Member Briefing November 9, 2023
Mortgage Rates Plunged Last Week. Buyers Are Still Scarce.
The interest rate on the most common type of U.S. residential mortgage plunged last week by the most in nearly 16 months on the back of a rally in the Treasury market that drove down the benchmark yields used to set home loan costs. The Mortgage Bankers Association (MBA) on Wednesday said the average contract rate on a 30-year fixed-rate mortgage dropped in the week ended Nov. 3 by a quarter percentage point to 7.61%, the lowest in about a month. It was the largest weekly drop since late July 2022.
The MBA's mortgage market composite index, measuring the volume of mortgage applications for both home purchases and refinancings of existing loans, rose 2.5% from the week prior to 165.9. Purchase applications rose 3% on the week, but they remain 20% below this time a year ago. That indicates prospective buyers are still waiting on the sidelines despite the dip in rates, said Kan. Sellers locked into lower mortgage rates continue to hold their homes, keeping a lid on inventory in the housing market.
War in Israel Headlines
- Israel and Hamas: The Latest News – The Guardian
- Thousands of Civilians Flee North Gaza as Israeli Troops and Hamas Fighters Battle - Reuters
- More Palestinians Fleeing South With Food, Water Running Out in North Gaza: UN Agency – The Hill
- The Risks of Wider War Over Gaza, as Iran’s ‘Axis’ Activates – Christian Science Monitor
- Israel faces a daunting fight in Gaza City – The Hill
- China and Russia Claim Moral High Ground Over Palestinian Deaths - WSJ
- Israel Says it Wiped Out Hamas’ Weapons Chief – Politico
- Hezbollah's Anti-Ship Missiles Bolster its Threat to US Navy - Reuters
- Hamas Leader Refuses to Acknowledge Killing of Civilians in Israel - BBC
- Why the U.S. Isn’t Stopping This War, and Other Middle East Realities -Politico
- 'I’m Calling from Israeli Intelligence. We Have the Order to Bomb. You Have Two Hours' - BBC
- Israel-Hamas War in Gaza: What is the History of the Conflict? – Reuters
- Map – Tracking Hamas’ Attack on Israel – Live Universal Awareness Map
War in Ukraine Headlines
- Ukraine and Russia: The Latest News – The Guardian
- Russian Bombing of Kherson Region at Record High, Says Ukraine -BBC
- US Says Russia Funds Latin America-Wide Anti-Ukraine Disinformation Drive – Reuters
- Ukraine President Zelensky Says Time Not Right for Elections - WSJ
- The West Must Stop Putin From Provoking Conflict in the Balkans – Foreign Affairs
- Ukraine Faces Economic Crisis Without Quick EU Aid, Finance Minister Warns - Politico
- G7 Summit: Bloc Insists Support for Ukraine 'Will Never Waver' - BBC
- Ukraine Takes Credit for the Car Bomb Killing of a Russia-Backed Official in Luhansk - AP
- 'If Not Me, Who?': As Ukraine Seeks Troops, Women Prepare for the Call - NYT
- Ukraine Hails 'Historic Step' as EU Takes Kyiv Closer to Membership Amid War With Russia – Reuters
- Interactive Map: Assessed Control of Terrain in Ukraine – Institute for the Study of War
- Map – Tracking Russia’s Invasion of Ukraine – Live Universal Awareness Map
Consumer Borrowing Rises Less Than Expected in September
Consumer credit grew by $9.06B in September, trailing the $10.0B increase expected and accelerating from the $15.8B decline in August (revised from -$15.6B), the Federal Reserve said on Tuesday. Total outstanding consumer borrowing of $4.98T edged up from $4.97T in the prior month. On a seasonally adjusted basis, consumer credit increased at a 2.2% annual rate in September, falling short of the 3.8% ascent in August.
Revolving credit, which includes credit card debt, climbed at an annual rate of 8.6% to $1.29T. Nonrevolving credit, which consists of auto and student debt, fell at an annual rate of 2.4% to $3.69T, said the Fed. Americans now owe $1.08 trillion on their credit cards, according to a new report on household debt from the Federal Reserve Bank of New York. Credit card balances spiked by $154 billion year over year, notching the largest increase since 1999, the New York Fed found.
