Member Briefing May 23, 2024

Posted By: Harold King Daily Briefing,

Top Story

Sienna Poll: Biden, Hochel Favorability Remain Low Among New Yorkers. Support for Peaceful Gaza Protests High

President Biden has a 45-50% favorability rating, little changed from 45-52% in April. His job approval rating improved slightly to 46-51%, from 45-55% last month. Former President Trump has a 39-56% favorability rating, up a little from 37-59% in April. Currently, Biden leads Trump 47-38%, little changed from 47-37% last month. Governor Kathy Hochul has a 38-46% favorability rating, little changed from 40-49% last month. Her job approval rating was also little changed at 45-46%, compared to 45-49% in April. Voters favor Democrats for Congress over Republicans, 49-33%, little changed from 49-36% last month.

By a 72-22% margin, New Yorkers support students peacefully demonstrating in support of those suffering in Gaza. By a similar 70-22%, they say the protests went too far and they support the police being called in. A slightly smaller 64-27% majority say they understand the frustration demonstrators have with the continuing Gaza war and they also support an immediate ceasefire. Finally, they say 61-25% that demonstrators have forgotten Hamas started the war and it feels like the demonstrations have crossed the line into anti-Semitism, according to a Siena College poll of New York State registered voters released today.

Read more at The WSJ

Nvidia Reports a 262% Jump in Sales, Signals Continuing AI Boom

 Nvidia reported first fiscal-quarter earnings on Wednesday that beat expectations for sales and earnings, and provided a strong forecast for the current quarter. The company said it was splitting its stock 10 to 1. Nvidia’s results have become a way for investors to gauge the strength of the AI boom that has transfixed markets in recent months. Its strong results on Wednesday suggest that demand for the AI chips Nvidia makes remains strong.

Earnings Per Share were $6.12 adjusted and revenue was: $26.04 billion. The company said it expected sales of $28 billion in the current quarter. Wall Street was expecting earnings per share of $5.95 on sales of $26.61 billion, according to LSEG. Nvidia reported net income for the quarter of $14.88 billion, or $5.98 per share, compared with $2.04 billion, or 82 cents, in the year-ago period. In the past year, Nvidia sales have skyrocketed as companies such as Google, Microsoft, Meta, Amazon and OpenAI buy billions of dollars of Nvidia’s GPUs, which are advanced and pricey chips required for developing and deploying artificial intelligence applications.

Read more at CNBC

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Policy and Politics

Senate AI ‘Road Map’ Potentially a Dangerous Detour, Critics Say 

Senate Majority Leader Charles E. Schumer’s outline for potential federal legislation on artificial intelligence systems was widely welcomed by tech companies for its light touch and promise of federal spending. Civil society groups have been far less welcoming. They say it fails to adequately address the harms that AI systems may pose and lacks the specifics needed to develop strong federal policy.

In presenting the 31-page outline, The group proposed that Congress appropriate at least $32 billion annually for nondefense-related AI systems. A similar amount could be spent on defense-related AI as well, Schumer said. That has the tech industry cheering. The road map passes the responsibility to congressional committees to consider whether those who develop AI applications and those who deploy them should be held accountable if their products or actions cause harm.

Read more at Roll Call

NAM to Senate: Administration March-in Proposal Undermines IP, Innovation

The Biden administration’s push to invoke “march-in” rights is unlawful and would have “disastrous consequences” for the United States if enacted, the NAM told the Senate Tuesday. Ahead of a Senate Judiciary Committee hearing on intellectual property in the biopharmaceutical sector, the NAM warned of the potentially dire consequences of the proposed march-in framework issued by the National Institute of Standards and Technology.

The NIST proposal would allow the federal government to “march in” and seize manufacturers’ patent rights if an innovation was developed in any part with federal dollars. Robust IP protections ensure that manufacturers can bring innovative products to consumers. “Policies that threaten IP protections, like NIST’s proposed march-in guidance, will cede one of our greatest advantages to our competitors. Manufacturers look forward to working with the committee to ensure the U.S. maintains the strongest IP protections in the world in order to spur the discovery and commercialization of inventions that improve health and quality of life for all people.”

Read more at NAM

Biden Cancels Another $7.7 Billion In Student Debt

President Joe Biden announced Wednesday he is canceling another $7.7 billion in student debt, the latest move in his signature relief targeting education debt that has faced fierce pushback from Republicans. In a statement, Biden said the latest relief action will affect around 160,000 people and cancel over $35,000 of debt on average.

The president said the recipients of the debt relief are “public service workers like teachers, nurses, or law enforcement officials,” those enrolled in the White House’s SAVE plan, and borrowers approved under the “fixes we made to Income-Driven Repayment” plans. Around $613 million of the debt forgiveness covers 54,300 people enrolled in the SAVE Plan—under which people who borrowed $12,000 or less are eligible for loan cancellation after 10 years of payments. Another $1.9 billion in forgiveness will cover 39,200 people enrolled in older income-driven repayment plans and the remaining $5.2 billion relief will benefit 66,900 borrowers covered by the Public Service Loan Forgiveness program.

