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Flying Financials

In the recent sector rotation, basically OUT of technology and INTO anything else, Financials and Real-Estate led the relative move.

On the RRG above, I have highlighted the (daily) tail for XLF to show how it stands out from the other sectors.

On the weekly RRG, XLF is still positioned inside the lagging quadrant but has started to curl back up on the back of the recent strength.

The start of the rotation out of Technology translates into a tail for XLK, which has started to roll over inside the leading quadrant. With increased weakness for Technology, Communication Services, and Consumer Discretionary showing on the daily RRG, it now becomes a balancing act to match this rotation with the one seen on the weekly RRG.

Technology Still Carries a Lot of Weight

Let’s start at the top, the weekly time frame. Technology is still inside the leading quadrant and has just started to roll over. There is nothing unusual or alarming from this rotation on its own. What is unusual, and at least a bit worrisome, is the high concentration of tails on the opposite side inside the lagging quadrant. This image tells the story of narrow breadth, which I have mentioned in articles and blogs.

Information Technology, on this weekly RRG, still carries the weight of the entire market.

On the daily RRG, the situation is the exact opposite. XLK has rapidly rotated into the lagging quadrant. XLY is inside weakening and heading for lagging, while XLC is on a very short tail inside, lagging with this week’s node picking up relative momentum. ALL other sectors have rotated into the leading quadrant at long tails led by Financials and Real Estate.

This raises the question: Is the strong rotation on the daily RRG the start of a bigger rotation, which will drag XLK out of the leading quadrant on the weekly RRG, and will this benefit the other sectors? Or is this rotation on the daily RRG just an intermezzo, and will the rotations that have started on the weekly RRG be completed on their respective sides of the chart and maintain their long-term relative trends?

Rotation To Other Sectors or Out of the Market?

From the RRGs alone, I feel that Technology has become top-heavy and needs a break. Money has started to rotate out of the sector, which is likely not over yet. With the market capitalization remaining so split between tech and anything else, it is very well possible that the other sectors will now take over and help $SPX stay afloat. In that case, we will see broader participation, with all sectors minus tech, but still a market under pressure.

But this only works when the money remains in the stock market, i.e., true sector rotation. It’s a different story when money starts to move out of the market ($SPX).

Stocks vs. Bonds Tell a Story

When I compare stocks and bonds, we see a clear rotation out of stocks (SPY) into bonds (GOVT) in the daily time frame.

Here, the weekly picture is also not as pronounced, but the first cracks are visible.

On the straight 1-1 comparison between SPY and IEF, we get a bit more clarity.

This week (one more hour of trading to go), the SPY:IEF ratio is breaking down from its rising channel, which has been in place since October 2023. It is breaking the rising support line and the previous low (double support), while the negative divergence between price and RSI is now executing/triggering with a break below the previous low in the RSI.

So, all in all, it leads me to believe that we are facing, at least, a few weeks of sideways to lower movement for the S&P 500.

To maintain the long-term uptrend, the market must catch the outflow from large-cap growth/Technology stocks and regroup during this period. Preferably, it should build a stronger base in terms of the number of sectors and stocks that contribute to a renewed or continued rally in the S&P 500.

For now, caution and careful money management are key.

#StayAlert and have a great weekend. –Julius


Major equity indexes rose on Friday after a selloff that hit the Technology sector especially hard. But this doesn’t necessarily mean that everything is OK going into next week. Wall Street seems to be in whiplash land, veering from one market area to another.

The Dow Jones Industrial Average ($INDU) closed higher by 1.64%, providing a boost to Industrials. The Nasdaq Composite ($COMPQ) and S&P 500 ($SPX) closed mid-range. That all indexes closed above their Thursday lows is encouraging and a good way to end a week that looked like it could end in doom. 

Softer Inflation Data Sheds Optimism

It’s possible the June Personal Consumption Expenditure (PCE) price index was the catalyst behind the recovery rally. The PCE rose 0.1% month over month and 2.5% year over year. The core CPI rose 0.2% month over month and 2.6% year over year. The data suggests that inflation is slowly converging toward the Fed’s 2.0% target. So, perhaps the soft landing scenario will become a reality. Let’s wait to hear what Fed Chair Powell says next week.

The S&P 500 bounced off the 50-day simple moving average (SMA) and touched the October–April trendline at its high but closed lower (see chart below). Will the trendline act as a strong support level for the index to conquer?

CHART 1. UPTREND IN THE S&P 500 SINCE OCTOBER 2023. The S&P 500 is in an important area, and investors should watch to see if it breaks above or below the trendline or moving average. Chart source: StockCharts.com. For educational purposes.

The long-term trend is still looking strong, but given that the next few months is a seasonally weak period, expect the market to correct. As long as it stays above its 25-week SMA and the SMA is trending higher, the long-term trend will be bullish. 

The Nasdaq was hard hit on Wednesday and Thursday, and Friday’s recovery didn’t take the index above its 50-day SMA. It’s still looking indecisive as it straddles below the 38.2% Fibonacci retracement level (see chart below). 

