The overnight market action has so far been a repeat of yesterday’s, when global bond yields relentlessly slid to fresh record lows around the globe following the launch of the ECB’s corporate bond monetization program, and which unlike in recent days has been seen increasingly as a “risk off” signal, pressuring worldwide equities sharply lower. Indeed, Asia was down 1% and various European bourses flirting with a 2% drop, with US equity futures down about 0.6%, but the biggest story once again remains the collapse in yields, as 10Y government notes in Japan, Germany and the U.K. all posted record-low yields over last 24 hours, with US Treasury set to follow soon. For now, all eyes are fixed on the 10Y German Bund and what time today it goes into negative territory.

One explanation for today’s risk off mood is rising concerns about upcoming event catalysts: “ahead of the Fed and BOJ next week, and the vote on Brexit the week after, no one wants to take risk today,” said Juichi Wako, a senior strategist at Nomura Holdings Inc. in Tokyo. A better explanation is that stocks are finally paying attention to what the bond market has been screaming in recent weeks which is simple: deflation, if not stagflation. At this point lower yields will likely result in lower stock prices.

As we noted yesterday, when UK Gilt yields had slid to the lowest level in history, while 10y Treasuries closed below 1.7% at 1.688% after dropping a couple of basis points in yield, the rush into bond safety is unprecedented. That took US Tsys to the lowest level since February and a lot of the chatter is how they’ve now broken the downside of the recent tight trading range with February’s low mark of 1.659% now well within sight. Meanwhile 10y Bunds continue to set new dizzying lows. They finished a couple of basis points lower yesterday at 0.031% and touched an intraday low of 0.022% mid-way through the afternoon. Yesterday’s move actually meant Bund yields were 41% tighter on the day and is the third time in five days that yields have tightened by over 40%! Bloomberg’s global developed sovereign bond index is now yielding just 0.601%, the lowest on record after starting the year at 1.021%. Moments ago Bunds were trading below 0.02% and appear set to cross into the negative zone at some point today unless the ECB steps in with a bout of selling, as it did last April/May.

And while in recent weeks the collapse in global yields was largely ignored by risk assets, this time caution prevails as the week draws to a close, with global stocks headed for their biggest two-day decline in a month as investors finally gird themselves for potentially seismic events this month. The MSCI All-Country World Index pared its fourth weekly advance. Bonds rose, sending yields from Japan to Germany to all-time lows, before next week’s Federal Reserve meeting and Britain’s referendum on European Union membership later in the month. Rates on investment-grade corporate debt in euros were also near lows following purchases by the European Central Bank.

The Dollar Spot Index rose for a second day, adding 0.2% after rallying 0.4% on Thursday, which in turn has pressured commodities as copper declined again and WTI slid back under $50.

According to Bloomberg, optimism that drove U.S. stocks to a 10-month high this week may have peaked before meetings by the Fed and the Bank of Japan, Britain’s vote and U.S. political conventions, all of which have the potential to roil markets. While policy makers have done what they can with stimulus to shore up economies, they’ve pushed yields lower, hurting earnings prospects for banks.European shares have fallen every day since the ECB’s corporate bond-buying program started on Wednesday.

In other words, the ECB has another policy failure on its hands, and this time it may have no choice but to buy stocks as a last ditch measure to prevent an all out rout.

“The market is looking at a very small chance of the Fed moving next week,” Chris Green, the Auckland-based director of economics and strategy at First NZ Capital Group Ltd., said by phone. “While that’s been supportive of risk assets, a delay in the Fed rate hike is also a reflection of weaker economic backdrop. Further weakness in U.S. economic data along with the potential for Brexit would be a cause for concern.”

The MSCI world index lost 0.6 percent at 10:32 a.m. in London. It reached a six-month high mid-week as the S&P 500 came within 0.6 percent of a record. The gauge of global equities is still heading for a 0.3 percent weekly advance, while the U.S. measure has climbed 0.8 percent — both set for a fourth week of gains. Futures on the S&P 500 Index slipped 0.6 percent, following a 0.2 percent retreat in the U.S. benchmark. The index — which remains about 1 percent away from its record high — clawed back declines of as much as 0.5 percent Thursday as gains in utilities and telephone companies countered losses among banks and mining shares.

