Member Briefing October 24, 2024
Boeing
yet underwhelming.”
September Home Sales Drop To Lowest Level Since 2010, Median Price Rises
Sales of previously owned homes fell 1% in September compared with August, to a seasonally adjusted, annualized rate of 3.84 million units, the slowest pace since October 2010, according to the National Association of Realtors. Sales were 3.5% lower than in September 2023. Sales fell in three out of four U.S. regions, with just the West region seeing a gain. This count is based on closings, representing contracts signed likely in July and August. Mortgage rates started July near 7% on the 30-year fixed and then fell slowly through August to just below 6.5%. Rates are now more than a full percentage point lower than they were a year ago.
Inventory rose 1.5% month to month to 1.39 million homes for sale at the end of September. That represents a 4.3-month supply at the current sales pace. Inventory was 23% higher from September 2023. The pressure of still low inventory continues to push prices higher. The median price of an existing home sold in September was $404,500, an increase of 3% year over year and the 15th consecutive month of annual price gains.
Fed Beige Book: US Economic Activity Little Changed In Recent Weeks
U.S. economic activity was little changed from September through early October while firms saw an uptick in hiring, continuing recent trends that have reinforced expectations the Federal Reserve will opt for a smaller 25-basis-point reduction in borrowing costs in two weeks. The U.S. central bank's latest temperature check on the health of the economy also showed that inflation pressures continued to moderate.
"On balance, economic activity was little changed in nearly all Districts since early September, though two Districts reported modest growth," the Fed said on Wednesday in the survey known as the "Beige Book," which polled the business contacts of each of its 12 regional banks through Oct. 11. "Despite elevated uncertainty, contacts were somewhat more optimistic about the longer-term outlook." The central bank last month began an easing cycle with an unusually large half-percentage-point cut in its policy rate, lowering it to the 4.75%-5.00% range, amid increasing concerns about the labor market. The Fed hiked rates by 525 basis points in 2022 and 2023 to quash high inflation.
Global Headlines
Middle East
- Israel And Hamas: The Latest News – The Guardian
- U.S. Charges Iranian Revolutionary Guards Official in Assassination Plot - NYT
- Blinken Urges Halt To Middle East Conflict - Reuters
- US Top Diplomat Issues Warning To Israel Over Gaza Aid - BBC
- Israeli Strikes Pound Lebanese Coastal City After Residents Evacuate – France 24
- Blinken Says There Is ‘Real Opportunity’ For Deal To Free Hostages After Killing Of Hamas Leader - VOA
- Israel’s Once-Fringe Movement to Reoccupy Gaza Gains Momentum - WSJ
- 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
- Russia Deploying Strategic Nuclear Forces as Regular Infantry in Ukraine - Newsweek
- Russians Accused Of Crimes Offered Choice - Go To War Instead Of Court - BBC
- Host Putin Faces Calls To End Ukraine War At BRICS Summit – France 24
- US Says Evidence Shows North Korea Has Troops In Russia For Ukraine War - Reuters
- Ukraine's Prosecutor General Resigns Following Draft-Dodging Scandal - VOA
- Washington And Berlin Are Slow-Walking Ukraine’s Bid For A NATO Invitation - Politico
- Tony Blair: US Should Make Sure Iran Never Gets Nuclear Weapons - Newsweek
- 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
- Taiwan Says Chinese Aircraft Carrier Group Sailed Through Taiwan Strait - VOA
- Suicide Bomb Explosion and Gunshots Reported at Turkish Defense Company - Newsweek
- Ghana's Parliament Suspended After Chaotic Scenes - BBC
- UN Urges Indonesia To Rescue Stranded Rohingya Refugees - AP
- EU Farm Ministers Reject Push To Reform CAP Spending - Politico
- Putin Scores A BRICS Win With Rare Xi And Modi Show Of Harmony - Reuters
- Incoming EU Foreign Policy Chief Kallas Warns Against Russia And China - VOA
- Sensational Mass Trial Shines A Dark Light On Rape Culture In France - AP
- Budget Deals Struck With All Departments, Says UK’s Reeves- BBC
Policy and Politics
Progressives Warn New York State’s Plan Won’t Produce Enough Renewable Energy
Clean energy activists and progressive politicians are pushing back against the lack of renewable energy mandates in the New York Power Authority’s new Renewables Draft Strategic Plan. Although the authority maintains that it is acting on a state budget that lawmakers and the governor approved, and making progress towards a cleaner future, activists say that NYPA is ignoring the Build Public Renewables Act that was included in last year’s state budget.
