa., she wanted to know if she carried genetic mutations associated with a recurrence of the disease. When she realized she could get a cancer DNA test for $19 through her husband’s employer, she jumped at the chance.

The results came back negative. “I’m always looking for the best treatments, diet, whatever I can to stay healthy,” says Orfanakos, 49. “Getting the test was a no-brainer.”

The growth in DNA testing, while not widespread as a corporate perk, is just one example of ways life-sciences companies are thriving as advances in gene analysis and other technologies open up new markets. At the same time, life-science companies, which make lab tools, scientific-research equipment and daily-use supplies, are seeing one of the healthiest funding cycles in years, from both the private sector and government-funded research.

Much of the industry’s cash flows down from the National Institutes of Health through grants to universities and other research institutions. The NIH has a $39 billion budget for 2019, up 5% from 2018. Life sciences is “one of the few areas where we see bipartisan support in Congress,” says Charles Kummeth, CEO of Bio-Techne (ticker: TECH), a small but growing life science firm. Spending is also rising about 10% a year in China. By the early 2020s, China will exceed the U.S. in spending on life-sciences research, as a percentage of gross domestic product, says Ross Muken, a senior health-care analyst at Evercore ISI.

Another big source of funding for tools and equipment companies is the pharmaceutical sector, which is spending more on research and drug development. Global R&D spending by the drug industry is rising about 3% a year, estimated to reach $177 billion in 2019, according to Bank of America Merrill Lynch analyst Derik de Bruin. Companies have also raised more than $345 billion through debt and stock offerings since 2015—capital that is fueling more basic research and hundreds of new clinical trials.

Granted, life-science tools and equipment stocks trade at an average price/earnings ratio of 25, well above the S&P 500’s P/E of 15, based on 2019 estimated profits. The industry also trades at a 36% premium to health-care stocks overall, according to Morgan Stanley . Steep valuations create an unforgiving environment if companies miss earnings estimates.

Another challenge is that funding for biomedical research may be at a cyclical peak. Concerns about the trade war between the U.S. and China are showing up in company earnings calls. There’s also no guarantee of insurance reimbursements for expensive, new diagnostic tests, many of which involve technology sold by life-science companies.

Barron’s found five life-sciences tools and equipment firms benefiting from rising demand in a variety of areas, from lab work to the consumer market. Illumina (ILMN) is the leader in gene-sequencing technology. Thermo Fisher Scientific (TMO) sells an array of lab tools and equipment. Agilent Technologies (A) and Danaher (DHR) also sell lab equipment, diagnostic tools, and products outside life sciences. Bio-Techne makes protein-science kits and new “liquid biopsy” tests, a fast-growing field.

All five companies are poised to capitalize on medical innovation and demand for health care in emerging markets. The firms sell the picks and shovels of the industry—tools that will be needed for years as companies and governments seek to advance medical science and bring more products to market.

Illumina controls more than 75% of the market for whole genome-sequencing—creating road maps of a person’s unique DNA so that it can be analyzed for genetic mutations associated with disease. Its platform is so widely used across academia, government labs, and the private sector that more than 90% of sequenced genetic material probably comes from an Illumina machine, according to Morningstar analyst Michael Waterhouse. Genomics is at the heart of efforts to detect early-stage cancers and assess drug efficacy; it’s the foundation of new gene-based therapies and research into everything from Alzheimer’s to hereditary diseases.

Governments world-wide are funding population studies to create vast genome databases. Illumina has the most widely installed base for whole-genome sequencing, and it is the standard platform for population studies such as the All of Us Research Program, an NIH-funded initiative to develop a database of one million genomes from U.S. participants. Worldwide, more than six million genomes in large-population projects have been announced so far, but only 500,000 have been run, according to Puneet Souda, an analyst with Leerink Research.

One way to see the promise of gene-sequencing and related analyses is in DNA testing as a health benefit. Employers such as Levi Strauss, Visa, Nvidia, and Jefferson Health System have started offering tests to screen for mutations in 30 genes associated with eight common hereditary cancers, including breast and ovarian cancers linked to the BRCA1/2 genes. Workers are taking advantage of the benefit, says Othman Laraki, co-founder and CEO of Color Genomics, the firm selling the testing service. “Half the women with BRCA mutations get rejected by their insurer for the test,” he says. “This is a way to get it done.”

Illumina launched a more powerful gene-sequencing machine in 2017, the Novaseq 6000, that has fueled a cyclical growth spurt. Ilumina expects the technology to enable sequencing costs to fall to $100 for a human genome, and sales of the machine have exceeded initial estimates. llumina is also integrating an acquisition, Pacific Biosciences, extending the firm’s product line to analysis of longer strings of DNA.

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Illumina also sells microarray instruments for targeted gene analysis and consumable products such as reagent kits. Its stock can bounce around with sales of those products, and shares have retreated lately, partly due to a slowdown in the consumer market. It is still pricey, trading at 48 times estimated earnings, nearly double the average of the life-sciences tools industry.

