Trump water rule almost allowed nationwide... not in Colorado
In Today’s Updates
* EPA wins dicamba court challenge
* Trump's WOTUS rule replacement survives court challenge, but not in Colorado
* USDA Sec. Perdue says China will fulfill Phase 1 U.S. farm product purchases
* China suspends poultry imports from a Tyson Foods plant
* China also ordered a PepsiCo factory to close on Sunday
* Trump in Axios interview: Held off Xinjiang sanctions for trade deals
* More details on China's proposed national security law re: Hong Kong
* Leaders from EU and China meet digitally for a summit today
* Grassley on timing of next Covid-19 aid package
* Big PPP borrowers to be revealed
* U.S. food supply update
* Eskimo Pie, founded in 1920, is changing its name and marketing
* Update on reopening America... and around the world
* New York City presses ahead with phase two of reopening
* EPA to reopen D.C. office, give workers return option
* Detroit carmakers to resume pre-Covid output
* Coronavirus update
* Navarro: White House preparing for a second wave of coronavirus
* Brazil’s coronavirus death count breached 50,000 this weekend
* John Bolton’s memoir to be released on schedule
* Trump fired a prominent federal prosecutor
* Trump approves LNG by rail plan
* Trump to order restrictions on H-1Bs
* Twelve women are under consideration to be Joe Biden’s running mate: NYT
* Hogan gets Ireland’s backing to head WTO
* Vladimir Putin said he would consider running for a fifth term as Russia’s president
Equities today: U.S. stock futures rose Monday, signaling a higher open despite an uptick in coronavirus infections in some states. In Asia, most major equity benchmarks dropped by the close of trading. Hong Kong’s Hang Seng Index was among the biggest losers, down 0.5%. India’s S&P BSE Sensex, meanwhile, gained 1.2%. In Europe, the pan-continental Stoxx Europe 600 wavering between gains and losses before it edged down 0.6%.
U.S. equities Friday: The Dow fell 208.64 points, 0.80%, at 25,871.46. The Nasdaq eked out a gain of 3.07 points, 0.03%, at 9,946.12. The S&P 500 lost 17.60 points, 0.56%, at 3,097.74. More than 97% of the stocks in the S&P 500 are trading above their 50-day moving averages, marking a high since at least June 2010.
For the week, the Dow gained 1%, the S&P 500 added 1.8% and the Nasdaq climbed 3.7%.
On tap today:
• The European Commission's flash consumer confidence index for June is out at 10 a.m. ET.
• U.S. existing home sales for May are expected to fall to an annual pace of 3.95 million from 4.33 million a month earlier. (10 a.m. ET)
• Bank of Canada Gov. Tiff Macklem speaks via videoconference at 11 a.m. ET.
• Minneapolis Fed President Neel Kashkari speaks at 6:30 p.m. ET.
• Japan's Jibun Bank surveys of manufacturers and service providers for early June are out at 8:30 p.m. ET.
The IMF updates its economic forecasts on Wednesday. Gita Gopinath, the organization’s chief economist, said last week that the numbers were likely to show negative growth rates even worse than previously estimated.
• Copper is on a bullish run since it dropped to $4,600 at the peak of the Covid-19 crisis in late March. Amid initial positive economic data from China, huge fiscal and monetary stimulus worldwide and an easing of lockdowns in many countries, the commodity has surged 26%, touching $5,900 earlier this month before retreating.
• Crude oil prices have been choppy and are both showing losses after being mixed earlier. U.S. crude is trading around $39.50 per barrel while Brent crude is under $42 per barrel.
• In bond markets, the yield on the 10-year U.S. Treasury ticked higher to 0.699%, from 0.696% Friday.
• The U.S. dollar index is weaker early today. Meanwhile, the pound rose following reports that U.K. Prime Minister Boris Johnson will announce a further easing of coronavirus restrictions on Tuesday. Johnson is expected to say pubs, restaurants, hairdressers and hotels will reopen next month, while the two-meter social distancing rule could be reduced.
A summer without rodeos. Hundreds of U.S. rodeos have been canceled because of the pandemic. “Tumbleweeds gather in the box seats of arenas, and the loss of millions of dollars in prize money is a blow to the 5,000 registered cowboys and cowgirls who compete each year,” the New York Times reports (link). For many small towns in the West, rodeos are a major fund-raising mechanism and a beloved tradition that brings people together.
Meanwhile, with baseball shut down, the Red Sox organist isn’t playing at Fenway Park, but he is playing a concert online every afternoon.
