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Global Stocks in Steep Weekly Retreat After Central Bank Rate Rises

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Global stocks have suffered one of their heaviest weekly falls since the outbreak of the coronavirus pandemic, as the aggressive pace of stimulus withdrawal by major central banks and the threat of an economic slump spooked investors.

With just a few hours to go before the end of the New York session, a FTSE gauge of developed and emerging market shares had dropped 5.8 per cent since trading kicked off on Monday — putting it on track for its worst weekly performance since the pandemic-driven ructions of March 2020.

An equity rout on Thursday had pushed the US benchmark S&P 500 gauge down 3.3 per cent, in a sign of the increasingly gloomy market outlook as the Bank of England and the Swiss National Bank followed the Federal Reserve in raising interest rates to tackle soaring inflation.

“What’s been driving the markets over the past week is the realisation that recession risks in the US are much higher than what were anticipated,” said Jeff Schulze at ClearBridge Investments.

The blue-chip S&P was poised for a 6 per cent slide over the week even as equity markets were steadier on Friday in New York, with the index up 0.1 per cent and the technology-heavy Nasdaq Composite up 1.4 per cent.

In Europe, the regional Stoxx 600 closed 0.1 per cent higher, having lost 2.5 per cent in the previous session.

Some analysts believe the decline in European equities has bottomed out, with Bank of America upgrading its view of the Stoxx 600 index from “negative” to “neutral” on the premise that a sharp drop since January’s all-time high has priced in the bad macroeconomic news it anticipates. “We expect central banks’ focus to shift from inflation to weakening growth,” the Wall Street bank said.

The SNB on Thursday surprised markets with its first rate rise since the lead-up to the global financial crisis in 2007, lifting borrowing costs by half a percentage point after inflation in the country hit a 14-year high last month. The BoE joined the trend hours later, with a 0.25 percentage point increase as it warned that UK inflation would climb above 11 per cent this year.

A day earlier, the Fed had lifted rates by 0.75 percentage points in its biggest such move since 1994. And in a monetary policy report released to Congress on Friday, the Fed said its “commitment to restoring price stability — which is necessary for sustaining a strong labor market — is unconditional”.

“The more aggressive line by central banks adds to headwinds for both economic growth and equities,” said Mark Haefele, chief investment officer at UBS Global Wealth Management. “The risks of a recession are rising, while achieving a soft landing for the US economy appears increasingly challenging.”

Indicating traders’ anticipation of further equity market volatility to come, the Vix — often referred to as Wall Street’s “fear gauge” — registered a reading of more than 31 on Friday, well above its long-run average.

In government debt markets, the yield on the benchmark 10-year US Treasury note fell 0.1 percentage point to 3.21 per cent, after sharp swings in recent days as investors adjusted to expectations of higher interest rates and an end to the Fed’s bond-buying programme that pumped billions of dollars into the US economy. Bond yields fall as their prices rise.

The Fed’s aggressive rate rises have also hit corporate debt markets, with investors pulling $6.6bn out of funds that buy lower-quality, US high-yield bonds in the week to June 15.

Meanwhile, Italian bonds continued to rally after European Central Bank president Christine Lagarde told the bloc’s finance ministers that doubting the central bank’s commitment to fighting financial “fragmentation” of the region “would be a serious mistake”.

Italy’s debt has rebounded from a heavy sell-off after the ECB said at an unplanned meeting this week that it would speed up work on a new tool to counter surging borrowing costs in the euro bloc’s weaker economies. Italian 10-year yields fell 0.18 percentage points to 3.58 per cent on Friday, down from a high of 4.19 per cent earlier in the week.

In currency markets, the yen weakened as much as 2.4 per cent to ¥135.42 against the dollar after the Bank of Japan diverged from the strategy of aggressive tightening taken by its global peers by leaving policy rates unchanged.

Additional reporting by Tommy Stubbington

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Original Post: ft.com

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Shoppers Astonished As Price of Lurpak Butter Soars to Eye-watering Sum

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CUSTOMERS have shared their shock after a 500g pack of Lurpak shot up in price to an eye-watering new level.

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Key Passages From the US Supreme Court on Abortion Rights

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The US Supreme Court on Friday struck down Roe vs Wade, the 1973 ruling that guaranteed a constitutional right to abortion, in one of its most consequential decisions on civil rights in years.

The arguments on both sides are lengthy and involved, and the final ruling comprised five separate opinions spanning 213 pages: the opinion of the court, two concurring opinions, an opinion agreeing only with the court’s judgment and a dissenting opinion.

Below are some of the most notable passages from each.

