Member Briefing April 30, 2024
Fed Meeting Looms: Here Are The Rate-Cut Odds
The latest Fed meeting takes place on April 30-May 1. A few months ago, investors were betting that a major easing cycle would be well underway by this time. Now markets see virtually no chance of a Fed rate cut on Wednesday, with the first cut not coming until September and possibly not at all. The Fed meeting statement and Fed chief Jerome Powell's comments Wednesday afternoon will offer signals on when rate cuts could take place. But that really depends on the economic data. This coming week, investors will get the ISM manufacturing index for April and a slew of labor data, capped by Friday's April jobs report.
- May 1: Markets expect a 2.4% chance of a quarter-point rate cut at the end of the April 30-May 1 meeting,
- June 12: Investors give only an 11.1% chance of a quarter-point rate cut at the June 11-12 Fed meeting, and 0.2% of 50 basis points by then.
- July 31: There's a 31.3% chance of a quarter-point cut by the July 30-31 meeting, and 5.7% of 50 basis points.
- Sept. 18: Markets do forecast a rate cut by the Sept. 17-18 Fed meeting, but it's no lock at 57.4%. There's a 13.5% chance of 50 basis points by then.
- Nov. 7: The odds of a quarter-point Fed rate cut are 67% by the Nov. 6-7 meeting, which ends two days after U.S. elections. There's a 23.4% chance of 50 basis points by then.
- Dec. 18: By the final Fed meeting of the year on Dec. 17-18, investors still only see a 79.8% chance of a rate cut, with 20.2% odds of no move at all. There's a 40.3% chance of 50 basis points and 11.4% of 75 basis points.
Read more at Investor’s Business Daily
Consumer Sentiment Weakens in Late April, University of Michigan Survey Says
The final reading of the sentiment survey dropped to 77.2 from 77.9 in early April, the University of Michigan said Friday. Sentiment had hit 79.4 in March, a 32-month high. According to the survey, Americans think inflation will average 3.2% in the next year. That’s the highest rate since last November. Longer-run inflation expectations also edged up to 3%, from 2.8% last month. “Overall, consumers continue to express uncertainty about the future trajectory of the economy pending the outcomes of the upcoming election,” said Joanne Hsu, director of consumer surveys at the University of Michigan’s Institute for Social Research.
The gauge of consumer views of current conditions fell to 79 from the earlier estimate of 79.3. The index was 82.5 in March. The gauge of expectations for the next six months dipped to 76 from a preliminary 77. The index was 77.4 in March. Economists said weaker stocks, rising geopolitical tensions and a more hawkish Federal Reserve were all likely causes of the drop in confidence.
Global Headlines
Middle East
- Israel and Hamas: The Latest News – The Guardian
- Israeli Strikes Hit Residential Buildings in Rafah - NYT
- Blinken to Hamas: Accept Israel's 'Extraordinarily Generous' Gaza Truce Proposal - Reuters
- In Gaza, Authorities Lose Count of the Dead - WSJ
- EU Pledges Further €68M in Humanitarian Aid for Palestinians – Politico
- Likely Missile Attack by Yemen’s Houthi Rebels Targets a Ship in the Red Sea - AP
- José Andrés' World Central Kitchen Resumes Gaza Aid—4 Weeks After Deadly Strike Killed Staffers - Forbes
- Vast Majority of Americans Back Israel Over Hamas: Poll – The Hill
- Interactive Map- Israel’s Operation in Gaza – Institute for the Study of War
- Map – Tracking Hamas’ Attack on Israel – Live Universal Awareness Map
Ukraine
- Ukraine and Russia: The Latest News – The Guardian
- World War I Tactics: A Ukrainian Gunner In The Back Of A Propeller Plane Shoots Down A Russian Drone - Forbes
- Polish Protesters Suspend Months-Long Blockade of Ukraine Border – Reuters
- NATO’s Stoltenberg Rebukes Allies for Tepid Support of Ukraine - Politico
- Russia Arrests More Journalists on ‘Extremism’ Charges – The Hill
- Ukraine Bets on Long-Range Drones, Raising Costs of War for Russia - WSJ
- Russia Is Turning To Low-Tech Solutions To Counter Ukrainian Drones - Forbes
- UN Experts Say North Korea Missile Landed in Ukraine's Kharkiv – Reuters
