Daily Briefing – 379

Post: Sep. 22, 2021

Rates May Rise Sooner Than Expected, Fed Indicates

The Federal Reserve signaled it could start reversing its pandemic stimulus programs in November and could raise interest rates next year. The Fed’s rate-setting committee revised its post meeting statement Wednesday to say that it could start to reduce, or taper, its $120 billion in monthly asset purchases as soon as its next scheduled meeting, Nov. 2-3.

Fed Chairman Jerome Powell added during a news conference Wednesday that officials generally agreed at their meeting that “a gradual tapering process that concludes around the middle of next year is likely to be appropriate.” New projections released at the end of the Fed’s two-day policy meeting showed half of 18 officials expect to raise interest rates by the end of 2022. In June, just seven officials anticipated that, with most instead penciling in rate rises in 2023.

Infrastructure Plan Faces Fresh Uncertainty as Democrats Remain Divided

Persistent divisions among Democrats over the size of their climate and social-welfare plan are threatening to derail much of President Biden’s agenda, as progressives signal that they could block passage of a roughly $1 trillion infrastructure package next week. Democrats have for weeks been crafting a $3.5 trillion bill that would expand access to healthcare, offer universal prekindergarten and reduce carbon emissions, among other measures, approving segments of the legislation in committees in the House. But centrist Democrats have repeatedly raised concerns about the top-line figure, along with the tax increases proposed to cover its cost, arguing for a smaller bill.

As the party struggles to find a path forward, Mr. Biden plans to meet Wednesday with Senate Majority Leader Chuck Schumer (D., N.Y.) and House Speaker Nancy Pelosi (D., Calif.) at the White House to discuss the two proposals, according to a person familiar with his schedule. Mr. Biden was also expected to convene a group of House and Senate Democrats to discuss the proposals as he takes a more prominent role in steering his legislative agenda through Congress.

GM President Expects Chip Supplies to Stabilize at a Level Lower Than Needed

General Motors President Mark Reuss said Tuesday that the supply of semiconductor chips would soon improve, but that the available volume would still fall short of the amount needed. “We’re going to see a stabilization to some extent before we see getting the volume we really need,” Reuss said at a Detroit Regional Chamber conference in Michigan, according to Reuters.

While General Motors executives said they expect 2022 to be a “more stable year” for chip suppliers, they added that wholesale deliveries could be down by 200,000 vehicles amid the shortage with possible effects lasting into 2023.

Natural-Gas Prices are Spiking Around the World

Across the world, a natural-gas shortage is starting to bite. Prices of power in Germany and France have soared by around 40% in the past two weeks. In many countries, including Britain and Spain, governments are rushing through emergency measures to protect consumers. Factories are being temporarily switched off, from aluminium smelters in Mexico to fertilizer plants in Britain. Markets are frantic. One trader says it is like the global financial crisis for commodities.

Even in America, the world’s biggest natural-gas producer, lobby groups are calling on the government to limit exports of liquefied natural gas (LNG), the price of which has climbed to $25 per million British thermal units (mBTU), up by two-thirds in the past month.

US COVID-19 Update – Modeling Group Offers Reason for Optimism

The COVID-19 Scenario Modeling Hub, a group made up of a team of researchers who produce a short-term projections of various elements of the infectious disease, released its latest updated projections on the trajectory of the virus on Wednesday. According to the group the Delta surge appears to be peaking in the United States, meaning a decline in new infections and deaths may be on the way, according to a new analysis.

According to the latest projection, of the four possible scenarios highlighted, the most likely indicates that children will be able to get vaccinated and another highly-contagious variant will not emerge, leading to a decline in new cases and deaths. Were this scenario to play out, the projection indicates that new cases could fall from its current 140,000 new cases per day to approximately 9,000 new cases per day by March. COVID-19 deaths could also decrease from its current approximation of 1,500 per day to less than 100 per day by March, meaning the coronavirus pandemic could be “comparatively under control by March.”

NYS Vaccine and COVID Update

Vaccine Stats as of Wednesday September 22nd.:

One Vaccine Dose

70.2 of all New Yorkers – 13,602,159 (plus 21,646 from a day earlier)
In the Hudson Valley 1,435,636 (plus 2,584)

Fully Vaccinated

62.7% of all New Yorkers – 12,187,238 are fully vaccinated (Plus 19,457)
In the Hudson Valley – 1,73,399 (plus 2,602) are fully vaccinated.

The Governor updated COVID data through Tuesday September 21st. There were 30 COVID related deaths for a total of 56,371.

Hospitalizations:

Patients Currently in Hospital statewide: 2,352.