CHART 2. DAILY CHART OF NASDAQ COMPOSITE WITH FIBONACCI RETRACEMENT LEVELS. The Nasdaq failed to break above its 38.2% Fibonacci retracement level. Let’s see what next week brings. Chart source: StockCharts.com. For educational purposes.

Where Are Investors Flocking?

The Dow Jones Industrial Average, which got hit hard after hitting a new high on July 17, was the big winner on Friday. And since the S&P 400 midcap index has a high concentration of Industrials, the S&P 500 Mid Cap Index ($MID) got a boost. 

Small-cap stocks also rose, with the S&P 600 Small Cap Index ($SML) hitting a new 52-week high. Does this mean that undervalued small caps are a good place to park your cash while the mega-cap indexes go through their correction? It may be worth considering, given that most of the big tech companies reporting next week are looking weak technically. 

So, what’s going well? The cooling inflation data increased expectations of interest rate cuts which helped bank stocks. While the broader equity indexes were struggling, the KBW Bank Index ($BKX) saw a mild correction followed by a rally. The index closed at a new 52-week high.

CHART 3. KBW BANK INDEX HITS NEW 52-WEEK HIGH. Expectations of cuts in interest rates this year sent bank stocks higher. Chart source: StockCharts.com. For educational purposes.

The stock market is forward-looking, so it’s important to pay attention to what comes next. We’re entering a week of heavy earnings from some big mega-cap tech stocks. There’s also the Fed meeting. While no rate cuts are expected in next week’s meeting (the CME FedWatch Tool shows a 95.3% probability of no rate cuts in July), investors will listen closely to Chairman Powell’s comments during his presser. Next week is also an economic data-heavy week with July Manufacturing PMI and Non-Farm Payrolls. Both will give some indication of the US economic landscape. 

Expect some market volatility next week. Although the Cboe Volatility Index ($VIX) eased on Friday, it’s still high, relatively speaking. Each day in the market is different. Take each day as it comes. 

End-of-Week Wrap-Up

  • S&P 500 closed down 0.83% for the week, at 5459.10, Dow Jones Industrial Average up 0.75% for the week at 40,589.34; Nasdaq Composite closed down 2.08% for the week at 17357.88.
  • $VIX down 0.79% for the week closing at 16.39
  • Best performing sector for the week: Utilities
  • Worst performing sector for the week: Consumer Discretionary
  • Top 5 Large Cap SCTR stocks: MicroStrategy, Inc. (MSTR); Carvana Co. (CVNA); Insmed Inc. (INSM); Tenet Healthcare Corp. (THC); Arm Holdings (ARM).

On the Radar Next Week

  • FOMC meeting
  • May S&P/Case-Shiller Home Price MoM
  • June JOLTs Report
  • July Manufacturing PMI
  • July Non-Farm Payrolls
  • Earnings from Advanced Micro Devices (AMD), Apple, Inc. (AAPL), Amazon.com, Inc. (AMZN), Coinbase Global Inc. (COIN), Intel Corp. (INTC), Meta Platforms (META), Microsoft Corp. (MSFT), On Semiconductor Group (ON), Snap Inc. (SNAP), and many more.

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

This week saw the major equity averages continue a confirmed pullback phase, with some of the biggest gainers in the first half of 2024 logging some major losses. Is this one of the most buyable dips of the year? Or is this just the beginning of a protracted decline with much more pain to come for investors?

Today, we’ll walk through four potential outcomes for the S&P 500 index over the next six to eight weeks. As I share each of these four future paths, I’ll describe the market conditions that would likely be involved, and I’ll also share my estimated probability for each scenario.

By the way, we conducted a similar exercise for the S&P 500 back in April, and you may be surprised to see which scenario actually played out!

And remember, the point of this exercise is threefold:

  1. Consider all four potential future paths for the index, think about what would cause each scenario to unfold in terms of the macro drivers, and review what signals/patterns/indicators would confirm the scenario.
  2. Decide which scenario you feel is most likely, and why you think that’s the case. Don’t forget to drop me a comment and let me know your vote!
  3. Think about how each of the four scenarios would impact your current portfolio. How would you manage risk in each case? How and when would you take action to adapt to this new reality?

Let’s start with the most optimistic scenario, involving the S&P 500 making yet another new all-time high as the bullish trend resumes.

Option 1: The Super Bullish Scenario

Our first scenario would mean that the brief pullback phase is now over, and the S&P 500 and Nasdaq would power to new all-time highs in August. By early September, we’d be talking about the resurgence of the Magnificent 7 names, reflecting on how the markets in 2024 have diverged so much from the traditional seasonal patterns, and discussing the likelihood of the S&P finishing 2024 above the 6000 level.

Dave’s Vote: 5%

Option 2: The Mildly Bullish Scenario

What if the Magnificent 7 stocks take a backseat to other sectors, such as financials and industrials? If the value trade continues to work, as we’ve observed in the last couple weeks, we could see a scenario where lots of stocks are working well but it’s not enough to propel the equity benchmarks much higher. The S&P 500 wouldn’t see much downside in this scenario and would spend the next six to eight weeks between 5400 and 5650.

