Member Briefing October 6, 2022
OPEC+ Agrees to Biggest Oil Production Cut Since Start of Pandemic
The Organization of the Petroleum Exporting Countries and its Russia-led allies on Wednesday agreed to slash two million barrels of oil a day, delegates said, in a move likely to push up already-high global energy prices and help oil-exporting Russia pay for its war in Ukraine. The oil-production cut is the biggest from the group collectively known as OPEC+ since April 2020, signaling its intent to keep prices high after enduring seven years of a relatively subdued market, oil-industry analysts said.
The decision could undermine a plan by the Group of Seven wealthy nations to cap the price of Russian oil on the global market, a key part of the West’s economic battle with Moscow. It came less than three months after President Biden visited Saudi Arabia, the OPEC’s de facto leader, in a bid to repair relations between the world’s biggest oil consumer and its biggest crude-oil exporter during a period of rising inflation driven in part by high energy prices. Brent crude rose 0.6% to $92.38 on Wednesday, after having risen steadily on expectations of a production cut in recent days.
War in Ukraine Headlines
- Ukraine and Russia: The Latest News – The Guardian
- Putin is ‘Literally Out of Moves,’ Former CIA Chief Petraeus Says - Fortune
- Ukraine’s New Offensive Is Fueled by Captured Russian Weapons - WSJ
- Putin Finalizes Annexation As Ukraine Forces Russia Into Retreat On Southern Front Line - Forbes
- Biden Pledges Support for Ukraine During Zelenskyy Call Amid Russia’s Attempted Annexation - Politico
- How the US Might Respond to a Russian Nuclear Attack in Ukraine – The Hill
- EU Agrees on Price Cap for Russian Oil Over Ukraine War - AP
- Border Fear, and Then Relief, for Men Fleeing Russia - Reuters
- Map – Tracking Russia’s Invasion of Ukraine – Live Universal Awareness Map
Poll: Vast Majority Of Manufacturers Plan Price Increases In 2023
The poll of 150 manufacturing CEOs surveyed in late August found that nearly half of companies (45%) had passed on the costs of inflation to customers today, while 38% said they had avoided doing so and 17% said their companies absorbed the costs despite the financial hit. With inflation running above 8% in August, the vast majority of executives polled who had passed on the costs of inflation (80%) said that they increased their prices between 5% and 15%. And 12% of them said they hiked prices between 15% and 20%.
Those price increases had an impact. More than half (55%) said they had lost customers over the past year due to price increases, while nearly one in five (19%) have cut their workforce to keep costs in line.
WTO Sees Sharp Slowdown in Global Trade, Pointing to Possible Recession, Lower Inflation
Surging energy costs and rising interest rates are weakening household demand across the globe, a dynamic that could cause exports and imports to increase by just 1% in 2023, the World Trade Organization said Wednesday. That is down from a previous forecast of 3.4%. A slowdown in trade could help bring down price pressures by easing pressure on supply chains and reducing transportation costs. It also means there is an increased risk that the global economy will contract.
The WTO also lowered its forecast for global economic growth in 2023 to 2.3% from 3.3% and warned of an even sharper slowdown should central banks raise interest rates too sharply. Several long-term trends are weighing on international trade, including a slowdown in globalization that threatens to intensify as a result of Russia’s invasion of Ukraine and other geopolitical tensions.
US COVID – Will there be a COVID Winter Wave? What Scientists Say
Evidence is building that the northern hemisphere is on course for a surge of COVID-19 cases this autumn and winter. New immune-evading strains of the SARS-CoV-2 Omicron variant, behaviour changes, and waning immunity mean that many countries could soon see large numbers of COVID infections — and potentially hospitalizations — say scientists.
In mid-August, an effort called the COVID-19 Scenario Modelling Hub laid out several possible US scenarios for the coming months. The models suggested, so long as vaccine booster campaigns began quickly and new variants didn’t emerge. Even with a new variant, a big surge in cases wasn’t certain. More than a month on, hospitalizations are declining in line with projections, says Justin Lessler, an infectious-disease epidemiologist at the University of North Carolina at Chapel Hill who leads the modelling effort. But other factors on the horizon could spell trouble.