German Industrial Output Falls Further Than Forecast in September
German industrial production fell more than expected in September, data showed on Tuesday, as a recent slump in incoming orders took its toll on production.Production fell in September by 1.4% compared with the previous month, the federal statistics office said. Analysts polled by Reuters had predicted a 0.1% decline. In a less volatile quarter-on-quarter comparison, production in the third quarter of 2023 was 2.1% lower than in the second quarter, the statistics office said.
There are few figures that summarize the state of the German economy as well as industrial production, Thomas Gitzel, chief economist at VP Bank, said. Another disappointing data release in industrial production not only suggests that third-quarter GDP growth could be revised downwards, but also that the country is likely to end the year in a technical recession, said Carsten Brzeski, global head of macro at ING.
COVID Update – Second Infection Hikes Long COVID Risk: Expert Q&A
People infected multiple times with COVID-19 are more likely to develop long COVID, and most never fully recover from the condition. Those are two of the most striking findings of a comprehensive new 3-year research study of 138,000 veterans.
Lead researcher Ziyad Al-Aly, MD, chief of research at Veterans Affairs St. Louis Health Care and clinical epidemiologist at Washington University in St. Louis, spoke with Medscape about his team's findings, what we know — and don't — about long COVID, and what it means for physicians treating patients with the condition.
Here are excerpts of the interview at Medscape
Abortion Rights and Weed: Takeaways from Tuesday’s ‘Off Year’ Elections
In Tuesday night’s off-year elections, the incumbent Democratic governor in Kentucky — a state President Joe Biden lost by 26 points — handily won reelection. Democrats not only rebuffed Virginia Gov. Glenn Youngkin’s bid for total control of the state legislature by keeping the state Senate — they flipped the state House, too. And the party held a state Supreme Court seat in the nation’s largest Electoral College battleground of Pennsylvania.
For now, the results on Tuesday — taken together with a string of special elections throughout the year that showed Democratic candidates outperforming Biden’s vote shares in districts across the country — serve as a powerful counterpoint to the party’s doom-and-gloom over the president’s poll numbers. Democrats’ victories won’t make those polls go away, but they should prompt a rethinking of the current political moment, with a year to go until the next general election.
Here are five takeaways from Tuesday night from Politico
UAW to 'Pull Out All Stops' Organizing Nonunion Automakers
United Auto Workers President Shawn Fain said on Wednesday the union will "pull out all stops" in working to organize non-union U.S. auto plants after winning new contracts with the Detroit Three automakers. Fain will join President Joe Biden on Thursday in Belvedere, Illinois to tout Chrysler-parent Stellantis decision to reopen a shuttered assembly plant there. In an video interview at the Reuters Events auto conference in Detroit, Fain said the UAW is aggressively working on its organizing plans. Fain praised Biden administration officials for helping the union win agreements with the Detroit Three automakers to ensure battery plant workers get higher wages and benefits.
Days after the UAW won major pay and benefit hikes from the Detroit Three automakers, Toyota announced that hourly manufacturing workers at top pay will receive a wage hike of about 9% effective on Jan. 1 and cut the time needed to get top pay from eight to four years. The UAW has tried and failed for years to organize nonunion U.S. auto factories, most of them built by Asian and European legacy automakers in southern U.S. states where so-called "right to work" labor laws make it optional for workers to pay union dues.
Stewart Airport - Breeze Airways to Commence Round-Trip Service to Orlando, Fla., and Charleston, S.C., Beginning February 2024
The Port Authority of New York and New Jersey and Breeze Airways announced Wednesday that Breeze Airways will begin operating out of New York Stewart International Airport (SWF) in February 2024. The airline will offer twice-weekly round-trip service to Orlando, Fla. (MCO), and Charleston, S.C. (CHS), starting Feb. 15 and 16, respectively. “The addition of Breeze Airways underscores our commitment to growing the list of diverse, convenient offerings for passengers at New York Stewart,” said Port Authority Chairman Kevin O’Toole. “We’re excited to welcome this new airline offering affordable, direct flights to Florida and South Carolina, just as New Yorkers are looking to escape the cold winter weather.”