Dave’s vote: 15%

Option 3: The Mildly Bearish Scenario

How about a scenario where this pullback continues to plague the equity markets, but the pace of the decline lightens up a bit? The mega-cap growth stocks continue to struggle, but we don’t see those full risk-off signals and the VIX remains below 20. By early September, we’re down about 10% overall off the July high, but investors are licking their lips about a potential Q4 rally into year-end 2024.

Dave’s vote: 60%

Option 4: The Super Bearish Scenario

You always need to consider an incredibly bearish scenario, if only to remind yourself that it’s a possibility, even a very unlikely one! What if this pullback is just getting started, the S&P 500 fails to hold the 5000 level, and we see a break below the 200-day moving average? That would mean a similar pullback to what we experienced in August and September 2023, and while we’re talking about the potential for a Q4 rally, we’re all way more concerned that there’s even more downside to be had before it’s all said and done.

Dave’s vote: 20%

What probabilities would you assign to each of these four scenarios? Check out the video below, and then drop a comment with which scenario you select and why!

RR#6,

Dave

PS- Ready to upgrade your investment process? Check out my free behavioral investing course!

David Keller, CMT

Chief Market Strategist

StockCharts.com

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional. 

The author does not have a position in mentioned securities at the time of publication.   Any opinions expressed herein are solely those of the author and do not in any way represent the views or opinions of any other person or entity.

A group of 45 American physicians and nurses who volunteered in hospitals across Gaza have sent an open letter to US President Joe Biden and Vice President Kamala Harris sharing their experiences and demanding an immediate ceasefire and arms embargo.

The signatories unanimously described treating children who had suffered injuries they believed must have been deliberately inflicted. “Specifically, every one of us on a daily basis treated pre-teen children who were shot in the head and chest,” they wrote.

“We wish you could see the nightmares that plague so many of us since we have returned: dreams of children maimed and mutilated by our weapons, and their inconsolable mothers begging us to save them. We wish you could hear the cries and screams our consciences will not let us forget.”

Many in the group have public health backgrounds and experiences volunteering in other conflict zones such as Ukraine and Iraq, according to the letter. “We believe we are well positioned to comment on the massive human toll from Israel’s attack on Gaza, especially the toll it has taken on women and children,” reads the letter posted to X on Thursday by Dr. Feroze Sidwa, who spearheaded the writing of the letter with the other physicians.

“We believe our government is obligated to do this, both under American law and International Humanitarian Law, and that it is the right thing to do,” the letter said.

The ‘only independent monitors’ in Gaza

“In Gaza, there’s no independent monitor,” he said. “If you’re not going to believe the Palestinians, then you should believe 50 doctors who’ve gone there at different times and places.”

Apart from Palestinian journalists living in Gaza, there has been no media access to the enclave since October 7, with a few exceptions of entry under official escort.

Hamawy signed the letter to recount what he saw with his own eyes. “We all saw a complete devastation of a society, of people’s lives, of health care structure,” he said.

Hamawy has worked as a surgeon in Sarajevo, in New York City on 9/11, and in Iraq, where he performed life-saving surgery on US Senator Tammy Duckworth in 2004 after her helicopter was hit by an RPG. But he said those experiences in other conflict zones were not comparable to what he had witnessed in Gaza, adding that 90% of those he had seen killed there were women and children.

Hamawy worked at the European Gaza hospital in the southern city of Khan Younis in May of this year where he performed about 115 reconstructive surgeries and treated mostly children under 14 years old. He worked on amputations, burns, and gunshot wounds to the face, he said.

Another patient was a little boy who picked up what he thought was a can of tuna to bring back to his family in Rafah, Hamawy recalled. But the metal object was in fact an unexploded cluster bomb, according to Hamawy, who said that after opening it in front of his family, the child lost his left arm, both his legs, and three fingers on his right arm.

‘No kid gets shot twice by a sniper by mistake’

The photos were sent to him by a first-year medical resident who had been forced to perform the surgery and requested Perlmutter’s expertise. When Perlmutter asked why senior surgeons hadn’t done the operation, the resident explained that they had been killed in a bombing.

Describing a hospital overrun, Perlmutter said after every bombing, he would find injured children laid across the floor, their loved ones panicking and crying.

“Some are dead, some will die in front of you, and some you can save. You try to save the ones you can save,” Perlmutter said.

He recalled two patients aged around six years old, who had suffered gunshots to their heads and chests – wounds which suggested they had been deliberately targeted, he said.

“No kid gets shot twice by a sniper by mistake,” Perlmutter said, adding that the shots were “dead center” to their chests.

As Perlmutter tried to treat the children with head injuries, he said, their “brains poured out” in his hands, in what he described as a personally traumatic moment.

‘Everyone in Gaza is sick, injured, or both’

Launched in response to Hamas-led terror attacks in Israel on October 7 which killed at least 1,200 people, Israel’s monthlong military offensive in Gaza has left more than 39,000 Palestinians dead, according to the Gazan Health Ministry. The letter’s signatories estimate that the true toll of the war could be in excess of 92,000, if it included deaths from starvation or disease and bodies still buried under the rubble.

