Daily Briefing – 325

Post: Jun. 15, 2021

The 70 Percent Solution – State Reaches Vaccine Threshold Set By Governor for Broad Reopening

Governor Andrew M. Cuomo yesterday announced that COVID-19 restrictions are lifted immediately as 70 percent of New Yorkers aged 18 or older have received the first dose of their COVID-19 vaccination series.

With the removal of the State’s minimum standard for reopening, businesses are free to choose to lift all or some restrictions, continue to adhere to the State’s archived guidance, or implement other health precautions for their employees and patrons. Businesses are also authorized to require masks and six feet of social distancing for employees and patrons within their establishments, regardless of vaccination status. Any mask requirements that businesses choose to implement must adhere to applicable federal and state laws and regulations, such as the Americans with Disabilities Act.

Boeing-Airbus Trade Battle Set to End After 17 Years

The US and the EU have agreed a truce in a 17-year trade dispute over subsidies for Boeing and Airbus. Under the agreement, both sides will remove taxes on $11.5bn (£8.2bn) of goods, including wine, cheese and tractors, for five years. Those tariffs, imposed by both sides as punishment in the escalating dispute, had already been suspended in March while they tried to resolve matters.

The dispute between the US and EU has escalated over many years, with both sides accusing the other of unfairly propping up their flagship planemakers. In 2019, the World Trade Organization ruled that the EU had illegally provided support to Airbus, clearing the way for the US to respond with tariffs worth up to $7.5bn (£5.4bn) in annual trade. Roughly one year later, in a parallel case, it ruled that the US benefits to Boeing also violated trade rules, authorizing the EU to hit the US with tariffs worth roughly $4bn.

Producer Prices Climb 6.6% in May, Largest 12-month Increase on Record

Producer prices rose at their fastest annual clip in nearly 11 years in May as inflation continued to build in the U.S. economy, the Labor Department reported Tuesday. The 6.6% surge was the biggest 12-month rise in the final demand index since the Bureau of Labor Statistics began tracking the data in November 2010. On a monthly basis, the producer price index for final demand rose 0.8%, ahead of the Dow Jones estimate of 0.5%.

Goods inflation continued to be the dominant inflation force, rising 1.5% as opposed to a 0.6% increase in services. In the pandemic economy, goods have run well ahead of services as economic lockdowns constrained consumer demand for services-related purchases. Excluding food and energy, the 12-month final demand PPI rose 5.3%, which also was the biggest increase since that the BLS started tracking that number in August 2014.

Empire Manufacturing Survey: Continued Growth at a Slower Pace, Prices Rise

Business activity continued to expand in New York State, though at a slower pace than last month, according to firms responding to the June 2021 Empire State Manufacturing Survey.

The headline general business conditions index fell seven points to 17.4.
New orders and shipments increased moderately, and there was a rise in unfilled orders.
Delivery times lengthened at a record-setting pace, and inventories edged lower.
Employment levels and the average workweek continued to grow modestly, and
Both input prices and selling prices continued to rise sharply.

Looking ahead, firms remained optimistic that conditions would improve over the next six months, with the index for future employment reaching a record high.

US COVID Update – Covid-19 Ranged From Illinois to Massachusetts Well Before States Reported First Cases

The Covid-19 virus infected people in five U.S. states in December 2019 and early 2020 before those states reported their first cases, according to a large new government study, providing new insights into the first, unseen weeks of the nation’s deadly epidemic.

Scientists analyzing blood samples taken for a National Institutes of Health research program identified seven people in states from Mississippi to Wisconsin to Pennsylvania who were infected with the new virus days or weeks before the first cases were confirmed in their areas. At least a couple had mild symptoms.

NYS Vaccine and COVID Update – 70% of NYS Adults With at Least One Dose

State landmarks were lit blue and gold yesterday, June 15 in celebration of reaching 70 percent of New York adults receiving their first dose of the COVID-19 vaccine. In addition to these lightings, firework displays will be held at ten sites across the state beginning at 9:15 pm. The 7-day average positivity is 0.41% and is now the lowest in the nation.

Vaccine Stats as of Tuesday morning:

One Vaccine Dose

58.0% of all New Yorkers – 11,167,131 (plus 39,435 from a day earlier)
In the Hudson Valley 1,1188,794 (plus 5,554)

Fully Vaccinated

50.3% of all New Yorkers – 9,887,123 are fully vaccinated (Plus 79,050)
In the Hudson Valley – 1,047,006 (plus 11,802) are fully vaccinated.

The Governor updated COVID data through Monday June 14th. There were 9 COVID related deaths for a total of 42,882.

Hospitalizations:

Patients Currently in Hospital statewide: 650

Seven Day Average Positivity Rate:

Statewide 0.40%
Mid-Hudson: 0.38%

Useful Websites:

UK Study Finds Vaccines Offer High Protection Against Hospitalization from Delta Variant

COVID-19 vaccines made by Pfizer (PFE.N) and AstraZeneca (AZN.L) offer high protection of more than 90% against hospitalization from the Delta coronavirus variant, a new analysis by Public Health England (PHE) showed on Monday.

