Member Briefing October 17, 2024
Lower Oil, Natural Gas Prices, Higher Electricity Demand Expected Over Next Five Years: IEA
Natural gas and oil prices are likely to decline in the second half of the decade, but unexpectedly high worldwide demand for electricity will complicate efforts to reduce greenhouse gas emissions, the International Energy Agency said Wednesday in its yearly World Energy Outlook. Between 2025 and 2030, the supply of oil and gas is expected to increase barring a significant escalation in conflicts in Ukraine or the Middle East, IEA said in the report. The projected growth in annual electricity demand is equivalent to a year’s worth of demand from the entire nation of Japan.
Although oil prices have seen spikes amid Middle East tensions, record U.S. oil and gas production has offset much of the shock. IEA projected liquefied natural gas to flood world markets over the next five years, largely in the form of exports from the U.S. and Qatar. However, the report also found that demand for electricity is accelerating faster than earlier predictions, with the demand level now expected for 2035 6 percent higher than the figure the IEA projected in 2023. Much of the projected demand increase is due to data centers, as well as the increased proliferation of air conditioning in countries like India that only recently began to adopt it as heat becomes more extreme.
NRF Expects Holiday Sales To Rise As Much As 3.5%, Reaching At Least $980B
The National Retail Federation on Tuesday said it expects retail sales in November and December to rise between 2.5% and 3.5% year over year, reaching $979.5 billion to $989 billion. Historically those months have driven 19% of retail sales for the year. E-commerce in the holiday period is estimated to grow 8% to 9% to between $295.1 billion and $297.9 billion, less than last year’s 10.7% increase, according to the group’s press release. The report excludes spending on autos, restaurants and fuel.
Holiday hiring is down slightly, with NRF expecting retailers to hire 400,000 to 500,000 seasonal workers, down from 509,000 last year. There are a few factors unique to this year’s holidays, including fallout from devastating storms in the Southeast affecting consumers and stores, a shortened season and the presidential election. But, despite that and the cautious attitude consumers have adopted in the past four years, retailers this year are set to benefit from an economy that has been expanding since the worst of the pandemic.
Machine Tool Orders Making a Second-Half Rebound, Lag 2023
U.S. manufacturers’ new orders for machine tools improved to $360.8 million in August, up 22.7% from July but still -12.0% behind the August 2023 new-order volume. The latest result brings the eight-month value for U.S. machine tool orders to $2.86 billion, -11.5% less than the January-August 2023 order total. The totals are supplied by AMT - the Assn. for Manufacturing Technology in its monthly U.S. Manufacturing Technology Orders report.
AMT noted that the latest results show that new-order activity remains “above historic levels” for August, and concluded that this trend shows that the manufacturing-technology industry “is still undergoing a period of normalization following the COVID disruptions rather than a true decline. Historically elevated capacity utilization rates across durable goods manufacturers indicate a very real need for additional investment in manufacturing technology.” AMT noted that contract machine shops (i.e., “job shops”), which represent the largest cohort of machine tool buyers, increased both the number and value of machines ordered for the first time since March.
