Member Briefing November 10, 2022
Republicans Pick Up 3 New York House Seats With Long Island Sweep and Defeat of DCCC Chair
While Democratic Gov. Kathy Hochul won against Republican Lee Zeldin at the top of the ticket, Republicans fared much better down ballot in critical House races that will help determine control of the chamber in January. The GOP capitalized on economic woes and rode a wave of crime fears that resonated with voters in moderate areas in New York City’s moderate suburbs. The GOP won all four races on Long Island, and DCCC Chair Sean Patrick Maloney, conceded his race Wednesday in the Hudson Valley.
Maloney lost his seat to Republican Mike Lawler after serving in the region for five terms. Maloney didn’t even attend his own campaign party Tuesday night. He lost by about 3,200 votes, down 50.6 percent to 49.4 percent. And Republican Marc Molinaro, the Dutchess County executive, was also declared the winner in an open seat after opening up a more than 6,000 vote lead, 51.1 percent to 48.9 percent, over Democrat Josh Riley in the new 19th District that stretches across the Hudson Valley and into the Southern Tier and Finger Lakes. There was one big win for Democrats: Rep. Pat Ryan declared victory and his Republican opponent Colin Schmitt conceded in the Hudson Valley’s District 18.
War in Ukraine Headlines
- Ukraine and Russia: The Latest News – The Guardian
- Russia Announces a Withdrawal From Kherson, Only Regional Ukrainian Capital It Held - WSJ
- Biggest Defeat For Russia In A Generation As Starving Troops Flee Across A Key Ukrainian River - Forbes
- Teenager's Defiance Sums Up Ukraine's Resilience Amid Russian Onslaught - Reuters
- Russia Paid Iran For its Suicide Drones by Sending a Plane Full of $140 Million in Cash and Captured Western Weapon – Sky News
- Situation Difficult Along the Entire Frontline, Kyiv Says - CNBC
- Russia Links Extension of Black Sea Deal to Freeing its Grain and Fertilizer Exports - Reuters
- Backing Ukraine is Costly. Not Backing it Would be Costlier – The Hill
- More Than 400 Russian Reservists Died After Their Commanders Ran Away During a Ukrainian Artillery Bombardment, Russian Soldier Says - Insider
- German Officials Search UBS Branches Linked to Russian Oligarch Usmanov - Reuters
- U.S. Basketball Star Brittney Griner Has Been Sent to a Russian Penal Colony - NPR
- Map – Tracking Russia’s Invasion of Ukraine – Live Universal Awareness Map
Georgia Senate Race Between Warnock, Walker Heads to Runoff
Neither Sen. Raphael Warnock (D) nor Republican Herschel Walker is projected to score the majority support needed to clinch the hotly contested Senate seat. The results mean that one of the most competitive statewide contests in the country will be left unresolved for weeks. Under Georgia’s election laws, a candidate must receive at least 50 percent plus one to win an election outright.
Warnock and Walker will now advance to a Dec. 6 runoff election that will determine who will go to Washington next year. A runoff in Georgia wasn’t entirely unexpected. The vast majority of polling in the race showed both candidates falling short of a majority in the lead-up to Election Day.
Republicans Underperform in Midterm Elections
Republicans will probably win the House and the Senate remains too close to call. That is the state of play as results from the midterms dribble in. Relative to what most prognosticators expected, what some of the polls suggested and what economic fundamentals pointed to, this is a very good result for Democrats. Perhaps more importantly given his presidential ambitions, it is an awful result for Donald Trump.
In the House, Republicans look on course to win a majority. That would return America to divided government, which has been the norm since the 1960s. Yet the Republican majority will be narrow (a result that is in line with The Economist’s election forecast). This result points to a Republican ripple rather than a wave. In the Senate, there is still a path to a Republican majority. Republicans could take both Nevada and Arizona, or win one as well as the run-off in Georgia, dragging the election out until December. (Alaska, the other state not yet declared, is a certain Republican win.) But it is a narrow one with obstacles in the way.
U.S. COVID – The ‘Tripledemic’ is Sickening Kids Across America and Straining Hospitals
A so-called “tripledemic” of flu, RSV, and COVID is pushing North American children’s hospitals to their limits this fall. Some are so desperate for additional space and staff that they’re considering setting up “surge tents” in parking lots and requesting help from the National Guard.
On the East Coast, “almost every single major” pediatric hospital is full, Dr. Anita Patel, a critical care doctor at Children’s National hospital in Washington, D.C., told Fortune last week. Her hospital has been operating close to capacity for over a month. To cope with the increased patient load, the hospital formed an additional team of high-level ICU doctors to care for children who need admission, but who must stay in the ER until beds open up, she said.
