Member Briefing April 5, 2022
Stop Gap: Emergency Appropriation Bill Funds State While Budget Negotiations Continue
Late last night the legislature passed an emergency appropriation bill to temporarily allow the State to continue to fulfil its obligations while budget negotiations continue. The emergency appropriation is effective retroactively on April 1st, and will expire on Thursday, April 7th, 2022. Democratic lawmakers in the state Senate and Assembly have been told by legislative leaders to stay in Albany at least through mid-week, with some predicting they will be in town through Friday to iron out details on the more than $216 billion budget.
The state Legislature remains at odds with Gov. Kathy Hochul over her dual push for criminal justice reforms and $850 million in public funding for a new Buffalo Bills stadium, the top Democratic leader in the Assembly griped Monday morning, as lawmakers are set to miss another deadline to pass New York’s fiscal 2023 budget.
Invasion of Ukraine Headlines
- Germany Says West to Agree More Sanctions on Russia After Bucha Killings – Rueters
- Peace Talks Still on Despite ‘Genocide’, Zelensky Says – BBC
- Pope Francis Condemns ‘Sacrilegious War’ in Ukraine – The Hill
- Killing of Civilians in Bucha and Kyiv Condemned as ‘Terrible War Crime’ – The Guardian
- Why Ukraine Must Win – A Decisive Victory Could Transform the Security of Europe – The Economist
- Russian Energy Exports in Focus as Europe Plans New Sanctions – CNN
- America’s Gas Frackers Limber Up to Save Europe – The Economist
- Map – Tracking Russia’s Invasion of Ukraine – Live Universal Awareness Map
Supply Chain: Ford, GM Plants Idled
Ford Motor Co. and General Motors Corp. have separately idled production at two Michigan assembly plants for the week of April 4. In each case the automakers have cited parts shortage. The Ford Flat Rock (Mich.) Assembly plant – where it builds the Ford Mustang – is being slowed by a shortage of semiconductor chips, the automaker announced. The issue has been an ongoing problem for automakers since the initial end of Covid lockdowns and the effort to resume regular production efforts. Most automakers operating in the U.S. have resorted to idling plants for various lengths of time over the past year.
GM’s Lansing (Mich.) Grand River Assembly plant has paused production of the Cadillac CT4 and CT5 and the Chevrolet Camaro, though company spokesperson emphasized that this idling is not due to a shortage of semiconductor chips. Even so, GM would not specify the particular part or parts that are unavailable, citing competitive issues.
Commerce: Factory Orders Decline in February
New orders for U.S.-made goods fell in February, likely because of persistent shortages of materials and a shift in spending back to services, but manufacturing remains supported by low inventories at businesses. The pullback in factory orders came as durable goods orders tumbled by 2.1 percent in February following a 1.5 percent spike in January. Orders for non-durable goods shot up by 1.2 percent in February after jumping by 1.5 percent in January.
The Commerce Department said on Monday that factory orders fell 0.5% in February. Data for January was revised slightly higher to show orders rising 1.5% instead of 1.4% as previously reported. Economists polled by Reuters had forecast factory orders would decline 0.5%.
US COVID – Masks Come Off, Mandates Loosen as Companies Relax Covid-19 Protocols
U.S. companies are relaxing many of the vaccine and other COVID-related requirements that had become a staple of corporate life in the pandemic. As office occupancy nears pandemic-era highs in many U.S. cities, a number of employers have communicated new, looser safety protocols to workers. Some companies made masks optional in the office for all workers, while others dropped testing requirements for the unvaccinated or simplified the daily return-to-office questionnaires.
Beginning this week, JPMorgan Chase will relax—for now, anyhow—a number of its COVID safety workplace measures, including rules on masks at the office and testing for the unvaccinated. It’s not alone. It joins Verizon, and others. Meanwhile, on the West Coast, social media giant Meta is reversing its employee booster policy.