Last week the World Health Organization said the polio virus had been found in sewage samples, putting thousands of Palestinians at risk of contracting a disease that can cause paralysis.

Under such conditions, the American medical workers warned that epidemics could lead to the deaths of tens of thousands more children. The displacement of people to areas with no running water or toilets “is virtually guaranteed to result in widespread death from viral and bacterial diarrheal diseases and pneumonias, particularly in children under the age of five,” the letter said.

“Everyone in Gaza is sick, injured, or both,” with few exceptions, their letter said. “We are not politicians. We do not claim to have all the answers. We are simply physicians and nurses who cannot remain silent about what we saw in Gaza.” the letter said.

Reporting contributed by Tala Alrajjal, Sam Fossum and Eugenia Ugrinovich.

This post appeared first on cnn.com

The final lick of paint was barely dry on the newly built, white-tiled Al-Hasanat home when the war in Gaza erupted in October.

For three-year-old Ayten, the apartment in central Gaza was a source of immense pride. “This is our beautiful house,” she would say to anyone who would listen, her father, Ahmed Al-Hasanat, recounted.

But two weeks after the family moved into their new home, they were forced to flee the besieged Al-Mughraqa neighborhood, said Al-Hasanat. When they returned in November, they found their apartment badly damaged by Israeli strikes. A doll belonging to Ayten lay among the rubble, peeking out from behind a broken door.

“She said, ‘Daddy, my doll died.’”

From neatly organizing letters while staying in labyrinthine tent camps, to keeping branches from family olive trees, some say they are doing all they can to keep memories alive. For many, repeated displacement means reliving the trauma of generations uprooted by al-Nakba, or “the catastrophe,” when roughly 700,000 Palestinians fled or were forcibly expelled from their homes in historic Palestine, during the creation of Israel in 1948.

Israel launched its military offensive on October 7 after the militant group Hamas, which governs Gaza, attacked southern Israel. At least 1,200 people were killed and more than 250 others abducted, according to Israeli authorities.

Israeli strikes in Gaza have since killed more than 39,000 Palestinians and injured another 90,000, according to the Ministry of Health there.

A box of memories

Before the war, Fadi Adwan was studying for an electrical engineering degree at the Islamic University of Gaza, his dream since he was a teenager. These days, he fiddles with a navy and gray scientific calculator inside a tent in Rafah, in the south.

Israeli strikes destroyed several of the university’s buildings in the early days of the war, Palestinian news agency WAFA reported.

“Since I was in the 10th grade, I always had a calculator in my hands,” said the student, in his early 20s. He and his family have been displaced at least five times since October, he added. “I was thinking that we would go home after a month or so, but things were not the same in this war as previous wars.”

As her family prepared to flee, Ismail instructed her three sisters to fill a small box with their most treasured possessions. Her younger sister, Dina, contributed a necklace and some handwritten letters from close friends.

“Dr. Refaat’s voice is what keeps ringing in my head whenever I see my notes,” said Ismail. “He made us aware of the power of words and writing in delivering messages to the world, so we as Gazans will be heard.”

Cycles of displacement

Ismail wonders if she will relive the plight of her grandparents, whose lives were uprooted in 1948, when they were children. Her only living grandparent – her paternal grandma, who has Alzheimer’s disease – still remembers the horrors of al-Nakba, Ismail said.

“I hate it when I realize that I am reliving the exact wretched fate my grandparents once lived… I too will be traumatized and attached to my past life for as long as I live,” Ismail said.

Cycles of repeated displacement – without the promise of return – are embedded within Palestinian communities, according to Rochelle Davis, an associate professor of anthropology at Georgetown University.

“I used to wonder why they were leaving their homes in 1948,” said Adwan, the electrical engineering student. “But when this war happened, I understood why they left their homes; because of the horrific massacres that took place and because of the blood that was shed.”

Longing for ‘Palestine’

Small green leaves cling to a withering olive branch which 19-year-old Raghad Ezzat Hamouda took in October from a tree which had been planted by her father in their home in Beit Lahia, northern Gaza.

Having been displaced at least six times, Hamouda has preserved the branch – and a keffiyeh, the traditional scarf worn by many Palestinians, that belonged to her grandmother, Tamam – as they remind her of her “beloved homeland,” she says.

“Our ancestors were displaced by Israel in 1948, and the scene today in 2024 is repeated,” she added.

Once a marker of Palestinian life, Hamouda says her black-and-white fishnet-patterned keffiyeh is now a symbol of loss.

She said 85-year-old Tamam, a Nakba survivor, was injured when Israeli tanks opened fire as the family fled from northern to western Gaza in December. She was pushing her grandmother in her wheelchair at the time, she recalled. The teenager said her grandmother bled to death before they could get her to a hospital. “My grandmother was very affectionate and loved her grandchildren very much,” she said. “She loved to smile and gave us hope, especially during times of war.”

Along with house keys, some Palestinians will also have passports and land deeds from the 1940s testifying to pre-existing ownership of land in what is now Israel, according to Dr. Scott Webster, an academic from the University of Sydney. At least 70% of residents in Gaza are refugees, those who were displaced from their homes during the creation of Israel and their descendants, Amnesty International says.

