Member Briefing June 29, 2022
NYS Primary – Hochul to Face Zeldin for Governor, Delgado Will Be Dem Lt. Gove Candidate
New Yorkers headed to the polls Tuesday to vote in the primary contests for governor, lieutenant governor and state Assembly. In the Democratic gubernatorial primary, Gov. Kathy Hochul handily won against a pair of challengers to earn a full term in office. On the other side of the aisle, Rep. Lee Zeldin (41%) defeated former White House staffer Andrew Giuliani ( 23%), businessman Harry Wilson (16%), and former Westchester County Executive Rob Astorino (19%).
Lt. Gov Antonio Delgado officially became the party nominee on Tuesday after securing 57% of votes in the primary contest with 85% of election districts reporting, according to preliminary results from the New York State Board of Elections. In the Assembly progressive candidates did poorly with several of the left-wing insurgents backed by the Working Families Party and the Democratic Socialists of America falling behind incumbents or more moderate opponents.
War in Ukraine Headlines
- Ukraine and Russia: the Latest News – Reuters
- Turkey Lifting Objections to Sweden, Finland Joining NATO – AP
- Russia’s Medvedev says any NATO encroachment on Crimea could lead to World War Three – Reuters
- WNBA Star Brittney Griner Ordered to Trial Friday in Russia – AP
- Key G-7 Countries Ban Russian Gold Imports – CNBC
- Macron Says Russia Can’t Win in Ukraine After Strike on Mall – AP
- Pentagon Blasts Putin’s ‘Cavalier’ Nuclear Saber-Rattling as Russia Seeks New Advantages in Ukraine – US News
- Ukraine Mall Strike Caught on CCTV From Nearby Park – The Guardian
- G-7 Summit Exposes West’s Challenges in Tackling Russia – WSJ
- Map – Tracking Russia’s Invasion of Ukraine – Live Universal Awareness Map
Conference Board: Consumer Expectations Fall to 9-Year Low
The Conference Board’s consumer confidence index for June fell to 98.7 from 103.2 in May, below expectations for a reading of 100. The report’s expectations index, which is based on consumers’ short-term outlook for income growth, the job market, and overall business conditions, fell to 66.4, its lowest reading since March 2013.
“Consumers’ grimmer outlook was driven by increasing concerns about inflation, in particular rising gas and food prices,” said Lynn Franco, senior director of economic indicators at The Conference Board. “Expectations have now fallen well below a reading of 80, suggesting weaker growth in the second half of 2022 as well as growing risk of recession by year-end. “Looking ahead over the next six months, consumer spending and economic growth are likely to continue facing strong headwinds from further inflation and rate hikes,” Franco said.
NAM Pushes Back on Tax Increases with New Ad Campaign
The NAM is launching a large-scale ad campaign calling on Congress to oppose new taxes on manufacturers. Print, radio and digital ads urging federal legislators to refrain from imposing new taxes on manufacturers—including energy producers, which have been asked to produce more energy—will run in Washington, D.C., and in key states across the country.
“Manufacturers have kept our promises—especially after the 2017 tax reforms—to create jobs, raise wages and benefits and invest in our communities,” NAM President and CEO Jay Timmons said in a statement. “To keep up this winning record, we need Congress to enact policies consistent with our manufacturing competitiveness agenda. That’s how we’ll strengthen supply chains, expand access to affordable, reliable energy and tamp down inflation. Our industry is ready to keep solving problems and create well-paying jobs—but returning to outdated tax policies will impede our progress.”
U.S. COVID – What is the Strategy Going Forward?
As world leaders drop the COVID-19 pandemic from their agendas, and US federal, state, tribal, and local governments roll back pandemic-related funding and mitigation efforts—such as mask mandates—local officials, grassroots organizations, and frontline community health workers continue to push for and implement piecemeal strategies to help increase vaccination rates, draw attention to the need for research into long COVID, and improve trust in and funding for public health systems.
There is a need for the US to create “a sustainable infrastructure that can keep more people from getting COVID, regardless of their social circumstances,” writes Ed Yong in The Atlantic. Indeed, the US Government Accountability Office (GAO) last week released a report recommending that the US Department of Health and Human Services (HHS) prioritize the development of a real-time, public health situational awareness network to help raise public awareness to facilitate the early detection of and rapid response to future and potentially catastrophic disease outbreaks, such as COVID-19.
