Daily Briefing – 420

Post: Dec. 7, 2021

US Trade Deficit Saw Big Export-Fueled Drop in October

Strong American export business caused a large drop in the U.S. trade deficit last month, even as imports also rose, according to government data released Tuesday. The gap between imports and exports of goods and services dropped 17.6% to $67.1 billion last month, bringing the trade deficit down from a record hit the month before, the Commerce Department reported.

Exports jumped $16.8 billion from September to $223.6 billion, while imports rose by a small $2.5 billion to $290.7 billion. Sales of goods jumped the most with a $15.8 billion increase led by industrial supplies and materials, while services exports rose only $1 billion. Meanwhile, the value of goods purchased from abroad rose $1.8 billion, particularly of cars, parts and engines, which rose $1.5 billion. Service imports rose $700 million.

Democrats Offer Bill to Raise Debt Ceiling – Avoid Filibuster with Help of Republicans

House Democrats on Tuesday introduced legislation that would allow the Senate to raise the debt ceiling without having to overcome a filibuster. The legislation would set up a one-time process to raise the debit limit to a specific number without requiring 60 votes to overcome procedural roadblocks. After that process is established with the help of Republicans, then Democrats are expected to pass the separate debt-ceiling increase without any GOP support.

Senate Republicans emerging from a meeting with Senate Minority Leader Mitch McConnell (R-Ky.) Tuesday said the proposal will pass the Senate with at least 10 Republican votes.

Glaxo Says Its Covid-19 Antibody Drug Works Against Omicron

GlaxoSmithKline and Vir Biotechnology Inc. said their Covid-19 antibody treatment retained effectiveness against the Omicron variant in laboratory studies. The results provide hope that at least one monoclonal antibody therapy—a form of treatment that has proven useful in blunting severe disease—will remain effective against Omicron, which has been detected in dozens of countries including the U.S. since it was identified by scientists in South Africa two weeks ago.

Regeneron has said early studies suggested its treatment was blunted by the new variant and that it is conducting further testing to confirm that finding. The company says it has developed alternative antibodies that it thinks will retain effectiveness against Omicron that it can push into clinical trials if necessary.

Drugmakers Seek Universal Pill for Coronaviruses

Novartis is working on a pill that could serve as a comprehensive treatment for all varieties of coronavirus, and not just COVID-19. Novartis signed a deal with Molecular Partners last year to execute two protein-based treatments for COVID-19, and information from studies of one of those treatments is expected in January.

Initially, many pharmaceutical companies sold COVID-19 treatments at cost. But with the early days of the pandemic in the rearview mirror, drugmakers are looking to return to a more profitable model of production to create sustainable economic benefit and continue investing in drug development and retail.

US COVID Update – Omicron Information Starting to Come In

Early data from South Africa suggest that Omicron could be more transmissible and more likely to evade existing immunity from vaccination or natural infection but may cause less serious illness than previous variants. However, experts cautioned about placing too much emphasis on these early indications because of Omicron’s novel nature and information on hospitalizations and deaths typically lag several weeks behind initial outbreaks.

In South Africa, where some of the earliest Omicron cases were detected, the variant is spreading at an alarming pace, with a near vertical spike in the number of new COVID-19 cases. One estimate, which is not yet peer-reviewed, shows a doubling time of about 3.3 days, more than twice as quickly as Delta. A preprint report on Omicron’s clinical presentations at a large hospital in South Africa suggests the variant may cause less severe disease. Another preprint study (not yet peer-reviewed) from South Africa suggests Omicron may carry an increased risk of reinfection, indicating the virus could escape some immune system defenses and raising questions about vaccine-induced immunity.

NYS Vaccine and COVID Update

Vaccine Stats as of Tuesday December 7:

One Vaccine Dose

79.4% of all New Yorkers – 15,0458,710 (plus 18,652 from a day earlier).
In the Hudson Valley 1,5780,330 (plus 2,091).

Fully Vaccinated

69.2% of all New Yorkers – 13,454,007 (plus 19,107).
In the Hudson Valley – 1,382,314 (plus 2,330).

The Governor updated COVID data through Monday December 6. There were 52 COVID related deaths for a total of 59,645.

Hospitalizations:

Patients Currently in Hospital statewide: 3,401.

7 Day Average Positivity Rate – Cases per 100K population

Statewide 4.87% – 48.69 positive cases per 100,00 population
Mid-Hudson: 4.63% – 41.68 positive cases per 100,00 population

Useful Websites:

Biden Vaccine Mandates Are Crumbling

The Biden Administration’s broad campaign of COVID-19 vaccination mandates is crumbling in the face of multiple blows brought by court actions, a rebellion mounted by some federal legislators and state governors, and his own decision to stall enforcement of the federal employee requirement. Here is where we stand at this time, keeping in mind that the legal landscape continues to shift on a daily basis.

Mandate postponed for federal employees.
Courts block the CMS healthcare workers mandate.
Judges take a stand
Federal contractor order enjoined
Lengthy battles ahead
Wrestling over the OSHA ETS in the Sixth Circuit.
States move forward in all directions.

Judge Halts Biden Vaccine Mandate for Federal Contractors Nationwide

A federal judge in Georgia on Tuesday temporarily halted the Biden administration’s COVID-19 vaccine mandate for federal contractors across the country. The ruling by U.S. District Judge R. Stan Baker, an appointee of former President Trump, is the latest in a series of legal setbacks for President Biden as his administration seeks to blunt the effects of a global pandemic that has killed more than 788,000 people in the U.S. The order blocks the mandate while the case plays out in court. Baker sain said the challengers were likely to prevail on their claim that Biden exceeded his authority with the public health measure.