— EPA’s limited use of dicamba through July survives court challenge.The Environmental Protection Agency’s decision to allow farmers to use dicamba-based herbicides through the end of July was left intact by a federal appeals court that had previously found that the agency improperly permitted the weedkillers’ use two years ago. The U.S. Court of Appeals in San Francisco on Friday denied an emergency request by a group of environmental organizations to immediately enforce its June 3 decision that had prohibited the use of dicamba-based products made by Bayer AG, BASF SE, and Corteva Inc. The three-judge panel didn’t give a reason why it denied the petition in its one-page order.
Background. EPA said on June 8 that farmers would be allowed to use their existing supplies through July 31. According to the EPA, the agency had been overwhelmed with letters and calls from farmers who claimed the court’s decision was devastating for millions of acres of crops and millions of dollars they had already invested, as well as a threat to America’s food supply.
In the first lawsuit over dicamba crop damage to go to trial, a jury in February hit Bayer and BASF with a $265 million damage award to a Missouri farmer who blamed the companies for destroying his peach orchards. Bayer is challenging the verdict.
— Trump's revised WOTUS rule replacement survives initial court test. The Trump administration’s new rule narrowing the reach of the Clean Water Act takes effect today. Late Friday, a federal judge in San Francisco denied a request to block implementation of the new Navigable Waters Protection Rule. More than a dozen states — including California — and two cities sought to ditch the rule, which replaces the Obama era Waters of the U.S. (WOTUS) rule, which significantly expanded the jurisdiction of the anti-pollution law. While the case will proceed, observers say the Trump version will likely survive further court tests.
But a federal court in Colorado granted the state’s request to freeze implementation of the rule there, concluding that the state was likely to succeed in challenging the administration’s definition of protected waterways. Letting the rule take effect, only to be later struck down, “would likely create unnecessary confusion among the regulated community about what standard really applies,” the judge wrote.
Other lawsuits attacking the regulation are pending in district courts across the country, where litigants are pursuing similar efforts to block the measure.
— Update on China:
- China suspended poultry imports from a Tyson Foods plant where hundreds of employees tested positive for Covid-19, raising concerns over the broader implications for U.S. and global meat exports. The suspension issued Sunday covered products that have arrived in China or are about to arrive there, according to China’s General Administration of Customs. The agency’s order didn’t specify how much chicken the Tyson facility supplied, or other details about the products. A Tyson spokesperson said the company is looking into the matter, adding that health officials say there’s no evidence that the virus can be transmitted through food.
Tyson on Friday said it had tested 3,748 of its employees at seven of its Arkansas facilities from June 4-13 and 481 tested positive for Covid-19. About 95% showed no signs of infection when they were tested. Chinese officials have been testing imported meat and seafood products for traces of the virus in the past week after the new outbreak was linked to a market where imported meat and fish are sold.
The suspension announced Sunday varies from just a few days ago, when Chinese officials said food was unlikely to be responsible for a fresh virus outbreak in Beijing. The move is a potential new threat to meat plants across the world that have seen slaughter disruptions because of the virus. In the U.S., hundreds of workers have become ill, and dozens have died. There’s also been a recent uptick in infections at facilities in Brazil and Germany. If China continues to suspend shipments based on coronavirus cases reported at processing plants, it could also threaten to undermine promised agricultural purchases as part of the U.S./China Phase 1 trade deal.
- China also ordered a PepsiCo factory to close on Sunday as authorities clamp down on the food industry amid a new coronavirus cluster in Beijing. Two of the eight confirmed Covid-19 cases at the plant were from workers that had made purchases at the Xinfadi Market, where the latest outbreak in the city emerged. The marketplace, which supplies more than 70% of Beijing's fresh produce, has been sealed off, while dozens of communities and schools have been forced to close.
- Perdue says China will fulfill Phase 1 purchase commitments. USDA Sec. Sonny Perdue said Friday on 630 KHOW radio that Chinese officials “tell us forthrightly that they plan to fulfill those commitments” relative to the Phase 1 agreement and that he “takes them at their word.” Link for details. “It’s not a secret that they have been behind the first quarter,” Perdue said. “But we see a rapid escalation of their purchases.”
- Trump in Axios interview: Held off Xinjiang sanctions for trade deals. In an Oval Office interview on Friday afternoon, President Trump told Axios' Jonathan Swan that he held off on imposing Treasury sanctions against Chinese officials involved with the Xinjiang mass detention camps because doing so would have interfered with his trade deal with Beijing. Asked why he hadn't yet enacted Treasury sanctions against Chinese Communist Party officials or entities tied to the camps where the Chinese government detains Uighurs and other Muslim minorities, Trump replied, "Well, we were in the middle of a major trade deal. And I made a great deal, $250 billion potentially worth of purchases. And by the way, they're buying a lot, you probably have seen." Trump continued: "And when you're in the middle of a negotiation and then all of a sudden you start throwing additional sanctions on — we've done a lot. I put tariffs on China, which are far worse than any sanction you can think of."