Annual COVID Shots Mean We Can Stop Counting
Now that so many Americans have racked up several shots or infections, she told me, the question is no longer “How many doses have you gotten cumulatively?’ It’s ‘Are you up to date for the season?” The flip is subtle, but it marks a rethink of the COVID-vaccination paradigm. We’re at a define-the-relationship moment with these shots, when people are trying to commit—to normalize them as a routine part of our lives. At a September ACIP meeting, CDC officials noted that “we are changing the way we are thinking about these vaccines,” and trying to “get on a more regular schedule.” If COVID shots are here for good, then at least we can be rid of the bother of counting them.
If we’re going to shift our focus to timing shots, instead of counting them, we’ll have to schedule our shots smartly. Several prominent figures have already come out and said that yearly doses are a top choice. Albert Bourla, Pfizer’s CEO, has been pushing that idea since early 2021; Peter Marks, who heads the FDA’s Center for Biologics Evaluation and Research, has been delivering a similar line for several months.
Inflation Expected to Tick Down in Latest CPI Report
While most of the country was waiting on U.S. midterm election results on Tuesday, observers of the economy were already looking toward Thursday’s fresh inflation report. According to analysts reporting to FactSet, the U.S. Labor Department’s Consumer Price Index (CPI) rose an estimated 8% on a year-over-year basis in October, down from the 8.2% reported in September. Core CPI, which excludes food and energy prices, is forecast to be 0.5% against 0.6% last month.
Recent economic indicators have offered faint hope that the Fed could still scale back its recent monetary hawkishness. In this week’s CPI report, the focus will be on “stickier” categories like housing and rents which aren’t expected to decline until spring next year but account for over 30% of the CPI basket, Dutta said. In addition, the Fed will also be scrutinizing services as they are most responsive to interest rates, said Brian Coulton, chief economist at Fitch Ratings. “If that gets worse, the Fed will be concerned,” he said.
China Producer Prices Turn Negative in Warning Sign for Global Economy
Chinese producer prices fell 1.3% in October compared with a year earlier, the National Bureau of Statistics said Wednesday, the country’s first year-over-year decline in producer-price inflation since December 2020. The decline reflects weaker prices for the producers of raw materials following a recent pullback in commodity prices, as well as a high base for comparison because of rapid price rises a year earlier. The data come on the heels of ugly export figures released Monday that showed a surprise drop in Chinese exports to the rest of the world last month.
Taken together, the weakness in the world’s second-largest economy points to a global economy that is losing steam as central banks led by the Federal Reserve in the U.S. ratchet up interest rates to contain rocketing inflation.
China’s Manufacturing Hub Guangzhou Partially Locked Down as Covid Outbreak Widens
China’s southern metropolis of Guangzhou has locked down a third district, as authorities rush to stamp out a widening Covid outbreak and avoid activating the kind of citywide lockdown that devastated Shanghai earlier this year. The city of 19 million has become the epicenter of China’s latest Covid outbreak, logging more than 1,000 new cases – a relatively high figure by the country’s zero-Covid standards – for four straight days.
Guangzhou reported 2,637 local infections on Tuesday, accounting for nearly one third of new cases across China, which is experiencing a six-month high in infections nationwide. So far, the lockdown appears to be more targeted and less draconian than those seen in many other cities. While residents living in neighborhoods designated as high-risk cannot leave home, those in so-called low-risk areas within locked down districts can go out to buy groceries and other daily necessities.
Supreme Court Weighs State Court’s Jurisdiction Over Company
The Supreme Court on Tuesday weighed whether to limit where companies can be sued, in a case that tests the reach of state courts to hear cases about injuries suffered outside their boundaries. Businesses must register to operate in Pennsylvania, and a state statute deems that registration as consent to the jurisdiction of Pennsylvania courts over claims involving the company, even if the plaintiff resides elsewhere and the injuries happened out-of-state.
Behind the dispute is a practice called forum-shopping, where litigants try to maneuver cases into courts they think might be more sympathetic to their claims. A Supreme Court decision in favor of the railroad would likely impose tighter limits on a plaintiff’s choice of where to bring a suit. Carter Phillips, representing Norfolk Southern, said his client didn’t really consent to Pennsylvania’s jurisdiction. A railroad can’t pull up its tracks and take its business elsewhere, he suggested; to the contrary, the carrier is required to provide service by the federal government.