“The Court acknowledges the tragic toll that the COVID-19 pandemic has wrought throughout the nation and the globe,” Baker wrote. “However, even in times of crisis this Court must preserve the rule of law and ensure that all branches of government act within the bounds of their constitutionally granted authorities.”

Natural Gas Falls 42% in 42 Days

CME NYMEX Henry Hub futures dropped to $3.68/mmbtu on Monday. It marks a 42% decline since hitting $6.31/mmbtu on October 5. Since the Nov-Mar winter heating demand season began, New York is the only metro area with demand that is above historic averages among major retail markets. Chicago, Boston, Philadelphia, Houston, and Dallas have all seen mild starts to winter.

High Inflation, Falling Unemployment Prompt Powell’s Pivot

Just four weeks ago, the Federal Reserve set in motion carefully telegraphed plans to gradually wind down a bond-buying stimulus program by June. Officials are making plans to accelerate the process at their policy meeting next week, ending it by March instead. The abrupt shift opens the door to the Fed raising interest rates next spring rather than later in the year to curb inflation, marking a significant policy pivot by Chairman Jerome Powell shortly after President Biden offered him a second four-year term leading the central bank.

With this move, Mr. Powell would be focusing the Fed’s efforts more on restraining inflation and less on encouraging employment to return to its pre-pandemic levels. Inflation has surged this year—to 5% in October from a year earlier, according to the Fed’s preferred gauge—amid strong demand for goods and services and supply-chain bottlenecks associated with reopening the economy.

Eurozone GDP Growth Finalized at 2.2% in Q3, EU at 2.1%

On Tuesday Eurostat, the European Union’s statistics agency, published official figures for GDP growth in the euro area and all of the EU in the third quarter of 2021, as well as unemployment figures. Seasonally adjusted GDP increased by 2.2% in the euro area and by 2.1% in the EU, compared with the previous quarter. Year-on-year GDP increased by 3.9% in the euro area, which is a bit higher than its earlier estimate of 3.7% GDP growth. The number of those in employment increased by 0.9% in both the euro area and the EU in the third quarter of 2021, compared with the previous quarter.

But as Europe is in the grips of a vicious fourth wave of the covid-19 pandemic, the outlook for the Christmas season is gloomy. Restrictions for public events, restaurants and shops are becoming more stringent. Some European countries are thinking about following the example of Austria, which recently reimposed a hard lockdown. Rising inflation further depresses consumption

Musk Says Federal Government Should ‘Get Rid of All Subsidies’—Despite Tesla Deceiving Billions

The Tesla CEO expressed his opposition to the Biden administration’s inclusion of $7.5 billion for new electric vehicle charging stations in its recently passed, $1 trillion infrastructure bill. Going a step further, Musk said that “no one at Tesla” was thinking about the bill’s potential impact on the electric automaker’s business, and instead suggested that the government’s overall spending has gone too far.

“I think if this bill happened or didn’t happen—we don’t think about it at all really,” he said at the Wall Street Journal’s CEO Council summit in Washington, D.C. Referring to the even larger Build Back Better Act currently being deliberated in Congress, Musk added: “Honestly, it might be better if the bill doesn’t pass. We’ve spent so much money, the federal budget deficit is insane… We’re running this incredible deficit, something’s got to give.”

Pandemic Schooling Mode and Student Test Scores: Evidence from US States

Accumulating evidence shows the damage of school shutdowns. This working paper from researchers at Brown University, University of Nebraska-Lincoln and MIT and published in the National Bureau of Economic Research documents how much remote learning reduced student achievement, especially for low-income and minority children.

Researchers estimate the impact of district-level schooling mode (in-person versus hybrid or distance learning) on test scores.
They found that pass rates declined compared to prior years and that these declines were larger in districts with less in person instruction.
Passing rates in math declined by 14.2 percentage points on average; they estimate this decline was 10.1 percentage points smaller for districts fully in-person.
Changes in English language arts scores were smaller, but were significantly larger in districts with larger populations of students who are Black, Hispanic or eligible for free and reduced price lunch

Democrats’ Corporate Minimum Tax Plan Brings Late Lobbying Burst From Companies

Congress is poised to create a new corporate minimum tax, and pension advocates, renewable-energy backers and manufacturers are pushing for changes before the plan is finalized. The tax is aimed at companies that report large profits to shareholders but—legally—pay relatively little in taxes. It would impose a minimum 15% federal tax rate on many companies with at least $1 billion in profits, based on the income reported to investors.

The mechanics can be complicated, and companies are figuring out whether and how they are affected. In many cases, the tax would claw back breaks Congress gave companies under the regular tax system. Lawmakers are trying to strike a balance between raising revenue and encouraging behaviors they want from companies. “It’s hitting some things that are near and dear to Democrats’ hearts,” said Dustin Stamper, a managing director at accounting firm Grant Thornton LLP.

Surgeon General Issues Public Health Advisory on Youth Mental Health Challenges

U.S. Surgeon General Vivek Murthy has issued a public health advisory about mental health challenges young people are grappling with especially during the COVID-19 pandemic. “It would be a tragedy if we beat back one public health crisis only to allow another to grow in its place,” Murthy said in the advisory’s introduction. “Mental health challenges in children, adolescents, and young adults are real, and they are widespread. But most importantly, they are treatable, and often preventable,” he added.

The Office of the Surgeon General also noted that the pandemic had caused anxiety, depression and other mental health concerns to increase in young people. Additionally, it is estimated that over 140,000 children in the U.S. lost a parent or grandparent caregiver as a result of the pandemic.

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