Member Briefing March 23, 2022
Invasion of Ukraine Headlines
- Ukrainians Flee Mariupol as Russian Forces Push to Take Port City – The WSJ
- Ukrainian Forces Fight to Take Back Territory as Russian Forces Struggle – The Hill
- Pentagon scrambles to replenish weapons stocks sent to Ukraine – Politico
- Sanctions Start to Get Real for Russians – CS Monitor
- War in Ukraine to Increase CPG Prices, US Farming Costs – Washington Post
- Russian Court Finds Jailed Kremlin Critic Navalny Guilty of Fraud – Reuters
- The Next 2 Weeks Could Determine the Fate of Ukraine – Politico
- Biden to Announce New Sanctions on Russia During Trip to Europe – Axios
- Pentagon: We’re Seeing ‘Clear Evidence’ Russia is ‘Conducting War Crimes’ – The Hill
- Map – Tracking Russia’s Invasion of Ukraine – Live Universal Awareness Map
Powell Talks Recession Risk, Super-Size Fed Rate Hikes
Federal Reserve chief Jerome Powell on Monday responded to the legion of economists casting doubt on policymakers’ Goldilocks forecast issued last week. But his rebuttal appears only to have left investors bracing for more aggressive tightening. Powell essentially delivered two messages that some might see as contradictory. First, contrary to conventional wisdom, Fed rate hikes haven’t led to recession every time, except for the 1994 tightening, he said. Second, the Fed is prepared to tighten much more aggressively than it indicated last week.
Powell’s latest speech seemed to underscore what some economists had already concluded. The seven rate hikes penciled in for 2022 at last week’s meeting were “merely a floor,” not a base case, Jefferies chief U.S. financial economist Aneta Markowska wrote Friday.
New Trade Deal to Lift Tariffs on British Steel, U.S. Motorcycles, Whiskey
The United States and Britain ended a four-year dispute over U.S. steel and aluminum tariffs on Tuesday, pledging to work together to counter China in a deal that also removes retaliatory tariffs from U.S. motorcycles, whiskey and other products. Under the deal, Britain will receive a duty-free import quota of over 500,000 tons of steel “melted and poured” in the country annually. It also sets smelt and cast requirements on aluminum.
In a joint statement, U.S. Commerce Secretary Gina Raimondo and U.S. Trade Representative Katherine Tai said the deal would protect steel and aluminum companies – and their workers – in both countries, allowing the allies to focus on what they say are “China’s unfair trade practices.”
Russia’s Proposed Ban On Uranium Exports Sends Stocks Soaring
Several weeks ago, when Biden instituted a wholesale ban on Russian energy exports, he explicitly carved out Russian uranium suppliers for the simple reason that the US is very much reliant on Russia for its nuclear power plant needs – after all, Russia is the third-largest source of U.S. uranium, accounting for about 16% of total U.S. imports.
Tuesday the very thorny issue of Russian uranium came to a head when Russia news agency TASS cited deputy prime minister Novak, who said that Russia is considering a ban on Uranium exports. The news sent a basket of Uranium stocks and ETFs to fresh 2022 highs and prompted calls for expanded domestic mining.
US COVID – Omicron Subvariant BA.2
Public health professionals are warning state and federal government officials of a potential uptick in COVID-19 cases and hospitalizations due to the increasing prevalence of the Omicron subvariant BA.2. During a briefing this week, White House Chief Medical Advisor Dr. Anthony Fauci shared that current evidence suggests BA.2 is 50%-60% more transmissible than the original Omicron variant (BA.1), with similar clinical presentations. The US CDC estimates that 35% of new cases are caused by the BA.2 subvariant, and officials predict that it likely will become the predominant variant over the coming weeks.
US health officials are watching the situation in other countries, including the UK and France, for clues about how the BA.2 subvariant might impact the US. In the UK, new COVID-19 case numbers have doubled in the past 3 weeks, and hospitalizations also are rising. Case numbers also are rising in France. There is some hope that the increased proportion of individuals with immune protection from vaccination, natural infection, or a combination could help blunt a new wave of infections in the US, leading to a less stark surge in new cases.
CDC Study on Vaccine Effectiveness
The CDC COVID-19 Emergency Response Team published findings from a study on mRNA SARS-CoV-2 vaccine effectiveness against invasive mechanical ventilation (IMV) and death. The researchers conducted a case-control study from March 2021-January 2022, spanning both the Delta and Omicron surges. The study included more than 7,500 hospitalized COVID-19 patients—1,440 hospitalized adult COVID-19 patients who received IMV or died (case) and 6,104 hospitalized adult patients who tested negative for SARS-CoV-2 infection (control).
Most of the vaccinated COVID-19 patients who received IMV or died “had complex underlying conditions, commonly immunosuppression.” The researchers estimated the overall VE against IMV or death to be 90%, including 88% for 2 doses and 94% for 3 doses (eg, including a booster). Specifically during the Omicron surge, the researchers estimated the effectiveness to be 79% for 2 doses and 94% for 3 doses. This study provides further evidence that mRNA vaccines provide substantial protection against severe COVID-19 disease and death—particularly with booster doses—including over prolonged periods and against emerging variants.
Moderna Expands COVID-19 Vaccines to Treat Related Illnesses
Moderna said Tuesday that it would expand its COVID-19 vaccine to treat related illnesses. The biotech company announced the extension of its “mRNA pipeline” with two development programs that build on the company’s experience with the “Spikevax” vaccine.