But Illumina is advancing steadily: It’s selling systems for health-care applications like prenatal testing, liquid biopsies, and routine genetic testing in hospitals, notes Souda. Eventually, billions of people could get their genomes analyzed for cancers or other signs of disease. “Will everyone in the U.S. get their genes sequenced? Will every single cancer patient have tumor-sequencing done? Multiply that by the rest of the world,” says Teresa McRoberts, co-manager of the Alger Health Sciences fund (AHSAX), which recently added to its position in Illumina stock.

Thermo Fisher sells everything from scientific instruments to consumable materials like antibodies and cell cultures for lab research. Its end markets range from biotech to academia, along with areas like animal health and food-safety testing.

Sales growth has averaged about 11% annually over the past five years, reaching $24.1 billion in 2018 through a mix of organic growth and acquisitions. In 2016, Thermo purchased FEI, the maker of a pioneering 3-D electron microscopy system (technology that led to a Nobel Prize for its developers), and Affymetrix, a leader in cellular-and-genetic analysis computing. Thermo has also branched out into contract research, running clinical trials for drug companies, through its 2017 acquisition of Patheon for $7.2 billion.

China is a manufacturing hub and major end market for Thermo. Tariffs are taking a small bite out of Illumina’s revenue and could extract more if the trade war gets worse. Amazon.com (AMZN), meanwhile, is selling lab supplies, including a deal with Stanford University.

Thermo CEO Marc Casper says the firm sells supplies with “a very specific set of requirements within the industry,” including hazardous goods and products that require refrigeration and special handling. He has told analysts the company isn’t seeing a net impact from tariffs, noting that a large portion of its products sold in China aren’t subject to U.S. tariffs or have exemptions because no local substitutes are available.

At 20 times earnings, Thermo trades below the tools-industry average. With growth likely to accelerate, the stock could continue to climb. Evercore’s Muken has a buy on the stock with a $250 price target. “It’s a unique growth story with a sustainable strategy,” he says.

Agilent derives about half its revenue from life sciences and diagnostics, with the rest in tools and services for the food safety, chemical, and energy industries. It’s tethered to several life-sciences growth areas, including manufacturing of oligo-nucleic acids for gene therapy, lab-management services, molecular diagnostics, and mass spectrometry equipment, which is used for drug development and other applications. “We think we’re in large attractive markets, and the funding environment will continue to be strong for large portions of these markets,” CEO Mike McMullen tells Barron’s.

Growth should accelerate in 2019 as the company ramps up sales of spectrometry and gas chromatography equipment, nucleic acids, and environmental-and-food testing products. It has also developed a growing revenue stream in lab maintenance and management services with its CrossLabs division, accounting for about a third of annual revenue and expanding 8% to 9% a year, the fastest-growth part of the company, according to McMullen.

With about 20% of its revenue in China, Agilent expects trade friction to shave about three cents from earnings per share in 2019, estimated at $3.10, according to consensus forecasts. But McMullen isn’t seeing a slowdown in China: “What drives demand in our end markets is completely different than in consumer products.”

Goldman Sachs analyst Patrick Donnelly views Agilent as one of the best-positioned firms in life sciences. “We are increasingly comfortable with end market demand holding up,” he wrote in a note to clients after meeting with Agilent management recently.

Danaher’s sales are expected to top $20 billion this year, with about a third coming from life sciences, such as its operating companies Pall, Beckman Coulter, and Sciex. The rest of the business consists of diagnostics tools, environmental and chemical industry products, and a dental division. But Danaher plans to spin off the dental business in the second half of 2019. Its portfolio is becoming more heavily oriented to recurring revenue based on sales of consumable products in growth markets such as diagnostics and pharmaceutical manufacturing.

Danaher also has a renowned system for evaluating acquisitions, and it has plenty of dry powder for deals, with more than $14 billion at its disposal from cash, equity, and other capital sources in 2019, says UBS analyst Daniel Brennan.

At 22 times earnings, Danaher trades well above the market’s P/E ratio. But it’s reorienting around high-growth areas of life sciences, and acquisitions could add 9% to 25% upside on per-share earnings over the next three years, plus margin benefits. Brennan sees the stock hitting $125 over the next 12 months on modest assumptions of 5% sales growth and a P/E expanding to 24 times earnings.

Bio-Techne has carved a lucrative niche in protein sciences, such as reagent kits and instruments for protein analysis. It’s a steady growth business, benefiting from advances in stem cell research, Car-T immunotherapy, and other types of cancer research. “Those are also exploding areas for growth,” says Bio-Techne CEO Kummeth.

A bigger growth engine may be the firm’s “liquid biopsy” test for prostate cancer, based on technology it acquired from Exosome Diagnostics. The test analyzes nucleic acid content called exosomes in urine to rule out the need for a prostate biopsy. The tests have a 92% sensitivity, a big improvement over traditional PSA tests, which are less accurate and lead to many unnecessary biopsies.

“This is a test that urologists are looking for,” says Kummeth, noting that sales of the $760 tests are growing 25% a month. One stumbling block is whether Medicare provides reimbursement for the prostate test, but Kummeth says approval could come this year.