Ryan Leads Schmidt in NY-18 Fundraising – Race a “Toss-Up”
Rep. Pat Ryan had a huge fundraising quarter, bringing in $2.25 million from July to September, his congressional campaign exclusively told City & State. But the Democrat spent most of that on his way to victory over Republican Marc Molinaro in the 19th Congressional District special election in August. He’s expecting to report more than $600,000 on hand in the Oct. 15 filing.
Ryan’s Republican opponent in the new 18th Congressional District, Colin Schmitt, didn’t have to spend on a special. His campaign said it brought in more than $500,000 in three months, and raised an extra $100,000 in the past couple days thanks to House Minority Leader Kevin McCarthy coming to the Lower Hudson Valley district for a fundraiser. Schmitt’s campaign expects to enter the final month of the campaign with around $500,000 on hand – not much less than Ryan. The race is expected to be close. Most organizations rating House races call the 18th District a toss-up. while others think it leans Democratic, giving Ryan a slight advantage.
Midterm Voters Key in on Crime
Crime and public safety are proving to be a potent mix of issues in the midterm election, as Republicans relentlessly tie Democrats to a pandemic-era rise in crime on the campaign trail and in TV ads. From Pennsylvania to New Mexico to Ohio, Republicans are airing wall-to-wall ads that attack Democrats for being “dangerously liberal on crime,” as one TV ad aimed at Democrat John Fetterman says in the Pennsylvania Senate race.
More than three-quarters of voters said violent crime is a major problem in the United States, according to a new POLITICO/Morning Consult poll released Wednesday, demonstrating why the issue has become a key to the battle for control of Congress this fall. In the poll, 60 percent said crime would play a major role in deciding who they would vote for, exceeded only by economic concerns and abortion access.
Booster FAQ: Can it Cause a Positive Test? When Should You Get It?
Can you test positive for COVID from getting the vaccine? "It would be absolutely impossible" to test positive because you got the vaccine, says Jeremy Kamil, a virologist at Louisiana State University Health Shreveport. This is because the tests are "testing for something not in the vaccine," says Dr. Seth Cohen, an infectious disease physician and medical director of Infection Prevention & Control at the University of Washington Medical Center.
The vaccine and the tests are based upon different parts of the COVID virus. "All the vaccines in the United States use the spike genetic material," says Kamil. "All of the home tests detect something called nucleocapsid," a protein not found in the vaccine.
US Trade Deficit Narrows in August on Further Imports Drop
The U.S. trade gap declined for a fifth straight month in August as imports, including oil, fell further, according to official data released Wednesday. Exports edged down as well on decreases in industrial supplies and materials, the Commerce Department said. The overall trade deficit dropped $3.1 billion to $67.4 billion in August, the data showed, slightly more than expected.
U.S. goods and services imports fell by $3.7 billion to $326.3 billion in August, a decline fueled by a $2.7 billion drop in crude oil imports amid falling global energy prices. Exports dropped $700 million in August, with a dip seen in shipments of automotive vehicles, parts, and engines, as well as a slight decrease in travel. The U.S. deficit with China stood at $33.5 billion, up slightly from July, and the highest since November 2018.
World Bank Sees Weak Growth in 2023 for Eastern Europe, Central Asia
The World Bank said on Tuesday that countries in eastern Europe and Central Asia will return to weak growth in 2023, but warned that a cut-off of Russian energy to the European Union would tip them into recession next year.
In updated economic forecasts, the World Bank said collective GDP in its Europe and Central Asia region was now expected to contract 0.2% in 2022 and grow by 0.3% in 2023 due to spillover effects from Russia's invasion of Ukraine.
