Member Briefing April 20, 2023
NYS Legislature Passes Third Budget Extender, No Deal Expected This Week
An agreement on the state budget is not expected this week as a range of issues from housing policy to charter school and mass transit funding in New York remain under discussion, state Senate Majority Leader Andrea Stewart-Cousins on Wednesday said. Assembly Speaker Carl Heastie said Tuesday that "We could be within reach but we're not close." We're going to keep working today and tomorrow and see where it goes." A compromise on proposed changes to the state's bail laws and housing started to take shape but remains uncertain after a meeting between leaders and Hochul on Tuesday.
Both houses of the New York State legislature have passed a third state budget extender. The extender was then signed into action by Governor Kathy Hochul Monday evening. The deadline for the state budget is now Thursday, April 20 (Today). The budget was originally due on April 1 before the first budget extender was signed. The second extender was passed on April 10.
Read more at NY State of Politics
War in Ukraine Headlines
- Ukraine and Russia: The Latest News – The Guardian
- China’s Military Chief Vows to Bolster Ties With Russia - AP
- ‘A Dream’: Patriot Systems Arrive in Ukraine – Politico
- Russia Increases Shelling, Air Strikes in Bakhmut - Reuters
- Poland Agrees to let Ukrainian Food Shipments Resume Across its Territory – Politico
- Ukraine's 'Complex' Counteroffensive is Already Underway: Defense Minister – Newsweek
- Congress Hearing From Ukrainians Who Say They Are Russia War Crimes Victims – USA Today
- Russia Turns to Treason Laws as Putin Extends Crackdown - WSJ
- US Pledges a New $325 Million Arms Shipment to Ukraine – Military Times
- Russian Mercenaries Detail Killing Men, Women and Children in Ukraine - Yahoo
- US Huddles With Leaders in Sweden as Momentum Builds for NATO Bid - Politico
- Interactive Map: Assessed Control of Terrain in Ukraine - Institute for the Study of War
- Map – Tracking Russia’s Invasion of Ukraine – Live Universal Awareness Map
McCarthy Unveils Plan to Lift US Debt Ceiling by $1.5 Trillion -Sources
U.S. House Speaker Kevin McCarthy on Wednesday unveiled a plan to raise the nation's debt ceiling by $1.5 trillion, as Republicans dig in on a standoff with Democrats over the government's borrowing limit. The bill released on Wednesday — dubbed the Limit, Save, Grow Act — aims to raise the debt limit by $1.5 trillion or through March 31, 2024, whichever comes first. It proposes reverting discretionary spending caps to fiscal 2022 levels while limiting growth to 1 percent annually over the next decade. While Republicans have long said the discretionary spending cuts would not target defense spending, nothing in the bill explicitly protects defense spending, leaving that spending up to appropriators.
The move to release a debt limit increase bill comes as President Biden has refused to negotiate with McCarthy on the matter, calling for a “clean” debt limit increase not paired with any other policy points. Biden has asked that Republicans release a long-term budget plan before meeting with McCarthy, which is not expected any time soon.
IBM beats first-quarter profit estimates, signals demand holding up
IBM Corp beat Wall Street expectations for first-quarter profit on Wednesday and signaled demand for IT services was better than feared, sending shares up 3.5% after the bell.The company's software and consulting businesses rose 6% and 8.2%, respectively, at constant currency in the first quarter, in line with IBM's targets. Big Blue also reiterated its full-year free cash flow forecast of $10.5 billion.
Total revenue in the first quarter rose 4.4% at constant currency to $14.25 billion, compared with analysts' estimate of $14.35 billion. Excluding items, it reported earnings of $1.36 per share, beating estimates of $1.26. IBM Chief Executive Officer Arvind Krishna said clients were prioritizing digital transformation projects that focus on "cost takeout, productivity and quick returns."
COVID News – What to Know About XBB.1.16, a New Omicron Variant on the WHO’s Radar
There’s a new variant of the coronavirus that infectious disease experts and public health officials are keeping a close eye on. XBB.1.16, also known as Arcturus, is an Omicron subvariant that appears to be more transmissible and has fueled a recent surge of COVID-19 cases in India. While the variant is circulating at low levels in the U.S., health officials are closely monitoring it.