FDA Advisers Recommend Modifying Covid-19 Boosters to Target Omicron
Advisers to U.S. health regulators met yesterday to consider whether and how Covid-19 vaccines should be updated to better target circulating variants of the coronavirus, in preparation for a fall booster-shot campaign. The advisory panel to the Food and Drug Administration, which includes doctors and public-health specialists, is expected to vote later in the day on whether to recommend updating Covid-19 vaccines to target the Omicron variant. The Panel voted 19 to 2 to recommend updating Covid-19 vaccines to target the Omicron variant.
The recommendation, which the FDA doesn’t have to follow but often does, suggests the agency go ahead and direct vaccine makers Pfizer Inc., its partner BioNTech SE and Moderna Inc. to proceed with plans to roll out modified boosters that target more recent Omicron subvariants, including BA. 4 and BA. 5, but which haven’t been tested in people. The FDA’s staff recently expressed support for updating the vaccines to improve their effectiveness against variants, but each choice has trade-offs.
Moving from Pandemic to Endemic
While it’s hard to catch a moving target, employers are starting to transition from the pandemic perspective to the endemic one. “So, now that we are in a new phase, safety professionals are able to apply the lessons learned during the pandemic to decide how to move forward,” notes Rachel Walla, owner of Ally Safety. Safety professionals need to continue to be prepared for any changes. And they do have processes and procedures to fall back on, given their overall “success” in how they were able to deal with the pandemic and keep employees as safe as possible while continuing to operate their companies. In her work with companies large and small and in a variety of industries, Walla has discovered some best practices. Her advice is as follows:
- Have as few rules as possible.
- Change rules slowly and deliberately.
- Keep it simple and easy to follow.
- Communicate the why and not just the how.
Price Caps on Russian Oil and Gas?
At the G7 summit in the Bavarian Alps, Western leaders are attempting to find new ways to curb soaring energy costs, especially given the fears of an oncoming recession. The latest idea being pitched is caps on the price of Russian oil and gas, though obstacles remain, and the concept would need to garner widespread adoption to be effective.
Details are still being discussed, but the plan aims to cap prices at a level close to the cost of Russian production – thereby denting Moscow’s finances but still ensuring critical energy flows. To accomplish this, Europe would restrict the availability of transport and insurance services to shippers which only agree to observe the price ceiling (~95% of the world’s oil tanker fleet is covered by the International Group of P&I Clubs in London and companies based in continental Europe). Another proposal would apply similar caps on Russian gas prices, or limit the usage of U.S. financial services that could also benefit the scheme.
7 Things to Watch in New York’s Primaries Results from Tuesday
Tuesday’s primaries in New York are the first in the state’s history in which both major parties’ gubernatorial picks have faced competitive challenges for the nomination in the same year. Democratic Gov. Kathy Hochul is looking to fend off challenges from Long Island Rep. Tom Suozzi and New York City Public Advocate Jumaane Williams. Rep. Lee Zeldin is the nearly-unanimous pick of Republican leaders to represent their party, but needs to win a primary against former Westchester County Executive Rob Astorino; former White House aide Andrew Giuliani and businessman Harry Wilson.
There are also a host of contested races further down the ballot. Did, for example, Antonio Delgado secure the Lt. Governor spot on the ballot? What was turnout like? What was Hochul’s margin of victory? The answers to these – and other questions – will be watched closely by political insiders and junkies alike.
Lagarde Plays Down Recession Risks, Says ECB is Ready to ‘Move Faster’ on Rates if Needed
European Central Bank President Christine Lagarde on Tuesday played down concerns about a recession in the euro zone, also saying her team is ready to raise rates at a faster pace — if needed — if inflation continues to shoot higher. The euro zone is expected to see a headline inflation rate of 6.8% this year — well above the ECB’s target of 2%.
This comes at a time when economists are assessing whether or not the euro zone will escape a recession this year. The region has seen growth levels deteriorate amid an energy crisis, sanctions on Russia and food insecurity — just to name a few factors. “We have markedly revised down our forecasts for growth in the next two years. But we are still expecting positive growth rates due to the domestic buffers against the loss of growth momentum,” Lagarde said Tuesday at the Sintra Forum.