At 33 times earnings, based on 2019 estimates, this is one of the priciest tools stocks. But Leerink’s Souda views it as a strong growth story. More than 90% of the business consists of consumable lab products, creating a stable and growing revenue stream. He expects the Exosome tests to be a major growth driver, assuming they receive reimbursement coverage. Analysts expect revenue to increase nearly 11% in 2019 to $753 million, according to consensus estimates, with EPS up about 8% to $4.91 a share.

Nikkei : Paris tells Tokyo it wants Renault-Nissan integration

Paris tells Tokyo it wants Renault-Nissan integration - https://s.nikkei.com/2FLEvj0

French side seeks to name Japanese automaker's next chairman

PARIS -- The French government informed Tokyo this week that it will seek to integrate Renault and Nissan Motor, most likely under the umbrella of a single holding company, Nikkei has learned.

A delegation including Martin Vial, a Renault director designated by the French government, visited Japan to relay Paris' intentions to Japanese officials. The delegation also said Renault wants to name Nissan's next chairman, a post that has remained vacant since the ouster of arrested alliance chief Carlos Ghosn. The original alliance agreement gives the French automaker the right to choose top Nissan leaders.

As simmering tensions between the two partners rise to the surface in Ghosn's absence, Paris -- Renault's largest shareholder -- has renewed its yearslong push for a merger. Nissan has opposed a combination, not least because the French government would be a major stakeholder in a shared holding company, potentially giving it greater sway over the Japanese automaker.

The French government owns about 15% of Renault, which in turn controls 43.4% of Nissan. Nissan holds only a 15% nonvoting stake in its French partner.

Renault is expected to appoint Ghosn's replacement as chairman and CEO soon, with Paris leading the search for a successor. The new leadership could take a harder line in negotiations with Nissan at the behest of the French government.

Washington Post : Trump to offer temporary protections for undocumented ‘dreamer

Trump to offer temporary protections for undocumented ‘dreamers’ in exchange for $5.7 billion for border wall, GOP officials say

BREAKING NEWS: The president is expected to detail the proposal to Democrats in a rare Saturday address at 4 p.m. It comes as the record-breaking government shutdown entered its 29th day.

This story will be updated.

President Trump is preparing to make a new offer to Democrats that could end the record-breaking government shutdown in a rare Saturday address from the White House, while stopping short of declaring a national emergency on the southern border.

With the shutdown in its 29th day, Trump was expected to propose items he believes Democrats favor as part of a broader border-security package, according to two people familiar with White House planning. The hope is the proposal would revive negotiations with congressional Democrats, which have been nonexistent for days.

Although the president has threatened for more than a week to declare a national emergency, such a drastic step was unlikely to occur in Saturday’s address.

The individuals, who spoke on the condition of anonymity to discuss private deliberations, stressed late Friday that the planning remained very fluid and that nothing is firm until Trump makes his announcement.

Trump is scheduled to speak at 4 p.m.

Trump told reporters at the White House on Saturday morning that he will make an “important statement” that afternoon, and continued to point to a new caravan of Central American migrants crossing into Mexico from Guatemala that was the subject of segments this week on “Fox & Friends” as one reason for the wall.

“If we had a wall, we wouldn’t have a problem. But we don’t, we have too many open areas,” he said.

Aides to the top Democrats in Congress — House Speaker Nancy Pelosi (D-Calif.) and Senate Minority Leader Charles E. Schumer (D-N.Y.) — said late Friday that they had received no new offer from the White House.

The ongoing shutdown of some 25 percent of the federal government was triggered by Trump’s demands for $5.7 billion to build more than 200 miles of new wall along the U.S.-Mexico border. Pelosi calls the wall “immoral,” and Democrats are refusing to offer more than $1.3 billion to extend existing funding levels for border barriers and fences. Democrats also frequently point out that Trump long claimed Mexico would pay for the wall.

Absent negotiations, the impasse has devolved into bickering between Trump and Pelosi, offering little comfort to the 800,000 federal workers who have gone without pay since Dec. 22 and have been forced to rely on food banks or other jobs.

The fight escalated on Saturday, with Trump telling reporters he hopes Pelosi can “come along and realize . . . that walls work.” Trump was asked if the shutdown had become too personal between himself and Pelosi.

“It’s not personal for me,” he said. “She’s being controlled by the radical left, which is a problem.”

A spokesman for Pelosi did not immediately return a response for comment.

Sen. Tim Kaine (D-Va.) said Saturday that Democrats have shown repeatedly in the past that they’re willing to provide border security funding – but stressed that President Trump must first agree to reopen the government before such discussions can resume.

“Reopen government and we’ve shown you by our past actions and past votes that we’re willing to have a discussion,” he told reporters on Capitol Hill.

Kaine, the Democratic Party’s 2016 vice-presidential candidate, said the dollar amount Trump is request to build a wall isn’t the problem – it’s how to best use the funding.

