Goldman Cuts 2021 and 2022 US Growth Forecasts
A report released over the weekend has GDP growth forecasts for 2021 at 5.6% versus 5.7% expected prior. Goldman Sachs expects the US economy to grow by 4.0% in 2022 compared to 4.4% previous forecasts. The two main challenges to growth in the medium-term were a slowing of fiscal support and the need for spending on services to bounce quickly enough to offset a decline in the purchases of goods.
“After updating our estimates of the key growth impulses that drive our consumption forecast—reopening, fiscal stimulus, pent-up savings, and wealth effects—and incorporating a longer-lasting virus drag on virus-sensitive consumer services spending, we now expect a more delayed recovery in consumer spending. That, along with the assumption that semiconductor supply won’t improve until the second half of next year and that inventory restocking will be postponed, ‘argues for a less front-loaded recovery from here than we had expected.”
End Run – Home Depot, Costco and Walmart Resort to Private Charters to Stock Shelves for Holiday Shoppers
Global supply-chain delays are so severe that some of the biggest U.S. retailers have resorted to an extreme—and expensive—tactic to try to stock shelves this holiday season: They are chartering their own cargo ships to import goods. It is taking roughly 80 days to transport goods across the Pacific, or twice as long as before the pandemic, retail and shipping executives said.
Walmart Inc., Home Depot Inc., Costco Wholesale Corp. and Target Corp. are among the companies that are paying for their own chartered ships as part of wider plans to mitigate the disruptions, a costly and unattainable option for most companies. Some of the chains are passing along these added costs by raising prices for shoppers. The chartered ships are smaller than those that companies like Maersk operate and move just a small slice of total imports, the executives said. Ships that can hold around 1,000 containers are on average nearly twice as expensive as the cost of moving cargo on a typical 20,000-container vessel, according to freight forwarders.
Oil Settles Up 1.5%; Hits Multi-Year Highs on Surging Demand
Oil prices jumped on Monday to the highest levels in years, fuelled by rebounding global demand that has contributed to power and gas shortages in key economies like China. Brent crude rose $1.26, or 1.5%, to settle at $83.65 a barrel. The session high was $84.60, its highest since October 2018. U.S. West Texas Intermediate (WTI) crude gained $1.17, or 1.5%, to settle at $80.52, after touching its highest since late 2014 at $82.18. The pace of economic recovery from the pandemic has supercharged energy demand at a time when oil output has slowed due to cutbacks from producing nations during the pandemic, focus on dividends by oil companies and pressure on governments to transition to cleaner energy.
“Everything is very much focused on the lack of supply returning at a time when demand appears to be roaring back,” said Matt Smith, lead oil analyst at Kpler. “There’s the added dimension relating to the potential for fuel switching given global natural gas prices are so high, so it’s been a combination of factors here that are just continuing to propel (oil higher).”
Many Women Remain on Labor-Market Sideline
The unemployment rate fell to 4.8% last month from 5.2% in August, the Labor Department said, but only added 194,000 jobs in September, the smallest gain since December 2020. Many workers, especially women, exited the labor force last month, leading to a smaller pool of labor and driving the unemployment rate lower.
Not only are women driving this decline, but they are more likely to be so-called marginally attached workers—those who aren’t in the labor force but want to work, are available for work and had looked for a job some time in the prior year. more women want a job, but they aren’t searching for one because of personal reasons, such as having school and family commitments, health issues or a lack transportation.
US COVID-19 – High Demand for Kids’ Vaccines Expected
Pediatricians and pharmacists are bracing for a crush after the first vaccine maker submitted an application to authorize its COVID-19 vaccine for children ages 5 to 11. More than 28 million children could become eligible to receive the shot in just weeks, and there is pent-up demand as many parents are eager to get their kids vaccinated now that they are back at school. “We’ve already had families inquire when they come in or calling and asking if we’re going to be giving the pediatric dose,” said Dr. Sharon Marshall, a professor of pediatrics at Wayne State University.
Pfizer-BioNTech submitted its application to the U.S. Food and Drug Administration Thursday, and a Centers for Disease Control and Prevention advisory panel announced plans Friday to meet in early November to consider whether to recommend the vaccine for children.
NYS Vaccine and COVID Update
Vaccine Stats as of Monday October 11th:
One Vaccine Dose
- 72.2 of all New Yorkers – 14,040,863 (plus 18,366 from a day earlier)
- In the Hudson Valley 1,471,079 (plus 498)
- 64.5% of all New Yorkers – 12,614,866 (plus 11,494).
- In the Hudson Valley – 1,307,507 (plus 642).
The Governor updated COVID data through Sunday October 10th. There were 30 COVID related deaths for a total of 57,047.
- Patients Currently in Hospital statewide: 2,098.
Seven Day Average Positivity Rate:
- Statewide 2.5%
- Mid-Hudson: 2.49%
- Read the press release
- Visit the vaccine tracker site
- See the School Districts Dashboard
- See the SUNY Dashboard
- State Vaccine Information Site
Merck asks US FDA to Authorize Promising Anti-COVID Pill
Merck asked U.S. regulators Monday to authorize its pill against COVID-19 in what would add an entirely new and easy-to-use weapon to the world’s arsenal against the pandemic. An antiviral pill that people could take at home to reduce their symptoms and speed recovery could prove groundbreaking, easing the crushing caseload on U.S. hospitals and helping to curb outbreaks in poorer countries with weak health care systems. It would also bolster the two-pronged approach to the pandemic: treatment, by way of medication, and prevention, primarily through vaccinations.