- 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
Other Headlines
- Spain's Prime Minister Pedro Sánchez Will Not Resign After Allegations Against Wife - BBC
- Scotland’s Humza Yousaf Resigns Throwing His Pro-Independence Party into Chaos - CNN
- Ariel Henry Resigns as Prime Minister as Haiti Installs Ruling Council - CNN
- Millions of Afghans Made Pakistan Home to Escape War. Now Many are Hiding to Escape Deportation - AP
- Japan Intervenes After Yen Slides Against the Dollar - WSJ
- Russia Vetos US-Japan Resolution Against Nukes in Space – Breaking Defense
- At Least 45 People Die in Western Kenya After a Dam Collapses Following Heavy Rains - AP
- Plastic Talks Gather Steam Amid Impasse Over Production Limits – Reuters
Policy and Politics
Challenges to Noncompete Ban Already Hitting Courts
The first legal challenges to the Federal Trade Commission's nationwide ban on noncompetes are flooding in from business groups claiming the commission overstepped its authority on Tuesday by approving the new regulation. The U.S. Chamber of Commerce, which was promising to challenge the restriction even before the commission's 3-2 vote approving it, filed the first lawsuit in the Eastern District of Texas, followed closely by the tax services firm Ryan LLC in the Northern District. The chamber was joined in its lawsuit by Business Roundtable, which is an association of CEOs from many of the nation's largest companies, and the Texas Association of Business
While Section 6(g) of the act gives the agency authority "from time to time" to "make rules and regulations" that prevent unfair methods of competition, business groups say this provision doesn't come close to granting the FTC authority to adopt a rule with the magnitude of the noncompete ban. "To promulgate such sweeping rules, an agency must have clear and unmistakable authority," Ryan LLC argues in its suit. "The modest powers afforded the Commission in Section 6(g) do not come close to that standard."
Hochul Attempts to Push Democrat Party Toward Center Amid Swing House Races
Crafting New York’s $237 billion state budget this year came with a purpose for Gov. Kathy Hochul: Don’t hurt House Democrats in a pivotal election year. The spending package, approved this month, is an intended course correction for Hochul and her fellow Democrats that focuses on rebutting the two issues Republicans have seized on — the state’s lack of affordability and loosening of criminal justice laws.
The Democratic governor was hellbent on avoiding the same mistakes this year at the insular state Capitol. Over the past two years, Republicans for state and federal races focused on state-level issues — like a controversial cashless bail law and her own ill-fated housing plan that alienated suburbanites. Yet Republicans already were able to easily spot potential vulnerabilities with the new budget, which they said doesn’t do enough to keep the state safe from crime. And it will surely be part of their playbook in key races in November.
Read more at Politico New York
Greene Says Johnson’s ‘Days as Speaker Are Numbered.’ Dems May Save Him.
Rep. Marjorie Taylor Greene (R-Ga.) is doubling down on her commitment to oust Speaker Mike Johnson (R-La.), saying his days in the leadership position are “numbered” as House members await a potential privileged vote on a motion to vacate. Greene last month filed a motion to remove Johnson, saying he crossed a line by holding a vote for additional Ukraine aid. Two other GOP lawmakers have already backed it — enough votes to remove the Speaker if all Democrats vote with her — though Democrats have generally opposed her effort.
Some Democrats, however, are increasingly open to the idea of voting to protect Speaker Mike Johnson against an ouster attempt, putting him in a stronger than expected position even with a razor-thin majority. More than two dozen Democrats told POLITICO they expect a swath of the party to step in and save the Republican speaker following his decision to buck conservative members of his party and support military aid to Ukraine.