“The dollar amount has not been the challenge, the issue is do you use the money in the right way or the wrong way, and I think what our goal is we don’t want to use the money the wrong way,” said the senator.

A proxy battle — a political clash like few others — emerged over the past week between the leaders of two of the nation’s three branches of government as they leveraged the powers of their offices against one another, all the while trying to shape public sentiment.

Pelosi suggested this past week that Trump reschedule his Jan. 29 State of the Union address on Capitol Hill due to security concerns stemming from the nearly month-long partial government shutdown. He retaliated with a last-minute cancellation of her trip with other House members to Afghanistan using a military aircraft.

On Friday Pelosi accused Trump of putting herself and fellow lawmakers in danger by publicizing their plans to travel to Afghanistan, forcing them to abandon the trip. Pelosi said the State Department had determined that the trip, even using commercial aircraft, could no longer be made without endangering the safety of lawmakers, as well as of troops and support personnel due to the president’s actions.

“You never give advance notice of going into a battle area — you just never do it,” Pelosi (D-Calif.) told reporters at the Capitol. “Perhaps the president’s inexperience didn’t have him understand that protocol. The people around him, though, should have known that, because that’s very dangerous.”

The White House has forcefully denied Pelosi’s claims.

Meanwhile, the furloughed workers and those forced to work without pay will soon miss another paycheck unless the shutdown is somehow resolved, a fact that White House press secretary Sarah Sanders said Friday made it imperative for Pelosi to stay in the country this weekend.

“That’s one of the key reasons that the president did not want Speaker Pelosi to leave the country, is because if she did it would all but guarantee the fact that negotiations couldn’t take place over the weekend,” Sanders told reporters at the White House.

But Pelosi’s spokesman, Drew Hammill, said the White House had not sought to schedule negotiations with the speaker for this weekend.

The impacts from the shutdown have spiraled in various directions despite efforts by the administration to limit them by calling workers at agencies including the IRS and State Department back to work, in most cases without pay.

Federal Reserve Bank of New York President John Williams on Friday said the shutdown had created “head winds” to economic growth, and a key measurement of consumer confidence — released by the University of Michigan — has fallen to its lowest level of Trump’s presidency.

The administration moved forward Friday with a broader crackdown on congressional travel: Acting White House Budget Director Russell T. Vought said in a memo, “Under no circumstances during a government shutdown will any government owned, rented, leased, or chartered aircraft support any congressional delegation, without the express written approval of the White House Chief of Staff.”

The White House and Democrats are in agreement on the need for border security generally and even on some specifics of what that would entail — just not on the wall.

Next week the House will take up another batch of spending bills aimed at reopening the government without funding the wall that will include some spending directed to the border. One bill will include $563 million for immigration judges, the same figure Trump has requested; another will include $524 million to expand facilities at ports of entry along the border.

FT : Hedge funds have biggest quarterly outflows in more than 2 years

Hedge funds have biggest quarterly outflows in more than 2 years

2018 was first year the industry contracted since the financial crisis

The hedge fund industry contracted for the first time since the financial crisis last year as investor redemptions accelerated and the industry lost money in volatile financial markets.

It is only the second year in more than two decades that hedge funds’ assets under management have declined. The industry has gone through a period of rapid growth, expanding from $38.9bn in 1990 to $3.1tn at the end of December, according to data provider HFR, which published fresh research on Friday.

Despite the contraction, the decline in 2018, of just over $100bn, is significantly less than the $461bn drop in 2008.

Part of the decline was due to investors pulling money from funds amid market jitters and poor performance. Outflows from hedge funds in the fourth quarter were $22.5bn, the largest level of redemptions over a quarter in more than two years. That brought the year’s outflows to $34bn — roughly 1 per cent of the money managed by the industry. Last year was only the fourth in more than two decades when more money was pulled than invested in the industry.

Investor redemptions, which forced hedge funds to sell investments to raise cash, were a major contributor to the turmoil that wracked markets in December, according to Larry Fink, chief executive of BlackRock, the world’s biggest asset manager.

In an interview with the Financial Times this week, Mr Fink likened the period to a “mini 2008-2009 . . . We saw a massive amount of deleveraging” from hedge funds.”

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While there have been two other years since 2008 when outflows outpaced new money invested in the industry, performance gains previously swelled hedge fund coffers, leading to record levels of assets under management each year.

The industry’s performance failed to make up the difference last year, however. Hedge funds had their worst year in seven in 2018 as the market turmoil in the fourth quarter caught many off-guard. HFR’s main index, which monitors funds across strategies, was down 4.5 per cent last year after falling 5.8 per cent in the fourth quarter.

Still, hedge funds also beat the S&P 500 index for the first time in a decade, bolstering their argument that they perform better during down markets.

The biggest outflows in the fourth quarter came from a handful of firms, according to HFR. About two dozen funds saw redemptions of more than $500m in the quarter, including several that closed down. At the same time, about a dozen firms also received net inflows of more than $500m.

The largest chunk of redemptions in the fourth quarter came from equity hedge funds, the largest strategy in the industry, which suffered outflows of $16.8bn. Event-driven funds, which include distressed, restructuring and special situations strategies, gained new investments of $6.4bn.