Volkswagen Nears Deal to Sell Stake in Electrify America to Siemens
Volkswagen is close to selling a minority stake in its U.S. electric-vehicle charge business to an arm of Siemens A a deal that would value the network at more than $2 billion, according to people familiar with the matter. A sale of a stake in Volkswagen’s Electrify America LLC would generate additional funding as part of a plan to more than double the number of EV charging stations that Electrify America operates across the U.S. and parts of Canada to 1,800 by 2026. Reston, Va.-based Electrify America also offers EV charging stations for use at home.
Germany-based Siemens would make the investment through its Siemens Financial Services unit, according to the people. The deal would complement Siemens’s existing operations in the EV charging sector. In August, the engineering and technology company said it plans to expand its manufacturing operations in the U.S. as part of a plan to make over 1 million EV chargers for that market over the next four years.
Why Inflation Looks Likely to Stay Above the Pre-Pandemic Norm
Many forecasters expect that annual inflation will soon ebb, in part because of last year’s sharp increases in commodity prices falling out of the year-on-year comparison. You might be forgiven for not taking these prognostications too seriously. After all, most economists failed to see the inflationary surge coming, and then wrongly predicted it would quickly fade.
Some indicators point to more price pressure to come in the near term. Alternative Macro Signals, a consultancy, runs millions of news articles through a model to construct a “news inflation pressure index”. The results, which are more timely than the official inflation figures, measure not just how frequently price pressures are mentioned, but also whether the news flow suggests that pressures are building up. In both America and the euro area the index is still miles above 50, indicating that pressures are continuing to build.
Nike Profits Dip on Lower Sales in North America, China
Lower sales in North America and China dented Nike’s quarterly results as the sports giant on Monday projected modest revenue growth amid the strong dollar, rising inflation and other headwinds. For the quarter ending May 31, Nike reported profits of $1.4 billion, down five percent from the prior year on a one percent dip in revenues to $12.2 billion.
The Oregon company — which has enjoyed strong pricing at times during the pandemic but also faced Covid-19 factory lockdowns in Asia that have crimped its inventories — reported lower profits for its fiscal fourth quarter. Nike Chief Financial Officer Matthew Friend forecast revenues of flat to “slightly up” in the coming quarter. He said the company was monitoring consumer behavior over “implications of high inflation” and adopting a “cautious approach” to Greater China given the country’s restrictive Covid-19 policies.
China Eases Quarantine for Overseas Arrivals Based on ‘Lessons Learned’ in Shanghai
China has reduced quarantine time for overseas arrivals, in the first step towards easing its Covid-19 border restrictions. It marks the biggest change to the rules since China closed its borders in March 2020, but the country’s border controls remain tough compared to others that have completely reopened and dropped testing requirements.
People arriving in mainland China will now have to spend seven days at a government-run quarantine facility, followed by another three days in home isolation, according to new guidelines released by the National Health Commission on Tuesday.
Rockland IDAs Keep Economic Engines Pumping, Even Through COVID
A report issued last week by the New York State Comptroller Thomas DiNapoli shows that despite COVID-19 there were an abundance of new projects being shepherded by Industrial Development Agencies across the state, and job creation related to these projects stayed strong. Among the 108 IDAs statewide, some 30 percent of the projects originated in New York City, Long Island, and the Mid-Hudson region.
In the Mid-Hudson Region, for fiscal year 2020 (the most recent available) 279 separate project sponsors availed themselves of IDA incentives, costing net tax exemptions of $108 million dollars. The net tax exemption is calculated by taking the total tax exemptions and deducting whatever payments the sponsors made in lieu of taxes.
Supreme Court’s Next Major Ruling Could Severely Limit the Power of the EPA
West Virginia v. the Environmental Protection Agency has the potential to sharply curtail the power of the EPA. The case started last year, when a federal court ruling left open the possibility that policies putting caps on greenhouse gas emissions from power plants could be allowed. While there have been no moves to do that, a collection of Republican attorneys general and coal companies banded together to appeal the ruling.
The case is an unusual one for the court. Instead of looking at a rule that has already been established, this one will set a precedent for future actions, specifically those tied to the EPA’s authority to regulate power plant emissions. Should the court rule against the EPA, that could hamper the Biden administration’s plans to combat climate change, as regulating authority could shift to Congress.