Health and Wellness
Mayo Clinic Chimes in on Pickleball Injuries and Prevention
The popularity of pickleball has exploded in the last few years, and according to a recent report, so have injuries attributed to the relatively new sport. Dr. Sanj Kakar, a Mayo Clinic orthopedic surgeon who specializes in hand and wrist disorders, says there are two main injuries he sees due to pickleball. He offers three ways to prevent them. "Sometimes the patients are a little bit older, they may have undiagnosed osteoporosis, they fall over, they break their wrist, and we see actually a lot of those injuries," says Dr. Kakar. He says players can also face problems from overuse. "For example, the tendinitis type of injuries that when somebody plays, they're not conditioned to it," he says. The goal is to prevent those type of problems in the first place. Dr. Kakar says to think of these three P's when heading to the court.
"Properly warming up, having proper equipment and also proper form," he explains. Warm up by doing stretches before taking your first swing. "It's not tennis, it's not squash, it's its own sport. So having proper equipment is important such as having a proper paddle, which is thicker so you are not gripping as hard," says Dr. Kakar.
NYS COVID Update
The Governor updated COVID data for the week ending April 26th.
Deaths:
- Weekly: 14
- Total Reported to CDC: 83,237
Hospitalizations:
- Average Daily Patients in Hospital statewide: 459
- Patients in ICU Beds: 35
7 Day Average Cases per 100K population
- 2.2 positive cases per 100,00 population, Statewide
- 2.8 positive cases per 100,00 population, Mid-Hudson
Useful Websites:
Election 2024
- Trump Maintains Lead Over Biden in 2024 Matchup as Views on their Presidencies Diverge – CNN Poll
- DeSantis Meets With Trump to Help With 2024 Election - Politico
- What Nikki Haley’s Supporters Mean for Trump’s Chances in November - WSJ
- What to Expect in Today’s New York 26 Special Congressional Election - AP
- Real Clear Politics Latest GOP Primary Polls – Real Clear Politics
- Real Clear Politics Latest General Election Polls – Real Clear Politics
- Latest Polls - FiveThirtyEight
Industry News
Single Source: Northrop’s Rocket Fuel Factory Struggled to Meet Pentagon Demand
The Pentagon is getting a lesson in the risks of sole-source procurement in a key missile program. The U.S. military has long relied on one U.S. company to make the main ingredient that fuels its most powerful missiles. Years after building a factory to make more of the key chemical, Northrop Grumman’s output is still missing from the fuel powering many U.S. weapon systems. The delay comes as global conflicts have spurred demand for new tactical missiles, and billions of dollars in new spending is slated to bolster demand even more. But most of the fuel still comes from a specialty-chemicals company in Utah, American Pacific.
It is an example of the single-source chokepoints that Pentagon logistics experts have flagged as a national-security risk. Supply-chain snarls during the pandemic raised alarms over the situations, but efforts to diversify suppliers have lagged. Despite efforts to diversify, many weapon materials have no U.S. manufacturers. Others have only one source or a dominant provider. The supply-chain snarls caused by the Covid-19 pandemic heightened officials’ sense of urgency by exposing other materials only made in adversarial countries such as China.
First Container Ship Arrives at Port of Baltimore Since Key Bridge Collapse
The first container ship arrived at the Port of Baltimore since the Francis Scott Key Bridge collapsed more than a month ago. The MSC Cargo Passion III made it through the 35-foot temporary channel on Sunday, carrying nearly 1,000 containers. Four temporary channels have been opened since the bridge's collapse on March 26. This fourth channel will only be open for a few days, but at 35 feet deep and 300 feet wide it will allow several ships that are stuck in the Port of Baltimore to get out.