If cleared by the Food and Drug Administration — a decision that could come in a matter of weeks — it would be the first pill shown to treat COVID-19. All other FDA-backed treatments against the disease require an IV or injection.
AstraZeneca Says Antibody Drug is effective at Stopping Mild COVID-19 from Worsening
AstraZeneca Plc’s antibody cocktail was effective at preventing people with mild or moderate COVID-19 infection from worsening in a study that bolsters the drugmaker’s ambitions for the product. The cocktail halved the risk of developing severe illness or death compared with a placebo in 822 participants who had been symptomatic for a week or less and weren’t hospitalized, Astra said in a statement Monday.
Antibody treatments are a key tool in the fight against Covid as they can be used to supplement vaccines for people who haven’t mounted a strong response to the shots or to protect those who couldn’t be immunized. Cancer sufferers or people with weakened immune systems could be eligible for such cocktails.
Cold Brew – Major Coffee Buyers Face Losses as Colombia Farmers Fail to Deliver
Coffee farmers in Colombia, the world’s No. 2 arabica producer, have failed to deliver up to 1 million bags of beans this year or nearly 10% of the country’s crop, leaving exporters, traders and roasters facing steep losses, industry sources told Reuters.
World coffee prices have soared 55% this year, mainly due to adverse weather in top producer Brazil, prompting Colombian farmers to default on sales clinched when prices were much lower in order to re-sell the coffee at higher rates. Delivery defaults in a major producer like Colombia can exacerbate price spikes on world markets, although these would be temporary because the coffee ultimately exists and will weigh on markets once it is re-sold.
‘Candid Exchange’ – US, China Chief Trade Negotiators Meet
U.S. Trade Representative Katherine Tai spoke with Chinese Vice Premier Liu He on Friday to discuss Chinese commercial practices that Washington deems unfair. The two last spoke in May. “During their candid exchange, Ambassador Tai and Vice Premier Liu acknowledged the importance of the bilateral trade relationship and the impact that it has not only on the United States and China but also the global economy,” the USTR said in a statement.
The Biden administration says China’s massive state subsidies for national companies, intellectual property theft and other factors create a heavily uneven playing field in trade. This week, Tai announced the launch of “a targeted tariff exclusion process”. More than a goodwill gesture to Beijing, she explained that it was a matter of granting “case-by-case” exemptions for US companies that do not have an alternative source of supply to China.
Businesses Say Tariff Relief Plan From Biden Administration Falls Short
U.S. businesses are panning the Biden administration’s new China trade policy, saying it fails to provide the tariff relief they expected for importers who lack cost-effective alternatives to Chinese products. The complaints are coming from companies that rely on Chinese electronic components and other parts to manufacture goods, from retailers that import shoes and skirts from China, and from people including Michael Mojica, who owns a camping-gear company in Englewood, Colo.
“Tariffs are just burdens on Americans’ backs,” he said. “It’s either small businesses paying it, which I am right now, or passing it to consumers so they are paying it.” He said. Industry groups had hoped the Biden administration would expand the waiver program.
New York Municipalities Continue to Opt Out of Recreational Marijuana Dispensaries and Lounges
Cannabis consultant Mike Doyle has created and is maintaining a municipal cannabis opt-out tracking map for New York State. Leaning-In are 14 municipalities. Leaning-Out: 20. Opted-In: 37. Opted-Out: 102. Undetermined: 58. Upcoming Meetings: 67 (Information as of 10-7-2021) Opting-out municipalities believe they can always opt back in at a later date, and while that may be true, if the state limits the number of licenses issued, the opt-back-in vote may not have much meaning.
In accordance with the Marijuana Regulation and Taxation Act (MRTA), towns, villages, and cities have until December 31 to decide if marijuana dispensaries and cannabis cafes can situate in their communities. Counties can’t decide, and villages within towns make their own decisions. When a town opts out, it only binds the unincorporated areas within those towns — not the villages themselves.
Brexit: UK’s NI Protocol Demands ‘Could Break Relations’
UK demands on the Northern Ireland Protocol could cause “a breakdown in relations” with the EU. Ireland’s foreign minister Simon Coveney made those comments after the UK reiterated that it wants the European Court of Justice (ECJ) removed from oversight of the deal.
The EU will bring forward proposals on Wednesday for reforming the protocol. The Northern Ireland Protocol is the special Brexit deal for Northern Ireland, which the UK and EU agreed in 2019. The EU proposals will focus on easing practical problems with the movement of goods from Britain to Northern Ireland, rather than changing oversight arrangements.
Electric Vehicle Push Sparks Intense Lobbying Fight
Democrats’ effort to spur electric vehicle (EV) adoption has set off an intense lobbying battle on Capitol Hill as car manufacturers jockey for influence over legislation that will shape the industry’s future. Under the legislation advanced by the House Ways and Means Committee last month, most EVs would qualify for a $7,500 tax credit. But union-built EVs assembled in the U.S. would receive an additional $4,500 in credits. Only Ford, General Motors and Stellantis, Chrysler’s parent company, would benefit from the extra incentive. The proposal effectively leaves other automakers, including Tesla, the nation’s main EV manufacturer, at a $4,500 per vehicle disadvantage.
Automakers generally back President Biden’s green energy plan, which would spend billions of government dollars to construct charging stations across the nation and expand incentives that lessen the cost of buying an EV. But they’re sharply divided over a key tax credit component of the proposal.