Market Wrap

• S&P 500 futures down 0.6% to 2093
• Stoxx 600 down 1.5% to 336
• FTSE 100 down 1.4% to 6143
• DAX down 1.8% to 9903
• S&P GSCI Index down 0.8% to 384.8
• MSCI Asia Pacific down 1% to 130
• Nikkei 225 down 0.4% to 16601
• Hang Seng down 1.2% to 21043
• S&P/ASX 200 down 0.9% to 5313
• US 10-yr yield down 3bps to 1.66%
• German 10Yr yield down less than 1bp to 0.03%
• Italian 10Yr yield up 1bp to 1.39%
• Spanish 10Yr yield up 2bps to 1.44%
• Dollar Index up 0.25% to 94.19
• WTI Crude futures down 1.6% to $49.75
• Brent Futures down 1.4% to $51.20
• Gold spot down 0.2% to $1,267
• Silver spot down 0.3% to $17.23

Top Global News

• Tesla Denies Model S Defect, Effort to Discourage Report to U.S.: Issued a lengthy rebuttal to reports that the U.S. is investigating a potential safety defect involving Model S sedan suspensions, and said it hasn’t discouraged customers from reporting issues to regulators
• Obama Endorses Clinton, a Signal to Democrats and to Sanders: President to join campaign against Trump at Wisconsin event; Warren Endorses Clinton, Saying She’ll ‘Get Into This Fight’
• Twitter Says Some Accounts Locked After Password Disclosures: Said some of its accounts were locked to prevent potential disclosures from hacks of other websites that may have leaked login credentials on the internet
• AT&T Said to Make 2nd Round Offer for Yahoo Assets: Reuters: Yahoo set to put together new shortlist of bidders in coming days after AT&T, Verizon made 2nd round bids, Reuters reports
• Puerto Rico Debt-Crisis Plan Passes House in Bipartisan Vote: Senate said to plan action before July 1 bond payment deadline
• Japan’s Line Seeking to Raise as Much as $1 Billion in IPO: Naver-owned company to list in New York and Tokyo in July
• Whistle-Blower Said to Aid SEC in Deutsche Bank Bond Probe: Received a whistle-blower complaint alleging the bank inflated the value of mortgage bonds on its books and masked losses around 2013, according to people with knowledge of the situation
• Merck & Co. to Buy Afferent Pharmaceuticals for $500m Upfront: To acquire all outstanding stock of closely held Afferent for $500m in cash upfront
• Ralph Lauren Hires Coach CFO as It Shakes Up Management Ranks: Nielsen’s appointment comes after CEO turnaround announcement
• Wendy’s Says Breach Was ‘Considerably’ Bigger Than It Thought: Discovered malicious software aimed at getting customers’ payment-card information from point-of-sale systems
• U.S. Seeks Oil-Reserve Overhaul to Ease Mandatory Drawdowns: Energy Department seeking $2 billion to overhaul oil stockpile
• Banks Gain Ground in Push to Change Derivatives Capital Rule: Basel leverage rule said to punish banks for handling trades
• Goldman CEO Says Fed Hike Would Be Good for Confidence: Echos: A rate increase in the U.S. would be well received by markets, CEO Lloyd Blankfein says in interview
• PepsiCo Said to Cancel Meeting on Diet Pepsi Revival Plan: WSJ
• American Farm Bureau Federation Favors Bayer-Monsanto Merger: HB
• SolarCity, Arizona Public Service Talks Suspended: AZCentral

Looking at regional markets, we start in Asia which traded lower following yesterday’s modest US losses thanks to the last hour USDJPY-driven ramp, and where stocks snapped a 3-day win streak. Nikkei 225 (-0.4%) and ASX 200 (-0.9%) were both pressured following the downturn in energy which saw WTI crude futures also pull back from 3 consecutive days of gains, while weakness in basic materials also led the declines in Australia. The Hang Seng (-1.2%) completed the negative picture in Asia as a lack of drivers and the closure of markets in China kept demand subdued. Finally, 10yr JGBs gained with the June futures contract printing its highest on record, while both the 10yr, 20yr and 30yr yields declined to fresh record lows amid the risk-averse sentiment and the BoJ in the market to acquire over JPY 1.2trl in government debt.