Swan said he asked President Trump whether — as John Bolton charges in a book — he asked China President Xi Jinping to increase China's farm purchases from the U.S. to help Trump win in 2020. Bolton claims Trump made the request when the leaders met in Buenos Aires in December 2018. "No, not at all," Trump said. "What I told everybody we deal with — not just President Xi — I want them to do business with this country. I want them to do a lot more business with this country... By the way, what's good for the country is good for me," Trump continued. "What's good for the country is also good for an election. But I don't go around saying, 'Oh, help me with my election.' Why would I say that? And remember, when I'm dealing with him, the whole room is loaded up with people. We're in a large room with many people in that room. I wouldn't want to say a thing like that. I don't even know if that would be wrong because, you know, but why would I say a thing like that? And I certainly wouldn't say it anyway, but I certainly wouldn't say it in a room full of people."
- China confirmed that a proposed national security law would allow Beijing to override Hong Kong’s independent legal system. The proposal said the central government will have jurisdiction over an “extremely small” number of national security cases under “specific circumstances,” according to draft language released on Saturday by the official Xinhua News Agency. It said China will establish a new bureau in Hong Kong to analyze the security situation, collect intelligence and “lawfully handle national security cases.” The draft bill also calls for Hong Kong to establish a new committee to protect national security, which will be supervised and accountable to Beijing. The chief executive will oversee the committee, as well as appoint judges to handle criminal cases brought under the law. Authorities in Beijing will have the final say on interpreting the law.
- Leaders from the EU and China will meet digitally for a summit today. A face-to-face meeting between all 27 EU leaders and China’s president, Xi Jinping, planned for September, was nixed earlier this month. Officially, the reason was Covid-19. In reality, China had refused to pledge to open its own markets as part of a proposed investment treaty between the two economies.
— Update on next aid package:
- Senate Finance Committee Chairman Chuck Grassley (R-Iowa) said he believes that Covid-19 economic relief legislation will be approved by Congress before the August break although discussions in the Senate will not turn to that effort until after the July 4 break. This legislation is expected to carry significant new relief for U.S. agriculture while also curing the defects of USDA’s program.
— Update on implementation of CARES 1, including CFAP:
- Big PPP borrowers to be revealed. Bowing to bipartisan pressure in Congress, the SBA and Treasury are releasing the names of borrowers who received Paycheck Protection Program (PPP) loans of $150,000 or more, accounting for about 73% of funds lent through the program. "We value transparency and our fiduciary responsibility to ensure American taxpayer funds are used appropriately," SBA Administrator Jovita Carranza declared. Most of the borrowers who took advantage of taxpayer-funded forgivable loans will still remain unknown. Of the roughly 4.6 million borrowers in the program, about 86% took out loans worth less than $150,000.
— Food and beverage supply/industry update:
- Eskimo Pie, founded in 1920, is changing its name and marketing in the wake of nationwide protests over racial justice, following similar moves by the makers of Aunt Jemima and Uncle Ben's. "We are committed to being a part of the solution on racial equality, and recognize the term is derogatory," said Elizabell Marquez, head of marketing for Dreyer's Grand Ice Cream. Dreyer's is the U.S. subsidiary of Froneri, a joint venture between Nestle and private equity company PAI Partners.
— Update on reopening America... and around the world:
- New York City presses ahead with phase two of reopening. Starting today, offices, hair salons and retail stores can operate at 50% capacity, and outdoor dining at restaurants will be allowed. But most companies are taking a cautious approach to bringing employees back.
- The Labor Department on Friday reported jobless rates in May for the 50 states, and the news is the greater than usual variation. Some state economies are recovering much faster than others, and the worst performing tend to be those that have imposed the most severe lockdowns. The national jobless rate was 13.3% in May, but 10 states still have unemployment rates above 15%. They are: Nevada (25.3%), Hawaii (22.6%), Michigan (21.2%), California, Rhode Island and Massachusetts (16.3%), Delaware (15.8%), Illinois and New Jersey (15.2%), and Washington state (15.1%). Nine of the 10 states with the highest jobless rate are run by Democrats.
One exception is Colorado, where Democratic Gov. Jared Polis was one of the first to reopen. Other states well below the national rate include Georgia (9.7%), Arkansas (9.5%), Arizona (8.9%), Utah (8.5%), and Nebraska (the lowest rate in the country at 5.2%).