Read more at Forbes

Health and Wellness

Study Finds Higher Risk of Psychotic Disorders Among Teens Who Use Marijuana

A study published Wednesday found a higher risk of psychotic disorders among teens who use marijuana. “This study provides new evidence of a strong but age-dependent association between cannabis use and risk of psychotic disorder, consistent with the neurodevelopmental theory that adolescence is a vulnerable time to use cannabis,” the study, published in the journal Psychological Medicine, reads.

The study found that “compared to no cannabis use, cannabis use was significantly associated with psychotic disorders during adolescence.” An separate analysis published Wednesday found that about 17.7 million people in 2022 recorded daily or near-daily marijuana use versus 14.7 people who reported the same when it comes to alcohol use, the first time in the last 30 years that daily marijuana use was higher than daily alcohol use.

Read more at The Hill

Election 2024

Industry News

Empire Center: Eight in 10 New York Towns and Cities Have Lost Population Since 2020

Filling in more details of New York’s ongoing demographic decline, the Census Bureau has just released updated local population estimates showing that 80 percent of the state’s towns and cities have lost residents since 2020. In addition to New York City, whose 2020-23 loss of 546,164 residents was detailed in the Census Bureau’s previously updated county-level estimates, all but four of the Empire State’s 20 most populous localities have experienced population decreases—including the cities of Buffalo, Rochester, Syracuse and Yonkers.

Out of 994 towns and cities for which values were reported by the Census Bureau last week, the population increased in 191 places, decreased in 796, and was unchanged in seven. By any measure, the fastest-growing locality in New York State since 2020 has been the Orange County town of Palm Tree, which is co-terminus with the mostly Yiddish-speaking, Ultra-Orthodox Jewish village of Kiryas Joel.

Read More and see the map at The Empire Center

Walmart, Home Depot and LVMH Earnings Highlight Consumer Spending Shifts

Several large retailers have reported earnings for Q1 of 2024, and the numbers and management comments provide valuable insight into the health of the U.S. consumer. With roughly 70% of the economy driven by consumer spending, changes in these patterns significantly impact growth and employment. Results have been mixed, but there are clear signs of spending fatigue.

Walmart's earnings suggest that overall consumer spending is steady, but consumers with less disposable income are struggling and continue to look for value in their shopping habits.

The home improvement retailer is seeing customers defer major home projects due to high interest rates.

LVMH, the world leader in high-quality products saw organic revenue in its fashion and leather goods division grow at 2% in the first quarter of 2024. Growth in that division soared 20% in 2022 and 14% in 2023.

Meanwhile, results from The RealReal — a leading marketplace that buys & sells bags, jewelry, and clothing from designers like Chanel, Gucci, Louis Vuitton, and Prada — indicate growing demand for second-hand luxury products. For Q1, The ReaalReal delivered sales and profits at the high end of its guidance range, noting a 13% growth in consignment revenue.

Read more Forbes

Home Sales Slipped Unexpectedly in April, Despite Big Gains in Supply

Sales of previously owned homes fell 1.9% in April from March to 4.14 million units, on a seasonally adjusted annualized basis, according to the National Association of Realtors. The forecast had been for a slight gain. Sales were also down from April 2023, off 1.9% from last year. These sales are based on closings, so contracts likely signed in February and March. Mortgage rates jumped at the start of February and then held around 7% for the next two months before moving even higher in April.

Total housing inventory at the end of April was 1.21 million units, up 9% month to month and up 16% from the year before, but still just a 3.5-month supply at the current sales pace. A six-month supply is considered balanced between buyer and seller. The supply of homes priced at more than $1 million, however, was up 34% year over year, which is why that segment of the market is most active. Sales of homes priced below $100,000 fell 7.1% year over year, while sales of those priced over $1 million jumped 40%. The median price of an existing home sold in April was $407,600, an increase of 5.7% year over year. With multiple offers, due to strong demand, 27% of homes sold above list price.

Read more at CNBC

Companies Want Fewer Grad Hires This Year

Class of 2024 is about to join a job market nearly as turbulent as their college years. Employers plan to hire 5.8% fewer new graduates than they did last year, according to a spring survey of 226 employers by the National Association of Colleges and Employers. And what those bosses want from entry-level workers is changing, students and recruiters say, from years of experience to sophisticated artificial-intelligence skills. Some companies say AI is taking over part of the work fresh graduates used to do.

It’s just the latest challenge for the graduating seniors who began their studies with Covid-19 lockdowns and Zoom classes and finished them amid protests that disrupted campus life nationwide. Overall, the job market remains strong, and recruiting executives say new graduate-hires benefit from steady wage growth over the past few years. But it’s taking graduating seniors longer to find white-collar roles. By April 2023, more than a third had accepted a full-time job and stopped looking further, according to research and analytics firm Veris Insights. This year, just under a quarter had.