PHE said that the Pfizer/Biontech COVID-19 vaccine was 96% effective against hospitalization from the Delta variant after two doses, while Oxford/AstraZeneca’s offered 92% protection against hospitalization by Delta. They also said that those levels of protection were comparable to that against the Alpha variant, first identified in Kent, southeast England.

Chinese Scientist at Center of Virus Controversy Denies Lab-Leak Theory

The Chinese scientist at the center of theories that the coronavirus pandemic originated with a leak from her specialized lab in the city of Wuhan has denied her institution was to blame for the health disaster. “How on earth can I offer up evidence for something where there is no evidence?” Dr. Shi Zhengli told The New York Times in rare comments to the media.

According to The New York Times, in 2017 Shi and her colleagues at the Wuhan laboratory published a report on an experiment “in which they created new hybrid bat coronaviruses by mixing and matching parts of several existing ones—including at least one that was nearly transmissible to humans—in order to study their ability to infect and replicate in human cells.” But in an email to the paper, Shi said her experiments differed from gain-of-function experiments since they did not seek to make a virus more dangerous. Instead they were trying to understand how the virus might jump across species.

74% of Fortune 500 CEOs Say it is Likely They Will Reduce Office Space

To figure out how the big dogs will play their cards, fortune conducted a poll of Fortune 500 chief executive officers last month.

53% expect their revenues to be significantly stronger this year than what they expected before the pandemic.
74% say they expect to need less office space in the future.
53% say two or three days per week in the office is the optimal set-up. 39% say four or five days, while 3% say one day or less.
10% say they plan to require vaccinations for staffers returning to the office. 59% won’t require it, while 31% are still considering the policy.
50% agree that CEOs have recently gotten too involved in commenting on social and political issues. While 50% said CEOs have a responsibility right now to speak out on important social and political issues.

Manufacturing Output Accelerates in May on Autos

Production at U.S. factories increased more than expected in May as motor vehicle output rebounded, but shortages of raw materials and labor continue to cast a shadow over the manufacturing industry. Economists polled by Reuters had forecast manufacturing output increasing 0.6% in May.

Manufacturing, which accounts for 11.9% of the U.S. economy, is being underpinned by massive fiscal stimulus, low interest rates and continued strong demand for goods even as spending is shifting towards services amid a vastly improved public health situation. But robust demand is straining the supply chain, with shortages of raw materials and labor across the industry.

Retail Sales Fall

U.S. retail sales dropped more than expected in May, with spending rotating back to services from goods as vaccinations allow Americans to travel and engage in other activities that had been restricted by the COVID-19 pandemic. Retail sales fell 1.3% last month, the Commerce Department said. Economists polled by Reuters had forecast retail sales declining 0.8%. Retail sales surged 28.1% on a year-on-year basis.

“Activity decelerated likely on a shift from goods spending to services,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics in White Plains, New York. “Despite the slowdown, sales are rising at a strong pace in the second quarter.”

UBS: Price Surge for Steel Will Continue Into 2022

The price for U.S. steel has been exploding this year in what has been an enormous turnaround for one of the country’s most important commodities—used to make everything from buildings and bridges to cars and spoons.

UBS reckons the U.S. steel price, may continue rising into the first half of next year. Good news for the likes of Nucor; not such good news for the construction and manufacturing industries.

CDC Study of COVID-19 Hospitalization of Adolescents Aged 12–17 in 14 States Finds No Deaths, But Some Need for Intensive Care

COVID-19 adolescent hospitalization rates from peaked at 2.1 per 100,000 in early January 2021, declined to 0.6 in mid-March, and rose to 1.3 in April. Among hospitalized adolescents, nearly one third required intensive care unit admission, and 5% required invasive mechanical ventilation; no associated deaths occurred.

Recent increased hospitalization rates in spring 2021 and potential for severe disease reinforce the importance of continued COVID-19 prevention measures, including vaccination and correct and consistent mask wearing among persons not fully vaccinated or when required.

GE Aviation, Safran Launch Next-Gen Jet Engine Project

General Electric Aviation and Safran S.A. will work together on the next generation of aircraft engines. The companies announced June 14 they would extend their joint venture CFM International through 2050 and launch a program dedicated to developing new, more efficient aircraft engines with novel designs. The companies say the first-available CFM engines produced by the new program could be available by the mid-2030s.

The next generation of jet engine will look different from today’s. For one, the companies say the engine will include an open-fan architecture that shows off its turbine blades. Other technologies the companies teased would be used included composite fan blades, heat resistant metal alloys, and additive manufacturing.

Natural Gas Trades Highest Since Oct 2020 – Crude Hits 3 Year High

NYMEX Henry Hub natural gas spot prices continue to show strength. The benchmark traded at $3.30/mmbtu on Monday and has been climbing steadily since March, reaching its highest print since October 2020 when it hit $3.31/mmbtu.

Also, Crude oil rose to its highest price in almost three years Monday as demand rebounds and restrictions surrounding the COVID-19 pandemic are lifted. Crude oil in the U.S. was $71.50 per barrel on Monday, its highest price since October 2018 and around $23 more expensive per barrel than it was in January.

Our Blog