The World Health Organization warned about XBB.1.16 last month and labeled it a “variant of monitoring,” a designation that isn’t as serious as a “variant of interest.” XBB.1.16, the WHO noted, has a mutation in the virus’s spike protein that has been associated with increased transmissibility and potentially a higher degree of infection. However, some experts have said that while it looks like it could spread more quickly and lead to more cases, it doesn’t appear to cause more severe disease.
Single-Family Building is Picking Up. But Can it Help Solve the Housing Shortage?
Both single-family construction and new permits increased in March, potentially offering buyers more relief during the spring buying season as mortgage rates trend downward. But there was a pullback in multi-family construction from a month earlier, and some economists expect further declines in the months ahead. Commerce Department data released on Tuesday showed an overall 0.8 percent decrease in housing starts in March, led by a decline in construction of new multifamily units which fell by 6.7 percent.
This pivot could lead to an overall turning point for single-family home construction later this year after low levels in 2022, chairwoman of the National Association of Homebuilders Alicia Huey said in a statement. Huey said homebuilders still face supply chain issues and a shortage of skilled labor.
Copper Shortage Threatens Green Transition
Metal markets seem to think copper is the new lithium. A lack of new mining activity has added to worries that there won’t be enough of the red metal for the energy transition, a popular topic at this week’s World Copper Conference in Santiago, Chile. South America currently dominates copper production and Chile is the largest mined producer. Increasing mine output has proved a challenge, prompting a wave of deal making in the industry and warnings of a serious supply shortfall over the next decade.
Potential new supplies could come from the rich copper seams in Congo and Zambia in central Africa. They are now being exploited. However, the largest deposits are still in South America. According to Congo’s Ministry of Mines, copper metal exports totaled 2.3 million metric tons in 2022, up from 1.8 million metric tons in 2021, less than half of Chile’s output. According to analysts it is more of a “when” not an “if” copper demand is likely to surge. “The question is how fast this transition will occur and exactly where,” said Barbara Mattos, an analyst at ratings company Moody’s Investors Service.
Slide Show: EV Winners and Losers, Tax Credits Edition
New federal tax incentives for electric and plug-in hybrid vehicles go into effect earlier this week. To qualify for the full credit, vehicles must meet new sourcing requirementsfor critical minerals and battery components. In addition, the sticker price must not exceed $80,000 for pickup trucks, vans and SUVs, and $55,000 for all other vehicles.
Click through the slideshow to see which vehicles benefit from the rule changes, and which got dinged. The figures show what the previous incentive was (before), and what the incentive is now (after).
View the Slideshow at IndustryWeek
Oracle Asks: Is Data Helping—or Hurting?
The original promise of artificial intelligence was that powerful algorithms and speedy computers would take vast amounts of data and spin them into useful intelligence. Business decision making would get better. But the opposite may be happening. A giant study out this morning from Oracle, based on a survey of more than 14,000 business leaders, reveals some shocking statistics (more data for you to consume):
74% of those responding say the number of decisions that they have to make every day has increased more than 10X over the last three years. A similar proportion—78%—complain they are being bombarded with more data than ever before. 86% say the volume of data is making decisions in their personal and professional lives more complicated, not less. The result is a rise in decision distress, decision delay, and even decision paralysis. A stunning 72% admitted there are times when the sheer volume of data, and lack of trust in that data, prevents them from making any decision at all.
Pentagon CIO to Issue New Guidance for Protecting Classified Information, Contractors
Department of Defense Chief Information Officer John Sherman has been directed to “immediately” issue new guidance to help the Pentagon better protect classified information, according to a new memo from Secretary of Defense Lloyd Austin. The undersecretary of defense for intelligence and security is also expected to coordinate with Sherman and the director of administration and management, in leading the 45-day review of DOD security programs, policies and procedures.
DOD components must ensure their organizations adhere to a list of department standards regarding the handling of classified information, including those related to accountability; safeguarding; storage and destruction; transmission and transportation; security education and training; reporting of security incidents involving classified information; cybersecurity protocols; and transmission on private sector communications channels expressly prohibited, he added.
Read more at Manufacturing.Net
Americans Using Unhealthy Coping Mechanisms to Manage Mental Health
According to the GeneSight Mental Health Monitor, a survey from Myriad Genetics, 77% of Americans said they have used at least one addictive behavior and/or unhealthy coping mechanism to manage their mental health issues. The GeneSight Mental Health Monitor is a nationwide survey conducted online by ACUPOLL Precision Research, Inc. The survey included a representative sample of adults diagnosed with depression and anxiety.