The U.S. Housing Market to See Second Biggest Correction of the Post-WWII Era
Homebuilders and economists alike saw the 2000s housing bubble brewing—they just didn’t think it would burst. Their reasoning being, that at the time, home prices hadn’t really fallen since the Great Depression era. “I think that the religion people had from 1946 to 2008, that housing prices always go up, is dead. My parents believed that it was literally inconceivable for [home] prices to go down,” Redfin CEO Glenn Kelman tells Fortune.
That “religion” of course came crashing down after the bursting housing bubble caused U.S. home prices to fall a staggering 27% from 2006 to 2012. Knowing that home prices can indeed fall, Kelman says, is why builders and flippers started cutting prices faster this time around. Once the market shifted, they wanted to get out first.
Workplace Safety and Wearables by the Numbers
Companies are increasingly adopting new technologies to enhance worker safety and productivity. Some Internet of Things (IoT) technologies, such as wearables, are well-suited for frontline industrial workers because of their ability to improve the way workers move on the job, thereby reducing their risk of strains and sprains from laborious, repetitive-motion tasks. The technology also offers employers an opportunity to reduce injuries and lower workers’ comp claims costs.
A January 2022 special report by Microsoft reflects how technology is bringing about a new opportunity for digital tools to help ease the burden on frontline workers. The report’s findings—based on data from a survey of 9,600 front line employees in eight industries across five continents—revealed technology ranks third on the list of factors that workers say could help reduce workplace stress. Here are three ways that safety technology can improve workplace safety.
Nuclear Energy Is Looking Good Again
Two crises – the energy threat in Europe and global climate change – have converged to create ideal conditions for the revival of an idea that not too long ago was dead in the water: the reemergence of nuclear energy. Globally, fossil fuels still account for the majority of electricity consumption: coal accounts for 37% and natural gas for 25% (though it releases only half the CO2 that coal does). Nuclear, which accounted for 17% of electricity generation in the 1990s, today only accounts for 10% worldwide. The world uses more hydro (16%) and almost as much renewables (8%) as it does nuclear. After the Tohoku earthquake and Fukushima Daiichi nuclear disaster of 2011, officials in countries like Japan and Germany opted to completely forego nuclear energy, resulting in the downturn. (Only France has continuously relied on nuclear power, which accounts for more than 70% of that country’s electrical energy generation, the largest proportion for nuclear in the world.)
But Russia’s invasion of Ukraine is the straw that broke the camel’s back. With enormous scientific and political pressure to take serious measures to tackle climate change, governments were already reconsidering nuclear power. Russia’s decision to cut its gas supplies to Germany, its largest customer, has forced the latter’s hand, and the EU’s largest economy is revisiting its nuclear strategy. Japan, too, has reevaluated its plans and opted to bring nine reactors back on-line to date, with up to 30 restarting in the coming decade.
Meta Laying Off More Than 11,000 Employees, 13% of its Workforce
Meta is laying off 13% of its staff, or more than 11,000 employees, CEO Mark Zuckerberg said in a letter to employees Wednesday. “Today I’m sharing some of the most difficult changes we’ve made in Meta’s history,” Zuckerberg said in the letter. “I’ve decided to reduce the size of our team by about 13% and let more than 11,000 of our talented employees go. We are also taking a number of additional steps to become a leaner and more efficient company by cutting discretionary spending and extending our hiring freeze through Q1.”
The layoffs come amid a tough time for Facebook parent company Meta, which provided lukewarm guidance in late October for its upcoming fourth-quarter earnings that spooked investors and caused its shares to sink nearly 20%. Impacted employees will receive 16 weeks of pay plus two additional weeks for every year of service, Zuckerberg said. Meta will cover health insurance for six months.
Oil Prices Plunge 3% on U.S. Inventory Build, China COVID Worries
Oil prices sank by roughly $3 a barrel on Wednesday after industry data showed that U.S. crude stockpiles rose more than expected and on concerns that a rebound in COVID-19 cases in top importer China would hurt fuel demand. Brent crude futures settled at $92.65 a barrel, shedding $2.71, or 2.8%, while U.S. West Texas Intermediate (WTI) crude futures settled at $85.83 a barrel, dropping $3.08, 3.5%. The benchmarks fell around 3% on Tuesday.
U.S. crude in storage jumped by 3.9 million barrels last week to 440.8 million barrels as oil production increased to about 12.1 million barrels a day, U.S. Energy Information Administration data showed. Analysts in a Reuters poll had expected a stockpile rise of 1.4 million barrels. U.S. gasoline stocks were down by 900,000 barrels in the week to 205.7 million barrels, the EIA said, compared with analysts' expectations in a Reuters poll for a drop of 1.1 million barrels. ​Distillate stockpiles, which include diesel and heating oil, fell by about 500,000 barrels, a smaller-than-expected decline.