“Hedge fund outflows in Q4 were driven by several factors, most notably investor reaction to steep losses in traditional asset investments and the sharp spike in equity market volatility leading to redemptions,” said Kenneth Heinz, president of HFR.

NY Post : Skittish investors made it a painful year-end for hedge funds

Hedge funds got a double dose of pain at the end of 2018.

Skittish investors yanked $22.5 billion during the fourth quarter from the $3.1 trillion in assets managed by the struggling hedge fund sector, according to a report released by Hedge Fund Research on Friday.

That’s on top of the average hedge fund tanking 5.8 percent during the quarter as the stock market swung wildly amid fears about a global recession. Several funds shut down or converted into family offices.

The latest quarter’s redemptions — which accounted for the lion’s share of the $34 billion that exited hedge funds last year — were the highest they’ve been since the third quarter of 2016, when $28 billion was pulled from the industry, HFR noted.

Then as now, pension funds and other investors had grown tired of the industry’s high fees and mostly underwhelming performance.

While 2018’s redemptions were large, HFR downplayed their significance, calling them “orderly” and then pointing to the $255 billion that left hedge funds during the fourth quarter of 2008 and the first quarter of 2009 combined.

The latest redemptions represent “a stark contrast from the panic-driven redemption from the 2008 financial crisis,” HFR President Kenneth Heinz said Friday.

“While the overall investor flows and performance trends were negative, it is likely that discriminating institutional investors which experienced or observed areas of strong performance through the most difficult equity and commodity trading environment in a decade will factor these positive dynamics into portfolio allocations for 2019,” he added.

Further to that, hedge fund performance has been “bouncing back” this year, Morgan Stanley said in a report Friday, projecting that US stock-focused funds are up 4.4 percent so far this year.

WSJ : Trump to Support DACA Protections for More Wall Funding

Trump to Support DACA Protections for More Wall Funding

The president is scheduled to make an announcement on the budget impasse at 4 p.m.

WASHINGTON—President Trump is planning on Saturday to support protections from deportation for some undocumented immigrants in the U.S. in exchange for $5.7 billion to build the southern border wall, said White House officials familiar with the decision.

Mr. Trump is scheduled to make his announcement at 4 pm. Aides cautioned that the announcement has already been delayed once by an hour, and that the president may still change his approach.

The offer to codify protections for young immigrants brought to the U. S. as children, known as Dreamers, is seen as a major concession inside the White House.

(ZH) Here's How Europe's Nationalist Parties View The EU

Here's How Europe's Nationalist Parties View The EU

Europe's most conservative parties - some of which are still relatively young, have been rapidly gaining support over the last several years as nationalists across the continent speak out in opposition to mass migration, high taxes and the open-border policies espoused by globalist leadership.

Ahead of the upcoming European Parliament elections in May, many have been wondering what the various nationalist parties think of the EU. Answering that question is Germany's public international broadcaster, Deutsche Welle.

***

AfD (Germany) — 1 MEP

Post-war Germany's most successful far-right political party finally set out its position on the EU at a party conference on Sunday.

The new AfD European election manifesto says Germany should abandon the euro currency. That position that can be traced to the party's euroskeptic origins in 2013, when the AfD was founded as a direct protest against Brussels' plans to bail out Greece in the aftermath of the European financial crisis.

But despite a concerted effort from the party's hardliners, the AfD has stopped short of demanding that Germany leave the EU altogether. "Whoever toys with the idea of a Dexit also needs to ask themselves if this is not a utopia and should we be more realistic," party leader Alexander Gauland told delegates at the party conference in Riesa, Saxony.

That compromise means the AfD supports restricting the EU to economic cooperation and opposing a joint EU defense and foreign policy.

National Rally (France) — 15 MEPs

As one of the oldest far-right parties on this list, France's National Rally (known as the National Front until last summer) has held a number of different positions in its past. A basically a pro-European party intially, the FN u-turned in the early 2000s, when leader Jean-Marie Le Pen called for France to leave the EU and re-introduce the franc.

Le Pen's FN was also perhaps the first major party to link the EU to the idea of a shadowy "world government" or even a "New World Order," planting suspicions about Brussels as a globalist, anti-democratic conspiracy.

His daughter and successor Marine Le Pen, who has successfully shifted the party to the mainstream (it took 25 percent of the vote in France's European election in 2014), does not want the EU abolished, but she does want an end to one of its guiding freedoms. She has called for Europe's border checks to be reinstated and the Schengen free movement area to be ditched. Last year she also denounced the EU's "arrogant tyranny" and the "European oligarchy barricaded in Brussels."

Lega Nord (Italy) — 6 MEPs

Lega Nord (or just Lega, as it was rebranded ahead of last year's Italian election) has slowly crept from its regional roots to establishing its appeal across Italy — it is now part of the government in Rome, with its leader, Matteo Salvini, serving as both deputy prime minister and interior minister.

