Member Briefing October 23, 2024

Date postedOctober 23, 2024
Posted By: Harold King Daily Briefing,

Top Story

IMF Says Global Fight Against Inflation Is ‘Almost Won’ But Warns Of Rising Risks, Holds Global Growth Forecast Steady

Much of the world has managed to successfully lower inflation and engineer an economic soft landing, avoiding recession, but faces rising geopolitical risks and weaker long-term growth prospects, according to the International Monetary Fund. Global headline inflation will fall to 3.5% on an annual basis by the end of 2025, from an average 5.8% in 2024, the agency said in its World Economic Outlook released on Tuesday. Inflation peaked at a year-over-year rate of 9.4% in the third quarter of 2022. The yearend 2025 rate is slightly below the average annual rise in prices in the two decades before the Covid-19 pandemic.

“Despite the good news on inflation, downside risks are increasing and now dominate the outlook,” said IMF chief economist Pierre-Olivier Gourinchas. Now that inflation is headed in the right direction, global policymakers face a new challenge stemming from the rate of growth in the world economy, the IMF warned. The fund kept its global growth estimate at 3.2% for 2024 and 2025 — which it called “stable yet underwhelming.”

Read More at CNBC

Hudson Valley Labor Market Remains Strong

The Hudson Valley's private sector job count grew by 9,400, or 1.2 percent, to 822,300 in the year ending September 2024.  Employment gains were largest in private education and health services (+10,200), other services (+2,300), financial activities (+1,300), leisure and hospitality (+1,000) and manufacturing (+200).  Job losses were greatest in mining, logging and construction (-2,500), professional and business services (-1,300), trade, transportation and utilities (-1,200) and information (-600).  Private sector job growth was spread throughout the region.

The September 2024 unemployment rate for the Hudson Valley Region is 3.1 percent.  That is down from 3.9 percent in August 2024 and down from 3.5 percent in September 2023.  In September 2024, there were 35,800 unemployed in the region, down from 46,200 in August 2024 and down from 41,600 in September 2023.  Year-over-year in September 2024, labor force decreased by 22,400 or 1.9 percent, to 1,172,800.

Read The Hudson Valley Labor Profile

This Earnings Season, Corporations Are Paying Attention To The U.S. Dollar

We’re going to be hearing from a big list of U.S. companies this week about how they did in the most recent quarter, including 3M, Coca-Cola, Tesla and IBM. Analysts will be focusing a lot of attention on those companies’ sales and whether consumer spending is continuing to stay strong. But another theme that could come up in earnings reports this week is the value of the U.S. dollar, and the impact it’s having on companies’ profits. The dollar’s decline in value could be helping out lots of companies in the near future. Companies care about the dollar’s value because when it rises, it affects their sales overseas. “Ultimately, a strong dollar makes that weak in terms of revenue,” said Dan Ives, managing director with Wedbush Securities. He said those companies have to bring that revenue back home. And if the dollar is strong, those foreign sales just don’t go as far back in the U.S.

The dollar’s value shot up back when the Federal Reserve started raising interest rates in 2022. Back then, the U.S. economy was hot, and foreign investors were piling in to government bonds, which you need dollars to buy. But Nick Bennenbroek, international economist with Wells Fargo, said now, “We’re seeing somewhat slower job growth, somewhat slower economic growth. And the U.S. interest rates have started to come down. So, with all of that, we’ve started to see a gradual decline in the U.S. dollar at this point.”

Read more at Marketplace

Global Headlines

Middle East

Ukraine

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Policy and Politics

Siena Poll: Harris Extends Lead in NYS, ERA Prop One Popular, Hochul Job Approval Inches Higher, More

Vice President Kamala Harris has opened her largest lead, 19 points, against former President Donald Trump, and now leads 58-39% among likely voters, up from 55-42% in September. Voters continue to say by a wide margin they trust Harris to do a better job than Trump on abortion (64-31%) and democracy (58-38%), and narrowly they say Harris will do a better job on the economy (52-46%) and immigration (50-46%). Here are some other findings:

  • The 15-year Democratic incumbent, Kirsten Gillibrand, facing a largely unknown Republican challenger, Sapraicone, has a comfortable 26-point lead, up slightly from 23 points last month in the US Senate Race.
  • Voters Increase already strong Support for proposed ERA constitutional amendment on the Ballot. It now is favored by an overwhelming 69-22%.
  • Governor Kathy Hochul’s favorability rating is 36-51%, up a little from 34-54% in September. Her job approval rating stands at 41-51%, up from 39-56% last month.
  • By a 51-37% margin, voters say New York State is headed in the wrong direction, rather than on the right track, an improvement from 55-32% in September.
  • Voters favor Democrats for Congress over Republicans, 54-37%, up a little from 52-39% in September. Downstate suburbanites and independents had favored Republican candidates last month but now favor Democrats for Congress.
  • By a 75-23% margin, down a little from 79-19% last month, voters say this is the most important election of their lifetimes, a view shared by 80% of Democrats, 77% of Republicans and 63% of independent voters.