“The house key is important because it brings with it all the memories, memories of the house and the garden around it, and the grapevines,” said Adwan, who has held onto his keys while being forced to flee multiple times, including from the besieged Al-Shifa Hospital.

“My father and mother have been working hard for 30 years to be able to build this house… It was partially destroyed in 2014. We built it again and it was destroyed again,” he said. “We are people with lives and memories… Maybe one day someone might care about our cause and help end our suffering.”

‘I am no longer me’

Israeli attacks in Gaza have killed at least 15,983 children, the Government Media Office reported on July 7.

Guardians may use personal objects – including toys – to provide emotional support for displaced children, said Davis, of Georgetown University. Meanwhile some adults hide their psychological trauma because they do not want to overload younger generations, according to Dr. Samah Jabr, a psychiatrist, psychotherapist and head of the mental health unit at the Palestinian Ministry of Health, in Ramallah, in the occupied West Bank.

For Al-Hasanat, saving Ayten’s doll from the wreckage of their home was an attempt to soothe his daughter’s psychological trauma.

“She used to always laugh and spread happiness,” he said, explaining that she has now developed anxiety-related habits.

“I want to look for a safe place for the sake of my children, and for the sake of a happy life for Ayten, who needs a lot to return to the way she used to be,” he added. “The pain is indescribable. We have become without feeling or sensation.”

Since their visit in November, Al-Hasanat said, their apartment has been completely destroyed by bombing. “Nothing remains of the house,” he said.

Ismail, the literature student, says the stress of war has made her feel like “a stranger in my own life.”

“That’s how I and all Gazans feel after being snatched out of our lives and being forced to evacuate,” she said. “I am exhausted, counting days waiting for this all to end. I feel I am no longer me.”

This post appeared first on cnn.com

Federal agents arrested two Mexican alleged cartel bosses on Thursday, including Joaquin Guzmán López, the son of infamous cartel boss Joaquin “El Chapo” Guzman, in one of the biggest victories for US law enforcement in recent years.

The two detained men belong to the Sinaloa cartel, one of the world’s most powerful drug-trafficking organizations, thought to be responsible for the trafficking of vast amounts of cocaine, heroin, methamphetamine and fentanyl into the US.

Investigators exploited a rift in the cartel and used the help of Guzmán López to lure the other suspect, Ismael “El Mayo” Zambada, onto a flight bound for El Paso, Texas, where they were eventually arrested. Zambada is a co-founder of the Sinaloa cartel.

“‘El Mayo’ and Guzmán López join an increasingly long list of Sinaloa Cartel leaders and associates whom the Department of Justice holds accountable in the United States,” said Attorney General Merrick Garland.

Here are some of the men they join on that list:

José Antonio Yépez, “El Marro” (August 2020)

José Antonio Yépez Ortiz, arrested in August 2020 in Guanajuato, was considered by authorities to be the leader of the Santa Rosa de Lima Cartel.

At the time, Mexico’s Secretary of Security Alfonso Durazo confirmed Yépez’s arrest via his official Twitter account, noting that “El Marro” was detained under a warrant for “organized crime and fuel theft.”

In January 2022, a court in Guanajuato sentenced Yépez to 60 years in prison for kidnapping, according to the State Attorney General’s office.

The Santa Rosa de Lima Cartel has generated most of its income through fuel theft and extortion, according to Mexican authorities. “El Marro” had been sought for months, with authorities targeting his family and close associates amid a surge in violence in Guanajuato, an area controlled by the cartel.

Rafael Caro Quintero (July 2022)

Rafael Caro Quintero, one of the FBI’s most wanted fugitives, was arrested in July 2022 by the Mexican Navy, having been on the run since 2013.

Born in 1952, Caro Quintero founded the now-defunct Guadalajara cartel in the 1970s with Miguel Ángel Félix Gallardo and other drug traffickers, according to the US State Department. He is allegedly responsible for the cultivation, shipment, and distribution of large amounts of marijuana in Mexico.

An extradition order to the United States is pending against him. However, in July 2022, a judge temporarily suspended the extradition process. Caro Quintero is accused of kidnapping, torturing, and murdering Drug Enforcement Administration agent Enrique “Kiki” Camarena in 1985.

Ovidio Guzmán “El Ratón” (January 2023)

Ovidio Guzmán López, another son of “El Chapo,” is believed to play a significant role in the Sinaloa cartel, according to the US Department of the Treasury.

Guzmán was extradited from Mexico to the US in September 2023, as confirmed by the US Department of Justice. He faces charges in the US for conspiracy to import and distribute drugs, along with his brother Joaquín Guzmán López.

In 2019, the Mexican government captured Guzmán in Culiacán, Sinaloa, but later released him amid a tense situation between government forces and armed groups loyal to his organization. In October of that year, President Andrés Manuel López Obrador admitted his government had ordered the release, stating that it had prevented “a bloodbath.” Guzmán López was later recaptured on January 5, 2023, in a raid in Sinaloa, according to Mexican authorities.