Opinion of the court, written by Samuel Alito

Much of Alito’s majority opinion matched a leaked draft from February 10, which was published by Politico in May.

To begin, Alito argued that the court overstepped when first deciding Roe.

As Justice Byron White aptly put it in his dissent, the [Roe] decision represented the “exercise of raw judicial power”, and it sparked a national controversy that has embittered our political culture for a half-century.

He argued that the case was wrongly decided, and poked at its reasoning. (He also cited Planned Parenthood vs Casey, another abortion case that affirmed Roe.)

Roe was egregiously wrong from the start. Its reasoning was exceptionally weak, and the decision has had damaging consequences. And far from bringing about a national settlement of the abortion issue, Roe and Casey have enflamed debate and deepened division.

Alito argued that there is no right to an abortion rooted in American “history and tradition”.

We hold that Roe and Casey must be overruled. The constitution makes no reference to abortion, and no such right is implicitly protected by any constitutional provision, including the one on which the defenders of Roe and Casey now chiefly rely — the Due Process Clause of the Fourteenth Amendment. That provision has been held to guarantee some rights that are not mentioned in the constitution, but any such right must be “deeply rooted in this nation’s history and tradition” and “implicit in the concept of ordered liberty”.

He reiterated the Roe court’s “errors” and lamented that the issue had been taken out of the hands of those who opposed abortion rights.

Roe was on a collision course with the constitution from the day it was decided . . . and the errors do not concern some arcane corner of the law of little importance to the American people. Rather, wielding nothing but “raw judicial power,” the court usurped the power to address a question of profound moral and social importance that the constitution unequivocally leaves for the people . . . The court short-circuited the democratic process by closing it to the large number of Americans who dissented in any respect from Roe . . . Roe and Casey represent an error that cannot be allowed to stand.

Finally, Alito wrote that court does not know, and need not consider, the implications of its decision.

We do not pretend to know how our political system or society will respond to today’s decision over-ruling Roe and Casey. And even if we could foresee what will happen, we would have no authority to let that knowledge influence our decision. We can only do our job, which is to interpret the law, apply longstanding principles of stare decisis, and decide this case accordingly.

We therefore hold that the constitution does not confer a right to abortion. Roe and Casey must be overruled, and the authority to regulate abortion must be returned to the people and their elected representatives.

Concurring opinion by Clarence Thomas

Thomas, widely considered to be the most conservative justice, agreed. He also said the court should perhaps go further and reconsider its decisions on contraception, same-sex relationships and same-sex marriage, citing Supreme Court cases relevant to each issue.

For that reason, in future cases, we should reconsider all of this court’s substantive due process precedents, including Griswold, Lawrence, and Obergefell. Because any substantive due process decision is “demonstrably erroneous,” we have a duty to “correct the error” established in those precedents.

Concurring opinion by Brett Kavanaugh

Kavanaugh, another conservative, wrote to share his “additional views”. He emphasised that the court was returning the issue of abortion to the people, rather than outlawing it.

To be clear, then, the court’s decision today does not outlaw abortion throughout the United States. On the contrary, the court’s decision properly leaves the question of abortion for the people and their elected representatives in the democratic process.

He claimed the constitution was “neutral” when it comes to abortion rights.

In sum, the constitution is neutral on the issue of abortion and allows the people and their elected representatives to address the issue through the democratic process. In my respectful view, the court in Roe therefore erred by taking sides on the issue of abortion.

And he wrote that court itself must be “scrupulously neutral” — a point to which the court’s liberals took exception.

In my judgment, on the issue of abortion, the constitution is neither pro-life nor pro-choice. The constitution is neutral, and this court likewise must be scrupulously neutral. The court today properly heeds the constitutional principle of judicial neutrality and returns the issue of abortion to the people and their elected representatives in the democratic process.

Opinion by John Roberts, concurring in judgment

Roberts, the chief justice, concurred with the court’s specific judgment upholding Mississippi’s 15-week restriction on abortions, but not with the dramatic scope of its decision. He called it a “serious jolt to the legal system”.

I would take a more measured course . . . Our abortion precedents describe the right at issue as a woman’s right to choose to terminate her pregnancy. That right should therefore extend far enough to ensure a reasonable opportunity to choose, but need not extend any further.

He reiterated that overturning Roe was unnecessary to deciding the case.

I would decide the question we granted review to answer — whether the previously recognised abortion right bars all abortion restrictions prior to viability, such that a ban on abortions after 15 weeks of pregnancy is necessarily unlawful. The answer to that question is no, and there is no need to go further to decide this case.