Top Asian News

• Japan Bond Yield Falls to Record as Debt Surges Around the World: Joins a rally in U.S. and European debt on concern the outlook for the global economy is worsening
• Korea Prosecutors Raid Lotte, Hotel Unit Offices as Probes Widen: Search of offices comes as Hotel Lotte scales back IPO
• Ant Financial Said to Buy 20% of Hedge Fund Data Firm: Alibaba’s finance affiliate is said to pay $38m for Shanghai Suntime stake
• Nanshan Buys Virgin Australia Stake From Air N.Z. at 18% Premium: deal subject to regulatory approval by Chinese authorities
• Miners Cut Distressed Debt Pool by $60b as Rebound Firms: Anglo, Glencore, Freeport no longer make distressed bond list
• Fidelity Sees Indonesia Buying Opportunity as S&P Keeps at Junk: Holdings in fund 21.7% vs 4.3% y/y
• Singapore Losing Out to Hong Kong in Race to Be Most Competitive: stricter rules on foreign labor may explain Singapore’s slide

In Europe, this morning has started with a steep sell-off in equities with all European Bourses down in the session in tandem with the decline in oil prices. The Stoxx Europe 600 Index has been struggling for the past two weeks and slipped 1.6 percent on Friday, down for a third consecutive day for the first time since the beginning of May. All but nine of the 600 companies retreated, with banks and insurers leading the drop. Deutsche Lufthansa AG fell 4.5 percent after announcing the surprise departure of Chief Financial Officer Simone Menne. DAX is currently down -2.0% with the worst performing sector being financials. In terms of notable company news, the Sainsbury’s acquisition of Home Retail is starting to take shape with Sainsbury’s CFO replacing Home Retail’s CEO and announcing that the takeover should be completed in Q3. Elsewhere Lufthansa shares declined 4.5% after the airline announced the surprise departure of CFO Simone Menne. In credit markets, global yields have continued to plunge with Bunds hitting fresh record lows of 0.02%, while yields in the long end have notably underperformed as participants continue to hunt for yield. Of note, Bunds hitting around 165.18 could see yields fall to around —0%. 

Top European News

• Billionaire Roekke Agrees to Buy BP’s Norwegian Unit in Oil Push: Det Norske agreed to buy BP’s Norwegian unit in a NOK10.8b ($1.3b) stock deal, to issue 135m shares at NOK80 each
• Naspers Said to Plan Sale of Polish EBay Competitor Allegro: Morgan Stanley said to advise African tech firm on disposal, Polish e-commerce site said to be worth up to $3 billion
• Lufthansa Shares Fall as ‘Well-Regarded’ CFO Makes Surprise Exit: Finance chief Simone Menne to leave Aug. 31 to pursue other career options
• UniCredit Board Said to Meet on CEO Search That Could Take Weeks: Company’s succession process said to possibly take weeks
• Zurich Insurance to Create Simpler Structure Under CEO Greco: Heads of regions to report directly to new CEO Mario Greco
• Tesco Dumps Turkish Unit at Huge Discount to Market Value: Sale of 95.5% Kipa stake to yield proceeds of $43.4 million
• Axel Springer Buys EMarketer, Extending U.S., Digital Push: To buy market researcher EMarketer at an enterprise value of ~$250m
• Europe Stocks Could Plunge 24% in Brexit, Stress Study Shows: Risk-modeling firm Axioma Inc. found that stocks would take the hardest hit among asset classes when it simulated the effects of a “Leave” vote on a hypothetical portfolio
• Brexit Debate Sees Johnson Attacked for Leadership Ambitions

In FX, the Bloomberg Dollar Spot Index rose for a second day, adding 0.2 percent after rallying 0.4 percent on Thursday. The gauge is headed for a second straight weekly decline, down 0.2 percent. The Fed decision June 15, while the BOJ convenes the following day. The MSCI Emerging Markets Currency Index dropped 0.3 percent. The regional currency gauge is still up 1.4 percent this week, the best performance in two months. Sterling headed for its second weekly decline versus the dollar before the U.K. votes on June 23 on whether to remain in the EU. Implied volatility for one-month options on the pound versus the dollar rose to 23.5 percent, the highest since January 2009, and more than double the level at the end of April. Expectations for price swings have climbed every week since the period ended April 29, the longest streak of increases since late February. Russia’s ruble fell for a second day, dropping 0.6 percent, before a central bank rate decision. While economists are split on whether policy makers will cut or leave their key rate unchanged, forward-rate agreements are signaling a reduction over three months.