NYPA’s strategic plan, which comes as clean energy projects are stymied by technological, logistical, financial and legislative delays, includes 40 projects that will create 3.5 gigawatts of renewable energy by 2030 – enough energy to power nearly 3 million homes. Activists say that’s not enough, and the state must create 15 gigawatts of renewable energy by 203 in order to meet its clean energy goals. Barring a massive change in the energy sector’s economic realities or an upswell in public sentiment, NYPA’s plans will hew close to the draft they released. But as NYPA Chair John Koelmel put it in their meeting in early October, it's “not a fully baked cake.
US Scrambles After Israel War Plan Leak: What To Know
An apparent U.S. intelligence breach related to Israel’s plans to strike Iran has unsettled the intelligence community and sent the Biden administration scrambling to determine if it came from a hack or an internal leak. The breach, first posted to the Telegram messaging app Friday, comes as the globe has been bracing for an Israeli retaliatory strike on Iran since Tehran fired some 180 ballistic missiles at Israel on Oct. 1 in response for the killings of top leaders in Hamas and Hezbollah, Iran’s prized proxies.
On Tuesday, the FBI revealed it had launched an investigation into the incident and was “working closely with our partners in the Department of Defense and Intelligence Community.” The FBI’s involvement is notable given that it investigates violations of the Espionage Act, the U.S. law that makes it illegal to retain or disclose national defense information. A U.S. official told The Associated Press the investigation also was meant to glean if other intelligence information was compromised, and who had access to the documents before they were posted.
MTA Is Far More Broke Than Previously Expected, State Comptroller Says
The MTA’s finances are in far worse shape than the agency’s financial whizzes previously predicted, due in part to Gov. Kathy Hochul’s abrupt pause of congestion pricing, according to a report published Wednesday by state Comptroller Thomas DiNapoli. MTA officials as recently as July boasted their books were balanced through 2026. But the comptroller report says increased overtime costs and the slow rebound of transit ridership is pushing the agency toward a financial cliff. High spending and a lack of revenue could leave the MTA with a budget shortfall next year of at least $176 million — which could grow to $1.5 billion in a worst-case scenario, according to the report.
In 2023, Hochul pushed through a new slate of funding sources she said would keep the MTA solvent and stave off any service cuts for the following five years. But that package included at least $500 million in annual funding for the agency from fees on three casinos planned for downstate — none of which have been approved. “A year ago, the MTA was looking forward to a period of solid fiscal health, but its financial condition has quickly turned from stable back to uncertain,” DiNapoli said in a statement. The report also warns that Hochul’s congestion pricing pause could increase the cost of the agency’s debt payments, and that could eat into the budget used to pay for the daily operation of the subway, bus and commuter railroad systems.
Health and Wellness
Early Research Suggested Long COVID Didn’t Affect Children. New Studies Say That’s Not True
Evidence is growing that while children have a lower rate of severe acute illness from COVID-19, lingering effects after even seemingly mild cases are impacting millions of children and teens. Between 1 in 5 and 1 in 10 pediatric infections — including both asymptomatic cases and those that are severe — are followed by long COVID symptoms, per a recent JAMA study. That’s as many as 6 million U.S. children. And research suggests the risk rises with repeat infections. Meanwhile, symptoms can last three years or more.
Longer-term effects, which can show up just weeks or months after one had COVID-19, “impact every organ system,” according to a study of adolescents recently published in JAMA. In research published this month, children who had COVID-19 were found to have significantly higher risk of developing type 2 diabetes within six months of having COVID, compared to peers who had other respiratory illnesses — a finding published in JAMA Network Open. Symptoms must last at least three months to be considered long COVID. They can be physical, cognitive and mental, Dr. Kirti Sivakoti, an assistant professor of pediatrics at University of Utah Health. She said that the “multitude of symptoms” can include dizziness, headaches, brain fog, extreme fatigue and various types of pain.