Read more at The Siena College Research Institute

Supreme Court To Consider Which Courts Can Weigh Challenges To Some EPA Actions

The Supreme Court will take up a series of cases to determine which federal courts can take on cases related to certain Environmental Protection Agency (EPA) actions, it said Monday.  The cases stem from two seemingly separate issues: whether Oklahoma and Utah need to come up with better plans to fight smog, and whether some oil refineries can be exempt from requirements that their gasoline contain a percentage of ethanol. However, they share an underlying question: which courts can hear objections to a rejection from the EPA.

By taking up the cases, the Supreme Court could be barreling toward a judgment about where challenges to a wide array of EPA actions can be heard. And some circuits have reputations for different ideologies: The 5th Circuit in particular is regarded as the nation’s most conservative. The ruling will only pertain to cases heard under the Clean Air Act, which has a provision that says challenges to “nationally applicable” clean air actions need to be heard in the District of Columbia Circuit.

Read More at The Hill

Post Hurricanes - SNAP Benefits Extended to 400,000 in Florida

Disaster Supplemental Nutrition Assistance Program (D-SNAP) is being made available for approximately 407,733 households across 24 Florida counties following the devastating impacts of Hurricanes Helene and Milton. Florida was directly hit by both hurricanes within 12 days at the end of September and into October. In normal circumstances, SNAP benefits, often known as food stamps, are provided to low- and no-income households to pay for groceries. In the event of a serious natural disaster, D-SNAP is issued to those who may not otherwise be eligible for regular food stamps and have been impacted. You cannot claim D-SNAP if you already claim regular SNAP benefits.

"USDA is committed to making sure that families, farmers and communities impacted by recent hurricanes get the support they need, including help with grocery expenses as people grapple with significant disruption to their lives," Agriculture Secretary Tom Vilsack said. "The Biden-Harris Administration, including USDA, will do everything in our power to help you respond, recover and rebuild – no matter how long it takes."

Read more at Reuters

Health and Wellness

The Future of Workplace Wellness: Innovations to Watch

As companies across the globe rethink their approach to workplace wellness, innovative technologies and forward-thinking strategies are helping transform employee health and productivity. Wellness programs, once limited to gym memberships and periodic workshops, are now embracing a holistic, data-driven approach that supports both mental and physical well-being. Startups are playing a key role in this transformation by offering personalized, AI-powered solutions that meet the evolving needs of today's workforce.

At the core of these startup-driven innovations is a deep understanding of modern workplace challenges. Startups recognize that wellness is not just about reducing absenteeism or increasing productivity, but about creating environments where employees feel supported, both mentally and physically. The agility of startups allows them to provide real-time, flexible solutions that address the specific needs of a diverse workforce.

Read more at ISPO


Election 2024


Industry News

Robotic Use Grows By 10% Worldwide

The new World Robotics report from the International Federation of Robotics (IFR) recorded 4,281,585 units operating in factories worldwide - an increase of 10%. Annual installations exceeded half a million units for the third consecutive year. By region, 70% of all newly deployed robots 2023 were installed in Asia, 17% in Europe and 10% in the Americas. “The new World Robotics statistics show an all-time high in the number of industrial robots automating production around the world,” says Marina Bill, IFR President. “The annual installation figure of 541,302 units in 2023 is the second highest in history. It is only 2% lower than the record of 552,946 units installed in 2022.”

China is by far the world´s largest market, IFR concluded. The 276,288 industrial robots installed in 2023 represent 51% of the global installations. This result is the second-highest level ever recorded (2022: 290,144 units). Japan remained the second largest global market for industrial robots, The United States third and the South Korea fourth. India is one of the fastest-growing emerging Asian economies. Robot installations increased by 59% to 8,510 units in 2023, a new high. Demand from the automotive industry soared to 3,551 units—an increase of 139%. Both car manufacturers and suppliers contributed to this development.

Read More at Supply Chain Management Review

Threat of Chinese Overcapacity Looms Over Memory Chips

China's aggressive expansion of memory-chip production, evidenced by its DRAM output surging from 4% of the global total in 2022 to 11% this year, could pose a significant threat to US chipmakers. Fueled by government subsidies and increasing domestic demand, the growth could see Chinese companies prioritize homegrown chips, potentially leading to a global supply glut and intensified price competition.