New York Stewart is an economical, convenient alternative to the New York/New Jersey metropolitan region’s airports, offering minimal wait times at security, seamless border and customs checks, and simple baggage claim. The airport’s offerings also include: Nonstop daily service to Reykjavik, Iceland, with connections to dozens of popular cities in Europe via PLAY Airlines, Service to Orlando-Sanford, Punta Gorda and St. Pete-Clearwater in Florida, as well as Myrtle Beach, S.C., via Allegiant Air, and this year, New York Stewart also offered the nation’s first-ever nonstop service to the Faroe Islands with flights by Atlantic Airways.
DHL Cuts Full-Year Guidance as Second-Half Recovery Doesn’t Materialize
German transport and logistics giant DHL Group (DHL.DE) said Wednesday it reduced its 2023 earnings forecast in response to a hoped-for second-half global economic recovery that never materialized. The Bonn-based company said it now expects full-year earnings before interest and taxes to range between $6.6 billion and $7.05 billion. Revenue for the third quarter, which DHL reported Wednesday, fell to $20.7 billion, down sharply from $25.6 billion in the year-earlier quarter. Operating profit in the quarter fell to $1.49 billion from $2.13 billion.
DHL executives said the year-over-year (y/y) declines were expected amid an environment of slowing demand, higher fuel prices and unfavorable currency fluctuations. At this point, DHL is expecting either a macro recovery to kick in at the end of 2023 or no recovery at all until at least 2024. The company will not achieve its best-case forecast of $7.5 billion in 2023 EBIT, it said.
OSHA Cites 3M for Willful Safety Violations Related to Worker Fatality
An employee at a southwestern Wisconsin manufacturing plant suffered fatal injuries after becoming caught in a machine’s rotating rollers in May 2023. OSHA began an investigation after the 3M Company reported the death at its Prairie du Chien facility, home to 500 workers. The incident followed the company’s assessment of equipment at its U.S. and Canadian plants in May 2022 after a fatality at a 3M facility in Alexandria, Minn., in February 2022.
OSHA cited the company for two willful safety violations and assessed $312,518 in proposed penalties. Specifically, federal investigators found the company failed to use procedures for the control of hazardous energy and did not implement energy control application steps when employees set up the production line by threading through powered rollers by hand. They also determined the 3M plant allowed workers to circumvent machine guarding to cut and remove wrapped fibers from rotating powered rollers and to remove fibers from the floor, which exposed them to caught-in hazards.
GlobalNY Opens Round 11 of Trade Expansion Grant Funding
Empire State Development (ESD) announced Round 11 of the State Trade Expansion Program (STEP) with nearly $1 million in federal funding provided by the U.S. Small Business Administration (SBA). STEP connects New York businesses to exporting opportunities abroad through grants for qualifying small and medium-sized businesses. These grants can help increase the number of small businesses that begin to export; increase the value of exports for small businesses that currently export; and increase the number of small businesses exploring significant new trade opportunities.
STEP grants empower New York entrepreneurs to succeed globally by offsetting the costs of export activities like foreign trade missions, international marketing campaigns, overseas trade show exhibitions, training workshops, and other engagements. These reimbursement-based grants are available to New York companies that have been in business for at least one year, meet SBA size standards, have sufficient resources to bear trade costs, offer a product or service for export with at least 51% U.S. content, and align with STEP's standards and mission. By alleviating financial burdens, STEP enables small businesses to expand their global reach and competitiveness
Learn more and apply at Empire State Development
Airbus is Cruising, Looks to Increase Production, Secure Supply Chain
The steady recovery of the aviation industry will be in evidence on Wednesday when Airbus releases third-quarter results. The European aerospace consortium is expected to announce that revenues and profits comfortably exceeded those for the same quarter last year. Deliveries of passenger jets are continuing to grow as demand for travel bounces back after the pandemic. Airbus will probably reiterate plans to supply 720 new planes this year, compared with 661 in 2022.
Airbus wants to rebuild supply chains in order to reach a production rate of 75 planes per month in 2026. To bolster the effort, the firm recently created a new role: head of its commercial-aircraft division. Christian Scherer, a German, will take the job, which is one rung below that of the overall boss, Guillaume Faury, a Frenchman. Franco-German divisions have been a problem for Airbus in the past. But the appointment of Mr. Scherer, a company veteran, is unlikely to reopen old wounds.