The programs include a combination respiratory vaccine candidate and a new initiative against all four of the endemic human coronaviruses (HCoV). The respiratory combination vaccine program will be launched to target the SARS-CoV-2 virus, the influenza virus and respiratory syncytial virus (RSV). The new combination respiratory vaccine candidate (mRNA-1230) is envisioned as an annual booster targeting the diseases.
Biden Tells US Businesses to ‘Harden’ Defenses Against Russia Cyber Threat
President Joe Biden on Monday warned of intelligence pointing to a growing Russian cyber threat and urged US businesses to “immediately” prepare defenses. “If you have not already done so, I urge our private sector partners to harden your cyber defenses immediately,” he said in a statement.
Biden cited “evolving intelligence that the Russian government is exploring options for potential cyberattacks,” including in response to Western sanctions over Moscow’s launching of the war in Ukraine. Biden said the U.S. government would “continue to use every tool to deter, disrupt, and if necessary, respond to cyberattacks against critical infrastructure.”
Koch Industries, Built on Oil, Bets Big on U.S. Batteries
Founded more than 80 years ago as an oil refiner, Koch Industries is now the most diversified U.S. battery investor, said Vivas Kumar, a former Tesla Inc. senior manager and industry analyst who last year launched a battery-parts startup. “It’s stunning just how many different battery supply chain players they’ve taken a stake in,” he said.
Koch Industries is now a top shareholder in startups such as Freyr Battery SA, Aspen Aerogels Inc. and Standard Lithium Ltd. The money comes at a crucial time for many of these companies, which need to spend heavily to commercialize their products. Koch appears to be focused on building up the battery industry in the U.S. “The speed of the energy transition is directly correlated with companies like Koch participating in it,” said Tom Jensen, CEO of Freyr, a Norway-based company working to make low-cost, sustainable batteries.
Musk Hands Drivers First Teslas from New German Gigafactory
Elon Musk was cheered as he oversaw the handover of Tesla’s (TSLA.O) first German-made cars at its Gruenheide plant on Tuesday, marking the start of the U.S. automaker’s inaugural European hub just two years after it was first announced. “This is a great day for the factory,” Musk said, describing it as “another step in the direction of a sustainable future”.
Although German Chancellor Olaf Scholz, who also attended the event, lauded the gigafactory as the future of the car industry, it has faced opposition and some environmental activists blocked the factory’s entrance while displaying banners flagging its high water use.
VW Targets $7.1 Billion for North America, Could Build ID.Buzz Here
Volkswagen AG (VOWG_p.DE) plans to invest at least $7.1 billion over the next five years in North America and add 25 new electric vehicles there by 2030, including a recreation of VW’s classic Microbus, a top executive said on Monday.
The latter model, called ID.Buzz, is a centerpiece of the plan. It will be imported initially from VW’s Hanover plant in Germany, but ultimately could be assembled in the United States or Mexico, according to Scott Keogh, president and CEO of Volkswagen Group of America.
Labor Shortages Won’t Be Solved with Technology Alone
Now, more than ever, new and innovative technologies are being deployed—or considered for deployment—to answer workforce availability issues and improve safety. However, these technologies won’t provide the desired benefits without careful management, and they require well planned implementation and follow-up to succeed.
The COVID-19 pandemic was only the start of these issues, which now include a shift in expectations about the nature of the workplace itself and willingness to participate in various roles. As the labor market continues to fluctuate, business leaders are facing the harsh reality that these new dynamics and challenges might be here to stay. Part of the changing nature of the workplace includes heightened expectations and demands from employees for health and safety protections. All the while, companies have begun investing heavily in new technologies built, in part, to help address a scarcity of workers.
Delta Joins Airbus H2-Fuel Research
Delta Air Lines has been identified as the commercial carrier joining Airbus in its effort to develop hydrogen-powered aircraft, known as “ZEROe”. The project’s goal is to introduce the world’s first zero-emission commercial aircraft by 2035, based on hydrogen propulsion. Three aircraft configurations are being pursued, according to Airbus: a commercial jet with turbofan engine technology, other options would include a jet with a turboprop configuration and a blended-wing aircraft with two hybrid-hydrogen turbofan engines.
The airline is making no financial investment in the development, but according to a Delta spokeswoman its input will ill focus defining the requirements for deploying a hydrogen-powered passenger aircraft, including, including production of liquid hydrogen in the U.S. and making the fuel accessibility at U.S airports. Airbus has said it is working to establish a combustion technology that uses liquid hydrogen fuel, combusted with oxygen and powering modified gas-turbine engines – either turbofan or turboprop units.
SEC Proposes Publicly-Traded Companies Disclose Emissions, Climate Risk
The Securities and Exchange Commission proposed a new rule Monday, March 21, that would require large businesses to issue regular reports on greenhouse gas emissions caused by their operations and possible climate-related financial risks. The proposed rule would require relevant businesses to disclose three different “scopes” of greenhouse gas emissions. Scope 1 emissions are those caused directly by a company’s own operations—carbon dioxide from a steel mill, for example. Scope 2 emissions are those indirectly caused by purchasing energy from a greenhouse gas-producing source, like electricity from a coal-powered energy plant, and Scope 3 emissions are those caused indirectly in a company’s value chain, including energy sold to another business.
The rule is currently being made available for public comment. If taken up, it could take effect between 2024 and 2026, according to information published on the SEC’s website. The French news agency AFP noted that the emissions-reporting proposal is similar to efforts taken by regulators in Japan and Europe.