Trump set for acquittal as Democrats’ bid to call witnesses fails
In today's updates:
* China starts repatriating people to Wuhan, as coronavirus deaths hit 213
Markets: Oil prices are set for their worst month since May amid fears the coronavirus will hit oil demand, leading Saudi Arabia to push for an emergency OPEC+ meeting. Asian stocks halted a losing streak and the yuan steadied, but both were tempered after the update from the U.S. advising against China travel. Meanwhile, the U.S. yield curve inversion raises growth concerns as the coronavirus sparks a bond market rally and triggers a recession signal. The Baltic Dry shipping index (dry bulk, such as iron ore) dipped below 500 for the first time in four years.
LPGA Tour canceled an event scheduled for the first week of March on Hainan Island in China, citing health concerns and travel restrictions because of the viral outbreak. Meanwhile, Reuters reported that Japan Airlines said that 25% of its reservations on flights to China have been cancelled in the last 10 days.
Britain is set to leave the European Union at midnight (Central European Time). During the transition period — until Britain leaves the EU customs union at the end of the year — the change will be felt in Brussels. There are still more negotiations ahead, as officials hash out the future of EU/U.K. relations. And the EU Parliament will no longer have U.K. voting members, with 73 British lawmakers returning home. London and Brussels will try to hash out a trade deal by the end of the year as Britain enters a transition phase.
Late-night comedy: Jimmy Kimmel discussed the Republican argument that allowing new evidence at the impeachment trial would delay the Senate’s other business: “As if they’ve done any business. Blockbuster Video has done more business than the Senate in the last three years.”
— Coronavirus update:
- China starts repatriating people to Wuhan, as coronavirus deaths hit 213. Cases of the Wuhan coronavirus have now topped 9,800, Chinese envoy to the UN Wang Qun said in Vienna today. “Altogether there are 9,809 confirmed cases. Among them, there are 1,527 cases of critical conditions, (plus) 15,238 suspected cases," Wan said, adding there were 213 deaths. Reports indicate there are 131 cases have been reported in 23 other countries and regions. The total number of cases far exceeds that of the 2002-03 SARS epidemic, which killed almost 800 people worldwide — some 8,100 people were infected and 774 died after health authorities initially covered up the outbreak. Of the newly reported deaths, 30 were in Hubei’s provincial capital Wuhan, where the virus initiated, according to the Hubei health commission. The other death was in Heilongjiang province, in the country’s northeast, as the number of deaths nationwide totals 213. Meanwhile, Chinese Foreign Ministry spokeswoman Hua Chunying confirmed today that China was to arrange chartered flights to take Hubei residents stranded abroad to Wuhan. “Considering the difficulties facing Chinese citizens overseas, especially those from Wuhan, the Chinese government decided to send chartered flights as early as possible to take them back to Wuhan,” Hua said in a statement.
- U.S. warns against travel to China after WHO’s declaration of global public health emergency and a record 43 deaths in one day, 42 in China's Hubei province. “Do not travel to China, due to novel coronavirus first identified in Wuhan, China,” a travel advisory issued by the U.S. said. “Travelers should be prepared for travel restrictions to be put into effect with little or no advance notice. Commercial carriers have reduced or suspended routes to and from China.” The World Health Organization (WHO) called the coronavirus outbreak a China a global emergency on the risk that the outbreak could spread further, beyond the smattering of other countries that have already recorded infections. The declaration makes it easier for the WHO to co-ordinate the responses of governments. The State Department also said that people in China should consider leaving and nonessential U.S. government personnel should postpone travel there. A sixth person in the U.S. was confirmed with the novel coronavirus.
— U.S. Commerce Secretary Wilbur Ross said disruptions in China could help bring jobs to America. “The fact is, it does give businesses another thing to consider when they do a review of their supply chains,” Ross said Thursday on Fox Business. “I think it will help to accelerate the return of jobs to North America, some to U.S., probably some to Mexico as well.” Critics criticized the comment as insensitive to China’s plight.
— Perspective on report government and academic experts in the U.S. have developed a vaccine against African swine fever that has proven 100% effective, the American Society for Microbiology said last week. Both high and low doses of the vaccine, developed from a genetically modified prior strain of the virus, were effective in pigs when they were challenged 28 days after inoculation, a report said. "This new experimental... vaccine shows promise and offers complete protection against the current strain currently producing outbreaks throughout Eastern Europe and Asia," said Dr. Douglas Gladue, principal investigator at USDA's Ag Research Service (ARS), which developed the vaccine.