Embraer Hopeful E2 Jets Can Break Into U.S. Market, CEO Says
Brazilian plane maker Embraer has been trying to sell U.S. carriers on the merits of its E195-E2 jet as a "small narrow-body", even as demand in its No.1 market has remained focused on the smaller, first generation E175-E1. The world's third-largest plane maker after Boeing and Airbus amassed fresh orders for 23 E175-E1 planes from both American Airlines (AAL.O) and SkyWest in the third quarter, but sees room for its second generation plane to notch up its first orders there too.
"It is an aircraft that can very well complement the operation of large narrow-bodies," Chief Executive Francisco Gomes Neto said in an interview on Monday. Breaking into the U.S. market with E2 family would be an important step for the plane maker to further improve its production mix, which this year should show for the first time more second generation jets being delivered than first generation ones.
Post-Pandemic, Employees Are Taking More Sick Days. How Are Employers Responding?
According to a recent Gusto survey of over 300,000 small and midsize businesses, 30 percent of all employees in the professional services industries who get paid time off (PTO) have taken sick leave so far this year, an increase of 42 percent from 2019. The average amount of sick time these workers have taken has increased by 15 percent since 2019 and is now 15.5 hours per year. The largest increase is among workers ages 25-34: Nearly a third (32 percent) of them have taken sick leave in 2023, compared to 28 percent of workers ages 35-54.
Employers around the U.S. are figuring out how to respond to this growth while ensuring that employees are healthy—in every way. Danielle Tabor, chief people officer at Emburse in Portland, Maine, has noticed that many of the company's 900 employees are staying home when they feel sick. Emburse lets employees take up to three sick days at a time and promotes a culture of transparency. "If someone says they are sick, there has to be an element of trust that they're telling you the truth," Tabor said. "If someone is out for more than three days, our policy is to request a doctor's note, and obviously, if somebody takes way more sick days than normal without good reason, we'll ask their manager to keep an eye on things to make sure that it's not something more serious. But that's incredibly rare."
Manchin, Warner Call on Department of Energy to Invest in Domestic Battery Production
Senators Joe Manchin, and Mark R. Warner (D-VA), wrote to U.S. Department of Energy (DOE) Secretary Jennifer Granholm, detailing the need for the United States to establish its leadership in the research, development, production and manufacturing of new battery technologies. Currently, the People’s Republic of China dominates end-to-end supply chains, including the mining and refining of critical mineral inputs for lithium-ion batteries, which are used in the U.S. energy grid, electric vehicles, and military weapons and platforms, among other industries.
In October 2023, China restricted exports of raw and synthetic graphite, critical to manufacturing battery anodes. The move followed July 2023 export controls on gallium and germanium, two components used in the manufacturing of semiconductors and other critical technologies. Today, China’s Ministry of Commerce announced new export requirements on rare earth oxides and metals, which are key to electric motors, high-tech equipment, and defense manufacturing.
Read more at West Virginia Daily News
Shimmering Galaxies Revealed in New Photos by European Space Telescope
Scientists on Tuesday unveiled the first pictures taken by the European space telescope Euclid, a shimmering and stunning collection of galaxies too numerous to count. The photos were revealed by the European Space Agency, four months after the telescope launched from Cape Canaveral. Although these celestial landscapes have been observed before by the Hubble Space Telescope and others, Euclid's snapshots provide "razor-sharp astronomical images across such a large patch of the sky, and looking so far into the distant universe," the agency said.
“Dazzling," said the space agency’s science director, Carole Mundell, as she showed off the galaxy cluster shot on a large screen at the control center in Germany. Euclid's instruments are sensitive enough to pick up the smallest galaxies, which were too faint to see until now. The results are “crystal-clear and stunning images going back in cosmic time," Mundell said. Euclid took fresh photos of the Horsehead Nebula in the constellation Orion, a dramatic nursery of baby stars made famous by Hubble. It took Euclid just an hour to capture the nebula's latest beauty shot; the five new photos accounted for less than a day of observing time.
Read and see more at The Toronto Star