Election 2024
- Democrats Are Growing More Anxious Over Deadlocked Race - WSJ
- Election 2024 Swing State Polls: Latest Surveys Show Trump Up In Nevada, Georgia - Forbes
- Nate Silver: ‘My Gut Says’ Trump Will Win – The Hill
- America's Shifting Opinions on 2024 Election Issues - Newsweek
- Trump Campaign Accuses UK's Labour Party Of Election Interference - Reuters
- Bill Gates Donated $50 Million To Nonprofit Supporting Kamala Harris, Report Says - Forbes
- Senate Battle Goes From Bad To Worse For Democrats – The Hill
- Kamala Harris Has More Billionaires Prominently Backing Her Than Trump - Forbes
- These Governor Races Are The Most Impactful — And Could Produce Future Presidential Contenders - Politico
- Real Clear Politics General Election Polls
- Real Clear Politics Electoral Map
- Latest Polls - FiveThirtyEight
Industry News
The Quarter-Trillion-Dollar Rush to Get Money Out of China
Chinese residents have been illicitly moving billions of dollars out of the country under authorities’ noses as a cratering property market and economic uncertainties push people to find safer places to park their wealth overseas. Moving fortunes out of China is hard: The country imposes strict capital controls that cap individual purchases of foreign exchange at $50,000 a year. Violators can receive big fines, or even prison sentences, if they break the law.
Nevertheless, the stampede for the exit in the past few years appears to dwarf the outflows that occurred in 2015 and 2016, when an earlier property downturn propelled what at the time was the biggest episode of capital flight from China, in dollar terms, according to economists and a Wall Street Journal data analysis. The Journal’s tally suggests as much as $254 billion might have left China illicitly in the four quarters through the end of June. That is a larger sum than fled the country almost a decade ago, when outflows raised fears of a possible financial crisis. However, estimates of such outflows are inherently imprecise and overall capital flight appears to be smaller today as a share of China’s overall economy, which is now much larger.
Boeing Posts $6 Billion Q3 Loss
Boeing is debt-ridden, mistrusted and mistake-prone, but also capable of turning itself around. That is the assessment of Chief Executive Officer Kelly Ortberg, who took over the beleaguered jet maker in August. After reporting a $6.17 billion quarterly loss, Ortberg told staff that much work remains before the manufacturer is able to build a new airplane, something it hasn’t done since it launched the 787 Dreamliner in 2009.
“We need to know what’s going on, not only with our products, but with our people,” Ortberg said in a memo to employees. “And most importantly, we need to prevent the festering of issues and work better together to identify, fix, and understand the root cause.”
Storms Show Fragility of Healthcare Supply Chains
This year’s run of deadly storms in North America is showing just how fragile U.S. healthcare supply chains are. The largest maker of intravenous fluids in the U.S. is still struggling to restore deliveries of the crucial medical product nearly a month after Hurricane Helene knocked one of its plants offline. Baxter International expects to resume manufacturing at its factory in Marion, N.C., in phases by the end of the year, but there’s still no timeline for when production will return to pre-hurricane levels. In the meantime, some healthcare providers have been pushing back elective surgeries and taking other steps to conserve tight supplies.
Baxter, which suffered a similar disruption to supplies of its saline solutions when a hurricane damaged its plant in Puerto Rico in 2017, is tapping its global presence in the latest outage. The company has sought authority to import IV fluids from abroad even as it scrambles to get completed goods out of a North Carolina region devastated by flooding.
Qualcomm's Snapdragon 8 Elite Chip Aims to Level Up AI on Android Phones
At its Snapdragon Summit in Hawaii, Qualcomm revealed the Snapdragon 8 Elite, the next generation of chips that will power the best phones from Samsung, Motorola, OnePlus and more manufacturers. The chip has an improved neural processing unit, with more cores resulting, in what Qualcomm claims, is up to 45% faster AI performance and better power efficiency.
The new chip will enable even more generative AI capabilities, which became the showcase feature that tech companies scrambled to integrate into their products this year. The smartphone industry had its own competitive race toward generative AI starting with the Galaxy AI-equipped Samsung Galaxy S24 in January, while the iPhone 16 series is set to get parts of Apple Intelligence in a future update. While nascent with only a few standout features thus far, Qualcomm's next chip aims to support more features that will give users even more reason to buy Snapdragon 8 Elite-equipped phones.