U.S. National Debt Eclipses $31 Trillion For First Time
America’s national debt surpassed $31 trillion for the first time this week, the Treasury Department said Tuesday, as the country battles high inflation and contends with rising interest rates. The milestone figure comes as the Federal Reserve hikes interest rates to combat historically high levels of inflation, which makes borrowing more expensive for the government.
For now, monthly federal deficits are now far smaller than they were during the pandemic, and for two months this year—January and April—the government even ran a surplus. Congress must pass legislation to raise the debt ceiling—a cap on total borrowing that currently sits at just below $31.4 trillion—by early next year to avoid a government default, according to estimates.
Median Single-Family Home Prices Rise Hudson Valley In Third Quarter 2022 But Transactions Plummet Due To Low Inventory
The real estate market in the lower Hudson River Valley continued to be battered by chronic low inventory, rising interest rates and persistent inflation during the 3rd quarter of 2022. The single-family median sales price of $660,000 for the third quarter of 2022 in Rockland County was 14.2 percent higher than 2021.
Rockland County showed a drop in transactions, with single-family home sales down 9.2 percent and condo sales down 15.8 percent. In Orange County, the single-family home median sales price was up 9.1 percent at $420,000. The 3rd quarter single-family home sales number of 1,019 was down 14 percent over the 2021 second quarter.
Hochul Lauds Incentivized Semiconductor Investment in New York
New York sought to lure the world’s largest computer chip manufacturers with the biggest incentive package in state history. Now it landed one — thanks to a potential $6 billion in subsidies.
If the company reaches its job-creation goals and investments, state and local governments plan to offer the incentives over 20 years. Officials said the spin-off jobs from the development could create another 40,000 jobs. In June, the state Legislature and Hochul announced a tax incentive program, called the Green CHIPS bill, to spend $10 billion over 20 years to attract chip manufacturers.
Vocabulary Quiz: How Well Do You Speak Lean?
Do you use kaizen as a verb and CPK in casual conversation? Then test your knowledge with this fun 10 question quiz at IndustryWeek. (The Daily Briefing got 7 out of 10)
German Services Sector Weakens in Sept Slightly More than Initial Estimate -PMI
Germany's services sector shrank in September slightly more than initially expected as inflation and growing uncertainty hit demand, a survey showed on Wednesday, adding to signs that Europe's biggest economy may be heading for recession. S&P Global's final German services purchasing managers' index (PMI) for September fell to 45.0, slightly below a flash September PMI reading of 45.4, released on Sept. 23.
The index dropped from 47.7 in August and was at the lowest level since May 2020 during the initial COVID-19 wave. Inflows of new business fell last month at the fastest rate since the first economic shock caused by the pandemic, and inflation worries accelerated towards the end of the third quarter, hitting demand, as Europe's energy crisis intensified.
Inflation, Consumer Pessimism Push U.K. Firms to Close Their Doors
In the U.K., a wave of business closures is now washing over the country amid the economic pressure. Trapped between surging costs on the one hand and weakening customer demand on the other, cafes and bakeries, breweries and bookstores, pubs and fish and chip shops have been closing their doors.
Over a quarter of a million U.K. companies stopped trading in the first half of this year—16% more than in the first half of 2021 and 40% more than in the first six months of prepandemic 2019, according to the Office of National Statistics. It was the largest number ever recorded in a six-month period, according to the ONS.
Nobel Prize in Physics Is Awarded to 3 Scientists for Work Exploring Quantum Weirdness
Alain Aspect, John Clauser, and Anton Zeilinger are to be awarded the 2022 Nobel Prize in Physics for their work demonstrating the violation of Bell inequalities, research that has paved the way for quantum information science, the Royal Swedish Academy of Sciences announced on Tuesday.
The trio won for their experiments with what’s known as entanglement – a mind-boggling phenomenon when two particles behave as one and affect each other, even though they can be at a vast distance to one another, on opposite sides of the planet or even the solar system. It’s been one of the most debated elements of quantum mechanics and was memorably described by particle physicist Albert Einstein as “spooky action at a distance.”