Nearly all Americans (94%) surveyed agree that substance and behavioral addictions often mask underlying mental health issues. Though they may view these behaviors as addictive or as unhealthy coping mechanisms (or both), many admit to still using them. Two-thirds of those diagnosed with depression and/or anxiety have experienced trial and error in trying to find medication that works for them. Nearly half of this segment (45%) report they have turned to an unhealthy coping mechanism as a result of a medication failure.
3 New U.S. Employment Regulations That Companies Should Prepare for Now
A spate of new laws and regulations — many of which are intended to make the workplace fairer for employees — may make the situation even more challenging for employers. Three such developments — the Federal Trade Commission’s proposed ban on noncompete clauses in employment contracts, pay transparency legislation in many local jurisdictions, and new human capital disclosures mandated by the Securities and Exchange Commission — have far-reaching implications that company leaders may not have fully grasped.
How these changes will play out is far from clear, but the time to start thinking about them is now. Here’s how leaders can adopt a growth mindset by viewing the coming changes as an opportunity to think deeply about their talent strategy and turn these regulatory developments to their advantage.
Read more at The Harvard Business Review
Tesla Cuts Prices Again Ahead of Q1 Earnings Report
On the eve of a highly anticipated earnings report, Tesla (TSLA) slashed prices of its Model 3 and Model Y EVs yet again, in fact bringing one of them below $40,000.Last night's price cut, the sixth one this year by Tesla in the U.S., saw each version of the Model Y SUV slashed by $3,000 each, with the Model 3 RWD (rear-wheel drive) dropping by $2,000 to $39,990. The base Model Y, known as the AWD or all-wheel drive version, now starts at $46,990.
Tesla has now cut prices of its base Model 3 by 11% this year alone, and its base Model Y prices have fallen by 20%, according to calculations done by Reuters. These latest price cuts come as the federal government limited the number of vehicles eligible for the electric vehicle tax credit, with Tesla's base Model 3 RWD seeing its tax credit fall by half to $3,500.
Tesla Profits, Gross Margin Fall in Q1
Tesla Inc. missed market estimates for first-quarter total gross margin on Wednesday, throttled by a series of aggressive price cuts meant to spur demand in a sagging economy and fend off rising competition. Net income during the latest period dropped 24 percent to $2.51 billion. Tesla reported total gross margin of 19.3 percent, compared with expectations of 22.4 percent, according to analysts polled by Refinitiv.
a murky economic outlook meant that Tesla CEO Elon Musk's plan to ride out a recession with price cuts and lower production costs was not enough to make up for strained consumer spending on big-ticket items. Tesla deliveries in the first quarter rose 4.3 percent from the fourth quarter. The company reported first-quarter revenue rose 24 percent to $23.33 billion, just below a consensus estimate of $23.21 billion, according to 14 analysts polled by Refinitiv.
Renewable Energy is Booming in China – But so is Coal
China is leading the world in the completion of renewable energy projects. In 2022, China added almost as many renewable energy projects to the grid as the rest of the world combined, according to the Global Energy Monitor (GEM). GEM is a non-profit organization that tracks energy projects and fuel usage for all common energy sources.
However, GEM reports that there is another side to the story. While worldwide reliance on coal is decreasing, China is approving a “massive wave” of new coal-fired power plants. GEM collaborated with the Center for Research on Energy and Clean Air (CREA) on a study that concludes that China authorized 106 gigawatts of new coal power capacity in 2022. That capacity equates to about 100 large coal-fired power plants; four times the number approved in 2021. The researchers believe that the chief reason for the rapid increase is, ironically, concerns over energy security and resilience associated with last summer’s crippling heatwave and drought.
The Warehousing Industry’s Growth Comes with Consequences
These are regions of the U.S. where transportation and warehousing has boomed over the last decade, thanks in large part to the growth of online shopping and promises of rapid delivery. In those areas, logistics is often the biggest employer — and sometimes, the most controversial industry. One of those regions is California’s Inland Empire, a swath of land near Los Angeles where companies store, repackage and distribute goods coming in through the busy ports of L.A. and Long Beach.
The number of warehouses in the Inland Empire has roughly doubled every decade since the 1980s, according to data from Pitzer College. Now, the industry employs over a quarter million people in the region, according to the Inland Empire Economic Partnership. But it isn’t likely to make them rich. The Labor Department says average pay in the transportation and warehousing sector is roughly $28.50 per hour. That’s lower than average pay in the manufacturing and construction industries.