Dissenting opinion by Stephen Breyer, Sonia Sotomayor and Elena Kagan

The impassioned dissent by the court’s three-member liberal wing begins by pointing to the “half a century” during which Roe vs Wade “protected the liberty and equality of women”.

Respecting a woman as an autonomous being, and granting her full equality, meant giving her substantial choice over this most personal and most consequential of all life decisions.

They said they fear the “draconian restrictions” and punishments that states may now mete out.

Enforcement of all these draconian restrictions will also be left largely to the states’ devices. A state can of course impose criminal penalties on abortion providers, including lengthy prison sentences. But some states will not stop there. Perhaps, in the wake of today’s decision, a state law will criminalise the woman’s conduct too, incarcerating or fining her for daring to seek or obtain an abortion.

And in any case, they wrote, women’s rights have been curtailed.

Whatever the exact scope of the coming laws, one result of today’s decision is certain: the curtailment of women’s rights, and of their status as free and equal citizens.

The dissenters also took a direct shot at Kavanaugh’s neutrality argument.

When the court decimates a right women have held for 50 years, the court is not being “scrupulously neutral”. It is instead taking sides: against women who wish to exercise the right, and for states (like Mississippi) that want to bar them from doing so.

And unlike Alito, they specifically sought to address the real-world implications.

The disruption of overturning Roe and Casey will therefore be profound. Abortion is a common medical procedure and a familiar experience in women’s lives. About 18 per cent of pregnancies in this country end in abortion, and about one-quarter of American women will have an abortion before the age of 45 . . . [P]eople today rely on their ability to control and time pregnancies when making countless life decisions: where to live, whether and how to invest in education or careers, how to allocate financial resources, and how to approach intimate and family relationships.

They warned of the fragility of constitutional protections.

The American public, they thought, should never conclude that its constitutional protections hung by a thread — that a new majority, adhering to a new “doctrinal school”, could “by dint of numbers” alone expunge their rights.

Supreme Court justices often conclude their dissents by saying they “respectfully dissent” or, to hit a stronger note, that they simply “dissent”. On Friday, the court’s liberal bloc dissented “with sorrow”.

With sorrow — for this court, but more, for the many millions of American women who have today lost a fundamental constitutional protection — we dissent.

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Original Source: ft.com

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US Supreme Court Overturns Roe Vs Wade in Major Blow to Abortion Rights

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The US Supreme Court has struck down Roe vs Wade, the legal decision that has enshrined the constitutional right to an abortion for nearly 50 years, in a dramatic ruling by the court’s conservative majority that will shake up American society, politics and jurisprudence for years to come.

In the decision authored by Justice Samuel Alito, the justices of the Supreme Court upheld a state law in Mississippi that bans abortion after 15 weeks. They also went further, saying that the Roe vs Wade ruling of 1973 was incorrectly decided. The court’s three liberal justices dissented.

The court’s ruling was one of its most intensely anticipated in years — even more so after a draft of the majority opinion heralding its final decision to overturn Roe vs Wade was published by Politico in April, triggering a highly unusual probe within the institution into the leak. 

In denying a constitutional right to an abortion, the court has effectively given a green light for states to enact abortion laws that can be as restrictive as they wish. Several states run by Republican-led governors and legislatures have already passed laws that mean more restrictions on abortion will be automatically implemented if Roe is overturned.

The sweeping opinion in the Mississippi case was made possible by the appointment of three conservative Supreme Court justices during the presidency of Donald Trump, who secured their confirmation through the then Republican-led Senate. The court’s conservative majority is now so strong that it can afford to lose the support of Chief Justice John Roberts, who is considered a more moderate conservative, and still prevail in key rulings.

Earlier this year, the Democratic-led Senate confirmed Ketanji Brown Jackson, a liberal nominated by Joe Biden, to be a justice on America’s highest court. Since she is replacing Stephen Breyer, another liberal, her appointment will not affect the court’s balance of power.

The Supreme Court ruling on abortion was released with less than five months to go before November’s midterm elections, and may alter the political dynamic heading into the vote, though it is unclear whether it can overpower the impact of high inflation and economic perceptions as a factor for voters.

With polls showing that a majority of Americans opposed to overturning Roe vs Wade, Democrats are hoping that the ruling will trigger outrage, mobilise its base, and attract moderate swing voters who will see Republican positions on the issue as increasingly extreme.

But Republicans believe that disappointment with Biden’s handling of the economy, and high consumer prices, particularly for food and petrol, will still carry the day and give them a strong chance of recapturing control of the House of Representatives and possibly even the Senate. 

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Original Post: ft.com

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