NYS Makes Second COVID-19 Booster Shot Available to Eligible New Yorkers
Governor Kathy Hochul today announced eligibility for second COVID-19 vaccine booster doses. Booster doses are free and widely available statewide, including at all state-run mass vaccination sites. Eligible New Yorkers may receive an mRNA vaccine—either the Pfizer-BioNTech or Moderna COVID-19 vaccine—for their second booster shot.
The State’s Department of Health released new clinical guidance on the administration of second booster doses for all providers enrolled in the New York State vaccination program. Adults 50 years and older can receive a second booster of an mRNA vaccine at least four months after their first booster. Additionally, adults ages 18 – 49 years who received the Johnson & Johnson vaccine for their primary vaccine and initial booster dose now may receive a second booster four months after their first booster dose. Also eligible for the second booster are New Yorkers 12 years and older who are moderately to severely immunocompromised.
COVID Antibody Drugs Work Best When Given as Early as Possible
A first-of-its-kind analysis has a clear message about when to give the COVID-19 therapies called monoclonal antibodies: the earlier people get this type of treatment, the better they fare1. The study, based on dozens of clinical trials, also suggests that many antibody therapies might work at doses much lower than those usually administered.
The authors estimated that early treatment could reduce the risk of hospitalization by around 70%. They also determined that doses of antibody drugs 7 to 1,000 times lower than typically administered could still achieve nearly the same efficacy. This finding could have far-reaching implications given monoclonal antibodies’ extraordinarily high cost and their ability to keep people with COVID-19 out of hospital. The study was posted on the medRxiv preprint server on 22 March and has not yet been peer reviewed.
Mysterious Wave of COVID Toes Still has Scientists Stumped
Puffy, red-purple, and sometimes painful toes were one of the odder symptoms seen early in the pandemic. But experts are debating their cause—and whether COVID-19 is even to blame. A study published in October last year in the British Journal of Dermatology was among those suggesting an aggressive immune response to a SARS-CoV-2 exposure may be responsible for COVID toes.
Some experts suggest that there may be COVID toe cases that have nothing to do with the virus but something to do with pandemic behavior. People weren’t wearing shoes and socks as much while staying at home, which could have induced pandemic chilblains in some people. Until experts are able to trace back a definitive SARS-CoV-2 footprint in COVID toes patients, that association will continue to be subject to speculation. “There’s lots of open questions,” Arkin says, “and may be more mysteries still than answers.”
Goldman Sachs: Your Portfolio Will Flatline this Year—if You’re Lucky
Over the weekend, Goldman Sachs gave clients a best-case, worst-case scenario for stocks—and even the glass-half-full take looks pretty lousy. The Goldman team, led by chief US equity strategist David J. Kostin, reiterates it sees the benchmark S&P 500 closing at 4,700 at year-end. That would imply stocks are only set to rise a further 4% this year.
A 4,700 handle would be a bit of a jolt to investors, as the S&P closed out 2021 at 4,766.18. The investment bank reckons equities could tumble a further 21% to finish 2022 at 3,600. That would be Goldman’s “recession scenario.”
Economists Seek Recession Clues in the Yield Curve
Much was made of the inversion last week of the yield curve between 2 and 10 year treasury bonds and how that might portend a recession. Yield curves can be measured using interest rates across a wide spectrum of maturities, from overnight to 30 years, and some inversions matter more than others. Though investors often look at differences between yields on two-year and 10-year Treasury notes, Fed researchers Eric Engstrom and Steven Sharpe concluded those weren’t the rates that actually mattered. “There is no need to fear the 2-10 spread,” Messrs. Engstrom and Sharpe argued in a recent paper.
They found the relationship of rates over shorter horizons of less than two years was a more accurate measure of the risk of recession. They compare current three-month Treasury-bill rates to market expectations for three-month rates 18 months in the future. Using that approach, recession alarms aren’t ringing. Short-term rates are much lower than expected rates 18 months from now.