The opening of these channels follows the largest of four recent openings on Thursday, which restored 15% of the pre-collapse commercial activity at the Port of Baltimore. The adjustment will allow large commercial ships that were stuck to depart and others to enter, including those carrying containers, vehicles, and farm equipment. Recreational boats will also be able to pass through the Key Bridge collapse salvage area during specific hours.
Steel Output Lagging Year-Ago Pace
Global raw-steel production rose to 161.2 million metric tons during March, nearly 8.0% higher than the February total but still -4.3% less than the March 2023 tonnage. The new result reported by the World Steel Assn. brings 2024 raw steel output to 469.1 million metric tons, roughly even (+0.4%) with last year’s January-to-March production volume. Global raw-steel production rose to 161.2 million metric tons during March, nearly 8.0% higher than the February total but still -4.3% less than the March 2023 tonnage. The new result reported by the World Steel Assn. brings 2024 raw steel output to 469.1 million metric tons, roughly even (+0.4%) with last year’s January-to-March production volume.
For the current year to-date, Chinese steelmakers have produced 256.6 million metric tons, -1.9% less than they produced during January-March 2023. India, the world’s second-largest steel industry, produced 12.7 million metric tons during March, 7.1% more than during February and 7.8% more than during March 2023. During January-March, Indian steelmakers produce 37.3 million metric tons, which is 9.7% more than during the comparable period of last year. Steelmakers in the United States have curbed their output to match demand. For March, U.S. steelmakers produced 6.9 million metric tons (7.6 million short tons), which is 5.8% more than during the shorter month of February, and shows no change from the March 2023 result.
Read more at American Machinist
The Drone Industry is Booming in Central New York
A drone corridor has emerged with the placement of one of seven Federal Aviation Administration designated facilities known as UAS test sites for drones in Oneida County. Sprouting up near the decade-old test site is a state-funded business accelerator program for drone companies and a growing number of educational initiatives to support the growing industry. “New York state is the place to be for what is next in aviation,” said Kara Jones, director of Genius NY, the accelerator program based in Syracuse.
At the heart of the corridor is the test site at Griffiss International Airport in Rome. The 240-square-mile test area was originally just a 50-mile corridor between Griffiss and Syracuse Hancock International Airport. Now, the larger facility is overseen by NUAIR, a nonprofit, founded to develop the test site and industry in New York. NUAIR also launched the Center for Excellence at the Syracuse airport to manage the expanded test area and develop new economic, safety and regulatory models for the region, and to work with national and international clients. There is also a military presence at Syracuse Hancock, drone programs run by Le Moyne College and Syracuse public schools, as well as a growing corporate base.
GlaxoSmithKline Sues Pfizer and BioNTech Over Covid-19 Vaccine Technology
GlaxoSmithKline sued Pfizer(and BioNTech in Delaware federal court on Thursday, accusing them of infringing GSK patents related to messenger RNA (mRNA) technology in the companies' blockbuster COVID-19 vaccines. GSK said in the lawsuit, that Pfizer and BioNTech's Comirnaty vaccines violate the company's patent rights in mRNA-vaccine innovations developed "more than a decade before" the outbreak of the COVID-19 pandemic.
A Pfizer spokesperson said in a statement that the company is "confident in our IP position around Comirnaty" and intends to "vigorously defend" against GSK's claims. A BioNTech spokesperson declined to comment on the complaint. A GSK spokesperson said the company believes its patents "provided the foundational technology used in Pfizer and BioNTech’s COVID-19 mRNA vaccines," and that it is "willing to license these patents on commercially reasonable terms and to ensure continued patient access" to the shots.
Tesla Comes A Step Closer To Self-Driving Approval In China After Deal With Baidu
Tesla agreed to a deal with Chinese search giant Baidu for its mapping and navigation functions, according to several reports on Monday, as CEO Elon Musk met with senior Chinese government officials in a purported push to gain approval for its subscription-based driver-assistance technology which may help boost revenues for the company in its largest foreign market.