His defense has requested additional time to review documents presented by US prosecutors during a recent hearing concerning the charges against him. According to the case file, the defendant’s lawyers sought a review under Rule 16, which mandates information exchange between attorneys and prosecutors for trial preparation. Consequently, a new hearing has been scheduled for October 1.

Néstor Isidro Pérez “El Nini” (November 2023)

Néstor Isidro Pérez Salas was arrested in November 2023 in Culiacán and subsequently extradited to the United States. The US considers him one of the leaders of the Sinaloa cartel and linked with the security apparatus of Los Chapitos, a faction of the cartel associated with the children of El Chapo.

Pérez faces charges in two federal indictments. The first, in the District of Columbia, includes cocaine and methamphetamine importation, firearm possession, and conspiracy to obstruct justice through murder.

The second, in the Southern District of New York, accuses him of leading a criminal enterprise responsible for multiple deaths – including of a DEA informant – fentanyl trafficking, obstruction of justice through the murder of an informant, kidnapping with fatal outcomes for eight people, including a minor, and money laundering.

On May 30, Pérez pleaded not guilty to the charges he faces in New York.

Ismael “El Mayo” Zambada and Joaquín Guzmán López (July 2024)

Ismael “El Mayo” Zambada was arrested on Thursday, July 25, 2024, in El Paso, Texas, alongside Joaquín Guzmán López, 38, son of El Chapo. Both are in US custody, according to the Department of Justice.

Zambada is considered by US authorities to be the current leader of the Sinaloa cartel. His name has appeared in drug trafficking files for years, but there are no known charges against him in Mexico.

The US Department of Justice stated that both face several charges “for leading the cartel’s criminal operations, including its deadly fentanyl manufacturing and trafficking networks.”

Authorities had been searching for Zambada for years, and in 2021 increased the reward for information leading to his arrest to $15 million.

On July 26 Zambada pleaded not guilty to drug trafficking charges in the United States.

This post appeared first on cnn.com

Israel’s military issued an evacuation order to residents in the southern part of Khan Younis, warning it would “forcefully operate” in the embattled Gazan town, according to a statement on Saturday morning.

Khan Younis has faced intensifying bombardment recently, and a fresh Israeli ground assault earlier this week killed dozens of Palestinians there. The Israel Defense Forces (IDF) warned on Monday it would reduce its so-called humanitarian zone in the eastern part of the city, due to intelligence that militant group Hamas had embedded in the area.

Tens of thousands have been displaced over the past week. Israel said Friday that about 100 militants had been killed during recent fighting.

“The IDF is about to forcefully operate against the terrorist organizations and therefore calls on the remaining population left in the southern neighborhoods of Khan Yunis to temporarily evacuate to the adjusted Humanitarian Area in Al-Mawasi,” the military wrote on Telegram on Saturday.

The designated humanitarian area in Al-Mawasi has come under repeated Israeli attacks, including a strike on July 14 which reportedly killed 90 people and injured 300 more.

The statement said the move was in retaliation to “significant terrorist activity and rocket fire” emanating from southern Khan Younis. It added that the location previously defined as a humanitarian area “will be adjusted.”

Israel launched its military offensive in Gaza on October 7 after Hamas attacked southern Israel. At least 1,200 people were killed and more than 250 others abducted, according to Israeli authorities.

The military said on Saturday that “the calls for the temporary evacuation are being communicated to residents through SMS messages, recorded voice messages, phone calls, media broadcasts in Arabic and flyers,” adding that the early warning to civilians was “being made in order to mitigate harm to the civilian population.”

The United Nations estimated that about 150,000 people fled the area on Monday alone, following evacuation orders issued by the Israeli military, intensifying pressure on meager supplies of food and water, and places to seek shelter.

Aid agencies working in Gaza have warned previously that new rounds of evacuation orders are making the delivery of emergency rations even more difficult.

“People in Gaza are exhausted, living in inhumane conditions, with no safety at all,” the UN Relief and Works Agency posted on X on Monday.

On Thursday, the IDF said it had recovered the bodies of five Israeli hostages the previous day from a tunnel in an area of Khan Younis which it had previously designated as a “humanitarian area.”

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The most senior diplomats from China and the United States began talks in Laos on Saturday as the two global powers try to maintain lines of communication despite their deepening rivalry and regional tensions in Asia.

Secretary of State Antony Blinken is in Laos as part of a visit to Asia against the backdrop of a fierce US presidential election campaign, which has renewed regional scrutiny over what the world will look like with a new administration in the White House.

Blinken is meeting his Chinese counterpart Foreign Minister Wang Yi on the sidelines of the ASEAN foreign ministers’ meetings in Laos – the first leg of a week-long trip which also includes stops in Vietnam, Japan, the Philippines, Singapore and Mongolia.

Tension between the US and China has persisted in recent months, even as President Joe Biden’s administration has sought to stabilize rocky relations between the two global rivals.

Russia’s invasion of Ukraine, as well as China’s increasingly assertive moves in the South China Sea and threats toward Taiwan, have in recent years soured the Washington-Beijing relationship.