In commodities, the Bloomberg Commodity Index is down for a second day, the first two-day decline since May 24. It’s still heading for a fifth weekly advance, the longest rally in more than two years.
West Texas Intermediate crude fell 1.3 percent to $49.89 a barrel, trimming its fourth weekly advance in five to 2.7 percent. U.S. inventories fell by 3.23 million barrels last week to a two-month low, the third straight drop, government data showed Wednesday. Wildfires in Canada curtailed oil-sands production, with lost output estimated at less than 1 million barrels a day. Copper for delivery in three months extended a weekly decline by 0.4 percent to $4,497 a ton after stockpiles on the London Metal Exchange posted the biggest weekly increase in more than a decade. Metal registered to the London Metal Exchange jumped 37 percent, the most in more than a decade as falling premiums for physically delivered metal and warehouse incentives saw metal diverted to locations in Singapore and South Korea.

Bulletin Headline Summary from RanSquawk and Bloomberg

• European equities trade lower ahead of the US open with softness in energy prices and weakness in financial names guiding sentiment
• Some moderate moves in FX but all very tight/range bound as yet while, bond yields hitting record lows
• Looking ahead, highlights include the Canadian jobs report, Uni. Of Michigan and US monthly budget statement

• Treasuries rallied in overnight trading and global bond yields drop to record lows as concern over growth and Brexit increase risk-off sentiment. 10Y government notes in Japan, Germany and the U.K. all posted record-low yields over last 24 hours.
• Trader expectations for price swings in the pound climbed for a sixth week to a fresh seven-year high as anxiety about a potential British exit from the European Union gripped investors
• An influential adviser to Prime Minister Shinzo Abe said the BOJ should bolster monetary stimulus as soon as next week, but stick to its main tool of government-bond purchases for now rather than opt for a more-negative benchmark interest rates
• The European Central Bank has pledged enough stimulus to return euro-area inflation to its goal, policy maker Bostjan Jazbec said, in a sign that officials may sit tight over the summer months
• Spain is heading for its second election in six months on June 26 after party leaders failed to piece together a governing majority from the deadlocked parliament
• The world’s biggest banks have argued for years that capital rules punish them for handling clients’ derivatives trades. All that lobbying is starting to pay off

* * *

DB’s Jim Reid concludes the overnight wrap

Lower yields certainly weren’t just unique to the UK yesterday as global bond markets rallied in what was a much more risk-off day all round. Indeed 10y Treasuries closed below 1.7% at 1.688% after dropping a couple of basis points in yield. That took them to the lowest level since February and alot of the chatter is how they’ve now broken the downside of the recent tight trading range with February’s low mark of 1.659% now well within sight. Meanwhile 10y Bunds continue to set new dizzying lows. They finished a couple of basis points lower yesterday at 0.031% and touched an intraday low of 0.022% mid-way through the afternoon. Yesterday’s move actually meant Bund yields were 41% tighter on the day and is the third time in five days that yields have tightened by over 40%! Bloomberg’s global developed sovereign bond index is now yielding just 0.601%, the lowest on record after starting the year at 1.021%.

There didn’t appear to be one obvious trigger to set off the rally in bonds yesterday or safe haven trades for that matter. The decline in Chinese CPI and surprise Bank of Korea easing early on may have been partly to blame while WTI Oil (-1.31%) could have also been a factor after paring some of the big rally of late. Metals also had a rougher day with Copper and Aluminium down over 1%. A lot of the chatter was that the moves were just more reflective of position squaring as we edge another day closer to the Brexit vote with a general feel of caution clearly evident in the market at the moment. Reports surfacing out of the WSJ suggesting that George Soros has been recently buying Gold and Gold stocks perhaps helping while later on in the day we also heard Bill Gross warn that the current $10tn of negative yielding bonds is a ‘supernova that will explode one day’.

So unsurprisingly it was risk assets which lost out yesterday. European equities shed around 1% generally although losses in the US were a lot more modest by comparison. The S&P 500 finished just -0.17% lower and continues the theme that we’ve seen of late with moves either way being fairly subdued. With a number of big events still to come this month it still feels like there’s a bit of a waiting on the sideline approach at the moment.