As part of the deal, Tesla will gain access to Baidu’s mapping and navigation tech to power its driver assist feature it calls “Full-Self Driving,” Bloomberg and Reuters reported, citing unnamed sources. The deal will allow Tesla to tap into Baidu’s mapping license, a requirement for carmakers to launch self-driving or driver-assist features for use on China’s public roads, the Reuters report added. Foreign companies need to partner with local firms to access the license, which will allow Tesla’s cars to gather essential data about traffic, road signs and routes.
Boeing Buys GKN Factory, Ending Dispute Over F-15, F/A-18 Parts and Enhancing Its Workforce
Boeing has agreed to buy a St. Louis-area facility from GKN Aerospace that supplies critical parts for the Boeing F-15 and F/A-18 fighter jets, a lifeline for the aerospace giant’s fighter production that also ends contentious litigation between the two parties. The transaction would see GKN’s F-15 and F/A-18 operations immediately transition to Boeing, according to a Boeing press release. Additionally, Boeing has agreed to hire 550 GKN employees, the bulk of GKN’s workforce at the site located in the St. Louis suburb of Hazelwood, Mo.
GKN and its parent company, the British firm Melrose Industries, previously planned to shutter the Hazelwood facility by the end of the year, citing profitability woes. Boeing responded with a lawsuit in December 2022, arguing that GKN was violating an agreement to supply parts for the F-15 and F/A-18, according to the St. Louis Post-Dispatch. The agreement to buy the factory would end litigation between the two parties, according to a Boeing spokesperson. The spokesperson also told Breaking Defense that the facility employed roughly 600 people, some of whom retired or opted to seek work outside Boeing.
Leader of Federal Student Aid Office Steps Down After College Admissions Crisis
Richard Cordray, the chief operating officer of the Office of Federal Student Aid and top student loan official in the Biden administration, is stepping down. Cordray has faced mounting criticism from Congressional Republicans and the higher education community over his agency’s rollout of the new Free Application for Federal Student Aid (FASFA), which has been beset by a raft of delays and technical errors that have frustrated college financial aid offices and hampered college access for underserved students.
Cordray’s three-year appointment ends in early May, and he decided not to continue for another term, according to a department official. He will remain in leadership until June “in order to oversee the completion of key priorities within the organization,” the Education Department said in a news release late Friday morning. Education Secretary Miguel Cardona had nothing but praise for Mr. Cordray, his deput. He saluted Mr. Cordray for his “three years of service, in which he accomplished more transformational changes to the student aid system than any of his predecessors” and “undertook the work of fixing the broken student loan system programs.”
Read more at Inside Higher Education
Forbes Billionaires List – Cities with the Most in 2024
There are a record 2,781 billionaires spread around the globe this year, in places as far flung as the Isle of Man and Manantiales, a small fishing village and resort in Uruguay. Yet they mainly reside in just a handful of elite cities. In fact, nearly a quarter of billionaires, worth a combined $3 trillion, live in one of ten cities in only six countries, according to Forbes’ latest World’s Billionaires list.
New York City once again is home to the most billionaires in the world: It’s the primary residence of an estimated 110 billionaires who are worth a collective $694 billion. The Big Apple has long dominated the ranks, coming in at No. 1 for all but one of the past 11 years. (Beijing briefly took the top spot in 2021.) Billionaire New Yorkers include some 62 Wall Streeters and other finance and investment tycoons, 14 real estate moguls and a dozen fashion and retail magnates. Hong Kong and Moscow tie for second place, with 74 billionaires each. That’s a net gain of two for Hong Kong, which is an autonomous territory of China, and an impressive net jump of 12 for Moscow, which climbs from No. 6 last year to No. 2, as Russian wealth rebounds after the fallout from the country’s invasion of Ukraine in early 2022 pushed scores of Muscovites from the billionaires list. Mumbai also made a big jump, from seventh to fourth after adding 13 more billionaires since last year.