At the moment, the supply has mostly affected so-called legacy chips, which are chips from prior generations. Prices of such lower-end chips have started to fall while those at the higher end are more resilient. And export controls from the West might make it more challenging for Chinese manufacturers to move quickly to the next generation. Though given worsening geopolitics between China and the West, Chinese companies, such as smartphone makers, have strong incentives to use domestic memory chips in their products if possible. And with Beijing throwing money at the cause, they might be able to make faster progress than expected. China is a big market for memory-chip manufacturers: It accounts for about 20% to 25% of the total DRAM demand globally, according to JPMorgan.

Read more at The WSJ

Key Earnings Reports – GM, GE Aerospace, Lockhead Martin, Verizon, 3M, RTX

General Motors easily outperformed Wall Street’s third-quarter earnings expectations, leading the Detroit automaker in raising key guidance targets for 2024. Earnings per share were $2.96 adjusted and revenue was $48.76 billion. GM now expects full-year adjusted earnings before interest and taxes of between $14 billion and $15 billion, or $10 and $10.50 a share, up from between $13 billion and $15 billion, or $9.50 and $10.50. It also raised its adjusted automotive free cash flow forecast to between $12.5 billion and $13.5 billion, up from $9.5 billion and $11.5 billion. CNBC

GE Aerospace reported third-quarter results above expectations Tuesday morning. The engine and aerospace parts manufacturer posted $9.84 billion in revenue, while analysts polled by Visible Alpha had a consensus estimate of $9.55 billion. Net income was $1.89 billion, or $1.56 per share, compared with the projected $1.28 billion and $1.19. The company also lifted its profit projections for full-year 2024, guiding adjusted earnings per share (EPS) to a range of $4.20 to $4.35, up from $3.95 to $4.20 previously. GE Aerospace didn't mention any impacts of the five-week Boeing strike in its earnings release.  Yahoo

Lockheed Martin on Tuesday joined rival RTX in lifting annual profit and sales forecasts, driven by strong demand for military equipment amid escalating global tensions. The Bethesda, Maryland-based company now expects per-share profit of $26.65 for 2024, above its earlier forecast of $26.10 to $26.60. It also sees full-year sales of $71.25 billion, slightly above the midpoint of its earlier forecast of $70.50 billion to $71.50 billion. However, Lockheed's flagship F-35 program is facing challenges, particularly due to delays in rolling out an upgrade intended to enhance the fighter jet's processing capabilities. Yahoo

Verizon added more wireless subscribers than expected in the third quarter as the U.S. telecom giant’s promotional offers and plans that bundle 5G with streaming services such as Netflix helped attract customers. The company reported a profit of $1.19 per share. Its total revenue of $33.3 billion came in slightly below analysts’ expectations of $33.43 billion, largely driven by declines in the company’s wireless equipment revenue, as customers dialing back spending amid high interest rates led to fewer phone upgrades. Net income fell to $3.4 billion from $4.9 billion a year ago. CNBC

3M Co raised the lower end of its full-year adjusted profit forecast on Tuesday, after strong demand for its electronics and industrial products helped the U.S. conglomerate beat quarterly profit estimates. The company reported an adjusted profit of $1.98 per share for the third quarter, compared with $1.68 per share a year earlier. 3M now expects its full-year adjusted profit to be between $7.20 and $7.30 per share, compared with its previous forecast of $7.00 to $7.30 per share. 3M has cut jobs and spun off its healthcare business into a listed company in recent quarters to mitigate the impact from a demand slowdown. Sales in its transportation and electronics segment, which makes display materials for mobile phones and automobiles, increased by 1.8% from a year earlier. Yahoo

RTX Corp, the parent engine maker Pratt & Whitney (PW) posted strong financial results for the third quarter today. PW continues to struggle with replacing engines plagued by technical defects that have grounded nearly 600 Airbus A320neos worldwide. But year-over-year financial results are markedly improved. RTX reported $20.1bn in revenues operating cash flow of $2.5bn, free cash flow of $2bn, and returned $1.1bn of capital to shareholders. Net income was $1.472bn vs a loss of $984m in the prior year. Leeham News

A.P. Moller-Maersk raised its annual financial outlook for the fourth time this year after posting a surge in third quarter revenue and underlying earnings amid strong freight demand and tight capacity driven by Red Sea disruptions. The Danish container shipping and logistics giant said it now expects underlying earnings before interest, taxes, depreciation and amortization between $11 billion and $11.5 billion this year, up from a prior forecast from $9 billion to $11 billion. Like other shipping companies, Maersk has rerouted its vessels following attacks on commercial ships from Yemen’s Houthi rebels since the end of last year. The diversion to longer routes, mostly around the Cape of Good Hope, led to higher costs and fuel consumption, but it also contributed to a shortage of vessels and higher freight rates. WSJ