- EPA to reopen D.C. office, give workers return option. EPA is reopening its Washington headquarters tomorrow, according to an internal email sent last week. Employees will “have the option to return to the office,” wrote Donna Vizian, the EPA’s principal deputy assistant administrator for the Office of Mission Support. The reopening also applies to the EPA’s satellite office in Arlington, Va., Vizian wrote in the email.
- Detroit carmakers to resume pre-Covid output. Detroit’s automakers are gearing up for full production as they race to make up for lost output and meet stronger-than-expected demand. Ford Motor and Fiat Chrysler said they will resume pre-pandemic manufacturing schedules at their U.S. plants today. General Motors has said it aims to be back to normal output levels by month’s end.
— Coronavirus update:
- Summary: Covid-19 cases are closing in on 9 million, with data from the Center for Systems Science and Engineering (CSSE) at Johns Hopkins University (JHU) putting the global total at 8,969,827 with 468,567 deaths. The U.S. case count is at 2,280,969 with deaths at 119,977.
- Navarro says White House is preparing for a second wave of coronavirus, the Wall Street Journal reports. Navarro said that the federal government is "filling the stockpile in anticipation of a possible problem in the fall." Link for more.
- Trump’s Coronavirus Task Force briefing shelved. On Friday, Trump’s press secretary made its shelving official. Kayleigh McEnany said Friday that the task force will no longer brief the public, now that the U.S. is moving ahead with reopening its economy. McEnany said she will relay any further information about the pandemic.
- Brazil’s coronavirus death count breached 50,000 this weekend. In Brasília, the capital, demonstrators marching against President Jair Bolsonaro had to be kept apart from a pro-Bolsonaro rally.
OTHER ITEMS OF NOTE
- John Bolton’s memoir to be released on schedule. The Room Where It Happened, the former national security adviser's scathing account of his time in the Trump administration, is set to be published Tuesday after a judge denied the Justice Department's request to block its dissemination.
- President Donald Trump fired a prominent federal prosecutor, bringing to a close a stand-off between the Justice Department and Geoffrey Berman, U.S. attorney for the Southern District of New York. Berman at first refused to quit, but departed on Saturday evening. His office has been investigating Rudy Giuliani, Trump’s personal lawyer.
- Trump approves LNG by rail plan. The Trump administration has signed off on a plan to allow shipping liquefied natural gas by rail. The final rule by the Transportation Department, which authorizes the bulk shipment of LNG in specialized tank cars and other safety requirements, follows a multi-year lobbying campaign by railroads and natural gas advocates, who’ve argued it’s needed to serve customers in the U.S. Northeast, where there aren’t enough pipelines. “The Department’s new rule carefully lays out key operational safeguards to provide for the safe transportation of LNG by rail to more parts of the country where this energy source is needed,” Transportation Secretary Elaine Chao said in a statement. House Transportation and Infrastructure Chairman Peter DeFazio (D-Ore.) rebuked the administration for the move. “Should even one LNG tank car get punctured, the results could be far more devastating than most freight train disasters we’ve seen, yet this administration still fast-tracked a plan to move LNG by rail tank car through populated areas with a sham process whose outcome was a forgone conclusion,” DeFazio said in a statement Friday.
- Trump to order restrictions on H-1Bs. President Trump’s plan to restrict employment-based visas could affect an estimated 240,000 people seeking to work in the U.S. across industries from technology to finance and hospitality. Trump said on Fox News on Saturday that he will announce new restrictions on various work visas by today. The plan won’t affect certain workers who are already in the U.S., he added.
- Twelve women are under consideration to be Joe Biden’s running mate, according to New York Times reporting. Link to a NYT guide.
- Hogan gets Ireland’s backing to head WTO. Current European Trade Commissioner and former Ag Commissioner Phil Hogan has won the backing of Ireland in his bid to seek the top job at the World Trade Organization (WTO). However, given his interest in the role, the European Commission has applied some limits to Hogan relative to trade policy issues while he explores being a candidate for the role of Director General at the world trade body. The Commission has opted to set boundaries for Hogan aimed at preventing any potential ethics concerns. “The Commission decided, in agreement with him, to apply a certain number of measures,” a spokesperson told the Financial Times, adding that these included Hogan refraining from “public appearances that might distract from the subjects at hand.” However, the Commission also emphasized that the limits would not affect his ability to be Trade Commissioner. Several candidates have thrown their hats into the ring to replace Roberto Azevedo who announced he was leaving at the end of August, a year ahead of schedule.
- Vladimir Putin said he would consider running for a fifth term as Russia’s president when his current one ends in 2024, according to Russian media. The current constitution bars him from seeking another, but Russians will vote between June 25 and July 1 on changes that would allow Putin to run for two more six-year terms.