Earlier this week the North American Aerospace Defense Command intercepted two Russian and two Chinese bombers flying near Alaska in what a US defense official said was the first time the two countries have been intercepted while operating together.

China’s continued support of Russia more than two years into Moscow’s invasion has been a persistent point of tension for the US, its allies and the Ukrainians.

When NATO leaders met earlier this month a joint declaration labeled Beijing a “decisive enabler” of Russia’s war against Ukraine, citing China as giving “large-scale support for Russia’s defense industrial base.”

The US and the European Union in recent months have accused China of bolstering Russia’s defense sector with the export of dual-use goods, and sanctioned dozens of companies in Hong Kong and mainland China for evading the extensive measures imposed on Russia. Beijing has denied supplying weaponry and maintains it keeps strict controls on such goods.

Beijing has sought to position itself as a neutral peace broker in the conflict, despite its deepening political, economic and military ties with Moscow and Chinese leader Xi Jinping’s openly close friendship with Russia’s Vladimir Putin.

Earlier this week, Wang told visiting Ukrainian Foreign Minister Dmytro Kuleba that Beijing “supported all efforts that contribute to peace” – the first time China has hosted a top Ukrainian official since Moscow’s invasion began nearly two and half years ago.

In contrast, both Putin and Russia’s top diplomat Sergei Lavrov have been greeted in Beijing multiple times since the invasion.

Kuleba also visited Hong Kong and urged the semi-autonomous Chinese city’s government to prevent Russia from using the Asian financial hub to bypass Western sanctions.

On Thursday, Wang also met with foreign ministers from Southeast Asia, South Korea and Japan, as well as Lavrov.

Wang told Lavrov that, in the face of a turbulent international situation and external interference and resistance, “China is willing to work with Russia… to firmly support each other and safeguard each other’s core interests,” according to a statement from China’s foreign ministry.

Lavrov hailed Russia and China for “jointly upholding a fair and just international order” and “injecting positive energy into the construction of a multipolar world.”

“Russia will work with China to support the central role of ASEAN and prevent sabotage and interference by foreign forces,” Lavrov said, according to the statement.

ASEAN, a grouping of 10 Southeast Asian countries, has increasingly found itself nervously eyeing the growing tensions between China and the US in recent years.

Regional scrutiny

Among the countries Blinken will visit on his trip are the Philippines and Japan, both of which have a mutual defense treaty with Washington.

The Philippines has tacked closer to the US since the election of President Ferdinand Marcos Jnr. against a backdrop of increasingly violent clashes between Manila and Beijing in the South China Sea.

Before speaking with Wang on Saturday, Blinken urged Southeast Asian countries to work together to address challenges – including Beijing’s “escalating and unlawful actions taken against the Philippines in the South China Sea” – at a meeting with ASEAN foreign ministers.

But he also applauded Manila’s diplomacy with Beijing over the contentious issue, noting that the Philippines on Saturday completed unimpeded a resupply trip to troops stationed on a navy ship grounded at the hotly contested Second Thomas Shoal.

Such resupply missions had been the source of months of escalating tensions between the Philippines and China, which reached an interim deal last week to smooth deliveries.

“We are pleased to take note of the successful resupply today of the Second Thomas Shoal, which is the product of an agreement reached between the Philippines and China,” Blinken said.

“We applaud that and hope and expect to see that it continues going forward.”

During his presidency, Biden has pushed to deepen relations with the Philippines, Japan and South Korea, another mutual treaty ally, with Blinken a mainstay on the diplomatic circuit.

Beijing has bristled at such efforts, seeing it as part of Washington’s campaign to encircle China and contain its rise.

Asia is therefore watching closely for what might come next, especially given recent bombshell developments in the US election campaign.

Republican candidate Donald Trump, who recently survived an assassination attempt, has often viewed Washington’s alliances more transactionally than Biden does. His running mate JD Vance has advocated halting military aid to Ukraine in favor of focusing on Taiwan’s defense.

Meanwhile the Democratic Party’s campaign was upended by Biden’s decision not to seek re-election, and Vice President Kamala Harris becoming the party’s presumptive nominee.

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France is still facing travel disruption a day after saboteurs targeted high-speed railway lines in an attack coinciding with the start of the Olympics. As operators try to get service back to normal, a key question remains – who was responsible?

Authorities are investigating what outgoing French Prime Minister Gabriel Attal called a “coordinated” effort. He said that intelligence services and internal security forces are involved in inquiries and urged caution over jumping to conclusions.

No-one has yet claimed responsibility for the attacks, but given their scale, timing and precision, it is clear they are more than just random acts of vandalism.

There are many possible culprits – the opening day of the Olympic Games is one of the most watched events in the world, a tempting target for anyone seeking to cause chaos and disruption in the limelight.

Here’s what we know.

Extensive knowledge of railways

High-speed trains connecting southwestern, northern and eastern regions of French were all impacted on Friday, in what authorities described as a methodical pattern of attacks hitting key arterial routes.