Salvini is also a fierce critic of the EU and the euro, which he once described as a "crime against humanity." Indeed, Salvini's leadership has dragged Lega Nord closer to euroskepticism. While Lega Nord voted in favor of the Treaty of Lisbon, the constitutional basis of the EU, signed in 2007, Salvini and other major Lega figures have called for Italy to leave the bloc. That is not the official party position, however, and is a marked change from positions expressed by Salvini's predecessor, Roberto Maroni, who advocated the direct election of the European Commission president and the acceleration of European integration.

UK Independence Party (UK) — 7 MEPs

UKIP was founded in 1991 with the sole purpose of opposing the EU and all it stood for, eventually spearheading a movement under long-term leader Nigel Farage that led to the Brexit referendum in 2016. The party continues to insist that the EU is fundamentally undemocratic, and has emphasized its opposition to the bloc (especially its perception that the EU is responsible for allowing migrants into the UK) much more strongly than any other party in Europe. Though it has widened its focus to other issues in the past few years, UKIP's policies are still often framed in terms of how they relate to the EU.

Fidesz (Hungary) — 11 MEPs

The party of Hungarian Prime Minister Viktor Orban has also radically shifted its position on Europe since its foundation in 1988, when it began as a student movement that favored closer European integration, and when it campaigned for Hungary's accession to the EU in 2004. Since then, Orban's party has become more and more conservative, and his rhetoric increasingly anti-EU.

But despite this, and the fact that the EU has instituted dozens of procedures against Hungary for violating its membership criteria, Orban's increasingly authoritarian government has made no move towards leaving the bloc.

Law and Justice (Poland) – 16 MEPs

Poland's conservative ruling Law and Justice (PiS) party has taken a broadly anti-Brussels position, favoring closer ties with the United States and opposing closer integration in the EU. The PiS' nationalist tendencies have led it to more and more anti-EU rhetoric — especially in the wake of the influx of refugees into Europe in 2015, when both Poland and Hungary vehemently resisted Brussels' attempts to introduce a migrant quota. Indeed, PiS leader and former Prime Minister Jaroslaw Kaczynski has publicly declared his party's alliance with Orban in Hungary.

Party for Freedom (Netherlands) — 4 MEPs

Perhaps closest in spirit to UKIP, the second-largest party in the Dutch parliament has always favored withdrawal from the EU. Like UKIP, the Party for Freedom (PVV) has consistently held the EU responsible for the influx of migrants to Central European members states such as Poland and Romania.

Its other positions include abandoning the euro, abolishing the European Parliament and no cooperation in any EU activity.

(ZH) "You Want To See A Stock Market Crash, Impeach Trump!" Warns President Afte

"You Want To See A Stock Market Crash, Impeach Trump!" Warns President After Media Attacks

President Trump on Saturday hit back at critics after several "hit pieces" over the last week generated repeated calls by Democrats for his impeachment - the latest being a Thursday night BuzzFeed report that Trump instructed his former attorney, Michael Cohen, to lie about a Trump Tower Moscow project. The BuzzFeed report was debunked as a fabrication the next day by special counsel Robert Mueller's office, but not before giddy Democrats ran wild with calls for Trump's ouster.

"The Economy is one of the best in our history, with unemployment at a 50 year low, and the Stock Market ready to again break a record (set by us many times) - & all you heard yesterday, based on a phony story, was Impeachment. You want to see a Stock Market Crash, Impeach Trump!" the President Tweeted Saturday morning.

The latest flood of anti-Trump news began on January 11 with a New York Times report that the FBI supercharged their investigation into whether Trump had wittingly or unwittingly fallen under Moscow's influence after he fired FBI Director James Comey (at the recommendation of Deputy AG Rod Rosenstein). According to the report, agents and senior F.B.I. officials "had grown suspicious of Mr. Trump’s ties to Russia during the 2016 campaign" but held off on opening an investigation into him, the people said, in part because they were uncertain how to proceed with an inquiry of such sensitivity and magnitude.

One day after the NYT report, the Washington Post reported that Trump had "gone to extraordinary lengths to conceal details of his conversations with Russian President Vladimir Putin, including on at least one occasion taking possession of the notes of his own interpreter and instructing the linguist not to discuss what had transpired."

Of course, buried in paragraph nine the Post admits: "No evidence has emerged publicly that Mr. Trump was secretly in contact with or took direction from Russian government officials."