This morning in Asia and with little else to guide markets, it looks like that risk off theme is continuing for the most part with bourses edging lower. While markets in China are still closed, the Hang Seng (-0.73%) has reopened in the red, while the Nikkei (-0.85%), Kospi (-0.49%) and ASX (-0.99%) are also down. The move lower in bond yields yesterday is also being mirrored in the JGB market where the 10y has struck a new record low of -0.152%. In fact as we type the 15y maturity of the JGB has just turned negative for the first time ever. It’s getting to the stage where these sorts of headlines are almost becoming commonplace.

Moving on. The economic data didn’t add a huge amount to the debate yesterday. Early on in Europe we saw Germany print a larger than expected trade surplus in April with exports flat MoM after the consensus had been for a decline (-0.8% expected). Meanwhile in the US we saw initial jobless claims nudge down slightly last week. Claims printed at 264k (vs. 270k expected) which is down 4k from the week prior, while the four-week average was down 7k to 270k. Elsewhere we learned that wholesale inventories rose more than expected in April (+0.6% mom vs. +0.1% expected), while trade sales (+1.0% mom vs. +1.1% expected) were more or less in line. The Atlanta Fed left their Q2 GDP forecast of 2.5% unchanged post that report.

Away from the data, there was also some focus on the comments from ECB President Draghi yesterday when he warned about the cost of delaying reforms in Europe. Draghi said that ‘we cannot avoid the fact that, over time, the inherent speed limits resulting from the euro area’s unfavourable demographics will start to bite’ and that the cost from delaying the implementation of reforms is ‘simply too high’.
Looking at today’s calendar, this morning in Europe the early focus should be on Germany shortly after we go to print with the final revision to the May CPI report (no change to the +0.3% mom expected). In France and Italy we’ll get the latest industrial production reports too. This afternoon in the US the release of note will be the first take of the University of Michigan consumer sentiment reading for June where expectations are for a 0.7pt decline to 94.0. Later on this evening we’ll get the Monthly Budget Statement for May.

Before we wrap up, first thing Monday morning will see the release of the final batch of economic indicators out of China including retail sales, industrial production and fixed asset investment, so expect that to set the tone on Monday.

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Submitted by John Browne via Euro Pacific Capital,

As the June 23rd BREXIT (the UK-wide referendum to leave the EU) vote draws near, the polls indicate a close result. Those urging a vote for the UK to remain inside the EU are suggesting increasingly dire economic consequences that would follow a yes vote by the British people to leave. Voices from London, Brussels, and Washington have all put immense pressure on British voters to bend to the will of the elites.

To listen to their commentary one would think that apocalypse was just around the corner. But is there any substance to their warnings?

The Pro-EU membership camp is led by Prime Minister David Cameron, supported by most of his cabinet, the Bank of England, the BBC and the massive support from the UK and EU governments that have funded enormous advertising campaigns against separation. Given this weight of their power, it is amazing how strong the support for a British exit (BREXIT) has remained.

When Britain first joined the European Economic Community (the precursor to the EU) in 1973, the primary motivation was the hopes of increasing British trade through participation in the world’s largest free-trade zone. However, the hope that the union would simply be a free-trading zone of sovereign countries has morphed into a drive for an EU superstate that has relentlessly pushed for greater regulations on businesses and people and greater control of local laws that have nothing to do with trade.

It has been kept remarkably quiet, for instance, that the EU intends to divide the UK into eleven administrative regions, all reporting directly to Brussels. Although Scotland, Wales and Northern Ireland will remain intact as individual national regions, England will be split into eight regions. Worse still, the coastal counties of England will be teamed with regions in Portugal, France, the Netherlands and Germany, where they will remain in a minority role. Even the English Channel is to be renamed. Very little mention is of the EU proposal for EU-wide ID and tax numbers, likely heralding a heavy EU taxation regime.

Likewise, the proposals to create EU-wide armed forces have been put quietly on the back burner. England has a long and proud history of struggling for its sovereignty. In just the past two centuries she has stood alone against Napoleon and Hitler, before inspiring other nations to join the fray. The presence of French or German armed forces used to support a European police force in the UK will not sit well with the English.

All this and many more threats to the British people have been kept largely quiet. Instead, the main activities of the Pro-EU group have been concentrated on the economic and monetary catastrophe that would face the UK if it were to cut itself off from trading with the EU. Some call this, ‘Project Fear’. The actual underlying facts paint a somewhat different picture, one that makes the Pro-EU case appear misleading, even deliberately so.