The perpetrators have extensive knowledge of the network, according to Axel Persson, a leader of the CGT rail union. They must have had access to very “precise information,” he added.

Employees had implemented a failsafe plan in preparation for the Olympics, allowing some passengers to use alternative lines that would slow down traffic, but at least travelers would get to their destination, Persson added. “France is disrupted but not paralyzed,” he said.

Jean-Pierre Farandou, the CEO of state-owned rail company SNCF, told journalists that cables – which are there to ensure the security of train drivers – were set on fire and taken apart but again stressed authorities “don’t know who is behind it.”

An act of protest?

France is no stranger to widespread strikes or political demonstrations that manifest into blocked transport links across the country.

The parliamentary election held just weeks ago attracted large scale protests and rallies. However, such events tend to be announced in advance and those behind them are keen to make their cause known.

Environmental activists have previously blocked traffic to bring attention to the climate crisis. But these groups have mostly staged bold and striking demonstrations focused on fossil-fuel intensive transportation, such as on airports and highways, and also make it known when they are behind such protests.

The last major act of vandalism on high-speed train lines in France was in 2008, when steel rods were placed on overhead power cables. Police arrested individuals from an alleged anarchist group from Tarnac village but 10 years later, after a lengthy investigation, they were all acquitted and cleared of sabotage.

Foreign actors?

Recently, France has been one of several countries impacted by a wave of suspected Russian sabotage attacks against infrastructure and other targets.

French President Emmanuel Macron has remained a staunch ally of Kyiv throughout the fighting. Just in May, he suggested that Ukraine should be allowed to use their weapons against targets inside Russia from which the Kremlin attacks Ukraine.

Earlier this week, French authorities detained a Russian citizen in Paris, accusing him of preparing destabilizing events during the Games. Kremlin spokesperson Dmitry Peskov said Russia did not have any information on the arrest.

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At least 30 people have been killed and over 100 injured in an Israeli airstrike on a school in Deir-al Balah, central Gaza, according to the Palestinian Ministry of Health in Gaza.

The Israeli military it had launched the strike in order to destroy a Hamas command and control center inside the compound.

Most of the victims from the school arriving to Al-Aqsa Martyrs Hospital in the aftermath of the attack were women and children, according to Dr. Khalil Al-Daqran, a spokesperson for the hospital. More than 4,000 displaced people were housed in the school, the Palestinian Civil Defense said.

The strike came soon after Israeli’s military issued fresh evacuation orders further south, in the city of Khan Younis, where Israel launched a fresh offensive earlier in the week which has killed dozens of Palestinians.

Residents in southern neighborhoods were told to leave after being warned that the Israel Defense Forces (IDF) would “forcefully operate” in the area.

Fighting has been ongoing on Gaza for months, and the renewed offensive shows Israel’s challenges in achieving its goal of eliminating Hamas. Israel said that about 100 militants had been killed during recent fighting.

The United Nations estimated that about 150,000 people fled Khan Younis on Monday alone, intensifying pressure on meager supplies of food and water, and places to seek shelter.

Signaling another campaign was imminent, the IDF wrote on Telegram it was “about to forcefully operate against the terrorist organizations and therefore calls on the remaining population left in the southern neighborhoods of Khan Yunis to temporarily evacuate to the adjusted Humanitarian Area in Al-Mawasi.”

The statement said the move was in retaliation to “significant terrorist activity and rocket fire” emanating from southern Khan Younis. It added that the location previously defined as a humanitarian area “will be adjusted.”

Al-Mawasi has come under repeated Israeli attacks, including a strike on July 14 which reportedly killed 90 people and injured 300 more.

Israel launched its military offensive in Gaza on October 7 after Hamas attacked southern Israel. At least 1,200 people were killed and more than 250 others abducted, according to Israeli authorities.

Israeli military action in Gaza has since killed 39,090 Palestinians and injured another 90,147, according to the Ministry of Health there. As of early July, nearly 2 million people had been displaced in Gaza – almost the entire population, according to figures from the UN.

Aid agencies working in Gaza have warned previously that new rounds of evacuation orders are making the delivery of emergency rations even more difficult.

“People in Gaza are exhausted, living in inhumane conditions, with no safety at all,” the UN Relief and Works Agency posted on X on Monday.

On Thursday, the IDF said it had recovered the bodies of five Israeli hostages the previous day from a tunnel in an area of Khan Younis which it had previously designated as a “humanitarian area.”

Despite the fighting, US and Israeli officials expressed optimism this week over the possibility of a ceasefire and hostage deal being reached.

US Secretary of State Antony Blinken said Friday that the different parties are “inside the 10-yard line and driving toward the goal line.”

Israel’s Prime Minister, Benjamin Netanyahu, said he would likely dispatch a negotiation team to talks in Rome next week.

Netanyahu was in Washington this week and met with the presumptive Democratic presidential nominee, Vice President Kamala Harris, who urged him to seal an agreement.

“As I just told Prime Minister Netanyahu, it is time to get this deal done,” said Harris. “So to everyone who has been calling for a ceasefire, and to everyone who yearns for peace, I see you and I hear you.”

This is a developing story and will be updated.

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