JPMorgan CEO Dimon: Big Risks Loom for the U.S. Economy
The head of the nation’s biggest bank offered a largely upbeat view of the economy’s health in his annual letter to shareholders Monday. Consumers and businesses are flush with cash, wages are rising and the economy is growing rapidly after its pandemic slowdown. While consumer confidence has declined, Mr. Dimon says the more important gauge is booming spending. Yet Mr. Dimon warned that the war in Ukraine could collide with rising inflation to slow the pandemic recovery and alter global alliances for decades to come.
“They present completely different circumstances than what we’ve experienced in the past—and their confluence may dramatically increase the risks ahead,” Mr. Dimon wrote. “While it is possible, and hopeful, that all of these events will have peaceful resolutions, we should prepare for the potential negative outcomes.”
EEOC Gets Over 6,000 COVID Complaints
Employers should have paid attention when the Equal Employment Opportunity Commission (EEOC) issued its COVID-19 discrimination guidelines, covering responses to the disease itself as well as vaccination policies. It was recently revealed that between April 2020 and December 2021 more than 6,000 discrimination charges were filed. The EEOC also received more than 2,700 separate vaccine-related charges after the vaccine became widely available and vaccine mandates were introduced to workplaces across the county.
The majority of the EEOC charges claimed violations of the Americans with Disabilities Act (ADA), while others cited racial, ethnic and gender discrimination under Title VII of the 1964 Civil Rights Act along with other anti-bias laws. Many of the EEOC charges related to vaccine mandates appear to cite violations of the ADA; however, the majority of vaccine-related charges raised other statutes.
Cutting Tool Demand Down, But Up Year/Year
Machine shops and other manufacturing operations consumed $159.9 million worth of cutting tools during January 2022, according to the most recent Cutting Tool Market Report. The new total falls -2.7% below the figure for December 2021, but still shows 10.5% rise over than the consumption value for January 2021.
Despite the month-to-month decline indicated by the latest CTMR total, Steve Stokey, executive vice president and owner of Allied Machine and Engineering, said the January CTMR shows that “cutting tool data indicates we are continuing to trend in a positive direction, although the overall growth appears to be flattening. “If manufacturing was not already dealing with enough challenges coming out of the pandemic, it will now see how the war in Ukraine and the energy policies of this administration impact the numbers moving forward.”
Frontier Modifies Flights in and out of Stewart
When Frontier Airlines began to operate from New York Stewart International Airport last November, they flew to Miami, Orlando and Tampa. One of those routes was switched, said the airline’s Will Evans, Jr. “We found that there was more demand from the Hudson Valley to the Fort Lauderdale versus Miami so it just made sense to move the operation,” he said. Effective in May, the airline will be adding flights to Atlanta and Raleigh-Durham as well.
Meanwhile new discount airline Play will begin its European service to New York via New York Stewart International Airport at Newburgh on June 9. Based in Iceland, the airline will fly to dozens of European cities connecting through its Icelandic facilities. Service to European cities will dependent on the day of the week and can be reviewed at www.flyplay.com.
How Does Amazon’s Union Vote Affect Manufacturers?
The votes are in, and 55% of the workers at Amazon’s warehouse located on Staten Island, New York City, want to form a union. While it’s a historic event in Amazon’s history, it also will have a far-reaching impact on manufacturers. At first, it might not seem obvious to draw the line from Amazon to manufacturing, but as any manufacturers will tell you, and many have told me, in the competition for talent, Amazon looms large.
In an article on Bloomberg, in September of 2021, author Conor Sen said, “We’re used to America losing manufacturing jobs because companies can find cheaper workers abroad, but perversely, we might begin losing more of those jobs because factory owners can’t offer what service employers can.” He notes that while some manufacturing positions, like that of an autoworker, pay $30 an hour, those in the food industry pay closer to $20 and that’s not the starting pay. Sen said that manufacturing as a whole has lagged behind other industries over the past decade with leisure and hospitality wages increasing by 46% while factory wages rose 27% since 2011.