Read more at American Machinist
Global Headlines
Middle East
- Israel And Hamas: The Latest News – The Guardian
- Israeli Strike Hits Municipal Building In South Lebanon, Mayor And Five Others Killed - Reuters
- US Warns Israel To Boost Humanitarian Aid Into Gaza Or Risk Losing Weapons Funding - AP
- France Bans Israeli Companies From Top Naval Warfare Show - Politico
- How Israel’s Bulky Pager Fooled Hezbollah - Reuters
- UN Condemns 'Large Number Of Civilian Casualties' In North Gaza - BBC
- Interactive Map- Israel’s Operation In Gaza – Institute For The Study Of War
- Map – Tracking Hamas’ Attack On Israel – Live Universal Awareness Map
Ukraine
- Ukraine And Russia: The Latest News – The Guardian
- Biden Announces $425 Million In Military Aid For Ukraine - Reuters
- Zelenskyy Outlines His ‘Victory Plan’ To Ukraine’s Lawmakers, Including A Call To Join NATO - AP
- Escape From The Meat Grinder: The Making Of A Russian Deserter – The Economist
- U.S. Warns of North Korea's Growing Support for Russia's War in Ukraine - Newsweek
- Here’s What’s In Zelenskyy’s Victory Plan For Beating Putin - Politico
- Are North Korean Troops Joining Russia’s War In Ukraine? - BBC
- 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
Other Headlines
- Italy Sends The First Ship With Migrants To Albania As Rights Groups Warn Of A Dangerous Precedent - AP
- Fuel Tanker Accident Kills At Least 147 In Nigeria - Reuters
- North Korea Boasts of 1 Million Army Sign-Ups - Newsweek
- Elon Musk Is A ‘Promoter Of Evil,’ EU Rule-Of-Law Chief Says - Politico
- Canada's Trudeau Says India Made A 'Horrific Mistake' By Interfering - Reuters
- China's Xi Makes Rare Visit to Taiwan-Facing Province - Newsweek
- Biden To Travel To Germany This Week, Angola In December For Visits Delayed By Hurricane Milton - AP
- Bolivian Ex-Leader's Looming Arrest Warrant Triggers Protests - BBC
Policy and Politics
What 66 Economists Say About Where the Economy Is Headed, in Charts
Forecasters are increasingly upbeat about the economy’s prospects, according to The Wall Street Journal’s latest quarterly survey of business and academic economists.The following graphics show what economists are thinking and how their predictions—and the economy—have changed over recent months and years. After looking at the charts, see whether you can guess what the economists said about the two main presidential candidates and manufacturing employment.
We asked survey respondents a number of questions. Among the answers is a cooling labor market, higher GDP and cooling inflation. Here is how their answers stack up, both now and three months ago. After proposing the rule last year, the FTC received thousands of comments from consumers who had trouble canceling services, and advocates who criticized practices at gym chain Planet Fitness, meal kit company HelloFresh, Rihanna's Savage X Fenty lingerie shop, and others.
FTC Takes On Subscription Traps With 'Click To Cancel' Rule
The U.S. Federal Trade Commission adopted a final rule on Wednesday requiring businesses to make it as easy to cancel subscriptions and memberships as it is to sign up, in the agency's last major rulemaking before the Nov. 5 election. The "click to cancel" rule requires retailers, gyms and other businesses to get consumers' consent for subscriptions, auto-renewals and free trials that convert to paid memberships. The cancellation method must be "at least as easy to use" as the sign-up process.
The rule prohibits requiring consumers who signed up through an app or a website to go through a chat bot or agent to cancel. For in-person signups, companies must provide means to cancel by phone or online.
As Cuomo Eyes Return To Politics, Critics Mobilize
A former campaign strategist to ex-Gov. Andrew Cuomo is leading an effort to counter his potential political comeback. Peter Kauffmann, a longtime communications adviser and operative who worked on two of Cuomo’s campaigns, is overseeing a new organization that’s out with a digital ad on Wednesday eviscerating the Democrat’s handling of Covid. In it the group warns New Yorkers of scandal-scarred politicians like Cuomo. The spot, called “The Truth,” features shots of Cuomo after images of other disgraced former New York politicians — Anthony Weiner, Eliot Spitzer and George Santos.
The group of self-described business and labor interests, New Yorkers for Better Government, did not say how much it is spending on the 30-second ad or how much it has raised. It is structured in a way that allows it to shield its donors from public disclosure. “We will be educating New Yorkers about the impact that mismanagement, bullying, petty feuds, sexual harassment — how all those things have a direct impact on the ability of government to deliver for the people it represents,” Kauffmann added.
Health and Wellness
Most Older Americans Don't Trust AI-Generated Health Info, Survey Finds
Most Americans 50 and older don’t place much trust in health advice generated by artificial intelligence, a new survey finds. About 74% of middle-aged and senior Americans would have very little to no trust in health info generated by AI, the University of Michigan poll found. At the same time, these older adults have a lot of confidence in their ability to suss out bad info about health matters.
“Older adults are increasingly turning to the internet for health information, yet there is a significant trust gap, particularly with AI-generated content,” said Indira Venkat, AARP’s senior vice president of research. “While AI advancements offer promising opportunities to support healthy aging, this poll underscores the urgent need for reliable, accessible health resources,” Venkat added. “Ensuring that older adults have trustworthy information from health care providers and credible websites is crucial as we navigate the evolving landscape of digital health.”