Why The Drop In Luxury Goods Sales Could Be An Ominous Sign
As quarterly results are coming in, fears of a recession are growing. But this isn’t a recession of the general economy—which has more analysts proclaiming we have made a soft landing. The potential slowdown is one of luxury goods, which is an ominous sign for consumer confidence and the strength of the category. Luxury goods powerhouse LVMH, which owns 75 luxury brands—including Louis Vuitton, Christian Dior, Fendi, Veuve Clicquot, MoŃ‘t & Chandon and Hennessy—reported disappointing quarterly earnings last week. Organic growth across the group was just 3%, a similar slow rate to the previous two quarters, but way down from the 14% revenue growth it saw in 2023. Compared to a year ago, fashion and leather goods revenues are down 5%, and wine and spirits are down 7%. The drop is especially pronounced in China, which previously accounted for 50% of LVMH’s growth. Excluding Japan, Asian sales dropped 16%.
The luxury goods market has survived hundreds of years, and many brands have persevered through geopolitical upheaval and economic turmoil—though the full market declined 8% during the Great Recession, according to Bain. And with inflation going down and prices that average people pay for everyday quality goods and services on a (modest) decline, what difference does a potential luxury goods recession make for the broader economy?
Listeria and E. Coli Outbreaks – Frozen Waffles, McDonald’s Quarter Pounders Here is What you Need to Know
The CDC said in a food safety alert Tuesday an E. coli outbreak has so far impacted 49 people across 10 states, with most sick people reporting eating McDonald’s Quarter Pounder hamburger. Ten people have been hospitalized and one person has died in the outbreak so far. Investigators are still trying to figure out what specific ingredient in the Quarter Pounder is contaminated, with McDonald’s pulling fresh slivered onions and quarter pound beef patties in multiple states. Most illnesses have been reported in Colorado and Nebraska, according to the CDC.
Meanwhile TreeHouse Foods issued a voluntary recall of dozens of frozen waffle products sold under various brand names Friday and on Tuesday expanded the recall to include Belgian waffles and various pancake items sold under brand names like Kodiak, Simple Truth (Kroger’s brand), Good and Gather (Target), and Great Value (Walmart), as well as those sold under the Stop and Shop, Food Lion, Giant Eagle, Harris Teeter, Hannaford and other store brands.
Boeing-Built Communications Satellite Breaks Up In Orbit. 'Total Loss,' Operator Says
Intelsat declared a "total loss" of one of its satellites on Monday (Oct. 21) and is investigating the cause of the issue. The Intelsat-33e communications satellite is no longer operational after an outage Oct. 19; affected customers are being moved to other platforms, the company added in a statement. Meanwhile, U.S. Space Force was tracking around 20 pieces shortly after the incident, the military branch noted on X, formerly Twitter.
The event comes as a surprise given that the satellite only was in operation for seven years, while other satellites like it are rated for between 15 to 20 years of work. "We are coordinating with the satellite manufacturer, Boeing, and government agencies to analyze data and observations," Intelsat officials added in their statement. The breakup of Intelsat-33e will not have an effect on much lower Earth orbiting communications satellites, which most notably include the approximately 6,400 members of SpaceX's Starlink constellation. Starlink's fleet only orbits 342 miles (550 kilometers) above Earth, which is 65 times lower than Intelsat 33e.
Bombardier Starts Manufacturing New Biz Jet
Bombardier has started production for its new Global 8000 twin-engine private aircraft, which it unveiled in 2022 as “the world’s fastest and longest-range, purpose-built business jet.” Manufacturing centers in Saint-Laurent, Québec, Red Oak, Tex., and Querétaro, Mexico, are manufacturing major structural components for the jet that’s due to enter service in the second half of 2025. At the unveiling of the new model two years ago, Bombardier projected a list price of $75 million.
The Global 8000 will have a range of 8,000 nautical miles (14,816 km / 9,206 miles) at a top speed of Mach 0.94 (or 721 mph.) Bombardier has offered Dubai-to-Houston, Singapore-to-Los Angeles, and London-to-Perth as examples of long-distance routes that the aircraft will be capable of covering with non-stop service. The new aircraft’s cabin will offer a series of luxury details introduced on Bombardier’s current top model business jet, the Global 7500, including a principal suite with a full-size bed and a stand-up shower, entertainment controls and connectivity, etc.
Read more at American Machinist