Byron York

✔@ByronYork

· Jan 12, 2019

James Comey bungled Hillary Clinton investigation. Then started sketchy Trump probe. Then did a dossier-based, Moscow hookers, J. Edgar Hoover-style 'we know about you' routine with Trump before Trump became president... 1/4

Byron York

✔@ByronYork

Then Comey told Trump three times he wasn't under investigation while leaving public impression that he was. Trump understandably angry. Then, when Trump fired Comey--as some advisors had advocated for months--FBI saw it as treason. 2/4

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Byron York

✔@ByronYork

· Jan 12, 2019

Replying to @ByronYork

Now, NYT reports FBI reacted to justified firing of Comey by opening counterintelligence investigation, probing 'whether [Trump] had been working on behalf of Russia against American interests.' 3/4

Byron York

✔@ByronYork

Investigation result: 'No evidence has emerged publicly that Mr. Trump was secretly in contact with or took direction from Russian government officials.' Is NYT story about Trump, or about FBI malfeasance? 4/4 End. https://www.nytimes.com/2019/01/11/us/politics/fbi-trump-russia-inquiry.html?action=click&module=Top%20Stories&pgtype=Homepage …

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Continuing the anti-Trump train was a Thursday report in the Wall Street Journal that President Trump instructed Michael Cohen to rig CNBC and Drudge polls in his favor. Cohen reportedly agreed to pay a small IT firm $50,000 to conduct the rigging, only to pay them in a bag of cash containing between $12,000 and $13,000 and a boxing glove that Cohen said had been worn by a Brazilian mixed-martial arts fighter.

Cohen has disputed the account - but not the relationship with the IT firm - RedFinch or its CEO John Gauger, saying "All monies paid to Mr. Gauger were by check."

Hilariously, in May 2016 Cohen also asked Gauger to create a Twitter account - @WomenForCohen, which was run by a female friend of Gauger and described Cohen as a "sex symbol," praising his looks and character, while promoting his appearances and statements boosting Trump's candidacy.

And while Gauger says he never received the rest of the $50,000 he was owed, Cohen still requested - and received - a $50,000 reimbursement from Donald Trump and his company for the work done by RedFinch, according to the Journal, citing a government document and a person familiar with the matter. The reimbursement - based on a handwritten note by Cohen, was paid largely out of Trump's personal account.

Trump attorney Rudy Giuliani said that Cohen's full reimbursement for the $50,000 while paying RedFinch less shows the former Trump lawyer to be a thief. "If one thing has been established, it’s that Michael Cohen is completely untrustworthy," said Cohen.

And last but not least, of course, is the now-discredited BuzzFeed report alleging that Trump instructed Cohen to lie about Trump Tower Moscow.

It's interesting how quickly the news cycle turned against Trump after he threatened to flex his presidential powers and declare a national emergency to fund his wall - right on the heels of a Syria pullout announcement which has been wildly unpopular with establishment war hawks.

WSJ : FRANKFURT—The eurozone’s economic slowdown has taken European Central Bank

Central Banks Struggle With Policy Settings

ECB outlook reflects a global shift in central banking

FRANKFURT—The eurozone’s economic slowdown has taken European Central Bank officials by surprise, potentially disrupting their plans to lift short-term interest rates this year.

The shift underlines the difficulties central banks face getting back to growth rates and policy settings that were considered normal before the global financial crisis.

In June, the ECB appeared to be on course to end its bond-buying stimulus program at the end of 2018 and follow that with a first rise in its key interest rate some time this year. Right now, it charges banks 0.4% to deposit money with the central bank, a negative interest rate.

So widespread was the expectation of the first rate rise since 2011 that policy makers issued a statement promising not to move at least through the summer of 2019 to calm worries it might move too soon.

Since then, disappointing data have made it clear that the eurozone economy is weaker than the ECB expected. The ECB’s economists have cut their growth forecasts in each of their last three reports on the economic outlook.

Now, many investors expect the ECB to do nothing until next year. Some are considering what the bank could do to stimulate the 19-nation eurozone economy if it sinks.

“The narrow window in which the ECB could have lifted its key interest rate from emergency, negative levels, has closed,” said Simon Wells, an economist with HSBC in London. He expects the ECB to hold its deposit rate at current levels through at least the end of 2020, having previously forecast a first 0.15 percentage-point ECB rate increase for September.

The ECB outlook reflects a global shift in central banking. Federal Reserve officials—unsettled by market turbulence and slowing global growth—have said they would be patient before moving rates up again, meaning they’ll pause after a series of rate increases last year and before.

The Bank of Canada has also made a notable about-face. In early December, the Canadian central bank pointed to a weaker-than-anticipated housing market and the rapid decline in oil prices in signaling a pause in rate rises.

“We have to do our work in order to understand the shock better and what its magnitude actually is,“ Governor Stephen Poloz said last month. “We need some time.”

ECB President Mario Draghi is expected to acknowledge the darkening outlook after the bank’s policy meeting Thursday. Speaking at the European Parliament in Strasbourg earlier this month, Mr. Draghi admitted that recent data had been weaker than expected, although he argued that the eurozone probably would avoid recession.

“At least for some time to come, there’s going to be a continuing uncertainty that changes nature, and this has a cost. And the cost is lower confidence—lower business confidence and lower consumer confidence,” Mr. Draghi said.

JP Morgan projects a first rate rise in December, rather than September, and sees fewer subsequent moves.

The eurozone economy enjoyed its fastest growth in a decade during 2017, a 2.4% expansion that ECB’s economists expected to see continue through 2018. The World Bank now estimates growth slowed to 1.9% last year and will slip further to 1.6% this year.