Election 2024
- Rep. Marc Molinaro Discusses His Reelection Effort For NY-19 Seat - Spectrum
- Paths to Victory in the 2024 Election - WSJ
- 5 Takeaways From The Texas Senate Debate – The Hill
- Gender Gap Is Defining Feature of Deadlocked Trump-Harris Race - WSJ
- Democrats Clinging To Power In Tim Walz’s Minnesota - Politico
- Georgia Judge Blocks Ballot Counting Rule And Says County Officials Must Certify Election Results - AP
- Early Voting Record Shattered In Georgia – The Hill
- The Battle for the ‘Burbs of Pennsylvania – The Dispatch
- Harris Ramps Up Pursuit of Black Voters as Election Day Looms – US News
- Real Clear Politics General Election Polls
- Real Clear Politics Electoral Map
- Latest Polls - FiveThirtyEight
Industry News
Global Steel Demand Seen Shrinking Again
Global steel consumption is now forecast to decline to 1.75 billion metric tons for 2024, or about 12 million metric tons below actual global consumption for 2023, as multiple factors continue to impair economic growth worldwide. The new forecast by the World Steel Association revises the April 2024 consumption total by -0.9%, but it maintains the outlook for steel consumption growth (1.2%) in 2025.
As China is the by far the largest steelmaking nation, the poor rate of steel consumption there is among the prevailing factors dragging a rebound worldwide. World Steel identified the continuing decline of China’s real-estate market as the cause of a -3.0% drop in forecast 2024 steel demand there, and a further -1.0% drop in Chinese demand for 2025. Steel demand among developing nations other than China is forecast to grow 3.5% this year, and 4.2% in 2025. An important factor in this growth continues to be India, where consumption is seen growing 8.0% this year, and 8.5% in 2025. Some developed markets – the United States, Japan, Korea, and Germany – are forecast to deliver significant decreases in steel demand for 2024, but then regain growth prospects in 2025.
Read More at American Machinist
Boeing Closes In On $15 Billion Financing Via Stock, Hybrid Bonds
Boeing is closing in on a plan to raise around $15 billion with common shares and a mandatory convertible bond as the jet maker bolsters finances worsened by a crippling strike, four sources familiar with the matter told Reuters. The company on Tuesday said in regulatory filings that it could raise as much as $25 billion in stock and debt with its investment-grade credit rating at risk. One of the sources cautioned that a $15 billion sale may not be enough for Boeing to fix its ongoing crises.
The aerospace giant has been dealing with increased regulatory scrutiny, production curbs and a loss of confidence from customers ever since a door panel blew off a 737 MAX plane in midair in early January. Shares are down more than 40% this year. It has been burning through cash all year, leading to its Tuesday announcements that it will raise money in the capital markets and that it had also secured a $10 billion credit agreement with major lenders: Bank of America, Citibank, Goldman Sachs and JPMorgan.
$18M In Federal Funding Heads To New Genesee County Dry Pump Manufacturing Facility
The U.S. Department of Commerce and Edwards Vacuum in Genesee County have agreed to terms that will provide $18 million in funding for its new plant there. The money comes from the CHIPS and Science Act. Earlier this year, the company broke ground at the site of its new facility at the county's Science Technology and Advanced Manufacturing Park, known as STAMP.
“This investment will ensure an essential part of the semiconductor supply chain – that will be surging in demand – is made right here in Genesee County. I am proud to announce my CHIPS & Science Law is investing $18 million in Edwards Vacuum’s expansion in Western New York, creating the first dry pump vacuum manufacturing facility of its kind in America,” Sen. Chuck Schumer said in a statement.
DOD Reveals Parameters To Establish CMMC Program In Final Rule
The Pentagon has unveiled its plans to launch the Cybersecurity Maturity Model Certification through a final rule published today laying out key definitions, applicability for contractors and parameters for the assessment process. “With this final rule, DOD establishes the Cybersecurity Maturity Model Certification (CMMC) Program in order to verify contractors have implemented required security measures necessary to safeguard Federal Contract Information (FCI) and Controlled Unclassified Information (CUI),” DOD says in the final rule.