Read more at The WSJ

Study Says the Amount of Money People Need to be Food Secure Reaches Highest Level in 20 Years

The amount of money that people facing hunger said they need to have enough food reached its highest point in the last 20 years, according to Feeding America’s annual Map the Meal Gap study. At the local level, Map the Meal Gap finds that 1 in 9 people in the Regional Food Bank of Northeastern New York’s 23-county service area are living with food insecurity. This number reflects an increase of nearly 90,000 neighbors experiencing food insecurity from last year, when 1 in 12 individuals were food insecure. Among the findings:

Food insecurity impacts communities in every county, parish and congressional district in the U.S.  In the Regional Food Bank’s service area, 331,830 individuals are food insecure.

Nearly 50% of people facing hunger may not qualify for SNAP benefits due to income thresholds. In the Food Bank’s service area, 37% of people facing hunger do not qualify for SNAP.

In the Food Bank’s service area, the cost per meal exceeds this average, at $4.18 marking a 12% increase compared to the prior year. This is reflected in the growing need we see at the Food Bank.

Read more at Feed America

Visit the Regional Foodbank Website

Why Boeing Needs A New Plane — Soon

To Boeing’s long list of urgent near-term problems, add one more. It needs a new airplane. With its best-selling plane, the 737 Max, the subject of public and federal scrutiny after the terrifying midair blowout of a panel on an Alaska Airlines jet in January, the world's largest aerospace company is struggling to recover from a nightmare that’s slashed $28 billion from its market cap. And its two decades of procrastinating the launch of another new plane program since development of the 787 formally kicked off in 2003 is increasingly looking costly. Analysts told Forbes the clock is ticking for Boeing to come up with a new narrowbody plane to stem a steep loss in market share to rival Airbus.

With everything that will be on the new CEO’s plate – including what promise to be difficult contract talks with Boeing’s machinists in Washington state – there’s a risk that person won’t want to touch a new airplane till the near-term problems are solved. That would be a mistake, Robert Springarn, an analyst at Melius Research, told Forbes. Failing to roll out a new plane before 2035 means Boeing’s share of the narrowbody market could slide under 40%, Ron Epstein of Bank of America has estimated.

Read more at Forbes

Right On Cue: Airbus Lands $19B Saudi Order

Saudia Group, a state-owned holding company for two airlines, booked an order for 105 Airbus A320neo aircraft, a placement reportedly worth $19 billion. The actual value is not confirmed by Airbus nor the buyer, but the order consists of 12 A320neo and 93 A321neo aircraft for the former Saudi Arabian Airlines (now rebranded Saudia) and the budget carrier Flyadeal.

The twin-engine A320neo narrow-body aircraft are the best-selling jets in the world, a status that Airbus is likely to retain for 2024 given the ongoing problems with rival Boeing’s narrow-body program. Airbus has set a target for 800 jet deliveries for this year, though like Boeing it is having difficulties keeping up with heavy demand for new aircraft. Saudia will receive 54 A321neos, while Flyadeal will take the 12 A320neos and the remaining 40 A321neos. The delivery schedules were not announced. The new order raises Saudia Group’s order backlog with Airbus to 144 A320neo family aircraft.

Read more at American Machinist

Delta Joins ATL, Airbus, Plug Power in Hydrogen Fuel Study

Hartsfield-Jackson Atlanta International Airport (ATL), Airbus, Delta Air Lines and Plug Power have joined forces to assess the feasibility of hydrogen fueling at the world’s busiest airport in support of advancing a more sustainable future for travel.  The study will help define the infrastructure, operational viability, and safety and security requirements needed to implement hydrogen as a potential fuel source for future aircraft operations at ATL. It will also contribute to the understanding of supply and infrastructure requirements for hydrogen hubs at airports worldwide. 

The use of hydrogen to power future aircraft models could ultimately eliminate aircraft carbon dioxide emissions in the air while also decarbonizing air transport activities on the ground – a top priority for all of the partners as they work toward the decarbonization of the aviation industry. While the Atlanta-based study preliminarily launched earlier this year, it is one of three that Airbus announced with partners May 21. The study in Atlanta is scheduled for completion at the end of 2026.

Read more at Delta News Hub

Pattern For Progress: New Data Show a Dwindling Youth Population in the Hudson Valley

For the past many years, Pattern has been tracking data that show there are fewer children living in the Hudson Valley. There are many reasons for this. The number of births in most of our counties has declined significantly. Student enrollments have shrunk in 97 of our 120 public school districts since the Great Recession of 2008. And the outward migration of families from New York and the Hudson Valley has also sapped our neighborhoods of kids who might otherwise be our neighbors. In fact, a combination of state and federal data indicate that are at least 28,000 fewer children under the age of 14 living in our region now than in 2010.

This portends all kind of challenges for the future of our region. Our already-stressed workforce is likely to shrink. School districts have already closed more than two dozen elementary schools to adjust for smaller enrollments, but more are likely to close in the near future. And the overall vibrancy of our communities - schools, Little League, 4-H, and volunteers of all kinds - is inextricably connected to having a steady number of kids in our neighborhoods.

Read More at Utility Dive