Much of the turnaround is due to weaker demand for eurozone exports. There are problems closer to home as well. Holdups at Germany’s key automobile factories pushed Europe’s largest economy to the brink of recession in the final six months of last year. Italy may not have avoided that fate, following a jump in borrowing costs as investors fretted over the government’s plans to add to an already large debt load.

In France, President Emmanuel Macron is wrestling with rolling mass protests aimed at derailing his economic reform plans. And the U.K.’s Parliament is deeply divided over how to manage the country’s planned divorce from the European Union, barely two months before it is due to depart.

The composite Purchasing Managers Index for the region—which measures manufacturing and services activity—fell to its lowest level in more than four years in December.

The firm that compiles that measure— IHS Markit —has built a model that assesses the probability of a policy move based on the past relationship between the indicator and policy changes: it suggests the probability of a rate rise is just 7.7%, and a rate cut is more likely.

Europe’s economic prospects could brighten. A trade deal between the U.S. and China could revive growth, and a smooth Brexit would help. Unemployment has fallen below 8%, its lowest level in more than a decade, and wages are rising relatively briskly.

However, that hasn’t yet triggered a sustainable rise in inflation toward the ECB’s target of just below 2%. Figures released Thursday show the core inflation rate—which excludes volatile prices such as those charged for energy and food—was unchanged at 1% in December.

ECB officials are mindful of the bank’s past tendency to raise interest rates at the wrong time. It increased key rates in 2008 and then again in 2011. In both cases those moves were followed by recession.

If Europe is indeed headed toward a new downturn, policy makers would be in an uncomfortable position. The ECB has little room to cut interest rates further or to buy more government bonds.

“The uncomfortable truth is that there may not be a whole lot the ECB can do to offset a moderate slowdown,” said Mr. Wells.

NYT : F.T.C. Is Said to Be Considering Large Facebook Fines

F.T.C. Is Said to Be Considering Large Facebook Fines

WASHINGTON — The Federal Trade Commission is in the advanced stages of its investigation into whether Facebook violated privacy rules and is expected to seek large fines from the company, according to two people familiar with the inquiry.

The five members of the commission met in mid-December to discuss the investigation, according to the people, who would speak only on the condition of anonymity because the investigation is not public. The meeting is a sign that the investigation is far along, the people said, because the commissioners rarely meet in the early stages of an inquiry.

The investigation, which began in late March, is continuing, and the commissioners and staff have not reached a final conclusion, including how much the agency might seek in fines, the people said. Consumer-protection and enforcement staff members have provided updates on what they believe is evidence of privacy violations, but they have not submitted a final report.

The commissioners would vote on any recommendations from the staff, including whether to pursue fines or other penalties. They do not always approve staff recommendations.

The highest financial penalty imposed on a tech company was Google’s $22 million settlement in 2012 for privacy violations. In the December meeting, the commissioners discussed a higher fine for Facebook, the people said.

The Federal Trade Commission declined to comment. Facebook, which has repeatedly defended its actions, also declined to comment.

The Washington Post earlier reported about the meeting and the potential for a record fine.

The investigation is seen as a litmus test of the government’s ability to protect consumers in the digital age. All five commissioners have testified to Congress that they need more resources to go up against big corporations in enforcement actions. Their agency does not have the authority to create privacy rules, but it can police businesses through a broad mandate to protect consumers from deceptive and unfair practices.

The investigation into Facebook began with revelations by The New York Times that a British political consulting firm, Cambridge Analytica, had obtained data from tens of millions of Facebook users without permission. The report ignited calls for investigations by global regulators and the summoning of Facebook’s chief executive, Mark Zuckerberg, to testify before Congress last April.

A consent decree from 2011 requires Facebook to seek permission from users of plans to share their data with third parties. The trade commission also requires Facebook to notify it when third parties misuse user data.

Over the past nine months, enforcement and consumer-protection officials have looked into a series of additional reports by The Times and other publications that raised questions about whether Facebook’s use of data violated its consent decree, according to former officials. The expanded investigation included Facebook’s partnerships with hardware and other tech giants like Netflix and Amazon that gave other companies access to Facebook user data without explicit permission.

Facebook has said Cambridge Analytica told it that the firm had deleted the data. The social network has hired scores of lawyers and privacy experts to handle the commission’s investigation, and Facebook’s top privacy officials and lawyers are in regular conversation with officials leading the investigation.

For 17 months of the Trump administration, the Federal Trade Commission was run by two commissioners. In May, the new slate of commissioners arrived, all appointed by President Trump. Three members are typically from the president’s party, and two from the other party.

The agency’s chairman, Joseph J. Simons, an antitrust lawyer, has declined to comment about the investigation. He has sent strict orders throughout the agency against leaking information about the inquiry to reporters.

One of the people familiar with the investigation said the meeting last month, though unusual, had been called partly because three of the commissioners were new, and because the case warranted an update from enforcement and consumer-protection staff.

The people said the investigation had been slowed by the government shutdown, now in its fifth week. The hallways at the agency are empty, and just the five commissioners and a smattering of other employees have arrived for work during the shutdown.