The final rule amends Title 32 of the Code of Federal Regulations to establish CMMC program requirements. DOD is working on a separate rulemaking to amend Title 48 of the CFR which contains the department’s acquisition regulations. The final rule outlines a four-phase plan to establish CMMC requirements for defense contracts and provides a walkthrough of the CMMC program from the perspective of an organization seeking assessment. Industry groups reacted positively to the rule, while emphasizing they will be closely watching the implementation.
Stellantis Planning to Make Ram Pickups in Mexico
Ram’s parent company is taking steps to build its bestselling truck in Mexico, a move that threatens to inflame the automaker’s frayed relationship with its workers union. Stellantis STLA -2.49%decrease; red down pointing triangle, which also houses Jeep, Dodge and Chrysler brands, is expanding its factory complex in northern Mexico to build Ram 1500 pickup trucks, according to people familiar with the matter. The company in recent years has made nearly all of its light-duty Ram pickups at a factory near Detroit.
The company said Tuesday that the Ram trucks would continue to be made at its Sterling Heights assembly plant north of Detroit, and that “no other announcements have been made about production of the Ram 1500.” The Mexico plans come about a year after Stellantis signed a landmark labor agreement with the United Auto Workers, granting union members a substantial pay hike and promising billions in U.S.-based investment. Analysts have said the contract, which the union called the richest in its history, would increase labor costs for Stellantis and its rivals, and could compel the companies to shift some factory work outside of the country.
Plunging UK Inflation Spurs Rate Cut Bets, Offers Budget Relief For Reeves
British inflation slowed sharply last month and key price gauges watched by the Bank of England also fell, bolstering bets on a November interest rate cut and helping finance minister Rachel Reeves before her first budget. Annual consumer price inflation eased to 1.7% in September from 2.2% in August, the lowest reading since April 2021 and driven down by lower airfares and petrol prices, the Office for National Statistics said.
Data on Tuesday showed British pay grew at its slowest pace in more than two years in the three months to August and vacancies fell again. Britain's finance ministry welcomed the fall in inflation, which offers a helpful backdrop for Reeves as she readies her first budget, due on Oct. 30.
Is The World Ready For Tesla's New Domestic Robots?
At last week's Cybercab event meant to showcase Tesla's new line of autonomous taxis, Musk surprised attendees by debuting a phalanx of what have since been named "Optimus" robots, which will "walk amongst you,” and serve as a "teacher, babysit your kids, it can walk your dog, mow your lawn, get the groceries, just be your friend." As demonstrated later in the evening, Optimus can even "serve drinks."
The robot was "not a serious product when Musk first revealed the project in 2021, when a man in a robot suit took the stage to perform a silly dance," said The Verge. But last week's demonstration showed that the current models are "leaps and bounds from more hypothetical talks of the project just a few years ago," the New York Post said. The Optimuses "looked smoother" than their 2022 predecessors as they "danced, poured drinks, and played rock-paper-scissors with attendees at Tesla's event," said Business Insider. If you "extrapolate this you're really going to have something spectacular," Musk told attendees at the rollout, comparing Optimus to iconic "Star Wars" droids R2D2 and C3PO. Once production ramps up to scale, the robots are expected to cost between $20-30,000, and will be "something anyone could own," Musk said.
Mortgage Rates Rise To 2-Month High—Defying Conventional Interest Rate Cut Wisdom
The average 30-year fixed mortgage rate rose to its highest level since the week ending Aug. 9 at 6.52%, according to a Mortgage Bankers Association survey, which tracks mortgage application data nationwide. It’s the sharpest two-week jump for 30-year mortgage rates since Feb. 2023, according to Bloomberg, with mortgage rates up about 0.4 percentage points from the last week of September’s 6.14%.
It was the third consecutive week of increasing mortgage rates, a first since April. Mortgage applications fell 17% last week compared to the week prior. The “recent uptick in rates has put a damper on applications,” Mortgage Bankers Association economist Joel Kan explained in a statement. Mortgage rate movements correlate strongly with changes in yields for U.S. Treasury notes, which determine the rate at which investors are willing to hold government bonds, which are essentially loans to fund the federal government.