Perspective from National Pork Producers Council Chief Veterinarian Liz Wagstrom, DVM: “This vaccine has great potential for the future. However there are lots of hurdles. First, ARS does not have a commercial partner to take this research and get it ready for commercialization. This process can take many months to years. Secondly, this vaccine virus is being grown on cells collected from live pigs (macrophages). These cells can’t be used for the production of commercial vaccine and the process of adapting this virus to grow on cells that can be used, and then to get the virus to grow to high enough concentration, is complex and can also take years. Bottom line: this research is encouraging but will not be available in the near future for producers.”
— U.S. Sec. of State Pompeo says food portion will be most contentious in UK trade talks. Trade talks with the U.K. are likely to be contentious, especially on food and agriculture, according to U.S. Secretary of State Mike Pompeo. He expressed a hope during remarks in London that food safety will not be used as a cover for protectionist actions. "There will be real contentious issues around agriculture..," Pompeo told LBC Radio during his visit to London. “Our ask will be as it has been in the other negotiations: We need to be open and honest about competitiveness. We need to make sure we do not use food safety as a ruse to try and protect a particular industry."
Pompeo outlined a timeline of hoping that by late this summer, the two sides will have made substantial progress in trade talks before moving on to address the most difficult matters.
— Reuters: Mexico to threaten action against U.S. over seasonal Mexican farm exports. Mexico is warning that any protectionist actions by the U.S. over farm produce imports (fruits and fresh veggies) from Mexico will prompt an in-kind response, according to a Reuters report citing a letter from Mexican Deputy Trade Minister Luz Maria de al Mora. The letter is apparently in response to one U.S. Trade Representative Bob Lighthizer sent to officials in Florida and Georgia pledging they would monitor such shipments. "If the U.S. government seeks any action of this kind against Mexican agricultural exports, the government of Mexico will apply similar measures to U.S. products," the Mexican official said.
— Farm bankruptcies jumped by 20% in 2019, with most of the filings occurring in the Midwest, according to the latest data from U.S. Courts summarized by the American Farm Bureau Federation. There were 595 Chapter 12 family farm bankruptcies, up nearly 100 filings from 2018. Wisconsin endured the highest bankruptcies at 57 filings, followed by Georgia at 41. Nearly 46% of the filings were in the Midwest, followed by 22% in the Southeast. Link for details.
— Dairy group hail USDA’s Perdue for GIs stance with EU. The U.S. Dairy Export Council (USDEC), National Milk Producers Federation (NMPF) and Consortium for Common Food Names (CCFN) praised USDA Secretary Sonny Perdue for his position on European Union (EU) geographical indicators (GIs). During his recent visit to Europe, Perdue argued a U.S./EU trade deal should ensure GI protections are not imposed for common food names used in the U.S.
“The EU’s patently unfair trade policies, including the misuse of GI protections, have resulted in a lopsided trade dynamic where trade benefits only flow one-way: toward Europe. As Secretary Perdue rightly noted, Europe’s unfair trade barriers have less to do with preserving the rights of legitimate GIs than with restricting competition from exceptional U.S. products,” the three dairy groups said in a statement. “We commend Secretary Perdue for his firm stance defending the rights of U.S. farmers and food producers to use the common names consumers know and love. Dismantling EU trade barriers that drive the dairy deficit and cause undue harm to our industry must remain a top priority in negotiations with the EU,” they concluded.
— Other items of note:
Trump set for acquittal as Democrats’ bid to call witnesses fails. The Senate will vote today on whether to hear new testimony in the impeachment trial of President Trump. Republicans appear likely to block the effort, in a step toward acquitting the president of both impeachment articles. GOP Sen. Lamar Alexander of Tennessee opposes a motion for more evidence to extend the trial. Alexander reportedly thinks Trump did what he’s accused of doing, but that doesn’t warrant removal from office. Another swing vote, Sen. Susan Collins (R-Maine), said Thursday she would vote for witnesses. Mitt Romney (R-Utah) said he would “like to hear from Bolton.” That leaves Sen. Lisa Murkowski (R-Alaska), who says she’s “going to reflect … and read my notes” and will announce her decision this morning. It’s possible the Senate is faced with a 50-50 split on whether to call witnesses, one vote shy of a decision. It’s not clear who will get to decide any 50-50 vote. All this makes it more likely the trial could be over by this weekend.
FCC dedicates over $20 billion to fund rural broadband. The Federal Communications Commission (FCC) FCC voted Thursday to dedicate more than $20 billion over 10 years to subsidize the build out of broadband in rural areas through its Rural Digital Opportunity Fund. The effort will target census blocks that are currently unserved by connections of with at least 25 megabits per second (Mbps) download and 3 Mbps upload speeds (25/3). Money for the effort will come from Universal Service Fund, which is funded through fees on collected on telephone bills. Prior efforts in the past have frequently found similar funding diverted for other purposes once the money was received in states.