Seven Day Average Positivity Rate:

Statewide 2.91%
Mid-Hudson: 2.92%

Useful Websites:

CDC Panel Grapples with Who Needs a COVID-19 Booster Shot

An influential panel of advisers to the Centers for the Disease Control and Prevention grappled Wednesday with the question of which Americans should get COVID-19 booster shots, with some members wondering if the decision should be put off for a month in hopes of more evidence.

Much of the discussion at the meeting of the CDC’s Advisory Committee on Immunization Practices focused on the possibility of a scaled-back booster program targeted to older people or perhaps health care workers. But even then, some of the experts said that the data on whether boosters are actually needed, precisely who should get them and when was not clear-cut.

Biden Announces ‘Partnership’ With EU on Global Vaccine Distribution Effort

Biden said the partnership will allow the EU and U.S. “to work more closely together” and that one of its bedrock principals will be committing to “donating, not selling” vaccine doses to less-affluent countries.
He also made official his administration’s plan to purchase another 500 million vaccine doses to distribute to some of the world’s poorest nations. News of the additional supply trickled out earlier this week, and will bring the United States’ total commitment to 1.1 billion doses.

Biden also pledged that the U.S. will provide an additional $370 million “to support administering these shots and delivery globally,” as well as more than $380 million to Gavi, the organization overseeing the daily operations for the COVAX vaccination project.

California Port Jams Likely to Remain

There is no end in sight to the large and ever-growing “flotilla” of container ships at and around California’s logjammed Los Angeles and Long Beach ports. Before the pandemic, it was unusual for more than one ship to wait for a berth, but as of last Sunday, there were 73 ships waiting at these ports, nearly double the number that were stalled there a month ago.

Big vessels are continuing to join the bottleneck, experts say, because shipping lines and their cargo customers have few options for resetting countless supply chains moving goods into the U.S. that have been constructed over decades around the critical San Pedro Bay gateway now staggered by the overflowing demand for imports. The congestion has been caused largely by a surge in imports, owing to rising goods demand, coupled with a rush to restock pandemic-depleted inventories.

U.S. Housing Market Cools: Existing Home Sales Fell in August, Price Growth Slows

Sales of previously occupied U.S. homes fell in August and prices that have been soaring eased, the latest sign the housing market is cooling as intense competition leaves many would-be buyers on the sidelines. Sales fell 1.5% from August last year. As of last month sales were running 16% higher than in the same stretch of 2020, before a surge in sales as the market bounced back from a slowdown in the initial months of the pandemic. Sales are also up about 12% from where they were in the first eight months of 2019.

Existing homes sales fell 2% last month from July to a seasonally adjusted annual rate of 5.88 million units, the National Assn. of Realtors said Wednesday. That’s slightly more than the 5.87 million economists were expecting, according to FactSet.

Wilmington Trust Helps Us Understanding the Evergrande Risks

China Evergrande Group is at the center of media headlines and investor concern, stoking fear around China’s property market and coinciding with higher volatility in equity markets. Below we cover our view on the evolving issues and main questions we are hearing from clients. In short, Evergrande presents a risk to China’s property market and economic outlook, but broader systemic threat to financial markets remains a tail risk event.

Read the Q&A at Wilmington Trust

Harris Beach on Rescinded US Travel Bans

The White House announced that starting in early November, it will rescind the current COVID-19 related travel bans implemented for travelers from China, Iran, the Schengen Area, U.K., Ireland, Brazil, South Africa, and India.

Currently, foreign nationals who have been physically present in the affected countries (China, Iran, the Schengen Area, U.K., Ireland, Brazil, South Africa, and India) in the last 14 days are barred from traveling directly to the U.S. In place of these bans, all foreign nationals traveling to the U.S. by air (including those who were subject to the COVID-19 related travel bans) will be required to prove that they have been fully vaccinated against COVID-19, as well as provide proof of a negative COVID-19 test within three days of boarding a flight to the U.S. The Centers for Disease Control and Prevention (CDC) will provide information regarding which vaccines will be accepted.

U.S. Extends Travel Restrictions at Canada, Mexico Borders

The United States on Monday extended restrictions at its land borders with Canada and Mexico through Oct. 21 that bar nonessential travel such as tourism by foreigners despite Ottawa’s decision to open its border to vaccinated Americans. The latest monthly extension goes through Oct. 21, White House COVID-19 coordinator Jeff Zients told reporters Monday.

Canada on Aug. 9 began allowing fully vaccinated U.S. visitors for nonessential travel. read more The United States has continued to extend the extraordinary restrictions on Canada and Mexico on a monthly basis since March 2020, when they were imposed to address the spread of COVID-19.

iCIMS August Insights Hiring Report

Job openings and hiring activity increased again in August 2021. Since the beginning of the year, they are now up nearly 80% and 70% respectively. Applications continue to lag behind.

In this tight talent market, employers must strategically build pipelines to fill open roles. Employers may also want to look to two active cohorts of candidates: recent college graduates and women.

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