The basic argument is that with about 50 percent of its current trade with the EU, the UK would face a catastrophic economic and monetary collapse if it left the EU. As a threat, this sounds potentially devastating. Doubtless it has persuaded some. But in the light of reality, a different and far less worrying image emerges.

The UK has the fifth largest national economy in the world, according to 2015 figures compiled by the International Monetary Fund. In its present state of economic stagnation, the EU can ill-afford to lose the UK. According to the March 2016 Statistical Bulletin from the Office for National Statistics, the UK has had a negative trade balance in goods with the EU that has averaged about $8 billion a month this first quarter. If the UK were to leave without being able to negotiate an independent trade deal, the EU economy might shrink by some $96 billion a year. The UK was the second largest net contributor to the EU budget last year. It follows that the 8 English regions (with Scotland, Wales and N. Ireland considered as ‘relatively poor’) may in aggregate be the second largest suppliers of future intra-EU money transfers from the so-called ‘rich’ to the poorer southern and eastern regions of Europe. In that sense, the EU needs the UK more than the other way round.

The Pro-EU camp ignore the trade balance issue completely and threaten, as did President Obama, that the UK would be left out in the cold, like Switzerland, and unable to negotiate its way out of a disaster. Switzerland is not an EU member and has an economy of less than a quarter the size of the UK’s. And yet from 2009-2013 she exported, on average, 4.6 times the value per person to the EU than does the UK (The Truth About Trade Outside the EU, William Dartmouth MEP, June 2015). With a negative EU trade balance, why would the UK be unable to negotiate, from outside, a trade agreement at least as good as that achieved by Switzerland?

[As an aside, over dinner many years ago, my occasional Lords and Commons golfing partner Dennis Thatcher asked me how the UK would survive alone in an era when world power blocks and corporations were getting bigger? I replied, “In the same way as Switzerland.” He retorted while hitting the table hard with his hand, “That’s just what Margaret thinks!”]

Further, the EU negotiates international trade agreements under the auspices of the World Trade Organization (WTO), in the primary interests of the EU, not of the UK. England has flourished by trading globally, especially with the U.S. and the British Commonwealth. The EU has no trade agreements yet with China or Japan. Outside the EU, the UK would be enabled to negotiate freely to trade with the entire world and be unfettered by the EU where it has a muted voice of 1 among 28 members. Furthermore, free of burdensome and costly EU regulations, the British economy likely would be re-energized, particularly among the vital job-creating small business sector.

In addition to economic collapse, the Pro-EU camp postulates that the British pound sterling, still one of the top five global trading currencies, would plummet following a BREXIT. However, many informed observers believe the international monetary system is on the cusp of a major collapse. In these circumstances, the vital interests of the Federal Reserve, European Central Bank, Bank of Japan and even the Bank of China would be to steady the ship to avert a collapse of fiat currency. Unimaginable amounts of central bank money could be deployed to save the pound, rendering it a false scare.

On the other hand, although the UK is not a member of the euro, a BREXIT indirectly could threaten the euro, now the world’s second currency.

Already a number of EU members are experiencing anti-EU sentiments among their people. The United Kingdom Independence Party (UKIP), which forced the BREXIT vote, is not alone. It is part of a sizable block, styled the Europe for Freedom and Direct Democracy (EFDD) group, in the EU parliament. It is comprised of representatives from the UK, France, Sweden, Italy, Poland, Lithuania and the Czech Republic. In addition, countries like Greece, Spain and Portugal are becoming very unhappy about the implications of Eurozone membership. A for BREXIT vote could ignite an implosion within the Eurozone rather than being a threat to Sterling. This may be what worries the international central banking and political elite most. It has led directly to massive global elite support for Cameron’s Project Fear.

If the British public wises up to David Cameron’s game of fear and vote for BREXIT, there will be some short-term shock and disruption in currencies, equities, bonds, precious metals and possibly employment. However, the global central bank and political elites could be expected to move very fast to avoid the development of deeper problems. Negotiations likely would be concluded very quickly to calm things down with minimal damage to the UK economy or its currency.

USA fertility rate unexpected drops to the lowest on record:  1.30

And the pundits do not understand this??

Millennials are staying at home. You do not need any other explanation.

(courtesy Mish Shedlock)