HSBC Splits Bank Between East And West In Major Overhaul

HSBC's new boss has announced a major overhaul of the bank's structure, splitting geographically into eastern and western markets amid increasing geopolitical tensions and a need to cut costs. The bank said that it was simplifying operations by splitting into four key units, which will see its commercial and institutional banking divisions merged. The changes are set to take effect from 2025. HSBC also announced a reshuffle in its leadership ranks, with the appointment of its first female finance chief in the bank's 159-year history. The newly-appointed Ms Pam Kaur has worked at the bank for more than a decade and is currently its chief risk and compliance officer.

Under the plans, the bank will create separate business units in the UK and Hong Kong. There will also be two other operations: "corporate and institutional banking" and "international wealth and premier banking". Business in these operations will fall into either “eastern markets”, which includes the Asia-Pacific region and the Middle East, or “western markets”, covering the UK, continental Europe and the Americas.

Read more at BBC

America Is Primed for a Home-Renovation Resurgence

More homeowners are borrowing against the rising value of their properties, suggesting that the worst of the remodeling slump has passed. Analysts and building-products executives are forecasting lower interest rates will fuel a rebound next year in spending on new kitchens, bathrooms and decks, reviving a reliable source of economic activity and stock-market gains.

Spending on home repairs and renovations surged during the pandemic, when Americans were cooped up at home. Then it contracted for the first time since the aftermath of the 2008 mortgage meltdown, as the highest borrowing costs in a generation slowed home sales and made it expensive to tap home equity to pay for big jobs. Now, with the Federal Reserve cutting interest rates, the mountain of home equity that Americans have amassed thanks to sharply rising property values is getting cheaper to access.

Read more at The WSJ

Striking Boeing Workers to Vote on New Offer Today

Striking Boeing workers will vote on a new contract offer Wednesday, October 23, according to the manufacturer and the International Assn. of Machinists and Aerospace Workers, aiming to end their five-week impasse. The new proposal agreed upon Saturday, October 19, will be the second one put before the roughly 33,000 union members. On September 12 they overwhelmingly rejected a contract offer accepted by union negotiators, beginning their strike on September 13. A subsequent Boeing proposal was not put forth for a vote. Earlier this month, Boeing withdrew that offer.

The union describes the current proposal for a four-year agreement as offering a 35% wage increase; a $7,000 ratification bonus; restored incentive pay; a one-time $5,000 and other increased contributions up to 12% to employees’ 401(k) plans. The IAM union has been seeking a 40% average pay increase over four years. Boeing initially offered a 25% increase, and then 30% as part of the second proposal that the union did not submit for a vote.

Read more at American Machinist 

Boeing CEO To Give Clues On Company’s Future, While Striking Workers Vote On New Contract

Boeing has already braced investors for a rough quarterly report. Now, new CEO Kelly Ortberg has the chance to share his vision for the troubled manufacturer, from a potential strike-ending labor agreement to a slimmed-down future. When he takes the mic for his first earnings call as Boeing’s CEO on Wednesday, more than 32,000 striking machinists will start voting on a new, sweetened contract proposal. Results of the labor vote are expected Wednesday night.

During the call, investors, analysts and the public could get clues from Ortberg about what Boeing will look like in the coming years as well as clearer estimates on the company’s production targets for the next year. Ortberg has hinted at big changes ahead, promising employees and the public greater focus at the 108-year-old company. Earlier this month, he said Boeing will slash 10% of its global workforce, about 170,000 people. “We believe [Boeing] is poised for further restructuring as the company looks to potentially divest parts of the portfolio and continues to focus on strengthening its supply chain,” said RBC analyst Ken Herbert in a note Sunday.

Read more at CNBC

Podcast: Why AI Is A Must-Have For Manufacturers, Plus Practical Use Cases

Andrew Halonen is the president of Amatrium and the AmatriumGPT tool. Andrew has worked for 25 years in a variety of industries, including machine design, automotive castings, engineering, forging, and lightweight materials. Andrew earned a Bachelor of Science in Mechanical Engineering degree from Michigan Technological University, and he interned at Ford Motor Company before working for eight years at the 3M Company. 

Andrew recently spoke with Robert Brooks, editor in chief of American Machinist and Foundry Management & Technology, about new and inventive ways artificial intelligence is changing the manufacturing industry.

Read/Listen at Plant Services

 

 

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