EPA issued an interim final decision reapproving glyphosate after determining earlier the herbicide is safe to use. Consumer groups cited a 2015 conclusion from the World Health Organization that glyphosate is “probably” carcinogenic. Glyphosate is the active ingredient in Roundup. EPA said it is safe use and there “are no risks of concern to human health when glyphosate is used according to the label and that it is not a carcinogen.” The proposed interim decision issued by EPA in April 2019 also reached that conclusion. There were some 280,000 comments filed on that proposed interim decision. EPA included some updates to mitigation measures, including spray drift management requirements relating to droplet size on glyphosate labels. EPA said there will be a nontarget organism advisory to alert users to the fact that the weedkiller is toxic to plants and “may adversely impact the forage and habitat of non-target organisms, including pollinators.” EPA said it would also require those wanting approval to sell glyphosate to provide information and recommendations to slow the spread of herbicide-resistant weeds to users of the product. EPA said it would likely have a draft biological evaluation of the herbicide out for public comment this fall. The interim decision would open the way for a final registration on glyphosate that could be in effect for 15 years.
A magistrate judge ruled in favor of USDA and 15 state beef councils in a lawsuit arguing that beef councils should not be allowed to use checkoff money for private speech, Tri-State Livestock News reports (link). But R-CALF USDA, the plaintiff, shook off the summary judgement as just a setback in a case that will continue in federal district court.
— Markets. The Dow on Thursday rose 124.99 points, 0.43%, at 28,859.44. The Nasdaq gained 23.77 points, 0.26%, at 9,298.93. The S&P 500 was up 10.26 points, 0.31%, at 3,283.66.
CFTC adopts proposed reg for position limits on futures and options. The Commodity Futures Trading Commission (CFTC) Thursday approved on a vote of three-to-two a proposed regulation for speculative position limits to conform to the Dodd-Frank Act amendments to the Commodity Exchange Act. The plan would set new and/or amended federal spot month limits for 25 physical commodity derivatives and physically settled and linked cash-settled futures, options on futures, and economically equivalent swaps for such commodities, according to the CFTC. The plan also includes what the agency says are important exemptions from position limits, including a revised definition of “bona fide hedging transactions or positions” and an expanded list of enumerated bona fide hedges to cover additional hedging practices. There would also be a new process streamlining requests from bona fide hedgers for both exchange-set and federal position limit requirements. In an interview with Bloomberg TV, CFTC Chairman Heath Tarbert said the goal of the regulation is to “prevent things like corners and squeezes. But they were never meant to focus on anyone who's actually hedging.” He emphasized that prior plans from the futures market regulator did not “get that right” relative to those actually using the futures market to hedge. “And so we have really focused on American agriculture, [and] the energy sector, to make sure if you are going to these markets and you are actually hedging risk, you can do so,” he stated. The CFTC has put forth four prior proposals and finalized one which was later struck down in court. “So here we are — that was one issue … but the bigger issue in my opinion, and the one that Congress is most concerned about, is that previous proposals did not include the right hedging exemptions,” Tarbert said. The rule has a 90-day comment period ending on April 29, 2020.
Eurozone growth hits 6-year low. The eurozone’s economy slowed sharply in 2019 as factories faltered and its automobile industry struggled. Eurozone gross domestic product rose at an annualized rate of just 0.4% in the three months through December, its weakest expansion since the first quarter of 2013. For the entire year, growth was 1.2%. Economists don’t expect much of a pickup in growth in 2020, although the manufacturing sector is expected to steady as global trade flows level out.
U.S. gross domestic product grew at a 2.1% rate in the fourth quarter. Consumer spending, which makes up about two-thirds of the U.S. economy, rose 1.8% in the last quarter. That was down sharply from a 3.2% increase in the third quarter, the weakest rise since the start of 2019 and short of the 2% rate economists had projected. Although consumer confidence remains elevated, Americans nonetheless showed more caution amid trade tensions and moderating income growth. Meanwhile, business investment tumbled 6.1%, marking a third straight quarterly contraction and the worst rate of decline since 2009. There was a sharp 8.7% drop in imports, while exports rose just 1.4%. The boost to net trade added 1.5 of the 2.1 percentage points of growth last quarter.
GDP advanced 2.3% in 2019 — whether measured from fourth quarter to fourth quarter or one full year against the next. Year-over-year growth of 2.3% was the slowest pace since 2016, but in line with the average pace that has marked the expansion that began in mid-2009. Many economists expect the U.S. economy to grow at about the same pace in 2020,